Last week the know-it-alls at The Economist mag were at it again. Canadians have a housing market, they said, that’s “notably overvalued”, right up there with the idiots in Australia. In fact, maybe a little worse.
Compared to what they rent for, properties in Oz cost 63% too much, while in Canada the differential’s a whopping 89%. And compared to family incomes, Australian real estate is 43% overpriced, and our premium is 34%. In contrast, US housing is 6% too cheap, when measured against salaries.
Below is The Economist chart, so you can see for yourself. But the magazine misses one key point – the Canadian real estate market (unlike the one Down Under) is starting to stratify and unravel in a fashion you can only describe as scary – if you just happened to spend $2 million for a building lot on Van’s Westside or $850,000 for a creepy row house in Leslieville.
As we get closer to the Day of Reckoning for the house-horny among us, the contrast between YVR and the GTA, and the rest of the country, grows ever wider. As I detailed a few days ago, Saskatoon is a mess after riding a boffo housing market for over a decade. Sales have flatlined and prices started to dip in Ottawa. Halifax is a real estate swamp. Even in urban Montreal – the second-largest market in Canada – a detached house costs the same as it did a year ago.
This week is expected to being bring fresh evidence of the chasm, as local boards reveal their September stats.
We already know Calgary is sinking. In September sales plunged by almost a third, and the average price fell year/year by 5%. In fact, the first nine months of 2015 have been negative, with sales plunging 26%, new listings declining and available houses piling up by 34%. The average number of days it takes to sell a home, says the local board, is up about a third – but in reality, it’s worse for those families trying to bail out since the realtors reset the days-on-market clock with each re-listing of a property. This is the grimmest it’s been in more than five years, and the Cowtown numbers have begun to spiral lower.
Edmonton? Not good. Single-family home sales have dropped 10%, condo deals are off 9% and the average residential price is now eroding. In fact, there was a notable plop (1.75%) between August and September as about 7,200 families try to find buyers – a massive 47% increase in sellers over this time a year ago. Says the local board boss, “We will likely see prices continue to dip as we move into the colder months.”
Worse, the newly-unemployed yahoos, roustabouts and numbnuts from the oil patchhave started moving into town.
Chief cop Rod Knecht says so far in 2015 his guys have been called into action dramatically more often than during the same period last year. Violent crime’s up 12%, property crime is 18% worse and worried citizens have dialed the emergency line 14% more. It’s like someone threw a switch last autumn, Knecht says, with crime popping at the same time oil started flopping – tumbling below $70 a barrel.
“When oil is up, we are busy, and when oil is down, we are really busy,” Knecht told Canadian Press. “And that is just because a lot of folks are coming back to Edmonton from, say, Fort McMurray, Cold Lake, other points north, and they are staging here in Edmonton waiting for the price of oil to go back up so they can go back to work.”
Speaking of Fort Misery, a lousy 42 single-family houses sold in August, down 46% from an equally sad month last year, and prices have descended about 5%. In parts of BC’s Okanagan, sales are running behind year-ago levels by 20%.
In short, about 70% of Canada’s local markets are in stagnation or decline. Others are hot. The benchmark price for a detached house in YVR was up 19% from last year on the east side ($1.16 million) and 22% on the Westside ($2.7 million). In 416, a detached at just over $1 million is 12% ahead of last autumn, but actually less than it was in May ($1,114,120). Prices are flat in Oakville, but advancing modestly in the cheaper markets of Hamilton, London and Windsor.
What do we make of this?
First, all real estate is local. There is no national or provincial or even regional market.
Second, no place is more dangerous than Vancouver, where average incomes are flat, household debt is rising, speculation’s rampant, house lust is a social disease and suites are epidemic. By every measure, prices are unsustainable.
Third, real estate’s sticky. Homeowners would rather give up a kidney than sell for less than they paid, or think their place is worth. Prices go up rapidly and fall slowly. In bad markets people cancel their listings or turn into reluctant landlords. Nonetheless, prices are falling in oil country and everywhere else that commodities rule. Expect more. Eventually the inventory tide will be unleashed.
Finally, recognize that this is Year Seven of the supposed recovery since the lights went out in 2008. Interest rates have been cut twice in Canada since 2015 began. Five-year mortgages are being hocked at 2.5% or less, the lowest level in history. The negative correlation between rates and prices has seen values rise and debt explode. Both are at nosebleed levels.
So, buy a house if you want. Just don’t expect the next five years to replicate the last. Or much sympathy.
173 comments ↓
I really think that we need to stop focusing on detached housing prices and look at the market as a whole. Percentage of single family to multifamily dwellings are lowest in Vancouver and Toronto. So comparing single family in those 2 cities to the rest of Canada will always show inflated values. But in reality condos and townhouses are the houses of 30 years ago. Historical comparison of detached houses is fraught with the same issue when comparing pricing.
Fausto is going to keep buying new build townhouses in ancaster. They carry themselves and fausto is always up $60,000 from the time of sale to the time it’s built
If real estate is sticky, how much is because owners don’t want to sell for less and how much is because they can’t afford to sell for less?
I have 2 specific questions that I don’t know the answer to:
If you are in negative equity and want to sell up, what happens to the negative equity? Presumably it lives on as a loan, but do you still get the same rate as before, or do you have to pay a higher rate because the loan is no longer held against a property?
If you are in negative equity and you want to move house, can you take your negative equity with you to the next property, or do you have to settle up and start afresh?
#1 domino
The issue in Vancouver is that only something like 1.6% of the condos have more than two bedrooms. A family of four can’t really live comfortably in an 850 sq. foot 2 bedroom condo.
The surrounding suburbs are building heaps of condos as well, but there are few town homes available unless you go far out.
If a city is going to eliminate single family homes one would think that there would be an incentive to replace them with at least some family friendly apartments and town homes. This does not seem to be the case in Vancouver.
I smell a recession at hand. Sure, we might be moving forward at a snail’s pace, by some measures, but by the retired boomer’s warped yardstick – things suck!
Locally, farmers had an OK year, but milk prices are low, and good grain harvests mean lower prices.
Mining – think FRAC sand – is dead, at least until oil returns.
Manufacturing – slow to going good depending on industry. Auto good, heavy mfg slow. Builders are busy because money is still cheap.
Few I see are taking on more debt, some indebted I see are taking on a bit of water.
Last observation: Nobody is convinced we are in recovery, we are more in a weird quicksand just now…
From the unfashionable (but perfectly frugal) outer spiral arm of Eastern Ontario, I’ve seen small bungalows selling well for relatively high prices (lots of retired crumblies coming to town). Victorian houses that haven’t seen any maintenance in 40 years are selling well at low prices – often less than a bungalow – as early retirement “projects”.
Fancy new or renovated houses at high prices are not selling at all.
The cheap row townhouses rent at $700 for 3-bed. People tell me it’s hard to get “good tenants”. No wonder, when everyone with a job has got a mortgage.
Garth, how do you see Calgary unfolding? How long will it take before it’s a place to buy? Will this be like the 80’s where it took 10 yrs for prices to recover?
domino. You couldn’t be more correct. There is plenty of affordable housing in metro Vancouver. It’s just not single family homes in the city of Vancouver. Either move to the far flung suburbs if you want a sfh or buy a condo or townhouse closer in. Also no first time buyer can or will buy a sfh in Vancouver city period. So stop using this as an entry level property benchmark. The difference between canada and the U.S. is that in Canada there are only two cities worth living in Vancouver or Toronto. In the u.s., there are multiple choices and even some small towns that are close to a city. Huge difference.
Houses in Hamilton are surely rising in value and even more so in Stoney Creek, Grimsby, etc. People who can get so much more for their money than in Toronto, Oakville or Burlington.
However, the price you do really pay is if you have to travel to Toronto for work. What you lose is time….travel & rush hour has become a nightmare across the QEW, 403 or a week’s pay cheque to afford the 407 toll highway.
This is where not only are people losing on having debt issues with stagnant house prices coming, but having very little balance of life stuck on our highways.
I have been driving Hamilton to Toronto for 30 years on a regular basis…thankfully ending 5 years ago when I purchased my a company and moved it to Hamilton. I don’t think it is possible to do this commute any longer and keep your sanity. I have watched this commute go from an inconvenience to a nightmare.
Moral of my story is the swing of more companies moving away from Toronto will even more than ever create a housing price drop when times get tough in 416. Those who have moved may never afford to drive back and forth for sanity reasons.
2 Fausto on 10.04.15 at 5:42 pm
Along with avoiding referring to himself in the third person, Fausto should consider what happens to his tax rates and his tenants’ job prospects in a city whose second-largest ratepayer and top-five employer is about to shutter for good.
Fausto should reconsider his use of the word ‘always.’ Fausto should go back to Button Street with his winnings, while he’s still ahead.
To compound this made-in-Canada problem, we have a federal election looming where all of the candidates, in concert with the BoC, CMHC, and CREA, appear to be in mutually-lobbied agreement that the best course of action is to totally abandon free markets and further stack this house of cards.
After all, with our one-trick commodities market circling the toilet, our only option now is to sell unaffordable housing to each other.
“I really think that we need to stop focusing on detached housing prices and look at the market as a whole.”
Of course. This makes up part of what is colloquially known as the “sales mix”. The average identical Canadian housing unit hasn’t gained anything in the past 2-3 years, but what has changed significantly is the sort of housing that is actually being transacted. Increasingly higher-end. Increasingly new versus used/depreciated. Price declines have even been covered up by incentives not deducted from the transactional price — such as tossing in BMW leases, vacations, cash rebates, below-market financing offers, etc.
Another thing I’ve noticed in this bubble is that a lot of people seem to be ‘relying’ upon “assessments” made for taxation purposes. Those are of very limited use as assessment formula in most provinces is based criteria very different than ‘the market’ uses to evaluate the price of a house for resale purposes.
A factor that many do not properly consider in the whole ‘house price gain’ equation is that many properties will have appreciated, not on account of demand going up, but rather, because there has been a pile of renovations or upgrades performed. It is thus dishonest to generalize such price gains over all properties, even ones which have not seen such investment. A lot of people out there are completely delusional as to what they ‘think’ their properties are worth, and have entered a pattern of consumption on the basis of wealth they really don’t possess.
One last point, and that is with respect to the idea that Canadian housing is 89% overvalued. That is absolutely true, but doesn’t mean that housing will just drop 45% or so. Overshoot to the downside is typical, and is to be expected when a bubble has carried on for this long.
The Economist points out how severely overvalued Canadian real estate is and that houses in the US are actually undervalued by 6% when measured against incomes.
Incomes in Canada and the US are approximately equal and, up to 2006, house prices in these two countries had been at the same level for a long time. The US correction put house prices back to where they should be, based on rents and incomes.
If house prices in Canada corrected back to where they should be, based on rents and incomes, it would restore the long-time housing price parity that existed between Canada and the US.
How low is this level? It’s easy to understand where that level is when we take a look at where house prices currently are in various regions of the US.
The following houses have at least 3 beds, 2 baths and 1,800 sq. ft. of primary (above ground) living area, are no older than 2005 and have an attached double garage. No foreclosures have been included.
Florida:
$ 117 K, Jacksonville, FL
$ 109 K, Jacksonville, FL
Arizona:
$ 71 K, Arizona City, AZ (Phoenix)
$ 100 K, Coolidge, AZ (Phoenix)
Georgia
$ 90 K, Union City, GA (Atlanta)
$ 115 K, Forest Park, GA (Atlanta)
Nevada:
$ 121 K, Las Vegas, NV
$ 110 K, Las Vegas, NV
Texas:
$ 102 K, Fort Worth, TX
$ 114 K, Forney, TX (Dallas)
“no place is more dangerous than Vancouver, ”
Right! every house I saw “For Sale”
from last week in VAN on my way to work are “sold”
as I noticed yesterday. LOL!
So, it is idiots in Australia, and dickheads in Canada. Got it.
I’ll have to do some research and see the names used for the idiots/dickheads of the Japanese, Americans, European countries, et al, who bought into their own special we’re different housing mania.
One asset strategies are for idiots/dickheads/etc. No exception. Trust me. Rule of 90. Garth is never wrong.
Nasty of you to parrot the Edmonton police chief. I was thinking of the slur on Washed Up Lawyer.
If only they kept statistics.
The place I grew up, the local rag still publishes the court report. Long lists of Natives getting sentenced to time served (i.e. 3-6 weeks, as the circuit judge only comes once or twice a month) for breach of undertaking or typical minor violations of parole. Stay classy, Canada.
To: The Governor and Company of Adventurers of England trading into Hudson’s Bay
In Care of: Raymond James
Toronto, Upper Canada
Attention: Head Factor Garth Turner
May 25, 1808
Dear Head Factor:
I received your most recent missive and hereby humbly submit my monthly report from Fort Misery.
I left the Kootenae House on the 20th of April, 1808, proceeded to the Lakes, the sources of the Columbia River, carried everything about two miles across a fine plain to McGillivray’s River, etc., etc.
The navigation of the River was very dangerous from violent eddies and whirlpools which threatened us with sure destruction and which we escaped….
Yours,
David Thompson
PS. There appears to be an outbreak of rebellion and violence near Fort Edmonton. I will Tweet you about that later.
#13 Victoria Real Estate Update
You are a smart woman. I appreciate your Posts. Many don’t. Because the truth always hurts.
Please keep them coming. This Blog saves people.
Don’t believe The Economist numbers until you understand how they arrived at 89%. (What was the source of their data and what does it represent?)
the Canadian real estate market is baffling
this hot for houses now going on 15 years, could go on for some time given US interest rates will not be going up likely now till next year, there is no real slowdown in sight, even Windsor is getting in on the madness, double digit price increases in a city with over 10 per cent unemployment
this is really stupid
Thanks for the updates Sir Garth. Always a pleasure.
Wow. The other effects of a real estate slump – the police being called in 9,000 more times than the same period last year in Edmonton. Hope that 9,000 was a typo!
The economist has been saying our real estate has been in bubble territory for some time now. So has my gut instinct. Your comment that most people would rather lose a kidney than sell for less than they purchased is certainly keeping the bubble from popping in some areas. Too bad. I am still waiting.
Cheers
#4 Van real on 10.04.15 at 6:18 pm
“……The difference between canada and the U.S. is that in Canada there are only two cities worth living in Vancouver or Toronto……..”
_________________________
Congratulations.
You’ve just won the “Most Laughable Statement of the Year” award.
(Unless, of course, you’re biasing your statement solely on the ability of a REALTURD® to currently eke out a living.)
Whitby isn’t doing to bad with the 407 going through
Oh no, this is not good. Actual statistical data showing that the U.S. is now on the verge of entering a new recession:
Take a close look at the chart halfway down the page, that chart shows you all you need to know:
http://www.marketoracle.co.uk/Article52514.html
This gentleman created a chart using a mix of technical data, to show him when a recession is about to start, and this data now shows him that a recession has started in the U.S.
These are Charles Gave’s own words:
(“It was very easy to call the last two recessions well in advance because we had inverted yield curves. In the US at least, that phenomenon has a perfect track record of predicting recessions. The problem now is that, with the Federal Reserve holding the short end of the curve at the zero bound, there is no way we can get an inverted yield curve, come hell or high water. For the record, inverted yield curves do not cause recessions, they simply indicate that something is seriously out of whack with the economy. Typically, a recession shows up three to four quarters later.”)
(“I built a new indicator of US economic activity which contains 17 components ranging from lumber prices and high-yield bond spreads to the inventory-to-sales ratio. It was necessary to construct such an indicator because six years of extreme monetary policy in the US (and other developed markets) has stripped “traditional” cyclical economic data of any real meaning”)
(“When the reading is negative a US recession is a possibility. Should the reading fall below – 5 then it is time to get worried. Today my indicator reads – 5 which points to a contraction in the US, and more generally the OECD. Such an outcome contrasts sharply with official US GDP data, which remains fairly strong.”)
“If you are in negative equity and want to sell up, what happens to the negative equity? Presumably it lives on as a loan, but do you still get the same rate as before, or do you have to pay a higher rate because the loan is no longer held against a property?”
The loan no longer is secured with a charge against real property, so the rate obviously escalates quite severely in most cases (after all, nobody with a decent personal balance sheet would let their house go into foreclosure or sell into a negative equity situation, after all!).
Even in the case where the bank renews a secured mortgage loan (with the property/charge still intact) that is in negative or minimal equity, the applicable interest rate is likely to be considerably greater than applicable to a high-quality borrower with plenty of equity. This higher interest rate makes it very difficult to actually accrue equity to remedy the negative equity.
For these reasons, it is very difficult for most families to extricate themselves from negative equity unless they have income that is quite significantly inversely correlated to the RE market. The most common practical consequence of significant negative real estate equity is personal bankruptcy.
CMHC subprime mortgage insurance does offer an element of protection against this scenario since a CMHC subprime mortgage, in the eyes of the banker, has the credit quality of a GoC bond. However, any disruption to banker confidence in the CMHC making timely payment in full would likely cause a severe increase in interest rates applicable to renewals of CMHC-insured credit. Even in the absence of BoC policy rate changes.
Hi Garth, long time Stoon reader here. Appreciate your work and read daily. Been watching my neighbors house for over a year now. A regular bungalow in good location he listed for 399 originally. At the time I told my wife I would pay him not a cent more than 220, and that 20 of this would be a goodwill gesture. Anyways, it went up for sale aaaannd crickets. After 6 months he took the sign down. Then this spring “new listing” sign and price of 389. Aaaannd crickets. Mid-summer it was “price reduced” sign. 379. Aaaannd crickets. It’s now 369 and here comes our balmy and desired winter so in all likelihood another 6 months on the market. We are headed for a justly deserved collapse here.
#4 since when do you think politicians care about single families in BC? They wouldn’t have allowed this rampant speculation and money laundering as well as all those hundreds of dinky little, shoddily built hi rise condos if they did care.
#22 MSM-Free Zone on 10.04.15 at 6:54 pm
Actually there’s some truth in that, especially if you’re a recent immigrant. Chances are that you’ve already got relatives in one of the three city centres or job prospects are simply better.
Nothing stopping me from packing up and moving to say Charlottetown, but that’d be professional suicide. If I was a 65+ ‘old stock’ gent, that’d be a different story.
20 years ago I made a choice..live a balanced life and leave Toronto to small town Ontario where I could easily afford a house, enjoy a 5 minute commute, save for and enjoy vacations, build a portfolio and live stress free…
Still amazed at friends who stayed who are in their mid 50’s, sitting on 500% gains in housing and still drive 2 hours back and forth to work daily, much stress at the office once they arrive and few vacations…
As my Scottish friends told me years ago..”No one wishes they had worked harder or longer for a house. Your not taking it with you.”
Pure madness but to each their own…
Re# Victoria Real Estate Update
While I agree housing is severely overvalued in many Canadian cities, a more accurate comparison would include Seattle, Denver, NY, Chicago, Portland, etc. Phoenix is a sauna in the summer and a generally traffic choked, smoggy city with very little character.
I drive by this house everyday at the moment ,I was curious what they were asking .
I guessed around 800k ,ah well I was only 400k out!
http://www.visualtour.com/applets/mobiviewer/viewer.aspx?asr=true&prt=10002&vtwin=true&t=3661433
In the end, it may be the Andreas Fault that determines the value of 604 houses.
There are outside factors that sometimes play into economics.
Let’s pray not.
# 30 Tim
Your comment makes no sense. Did you read what I wrote? I doubt that you did.
You personally at not prefer Phoenix but in doing so you disagree with thousands of Canadians who own homes there and thousands more who flock there each winter to enjoy the beautiful weather.
Again, I doubt that you read my comment since you seem to think that I was comparing one Canadian city to one American city when in fact I was comparing all of Canada vs many US cities.
Looking at the examples I posted it would be logical to conclude that The Economist’s assessment of the overvaluation of Canadian properties vs American is correct.
Canada’s housing bubble is, perhaps, the biggest the world has seen. The bigger the bubble the bigger the price correction.
#2 Fausto on 10.04.15 at 5:42 pm
Fausto is going to keep buying new build townhouses in ancaster. They carry themselves and fausto is always up $60,000 from the time of sale to the time it’s built
——-
your $60,000 ‘gain’ is an illusion
there is comfort in illusions
you have maintained the buying power of your money, that’s it, this is not a criticism, I believe that your activity is better than a savings account
An article in the province reporting that bob rennie is worried for millennials who don’t buy his condos now …….because you know, they will likely never be able to afford anything if they don’t do it now….. is so ridiculous. Why don’t his followers see that he really doesn’t care about the millennials, just that he cares about his condos selling?!? We are only hearing from him because he is a bit panicked himself that things are slow. Let’s face it, if they were selling, there would be no article. His followers, these People encouraging others to jump in and take on that silly condo (the “#dontneed a million ” group) before they are all gone or no longer “affordable”. THAT is what is raising prices, not just investors. Stupidity. And the stupidity is spreading across the
Lower mainland. People frantically buying one million plus listings in delta, Surrey, Langley…..that were selling in the 500k range two years ago. And yup, nobody will budge on price. Thanks mr. Harper, I’m comforted in knowing there is no housing bubble. Whew!!!
dan: and crickets: wow an 8% reduction – chasing the market down
nubbers: If you are in negative equity and want to sell up
Mark: The loan no longer is secured with a charge against real property, so the rate obviously escalates quite severely in most cases
good answer Mark
Nora Lenderby: From the unfashionable outer spiral arm of Eastern Ontario
Winchester?
MSM-Free Zone: To compound this made-in-Canada problem, we have a federal election looming where all of the candidates, in concert with the BoC, CMHC, and CREA, appear to be in agreement that the best course of action is to totally abandon free markets and further stack this house of cards.
meaning that they will keep the price of houses high
at some point they are going to throw the housing market under the bus. Maybe they already have.
This is the sublet space available from a major oil and gas EPC company.
http://matrix.cwcanada.com/asp/filecabinet/Trans/445924/205_Quarry_Park_Boulevard_SE_Brochure_Septemper2015%20-%20FINAL.pdf
Word is that the rate is $20 per foot. This is laughable, as they would be lucky to get offered “ops costs”, considering how much space is available in Calgary right now.
Given the amount of space up at this one building, the main tenant is clearly not expecting any appreciable major projects coming in the door for at least 3 years.
Everyone else’s mileage may vary.
High income job growth reflect high price real estate in Toronto and Vancouver.Supply and demand always determine what people can afford.Its a good thing with these high prices every year.It shows the prosperity of owning hard assets.
Dear Pathetic: your anti-Alta sentiments are in full view here today. Those numnuts invading Edmonton are mostly from outside of Alta. The latest CAD government stats state that their was an influx of 30K from outside Alta to our great province. This stat took me aback at first but then I realized that these poor people have no other choice but come to Alta because their prospects are so poor elsewhere in CAD.
#36 45north on 10.04.15 at 8:25 pm
Nora Lenderby: From the unfashionable outer spiral arm of Eastern Ontario.
Winchester?
Morrisburg. If you’re a penniless crumbly with at least 3 dogs, consider it.
What happens to RE if Liberals win? If that happens, that will be the catalyst.
#8 Van real
The difference between canada and the U.S. is that in Canada there are only two cities worth living in Vancouver or Toronto.
*********************************************
Could you be more snob and arrogant, please?
That kind of thinking is part of the problem.
Well, it looks like one of those Alberta bashing day…
While a case can certainly be made about the worrisome Canadian real estate market I am mystified why this blog continuously ignores the broader economic market. Do we seriously believe that the US economy is a juggernaut? And what about emerging markets? There is a global debt issue that quite simply suggests that interest rates can’t rise as economic growth won’t support it. Thus, why we worry myopically about rising interest rates that will trigger a collapse of the Canadian real estate market yet not look closer at why interest rates haven’t risen in 8 years? Garth….you spoke with certainty that the Fed will raise rates yet they haven’t? Why do you think that is?
” Nobody is convinced we are in recovery, we are more in a weird quicksand just now… ”
Don’t bet against America … er, Corporate America that is
Hosta Lavista Canada.
No more tax collecting HST.
Off to the good old USA In morning.
See what cool writing topics I’ll find.
The TPP is about to polarize cities and towns even further.
#27 Tim
My eyes are open…we return to our single family house in Los Angeles next summer. Not worth putting down roots in Vancouver as it is now.
#32 old gringo
It is the Cascadia Subduction Zone, the San Andreas goes out to sea right around the Golden Gate Bridge. When either goes, watch out.
#35 Whipster1
The article comments were priceless. One woman commented on buying a $600,000 condo for her 22 yr old daughter. It is like the tulip craze in Holland.
So, buy a house if you want. Just don’t expect the next five years to replicate the last. Or much sympathy.
The following is equally true:
So, buy any ETF (Diversified Portfolio) if you want. Just don’t expect the next five years to replicate the last. Or much sympathy.
Right ?
That’s a counter argument? Once again, do I need to remind you why apples are not bananas? — Garth
To all the Albertans who aren’t liking the bashing spare a thought for me .
I am an Australian / Canadian or as Garth calls us idiot dickheads.
I don’t mind ,if you are being stupid and greedy I would expect to be called worse.
How can one guy wake up 35 million people without a few shock tactics?
Re: #8 Van real on 10.04.15 at 6:18 pm
Toronto is a hellhole with air pollution and congested traffic. Air pollution shortens lifespans. That only leaves Vancouver.
41# Sebee – Hey Seebe, I wondered that too. Not so much which party but a 2 outta 3 chance one of Les Boys from Quebec gets in. Would Quebec play on the homme field advantage, tugging at heart strings and spark a separatist reaction to parlay more power? Dollar goes down, short term rates go up. Who needs Janet if you’ve got your own fire in the hole. Dunno, it’s a mythical wild card that could turn out to be a real joker.
#41 SEBEE
“What happens to RE if the Liberals win?”
The SAME thing that was due to happen to RE without regard to which party wins. However, your taxes might go up along with whatever is due for RE.
“If that happens what will be the catalyst?”
Likely an outbreak on sanity.
…Just my thoughts here…
Two professionals I know (household income 150k+/yr) say they would be priced out of their Leslieville SFH and North York high end townhome today if they were again to buy.
Nutso low raters and bank of Momers are driving this.
“20 years ago I made a choice..live a balanced life and leave Toronto to small town Ontario where I could easily afford a house, enjoy a 5 minute commute, save for and enjoy vacations, build a portfolio and live stress free…”
Now exactly how is this boast helpful to anyone? Yes, there are plenty of jobs and amenities out there in small town Ontario …. it’s why populations are shrinking and you can’t find good tenants (as somebody mentioned earlier). Even CBC created a comedy show about this (Still Standing).
Re: #40 Nora Lenderby on 10.04.15 at 9:08 pm
The only place where real estate is still selling in Eastern Ontario would be Kingston. Everywhere else all you see is reduced signs. Oshawa was selling well until about 6 months ago.
#30 Tim on 10.04.15 at 7:44 pm
Re# Victoria Real Estate Update
“While I agree housing is severely overvalued in many Canadian cities, a more accurate comparison would include Seattle, Denver, NY, Chicago, Portland, etc. Phoenix is a sauna in the summer and a generally traffic choked, smoggy city with very little character.”
I am not sure how you can compare a smaller city like Victoria with Seattle, NY, Chicago… even Portland. Better examples would be Olympia, WA, Eugene, OR, Syracuse, NY, or Tucson, AZ. Compared to those cities, Victoria is still priced very high relative to their sister cities in size/demos.
Third, real estate’s sticky. Homeowners would rather give up a kidney than sell for less than they paid, or think their place is worth. Prices go up rapidly and fall slowly.
————————-
Nope, in significant bubbles prices increase gradually and crash rapidly, just look at Ireland and US.
There is nothing home-owners can do do prevent meltdown once CMHC sub-prime ‘insurance’ limit is exhausted. Prices can easily fell by 60- 70 % in a year and a half. Easily.
You made that up. Not a shred of evidence to support it. — Garth
High income job growth reflect high price real estate in Toronto and Vancouver.
Unfortunately true.
Real estate prices continue to rise in Toronto and Vancouver they are the epicentres of $. Cheap cheap $.
Y and F #55.
If your creative and pick the right location, there are always opportunities….online, serving seniors, enhancing other entrepreneurs,etc,etc,etc….
And you don’t have to make near as much to live..think the Niagara Peninsula….plus your still close to the USA and Toronto when you choose to visit…
#44 WallOfWorry on 10.04.15 at 9:34 pm
“While a case can certainly be made about the worrisome Canadian real estate market I am mystified why this blog continuously ignores the broader economic market. Do we seriously believe that the US economy is a juggernaut? And what about emerging markets? There is a global debt issue that quite simply suggests that interest rates can’t rise as economic growth won’t support it. Thus, why we worry myopically about rising interest rates that will trigger a collapse of the Canadian real estate market yet not look closer at why interest rates haven’t risen in 8 years? Garth….you spoke with certainty that the Fed will raise rates yet they haven’t? Why do you think that is?”
Here are my thoughts… first, check out this article on the Financial Post which reviews many of your concerns – the US is growing well domestically.
http://business.financialpost.com/investing/investing-pro/david-rosenberg-u-s-recession-the-numbers-say-no-even-if-the-market-says-otherwise
The US Fed is responding to concerns about the global markets not the domestic one. They are worried that the global market will cause pain in their own backyard. The reality is they should have increased rates a year ago. They have been overly cautious and now they are concerned more about perception than reality. By holding back, they will be thought of as doing the “prudent” thing… but they should have given themsevles a buffer during this window so they would be ready to reduce if need be a year or so from now.
Hey – its easy to second guess the Fed / BoC… I have been wrong 1/4 of the time and much more wrong on the state of housing in BC. But I am betting with my cash and the businesses I have invested in are returning far more than even the inflated housing at this time. My next move is to acquire land when a correction takes place in BC… whenever that finally happens ;-)
Idiots … dickheads … I’m so confused, was finally getting used to … cheezeheads. Back to the drawing board I guess …
sympathy…yes…tell me about it. anytime I expect some at home, I usually get passed my dictionary, already opened, at some page between shit & syphilis.
small town real estate holding steady in most areas around me, but lack of new jobs certainly seems to keep things in a fragile balance at best. if/when rates are to normalize, we will eventually be toast, as 2-5 year mortgage papers mature.
keep up the good work Garth…much appreciated !
The average identical Canadian housing unit hasn’t gained anything in the past 2-3 years
Complete fabrication to mislead readers. No cited evidence whatsoever.
Also, mischaracterization of mortgages covered by CMHC insurance to be ‘subprime’. Again no cited source to support such disinformation.
http://www.cbc.ca/m/news/business/mortgage-market-tiptoes-toward-subprime-1.1155125
Mark continues to enjoy misleading readers on this blog. His posts are not only misleading but potentially harmful to new investors.
Completely irresponsible.
…many properties will have appreciated, not on account of demand going up, but rather, because there has been a pile of renovations or upgrades performed. It is thus dishonest to generalize such price gains…
Another ridiculously unsupported comment.
The comment starts with an unsupported generalization and then goes on to say that it’s dishonest to generalize the price gains associated the the original generalization.
Complete idiocy.
#13 Victoria Real Estate Update on 10.04.15 at 6:33 pm
Although I appreciate your posts, I just wanted to let readers know that those FL properties don’t have much positive cash flow left in them for potential landlords.
The prices are definitely more reasonable for a resident than those in Canada, but that’s pretty much as far as it goes.
#45 young and foolish
NEVER bet against Corporate America, nor the government they bought….
oops, sorry NSA, just lost my head for a moment…
If real estate is sticky, how much is because owners don’t want to sell for less and how much is because they can’t afford to sell for less?
If the 90s are any guide, probably a bit of both.
Canadians simply built no wealth, as owners of overpriced homes fed the beasts as prices burned downwards.
“Also, mischaracterization of mortgages covered by CMHC insurance to be ‘subprime’. Again no cited source to support such disinformation.”
Its well known that nobody would pay CMHC money to insure a mortgage if the mortgage were otherwise Prime in its nature and acceptable to the lending community as a prime asset. Hence, CMHC insurance has the effect of converting an otherwise ineligible loan (“subprime”) into a Prime-quality loan. The logical inference is therefore that CMHC is a subprime mortgage insurer.
So once again, Troll proven wrong. Now try to add something useful here because your trolls certainly aren’t value-added.
“The difference between canada and the U.S. is that in Canada there are only two cities worth living in Vancouver or Toronto.”
******************************
“Could you be more snob and arrogant, please?”
“That kind of thinking is part of the problem.”
————————————————-
Arrogant for what, telling the truth?
I personally would not live anywhere in Canada, outside of Vancouver and I only stay here due to multi years invested in local business development.
As a sun worshiper, the US offers so many more ‘pleasant’ locations. In case your not paying attention to recent events, Harper has Canada well on it’s way to being assimilated by the US anyhow.
#61….really? How about this one?
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/10/20151004_America.jpg
Or…how about this one? Factory orders drop for 10 months in a row?
Here is the link:
http://www.cnbc.com/2015/10/02/aug-factory-orders-fall-17.html
I am going to quit commenting here. I really have nothing to offer with the exception of asking SM to drop the gloves and throw the dukes.
Garth:
Have you ever coached a hockey team?
I remember a coach talking to us about icing the puck when we found ourselves stuck in our own end.
We do not want to ice the puck but, in his words, “When the house is on fire, it is OK to pee in the living room.”
Go Flames.
Mark is quite correct.
If you need credit default insurance……sorry to break it to you….but that makes you and your real estate deal “subprime”.
CMHC is a defacto subprime “institution” even though they do not administer nor fund any loans, they enable them to exist, for without them, the sale would not occur. Don’t believe me ? Try your bank on for size without it.
Credit granting consists of three variables. CHARACTER, CAPACITY, and COLLATERAL……..and unless you have gold balls, as opposed to truck balls, you will need CMHC insurance.
Garth
Is the number of fights in the NHL inversely correlated with the oil price? Could this be the year of the return of the enforcer?
#69 Mark on 10.04.15 at 11:05 pm
Opinions still do not count as cited evidence. FYI.
Mortgages backed by CMHC insurance classified as ‘subprime’ by absolutely nobody.
Disinformation continues to be the cornerstone of his comments.
This is just wonderful….and so true..
http://markstcyr.com/2015/10/04/its-the-entrepreneur-that-saves-an-economy-not-the-fed/
Leo Toiletspray ,you spend a lot of time trying to be Mark’s nemesis but unfortunately for Mark his biggest nemesis is surprise ,surprise Mark.
You don’t understand my comment. Your comparisons are flawed. Phoenix is cheap because there is an endless supply and sprawl of suburban communities and it has lots of smog and sweltering heat. As for the other cities, you have picked many that have dim job prospects and aren’t nearly as attractive as the ones I’ve mentioned, so obviously they are much cheaper.
Re#57
I think my examples are better than comparing Syracuse or Tuscon. Syracuse is in the crumbling rust belt with brutal winters. Victoria is a retirement haven on the ocean with mild climate and a ferry ride from Vancouver.
#70 Blacksheep
Most of us would not consider living anywhere south of the 49th. You can have your guns, illiteracy, rampant consumerism, massive inequality, highest rate of incarceration in the developed world, Donald Trump circus…
#14 PT on 10.04.15 at 6:37 pm
“no place is more dangerous than Vancouver, ”
Right! every house I saw “For Sale”
from last week in VAN on my way to work are “sold”
as I noticed yesterday. LOL!
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
And dem wires are 100% guaranteed to be coming from foreigners. They are all 60K per year families buying 1.4 million dollar moldy tear downs. Ded Sirius……
Sorry……….guaranteed NOT to be coming from foreigners…..they are ALL 100% locals making 60K per year.
#71 WallOfWorry on 10.04.15 at 11:08 pm
#61….really? How about this one?
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/10/20151004_America.jpg
Or…how about this one? Factory orders drop for 10 months in a row?
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
Of course the recovery is real because it's told to use by men wearing suits. That alone proves you can believe what they are saying.
#66 Leo
The point of my comment had nothing to do with whether or not the properties were cash flow positive. Also, I listed properties from 5 different States, not just Florida. Did you read what I wrote? I doubt that you did.
I have 5 friends dealing with real estate issues in Calgary right now:
Friend #1 bought a retirement home in Cabo, Mexico but can’t sell her house in Marda Loop as nobody is buying million dollar properties. She can’t seem to rent it out either as it’s too high end. She’s rich, so this isn’t a huge problem, but it’s definitely costing her money to have the place sit empty, not including the market depreciation.
Friend #2 is a real estate agent who bought a townhouse up in the North East near the airport with the intention of flipping it. No offers in 2 months and recently lowered the price by 20 grand. Place is kinda dumpy for a new building – everything is cheap cheap cheap, the appliances, the thin granite, the size of the rooms. I personally would never live there. Nobody else wants to either, apparently. He’s in trouble because he assumed the mortgage on another place (the bank wouldn’t give him a mortgage of his own, which tells you something) and now needs the money to complete the convoluted transaction. He has a new baby.
Friend #3 isn’t actually a friend by former landlord. I recently moved out of his rental condo on McLeoud and Heritage. When I moved in last year there were 2 places for rent in the building. There are now 42. He didn’t lower the price of the rent (2 grand), so predictably, hasn’t been able to rent it out. He said he was thinking of moving in. (He’s still living with his parents). All the rent I paid him over the last year he’s lost to depreciation.
Friend #4 lost her job in Calgary so moved out to Halifax to take a contract gig. She couldn’t sell her Inglewood condo as it would have put her underwater and she can’t afford to write a cheque to the bank for the difference. When she did buy the place in 2009, she paid 70 grand just for the parking space in the garage below, for some reason they were selling these independently. I recently moved into this place and now pay 700 a month less than my old place and I get free cable, internet, and a gym membership.
Friend #5 and his wife smoked some pot one night and threw the buts in a big jar outside on the deck of their rented condo. They left to go do something and by the time they came back, the place was on fire. The landlord booted them out, so in another streak of infinite wisdom, borrowed a down payment from their parents to buy a half million dollar McMansion in Copperfield about a week before Saudi Arabia said they wouldn’t lower oil production to prop up prices. He work(ed) as a welder, she at Cenovus – that is before both got laid off. They’ve now filled up every room in the house with roommates to help pay the mortgage.
Prices in Fort Mac are only down 5%? Wow … I guess real estate prices really are sticky in Canada. If homeowners at ground zero are unwilling to budge I think any serious correction in Canada would be a slow motion affair. Think new year molasses …
Casting for a brand new all-Canadian-content CBC tv series, “LITTLE HORRORS ON THE PRAIRIE”: our very own beloved and highly respected eminence grise, Peter Mansbridge, in this his first foray into serious drama, will be playing Chief Cop Wilhelm Schnitzelbaecker, guest star Judy Dench is featured as the harried underwater housewife, Amy Dworkin, who is worried about her neighbourhood; OPEN AUDITIONS for 1) Tom, a YAHOO, 2) Dick, a ROUSTABOUT, and 3) Harry, a NUMBNUT, all newly unemployed oil patch workers.
In our first episode titled “OH MY GOSH!” Tom Dick and Harry amble by a man smoking and drinking JD in his parked car. The man asks the boys, “Where youse guys from?” and they say “Tronna.” The man (Donald Sutherland) immediately hurls homophobic epithets at them. They drag him out of the car and quickly beat him to death. Amy Dworkin who is witnessing this from her living room picture window screams hysterically and calls Chief Cop Schnitzelbaecker.
For those interested, present yourself at Massey Hall, 7:00PM sharp. You will be required to ad lib your assigned roles as Tom, Dick or Harry in the murder scene.
(Mr. Mansbridge, Ms Dench and Mr. Sutherland will not be signing autographs.)
I wasn’t a believer in HAM, but what else could explain just T.O. and YVR continuing to rise while the rest of Canada RE flounders? Same interest rates across the country.
Could it be the Yuan percenters? If they drive up the high end in T.O. and YVR, it trickles down to the other properties in the city, suckering in the locals.
http://www.bloomberg.com/news/features/2015-10-01/children-of-the-yuan-percent-everyone-hates-china-s-rich-kids
I’m currently sitting with:
– 60% cash
– 40% equities/preferreds
– 0% real estate
So regarding the real estate market, I say “crash, baby, crash”.
A subprime mortgage is anything that is not considered a conventional mortgage. A person who does not have 20% down is subprime.
For the lender there is little subprime risk because the mortgage is insured but there is still the same default risk. The subprime interest premium is paid in the form of a mandatory mortgage insurance fee and the risk is with CMHC. Just a shell a game on who takes the risk, who makes the subprime premium, etc. but the same higher default risk as other subprime mortgages which is all that matters. All CMHC insured mortgages are subprime and at higher risk of default than a conventional mortgage. Just because the financial industry and CMHC wants to spin CMHC insured mortgages as something that is not subprime does not make it so.
Why is Vancouver different?
Why does Vancouver have the highest number per capita of luxury cars on the continent?
Why do the most expensive areas have the lowest incomes?
Serious questions for those not afraid of being labelled.
Was in downtown Seattle today. What a dump compared to 10 years ago. The place is going downhill.
ended up going to Ballard and the Bellevue.
The divide between the haves and have nots is widening there.
Our future?
#70 Blacksheep on 10.04.15 at 11:06 pm
“The difference between canada and the U.S. is that in Canada there are only two cities worth living in Vancouver or Toronto.”
******************************
“Could you be more snob and arrogant, please?”
“That kind of thinking is part of the problem.”
————————————————-
Arrogant for what, telling the truth?
I personally would not live anywhere in Canada, outside of Vancouver and I only stay here due to multi years invested in local business development.
—–
I’ve travelled all over and Vancouver is the anus of the Fraser.
[…] Source: http://www.greaterfool.ca/2015/10/04/the-divide/ […]
#42 BG — If you want a beautiful setting you choose Vancouver and if it’s business and the attributes of a very large city (culture and big time sports), you choose Toronto otherwise go for most any of the other quiet, adaptable cities (Calgary?) in Canada. They are not extraordinary but are livable and safer than the top two and most any US city although the term safer may not apply to Vancouver any more and probably not Toronto either.c
“Eventually the inventory tide will be unleashed.” – Garth
————————————————————-
Yes. Maybe, but way down the road.
“Mortgages backed by CMHC insurance classified as ‘subprime’ by absolutely nobody.”
Whatever you say…. CMHC is in fact so concerned about people saying the truth about their role in the marketplace that they actually came up with a website in an effort to dispel such.
It kind of reminds me of that famous Iraqi “Minister of Information”. The bombs are a’fallin, yet he’s out there denying that Baghdad is even under attack. Famous Shakespearean phrase, “The lady doth protest too much, methinks” also comes to mind. The CMHC has no credibility whatsoever in its claims that it does not participate in the subprime mortgage marketplace as a guarantor. Anyone who has spent any time whatsoever studying the nature of the CMHC system of loan guarantees easily comes to the conclusion that CMHC is in the business of alchemizing trash quality mortgages, into the rough equivalent of pristine quality government bonds by way of subprime mortgage insurance. Additionally CMHC’s actuarial studies were based on one-off events of default, not the systemic correlated event of housing price declines like we’ve been seeing in Canada over the past few years and which now appears to be accelerating downwards. CMHC is grossly under-capitalized relative to the level of risk they’re taking in the mortgage marketplace, and sooner or later this will reflect in their finances.
Leo Trollstoy
Your #64 link is an article from 2012 which in effect makes the case that what CMHC is doing in 2015 is considered subprime.
This is akin to falling upon one’s own sword.
I am not defending Garth here nor trying to demean you but I take note that you do not substantiate your comments either in your posts to #68.
And the other thing that is way up is displaced oil workers running construction and maintenance scams, as well as petty theft. Be careful people. Desperate people do desperate things! Make sure the Porsche stays well hidden in the garage because if the scammers see it they will be ringing the door bell. there was a time in Alberta where you could commit to a project based on good will but now you need 3 quotes, one at least from a long time business. So for example I mean if you need a new furnace make sure someone like Arpi’s gives you a quote and don’t give the other 2 scammers a penny more, you’ll have to get Arpi’s back to fix it and bring it up to code anyway. Not that I am plugging for Arpi’s but I hired them once and they did what they said on time and on quote. College Pro is pretty good too if you just need your windows cleaned. The guy that fixed my stove and the guy that fixed my fridge were also good. Everyone else is ripping you off.
So my fridge is a good story, I was really worried about that because it’s an older Sub-Zero and the ice maker wasn’t working and the previous owner had hidden this fact by turning it off. (No, you cannot trust the bugger selling your his house either.) Ok it wasn’t going to run 1%, but what would this cost? Sub-Z’s cost a fortune wouldn’t this be like getting a Mercedes serviced? Do I have to bend over? Nope it was less than fixing my Sears fridge in the last house that was only 2 months off warranty. $140 an hour plus $35 for the part, less than $200 total. It’s still working. But I went with an established company. Don’t do business with the scammers.
And that includes Sears! We had one of their big fridges, like I said pretty new just off warrantee and it totally quit. They wanted a week before they would even look at it. We got some Chinese guy in a van to come look at it, and he didn’t have the part but he got it shipped from Mexico (control board I think) and had it working in a few days. For much less money than scamming Sears, good-bye enjoy bankruptcy. We bought a Sears because of the service, reliability, and reputation. Well guess what? That’s been gutted now.
I have a Sears vacuum that is probably 15 years old and it still works but I wouldn’t buy anything with their label on it now, and I’d never get them to service it.
Rates will never go up
http://business.financialpost.com/personal-finance/family-finance/why-interest-rates-will-remain-low-and-what-that-means-for-your-retirement-security
Deeply indebted governments, old people with money to burn ( like civil servants gorging on taxpayer pensions) and gobs of pilfered money looking for a laundry mat will keep trates down forever.
What ever any one thinks about the future of real estate any were is that if you take any position at all for long enough sooner or later you will be correct.
#91 BS on 10.05.15 at 1:24 am
———————————–
We’ve been down this road before. Less than 20% down is called “high ratio” mortgage.
A less than prime borrower (one with a poor credit rating) is called ‘subprime’.
For example, i have an excellent credit rating and could get a prime rate. But i have a high ratio mortgage. This does not make me a “subprime” risk.
Does anyone have any opinion of the real estate market in the Yukon? I’m considering a job opportunity there. Prices look very reasonable compared to Toronto and even Ottawa, but not as low as I expected.
conclusions are spot on. nice post
Bankruptcy Lawyers Strip Cash From Coal Miners’ Health Insurance
Sunday, 04 October 2015 00:00 By Alec MacGillis, ProPublica | Report
“We were assured as miners we would have lifetime health-care benefits – no one ever envisioned that we would have to worry about these other things that were going on,” said Bil Musgrave, 59, one of the retired miners in Indiana. “A lot of them depend entirely on this.”
http://www.truth-out.org/news/item/33086-bankruptcy-lawyers-strip-cash-from-coal-miners-health-insurance
Disagree with your comment that “unlike Australia, the Canadian market is stratified.”
You’ve probably heard this before but:
Vancouver = Sydney (“most generally ridiculously overvalued” award)
Toronto = Melbourne (“most overbuilt overpriced idiotic poor quality condo/apartment” award)
Calgary = Perth (“redneck town already going backwards due to commodity bust” award)
Oh, and some regional markets in Australia (the goal/gas regions of Queensland and iron ore/ gas regions in the north of Western Australia) have already had killer price declines- in some cases listed prices are down 50% from the peak and that’s polite because no one is paying the listed price anyway.
The poster child extreme case is a house in West Australia in a mining town that sold for over a million that can’t get 300,000.
And- I’m sure the same is true in regional Canada- the idea that a house out there could cost over a million is farcical given have you noticed how much land there is out there?
There’s much to-ing and fro-ing about how Sydney and Melbourne will go- previously overbullish commentators are already calling 7% drops in Western Sydney- but Perth is definitely dead in the water.
Some commentators are calling huge drops, some are saying it’ll only be the Melbourne apartment market, who knows.
The Oz market has been driven by a combination of mainly local investor driven buying (classic bubble “buy on price rises” rather than “buy on yield”) combined with a bit of foreign buying (not JUST the Chinese and I know you view the Chinese influence in Canada as heavily overstated, it’s probably a bit more prominent in Oz, a but let’s not get too distracted by that).
What is definitely true is that (a) the investor market is getting squashed by creeping macroprudential as banks realise if this thing goes pop they may be in a spot of bother (b) Chinese capital outflow controls are squashing Chinese buyers (c) flattening income growth and employment is gradually taking its toll on the market.
What’s fascinating is how what you call “housing horniness” has distorted the culture here. Housing renovation shows are prime time TV. The classic example is “The Block”, where four couples compete over several weeks to renovate separate flats in an apartment block and then the winner is who gets the highest price when the apartments go to auction.
It’s a badge of honour to have several- not just one- investment properties, all running at a loss, going for capital growth.
First time home buyers are now often as not buying houses as investments, not to occupy, while they live with Mum and Dad.
Crazy.
Housing is no different from any other asset. It’s an investment, and should be treated as one. The fact that you live in it doesn’t make it any less of an investment because you still have the chance to rent. Idiots who buy in right now are setting themselves up for a lot of pain, and a very hard life lesson.
While nobody can predict the future, you can act intelligently based on market conditions, specifically valuations. The best person to learn from is probably Warren Buffett’s teacher, Ben Graham.
http://www.netnethunter.com/benjamin-graham-still-relevant-or-a-complete-waste-of-time/
Not learning how to invest intelligently means getting caught up in financial speculation just like a lot of people are doing with housing right now.
#103 Bottoms_Up on 10.05.15 at 7:22 am
#91 BS on 10.05.15 at 1:24 am
———————————–
We’ve been down this road before. Less than 20% down is called “high ratio” mortgage.
A less than prime borrower (one with a poor credit rating) is called ‘subprime’.
For example, i have an excellent credit rating and could get a prime rate. But i have a high ratio mortgage. This does not make me a “subprime” risk.
———————————————————-
The way I look at it is.If you were to buy a house at $600,000 would you lend the money to yourself with 5%
down if not it’s sub-prime.
Hey Garth –
I guess that array of numbers from The Economist is supposed to mean something. Like most of the articles published in that magazine, it sure isn’t clear to me.
What IS clear to me is all the construction going on at Young & Eligible in the Big Lemon. Five or more giant condos currently a-building, more in the starting stages. Evidently you don’t believe in this housing market – I sure don’t – but somebody does. And they’re backing it up with some serious cash.
In the final analysis, that article in The Economist is just words. Actions speak a LOT louder. The guys risking capital on condo-construction clearly think this housing rally has some life in it yet.
P.S. Your call on US jobless last week was, shall we say, well off the mark. Perhaps your call on the US economy is similarly ‘off the mark’? And maybe even your call on the Canada housing market is likewise mistaken? You’ve been calling correction for years and, aside from markets like Winnipeg and Saskatoon and Halifax – about which few care, aside from those living there – or Calgary and Edmonton – which will rebound with oil prices when the Saudis tire of losing money on every barrel – I just don’t see house or condo prices falling appreciably in the foreseeable future. Perhaps your crystal ball needs a cleaning. JMHO
#64 Leo Trollstoy
“Also, mischaracterization of mortgages covered by CMHC insurance to be ‘subprime’. Again no cited source to support such disinformation.”
Didn’t we have that discussion a few months back? That high ratio (which is what CMHC insures) does not mean subprime?
Interesting reads
“In China, Your Credit Score Is Now Affected By Your Political Opinions – And Your Friends’ Political Opinions” https://goo.gl/GlJbcJ
#74 Keith in Calgary
“If you need credit default insurance……sorry to break it to you….but that makes you and your real estate deal “subprime”.”
No necessarily.
It’s actually 5 c’s of credit: Character, capacity, capital, collateral, conditions.
High ratio does not necessarily mean subprime by itself. It’s just the collateral piece that is more leveraged. CMHC insured loans have more scrutiny of the rest, especially capacity (debt service) and character (credit score), capital (other assets and liquidity) and conditions (term, amortization, co-borrower etc…).
Just like a low ratio / non CMHC loan does not necessarily mean a prime. Banks will lend (or refinance) low ratio loans without as much due diligence on capacity to repay. Even will have very low ratio loans without any debt servicing test or income verification or have more generous income tests (assumptions) for the self-employed.
It needs to be a balance of all but if push comes to shove I will take character and capacity over collateral. Collateral does not keep payments current. It’s just there in the event of default.
#198 Smoking Man on 10.03.15 at 7:00 pm
#191 Freedom First on 10.03.15 at 6:02 pm
#143 debtified
Your Post reminded me of something. Today’s women always go on about how they don’t need a man. This is great. Men like me can come and go as we like. Don’t have to stay the night.
…………………………………………………..
You should try love buddy, I’ve been with the same hag for over 35 years. She’s moody, goes through stages of obesity and anorexia.
Sometimes I plot her murder, other times I thank my lucky stars she’s here for me.
Remember, Mr happy, the adventurous beast on the hunt for boardom releaf will one day be dead and lost in the forest.
Then you will understand loneliness.
You get one that can cook, you’ve won the lottery.
My call on you, your heart was broken… You’ve never recoverd.
____________________________________________
#46 Smoking Man on 10.04.15 at 10:02 pm
Hosta Lavista Canada.
No more tax collecting HST.
Off to the good old USA In morning.
See what cool writing topics I’ll find
___________________________________________
Jesus Smoking Man your leaving for Boston, did you take your moody, overweight, anorexic hag with you? Or did you murder her? If so you’ve got nobody to cook for you. Is your wife really a hag? God dam do you call here that to her face? I would say she must have something over you for you not to leave her. Good luck in Boston, hag or no hag! BTW Just going to take the boat out of the water in two weeks. This is going to be our first year without the home. Going to close up the town-home in Oakville and do the Bahamas from Nov to March. But definitely flying home for Christmas.
P.S. Smoking Man really try to brush up on your spelling and grammar, it doesn’t look to impressive to American employers if they find out your a high school dropout. Or it appears that way!
Dam it Garth, Bahamas wasn’t on the chart! I’m still considering a property there. Well we will see how the first year goes there and then decide.
bidding wars to RENT townhomes is the norm in central toronto. prices are not going down anytime soon. so much pent up demand.
The Chinese money flying to Montreal to…
http://www.journaldemontreal.com/2015/10/04/les-capitaux-chinois-affluent-a-montreal
@ #3
the bank/mortgage holder don’t sign off, you would be stuck in house cage . . . indefinitely until a) find the next fool, b) walk away with repercussions, c) keep on paying mortgage with higher balance than the house is worth. Did I forget anything?
#103 Bottoms_Up — ‘Less than 20% down is called “high ratio” mortgage. A less than prime borrower (one with a poor credit rating) is called ‘subprime’. For example, i have an excellent credit rating and could get a prime rate. But i have a high ratio mortgage. This does not make me a “subprime” risk.’
A loan to someone with a high credit score but a too-high debt service ratio is a subprime loan. A loan with too high a loan-to-value ratio is a subprime loan. A loan to someone with a low credit score is a subprime loan.
The reason that banks are REQUIRED to insure loans like these (with CMHC or the other private mortgage insurers) is that otherwise, they’d be subprime mortgage loans, which banks whose deposits are insured by CDIC are not allowed to make.
Subprime loan + Mortgage insurance = Prime loan.
Obviously, not every loan currently insured by CMHC is currently subprime: Some owners’ houses have appreciated, and they’ve paid down the mortgage, so there’s enough equity that the loan is prime even though the insurance is still in force.
People with low credit scores are greater risks. But mortgages made to people with prime credit get defaulted on, too. The biggest predictor of default is negative equity, and the easiest way to end up there is to start with low equity.
http://lmgtfy.com/?q=predictors+of+mortgage+default
http://www.aei.org/publication/skin-in-the-housing-game/
#86 Kuato Lives on 10.05.15 at 12:13 am
I have 5 friends dealing with real estate issues in Calgary right now:
Friend #1 bought a retirement home in Cabo, Mexico but can’t sell her house in Marda Loop as nobody is buying million dollar properties. She can’t seem to rent it out either as it’s too high end. She’s rich, so this isn’t a huge problem, but it’s definitely costing her money to have the place sit empty, not including the market depreciation.
Friend #2 is a real estate agent who bought a townhouse up in the North East near the airport with the intention of flipping it. No offers in 2 months and recently lowered the price by 20 grand. Place is kinda dumpy for a new building – everything is cheap cheap cheap, the appliances, the thin granite, the size of the rooms. I personally would never live there. Nobody else wants to either, apparently. He’s in trouble because he assumed the mortgage on another place (the bank wouldn’t give him a mortgage of his own, which tells you something) and now needs the money to complete the convoluted transaction. He has a new baby.
Friend #3 isn’t actually a friend by former landlord. I recently moved out of his rental condo on McLeoud and Heritage. When I moved in last year there were 2 places for rent in the building. There are now 42. He didn’t lower the price of the rent (2 grand), so predictably, hasn’t been able to rent it out. He said he was thinking of moving in. (He’s still living with his parents). All the rent I paid him over the last year he’s lost to depreciation.
Friend #4 lost her job in Calgary so moved out to Halifax to take a contract gig. She couldn’t sell her Inglewood condo as it would have put her underwater and she can’t afford to write a cheque to the bank for the difference. When she did buy the place in 2009, she paid 70 grand just for the parking space in the garage below, for some reason they were selling these independently. I recently moved into this place and now pay 700 a month less than my old place and I get free cable, internet, and a gym membership.
Friend #5 and his wife smoked some pot one night and threw the buts in a big jar outside on the deck of their rented condo. They left to go do something and by the time they came back, the place was on fire. The landlord booted them out, so in another streak of infinite wisdom, borrowed a down payment from their parents to buy a half million dollar McMansion in Copperfield about a week before Saudi Arabia said they wouldn’t lower oil production to prop up prices. He work(ed) as a welder, she at Cenovus – that is before both got laid off. They’ve now filled up every room in the house with roommates to help pay the mortgage.
———-
Damn, yeah. I’m glad I got out of Calgary with what little I had.
My tip-off last year, just prior to the drop in oil prices, was my landlord cashing out and selling 3 of his 4 Calgary rentals. He tried to get me to buy the 3-bedroom shack in Silverado for 370K. No thanks. Wife and I ended up moving back to Ontario and still happily renting.
It sucks thought to see some really good friends there going through hard times now. Hopefully this blog can scare some sense into some like it did me. Keep up the great posts and comments.
#46 Smoking Man on 10.04.15 at 10:02 pm
Hosta Lavista Canada.
No more tax collecting HST.
Off to the good old USA In morning.
See what cool writing topics I’ll find.
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On a related note Monday afternoon I plan on heading down to Long Branch. I am on the lookout for a small bungalow close to Southside Johnnys. This particular bungalow has a Ford Ranger pick up out front, and possibly a small aluminum boat, and a gazebo out back. No doubt if I explore the property a bit I will be rewarded with bottles and bottles of Honey JD.
#94 family beagle on 10.05.15 at 1:40 am
I’ve travelled all over and Vancouver is the anus of the Fraser.
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and you live somewhere happening like williams lake?
van beats any city in NA and most on the planet in most every way.
thats why houses cost a fortune, because ppl keep coming here and sending their cash here. supply and demand. no cmhc for sfh either, not needed, plenty of qualified buyers.
howe sound , local mtns, beaches, whales swimming downtown, great neighbours (east van at least), mild climate (does it still rain in van anymore? – feels like we have just gone thru 7 straight months of summer), ‘legal’ medicine, close to usa for filling up/ball games/cheap booze/cheap acerages, no snow or road salt, quite safe, very diversified and strong economy (our family breadwinner was in oil and gas, we see the writing on the wall and have found a few great new jobs in the 160k range in no time. the best is in gastown -under 5 min from home)
enjoy your time in red deer or moncton or whatever place you feel is #1.
The U.S. market indexes are being pumped up to prepare for earnings season. Can they hold the DOW 16,000 mark when earnings reports come out in the next few days and coming weeks? Time will tell.
Hello Garth,
Please talk to Stratas or the Cloud guys… but the RSS service of you blog is still having problems (and have had many during the last few days).
#114 Ralph Cramdown
“The reason that banks are REQUIRED to insure loans like these (with CMHC or the other private mortgage insurers) is that otherwise, they’d be subprime mortgage loans, which banks whose deposits are insured by CDIC are not allowed to make.”
The reason why federally regulated banks are required is because the Bank act prohibits federally regulated banks to lend more than 80%. The act calls these loans non-traditional, not subprime.
Provincially regulated Credit Unions and alternative lenders do not have that requirement. Alternative/subprime lenders are seing are very large growth in subprime loans being what? Loans declined by banks even WITH CMHC insurance.
“For example, i have an excellent credit rating and could get a prime rate. But i have a high ratio mortgage. This does not make me a “subprime” risk.”
“high ratio” is just a synonym for ‘subprime’. It means you haven’t met the criteria for having a prime mortgage. It doesn’t mean you’re a bad person. It doesn’t mean you live in a trailer, or eat pork rinds. It simply means that your mortgage, at the time of issuance, was lacking in one of the three areas that makes up the overall quality of a mortgage, namely the equity component. Sometimes called loan to value, or ‘ratio’.
Failure in this aspect means that you loan isn’t prime, and hence, by definition, is subprime.
Equity is a very important determinant of loan quality, so yes, your loan is not as good of a quality as someone who brought a considerably larger down-payment to the table and hence has “skin in the game”.
A lot of people get confused because, once CMHC subprime insurance has been applied, in the eyes of the banker, the loan is not only a prime loan, but it is actually better than a prime loan on the strength of the guarantor. But this doesn’t mean that the loan itself, at the time of issuance without the CMHC insurance, was a top quality loan. Anything but, in fact, on account of the fact that the CMHC insurance was needed in the first place. “subprime” simply refers to a loan that, without enhancement (such as a CMHC guarantee), simply is not viewed by the lending community as an asset acceptable for investment without either a significantly higher than normal interest rate, or the application of an enhancement.
You are wrong. ‘Subprime’ refers to a person’s creditworthiness, not the kind of mortgage they choose to take. High-ratio does not mean the loan is of lesser quality, but that it is higher risk due to increased leverage, independent of the quality of the borrower. There can be a correlation between a low credit score and high-ratio, but they do not mean the same thing. This is a totally failed position. — Garth
#86 Kuato Lives
#120 Contrarian Coyote
Deteriorating in Calgary. Absolute numbers of bankruptcies not that high but rising year over year.
http://calgaryherald.com/business/local-business/personal-insolvency-filings-in-alberta-up-28-per-cent-from-2014#
#119 Ralph Cramdown
“The biggest predictor of default is negative equity, and the easiest way to end up there is to start with low equity.”
Easiest way to get to negative equity is starting with low equity, yes.
Biggest predictor of default? Maybe, although negative equity is irrelevant if the borrower has the financial capacity and the willingness (character) to continue to make payments.
Could be efinancing because the market increased and you want to improve, renovate, buy a car etc… You may start with 20% downpayment, house increases in value and you borrow again. And again. You may still be below 80% LTV, market may crash and you go above that, or you reach a level of debt which you can no longer service when rates go up. Borrower becomes subprime because of repayment ability, not lack of equity.
According to the Globe expect more bidding wars in Toronto. According to the FP expect interest rates to stay low for a long, long time, largely due to the aging population who tend to save more. I say average SFH in Toronto will be about 1.6M by about 2020. About 3.0 M by about 2025. There is an old saying when it comes to investing: don’t wait for bad times to invest or time itself will pass you by. Nobody can afford significantly higher rates so it simply won’t happen. We will see about another 1% increase over the next ten years. Politicians care about now.
Interesting how this blog’s turned into a refuge for failed fiction writers. — Garth
#126 Julia — “Borrower becomes subprime because of repayment ability, not lack of equity.”
I think you’re looking at it from the wrong angle. Banks don’t care “is the borrower subprime” as much as they care “will we lose money on this loan?” They’ll lend to a turnip* if it has a 35% downpayment.
If the borrower has a decent amount of equity, he typically sells the property if he loses his job and runs out of cash, meaning the bank gets its money without having to foreclose. If the borrower doesn’t have the equity to sell, the bank has to do it.
Take a look at this, it’s amazing:
http://toddwschneider.com/posts/mortgages-are-about-math-open-source-loan-level-analysis-of-fannie-and-freddie/
Note the default rate multipliers for current LTV and for credit score. Also see:
http://www.cmhc-schl.gc.ca/en/hoficlincl/moloin/hopr/hopr_004.cfm
to see what CMHC considers an acceptable credit score.
“It needs to be a balance of all but if push comes to shove I will take character and capacity over collateral. Collateral does not keep payments current. It’s just there in the event of default.” — spoken like a true banker near the end of a long credit boom. Often leads to bank writedowns and charge-offs.
Executives heading for the fences… minus their shirts!
http://www.theguardian.com/world/2015/oct/05/air-france-workers-storm-meeting-protest-executives-job-losses-paris
Heard on the radio driving into work today that there are now 100+ vehicles at the Edm Int’l Airport that are abandoned from (presumably oil workers) heading home for their days off, and then getting a layoff notice while back home. These aren’t clapped out 1980’s Chevette’s. Most are new and presumably with payments. OUCH.
Pricing here has also dropped about 1% YoY, and with nearly 2x the inventory from last year, it’s pretty safe to say that with $45 oil continuing that prices are finally going to start to drop here soon. Calgary too I would imagine.
My inlaws but an ‘estate’ just east of town last summer for $600k. Nearly the same house in the same estate area is for sale (it’s actually 300sq ft bigger) for $100k LESS. OUCH!
And a house just down the street from me has been listed for $400k. About what my last 2 neighbors originally listed their original and unrenovated houses for… Except this new listing is completely 100% renovated, beautiful inside. Reno job must have cost at least $30k. OUCH again.
It’s taken a year, but the tides are finally starting to turn around here, and it shouldn’t surprise anyone because all you have to do is head down to Nisku/Leduc or talk to anyone that works in that area and see/hear what’s happening in the oil patch. The last I heard last week was that Big Eagle (Hydrovac trucks) is going into receivership. They have 300 trucks. I hear stories like that weekly.
#121 Broke Dick on 10.05.15 at 10:22 am
#46 Smoking Man on 10.04.15 at 10:02 pm
Hosta Lavista Canada.
No more tax collecting HST.
Off to the good old USA In morning.
See what cool writing topics I’ll find.
+++++++++++++++++++++++++++++++++
On a related note Monday afternoon I plan on heading down to Long Branch. I am on the lookout for a small bungalow close to Southside Johnnys. This particular bungalow has a Ford Ranger pick up out front, and possibly a small aluminum boat, and a gazebo out back. No doubt if I explore the property a bit I will be rewarded with bottles and bottles of Honey JD.
_____________________________________________
If you find it look for his missing teeth, hag of a wife and two shitting little excuses for a dog.
I notion that M will tear up TPP is pretty funny, why is he pretending that the PM has that kind of power?
TPP is a done deal. The PM’s job is sell it to us.o
I don’t believe it Smoking Man is AWOL and this pops up in my google search engine. Oh what a tirade we are going to miss.
On October 5, along with over 100 countries around the world, the Canadian Teachers’ Federation and its Member organizations across the country celebrate World Teachers’ Day through a public awareness campaign that highlights the contributions of the teaching profession.
World Teachers’ Day – Canadian Teacher’s Federation
http://www.ctf-fce.ca/en/Pages/Events/WTD.aspx
Garth wrote:
“In parts of BC’s Okanagan, sales are running behind year-ago levels by 20%.”
Despite the obvious decline in RE value in the OK, realtors here continue to spew the bald-faced lie that prices are in fact increasing. A couple we know just bought a place and now plan to rent out the basement as a “mortgage helper.” Give up privacy and freedom to enrich a slimy realtor and the bank.
The level of delusion in the valley is staggering.
#130 Ralph Cramdown
You can look at it from both sides. Again, it’s a combination of factors that defines a sub prime borrower. High ratio alone does not do it.
When do borrowers default? When they run out of cash (capacity) or divert funds to avoid paying the bank (character). A sub prime borrower has less capacity, less job stability, worse credit score and character than a prime borrower. A high ratio loan can be granted to prime and sub prime borrower.
The CMHC table you provided? Adjusts criterias for those factors. Advance ratio reduces with the reduction in borrower quality. I guess you could say the larger downpayment reduces the capacity and character threshold requirements.
What leads to bank write offs? Insufficient value of security. But you only need to realize on your security if a borrower defaults.
Good quality borrowers are less likely to default in the first place. Good security will reduce risk of loss. Comes down to underwriting and balancing all aspects of risk.
From Toronto Star article today:
“It doesn’t matter where you go in the greater Toronto area, the price of a detached home is soaring faster than the rest of the market with the situation showing no signs of abating, according to new data.”
Those (myself included) that have been predicting a decline these last 6 years have been soooo very wrong. They (including myself) should just be quite about it because it’s getting very embarrassing.
This is a totally failed position. — Garth
————-
All of his positions are failed. GTA up another 9%
Thought I would do a little time travelling to see what I would find.
Oct. 25, 2010-In case, like me, you were cleaning your Hummer and missed the news, Canadian house prices are now overvalued by 23.9%. So says The Economist.
Oct. 12, 2010-You can bet if the economy was improving, the cost of money would be rising. In fact, long-term mortgage rates are set in the bond market, where yields have been falling and prices pumping as investors stampede in to escape the storm outside.
Oct. 3, 2010-For those who sell houses for a living, the future sucks. Not only is the curtain coming down on the last great bull housing market of this generation, but the whole commission structure is under assault.
The blog pictures were a lot hotter though.
#130 Ralph Cramdown
“I think you’re looking at it from the wrong angle. Banks don’t care “is the borrower subprime” as much as they care “will we lose money on this loan?” They’ll lend to a turnip* if it has a 35% downpayment.”
Yes, Banks do care. Capital requirements take into consideration borrower quality (risk of default) and security (risk of loss) and in the case of a home equity line, risk of loss also increases with risk of default. Why? Because a borrower that’s running out of cash will most likely draw on it’s home equity line more before defaulting.
Yahoos, roustabouts and numbnuts ? Lets not point the finger at oil and gas people all right? Okay i suppose some of the people who invariably appear during a boom might be considered the scum of the earth. Most if the scumbags didn’t show up to work they are here to ply their criminal trades; sell drugs, pimp, steal, rob, swindle, mug and generally cause trouble. When the usual pickins’ are slim they turn ugly. Oil and gas people are generally hard working, ambitious, have families, homes or farms across the country. A good many are educated, skilled technicians, skilled journeymen trades of every description geologists, engineers, geophysicists, marketers, salespeople, accountants, IT people, economists, HR people, supply chain managers and so on. Calgary still has one of the highest levels of university grads in the country. You have all been net beneficiaries of oil and gas revenues yet we already have to tell Mom and Grandma we play piano in a house of ill repute rather than admit we work in the oilpatch. Thanks a lot !
#ShapeShiftingPremierEludesCapture…
[CBC] – Cougar treed near B.C. Legislature in Victoria –
Big cat was spotted behind the Legislature Monday morning
…Victoria Police Department spokesman Bowen Osoko warned residents to use caution while taking children to school this morning — and to travel in groups if possible…
http://www.cbc.ca/news/canada/british-columbia/cougar-treed-near-b-c-legislature-in-victoria-1.3256866
5 predictions
Trudeau wins
The Leafs still stink
Housing correction Spring 2016
LCBO = your place to buy marijuana.
Garth re enters politics
#104 The Other Chris on 10.05.15 at 7:55 am
Does anyone have any opinion of the real estate market in the Yukon? I’m considering a job opportunity there. Prices look very reasonable compared to Toronto and even Ottawa, but not as low as I expected.
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Find a rental…..the people are friendly ,the winters brutal.
There is a reason only 40k people call this place home.
It’s clearly all the countries that lost WWII that are undervalued.
Oh, and Greece, too. Obviously an outlier.
#122 bdy sktrn on 10.05.15 at 10:24 am
#94 family beagle on 10.05.15 at 1:40 am
“…van beats any city in NA and most on the planet in most every way.
…… whales swimming downtown, great neighbours (east van at least), mild climate (does it still rain in van anymore? – feels like we have just gone thru 7 straight months of summer), ‘legal’ medicine, close to usa for filling up/ball games/cheap booze/cheap acerages, …….”
I wonder if there is any connection between to so-called medicine and seeing whales swimming down Robson, and not noticing 11 months of rain per year? Also had to laugh that one of the best things listed is that you can buy an acreage somewhere else….i.e. another country…..unbelievable!
The spinmeisters are out in full force today protecting CMHC.
https://www.cmhc-schl.gc.ca/en/co/
CMHC is the English abbreviation…….SCHL is the French one……sound it out……it sounds like SHILL…..
From the dictionary….SHILL :
1. An accomplice of a hawker, gambler, or swindler who acts as an enthusiastic customer to entice or encourage others.
Go figure……LOL !!!
#143 Nemesis on 10.05.15 at 12:39 pm
#ShapeShiftingPremierEludesCapture…
[CBC] – Cougar treed near B.C. Legislature in Victoria –
Big cat was spotted behind the Legislature Monday morning
…Victoria Police Department spokesman Bowen Osoko warned residents to use caution while taking children to school this morning — and to travel in groups if possible…
http://www.cbc.ca/news/canada/british-columbia/cougar-treed-near-b-c-legislature-in-victoria-1.3256866”
Is this sound advice? I mean isn’t traveling in groups creating a herd….which is exactly what big cats look for in the African savannah? Why not just catch the cat?
#104……….
Been to Whitehorse for a long weekend holiday.
Rent………do not buy at all costs.
It’s not as bad place as far as northern towns go, much better than Prince Rupert by a long shot.
#135 Holy Crap Wheres The Tylenol on 10.05.15 at 12:25 pm
I don’t believe it Smoking Man is AWOL and this pops up in my google search engine. Oh what a tirade we are going to miss.
*********************
Now there’s a bullet I don’t mind dodging!
Tim # 81,
#70 Blacksheep
“Most of us would not consider living anywhere south of the 49th.”
“You can have your guns, illiteracy, rampant consumerism, massive inequality, highest rate of incarceration in the developed world, Donald Trump circus…”
———————————————————-
As a responsible licensed firearms owner, I would love a concealed carry permit, if so legally allowed.
If illiteracy’s an issue, your living in the wrong zip code. Consumerism? drive by a Costco or mall in Van / Fraser Valley, you can barley find a parking spot.
Inequality….check out some of the homeless camps strewn around the lower mainland, then drive to Richmond to checkout some exotic cars.
As for incarceration don’t worry, an enlarged penal system is coming for you, [ ;)] as Canada has been expanding it’s prison capacity for years now to support new laws.
The Donald is just theatre until Jeb pulls out a surprise victory.
Democracy is an illusion designed to let the Cattle believe they have some control.
family # 94,
#70 Blacksheep on 10.04.15 at 11:06 pm
“The difference between canada and the U.S. is that in Canada there are only two cities worth living in Vancouver or Toronto.”
******************************
“Could you be more snob and arrogant, please?”
“That kind of thinking is part of the problem.”
————————————————
Arrogant for what, telling the truth?
I personally would not live anywhere in Canada, outside of Vancouver and I only stay here due to multi years invested in local business development.
—–——————————————-
“I’ve travelled all over and Vancouver is the anus of the Fraser.”
———————————————–
Well…I guess you could say I’m making the best, of a shitty situation.
#151 LP on 10.05.15 at 1:15 pm
#135 Holy Crap Wheres The Tylenol on 10.05.15 at 12:25 pm
I don’t believe it Smoking Man is AWOL and this pops up in my google search engine. Oh what a tirade we are going to miss.
*********************
Now there’s a bullet I don’t mind dodging!
____________________________________________
It’s the colossal slaughtering of the English vernacular that is simply beyond belief. I don’t know why I get a kick out his attempts to communicate with the ethereal world back in Nectonite.
Hi all, casual long time reader of this blog. Lots of good advice, some strange comments and then just really bad supposed expert advice.
#69 Its well known that nobody would pay CMHC money to insure a mortgage if the mortgage were otherwise Prime in its nature and acceptable to the lending community as a prime asset. Hence, CMHC insurance has the effect of converting an otherwise ineligible loan (“subprime”) into a Prime-quality loan. The logical inference is therefore that CMHC is a subprime mortgage insurer.
So once again, Troll proven wrong. Now try to add something useful here because your trolls certainly aren’t value-added.
__________________________________
Instead of taking some unknown posters word that a statement is fact spend a minute and look up the information and decide for yourself.
for example: (from Google)
“A subprime mortgage is a type of loan granted to individuals with poor credit histories (often below 600), who, as a result of their deficient credit ratings, would not be able to qualify for conventional mortgages.”
I have a great credit rating. I go to the bank and ask for a mortgage at 5% down and CMHC becomes part of the picture. Using the same example if I have a poor credit rating, CMHC is part of the picture. Bring in greater than 20% and CMHC disappears.
“Cougar Treed Behind the Victoria Legislature”
That “Cougar” was Premier Cristie Clark
Actually, according to the Teranet House Price Index, a single family home in Montreal costs the same as it did THREE years ago. The August 2012 index level was 150.4 while the August 2015 index level is 152.4. This is the equivalent of an average return of 0.43% per year (or 1.3% for a timespan of three years).
#137 Julia — “Again, it’s a combination of factors that defines a sub prime borrower. High ratio alone does not do it.”
“Until very recently, historically speaking, institutional subprime lending involved very low LTVs and probably the lowest rate of appraisal fraud or foolishness in the business. ‘That isn’t so surprising if you think about the concept of “risk layering,” which is also an industry term. In days gone by, with the three C’s, you didn’t “layer” risk. If the creditworthiness grade was less than “A,” then the capacity grade and the collateral grade had to be “summa cum laude” in order to balance the loan risk. It wasn’t until well into the bubble years that anybody seriously put forth the idea that you could make a loan that got a “B” on credit and a “B” on capacity and a “B” on collateral and expect not to lose money.”
http://www.calculatedriskblog.com/2008/08/reflections-on-alt.html
#147 Bush Doctor Mon on 10.05.15 at 1:10 pm
Love the “whales swimming down Robson”
Too funny!
#131 Steerage Bilge…
Nice to see SOMEONE in the world “As mad as hell” as they claim and doing something about it…
I recall a news story years ago about a Brazilian train dispute and seeing a train in flames..
I’m not advocating violence or property destruction but there are times when enough is enough…
Better than here where we just bend over, take the paddle and ask for another please….
Most areas in Vancouver you would never even talk to your neighbours…
http://www.cbc.ca/news/canada/british-columbia/vancouver-neighbourhood-takes-extra-measures-to-make-sure-earthquake-ready-1.3256541?cmp=rss
Kuato : I have 5 friends dealing with real estate issues in Calgary right now:
Friend #1 bought a retirement home in Cabo, Mexico but can’t sell her house in Marda Loop as nobody is buying million dollar properties. She can’t seem to rent it out either as it’s too high end. She’s rich, so this isn’t a huge problem,
of the five friends, she can undercut the market. drop the price to $800,000. problem solved.
#161 S.Bby on 10.05.15 at 3:48 pm
Most areas in Vancouver you would never even talk to your neighbours…
http://www.cbc.ca/news/canada/british-columbia/vancouver-neighbourhood-takes-extra-measures-to-make-sure-earthquake-ready-1.3256541?cmp=rss
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I live in this area ,good for them for trying to be prepared for the big one but it was a bit of a sham.
What happened was we got a flyer on last Thursday saying what was going to happen ,but in reality along my street there was 2 guys in a car with a bullhorn pretending that an earthquake had happened but a lot of people never read the flyer so people were coming up to me ( I was cleaning my van) asking why these guys were making a racket and should they call the cops.
I seen fire engines on Fraser St and heard super loud horns being honked but 2 blocks over everyone just wanted them to shut up.
should/would /and could of
Bernanke: Some Wall Street Executives Should’ve Gone to Jail Over Financial Crisis
By Staff, Los Angeles Times | Report
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travel boycott ?
In the wake of yet another mass shooting in America, there are a lot of Australians unhappy with the United States. America has failed, they note, to implement any gun control measures to prevent these recurring tragedies — no background check expansions, no bans on larger assault weapons, no nothing.
But besides expressing disgust and leading by example, is there anything Australians can actually do about it?
One group thinks there is. In an interview on Australia’s Today Show, Gun Control Australia director Samantha Lee suggested a boycott of non-essential travel to America to protest its inaction on gun control.
#132 Mike in Edm – said,
“Heard on the radio driving into work today that there are now 100+ vehicles at the Edm Int’l Airport that are abandoned from (presumably oil workers) heading home for their days off, and then getting a layoff notice while back home.”
This is what happens when people get tapped out. I expect much more of this stuff to happen as we go into 2016 and 2017. See Oil at 100 bucks a barrel, killed Canada. It took money out of the hard working people. Wages for many did not keep up…and gas kept going up and up. Young people are having trouble paying down debt from student loans (school is too much money with too many “go nowhere” programs), and they can’t buy a car etc., let alone a home.
No money…no funny. There must be velocity of money for the economy to survive. Low gasoline prices are the key to recovery. Put the cash back into the hands of the people who spend, and the economy will be fine. Unfortunately, you can’t quantify this concept.
Home prices can’t bubble up without a huge out gassing. Guess what is happening now….I can feel the flatulence now…and it will make hurricane Joaquin look like a kids balloon deflating.
I expect things to level out 10% decline…maybe more in the next 12 months…but we shale see.
A Texas mother spoke out against part of McGraw-Hill’s textbook, “World Geography,” when she noticed that the language erased slavery by calling slaves “workers” and including them in the section “Patterns of Immigration.” One example of the text:
” The Atlantic Slave Trade between the 1500s and 1800s brought millions of workers from Africa to the southern United States to work on agricultural plantations. ”
=
This Is How They Teach South Carolina Students About Slavery
by Casey Quinlan Jun 24, 2015 4:52pm
…”One of the lesson plans posted on the Teaching U.S. History in South Carolina page explains why West African slaves were chosen:
“Due to the omission of this crop in their European culture, English colonists who settled the rich North American land lacked the expertise required for the production of rice. Thus, the huge task of cultivating, processing, and packaging rice on South Carolina Plantations was commonly assigned to slaves. This task, though foreign to European colonists, proved to be quite common to the slaves who had been purposely imported from the rice growing region of West Africa. Where many English planters had failed in their previous attempts at growing and processing rice, the knowledge and rice-growing skills possessed by West Africans gave them a newfound success at cultivating the crop.”
http://thinkprogress.org/education/2015/06/24/3673587/teach-history-slavery-south-carolina/
If all you people keep saying about Toronto that “this won’t end well”, you might eventually start believing it. I don’t think the people who harp this tune really believe it though. I think they understand that in a City of probably over 3.0 Million people by now, demand for SFHs will not wane. This is not 1994 when the NDP was in power scaring off investment. Your best hope is that prices stagnate for a while. I remind everyone there are probably a quarter million or more well-paid government workers in Toronto (teachers, fire, cops, professors, etc.) who can pay a large mortgage forever. Government pensions were not so lofty in the 90s. If may be the rest of the Province outside the immediate GTA flounders; but you won’t see that in Toronto or the immediate surroundings. I continue to believe there are less than 300,000 SFHs in Toronto that people care to live in. Just the teachers in the GTA can fill them up. Let’s stop wasting time talking about the inevitable fall in Toronto prices. Even Garth doesn’t waste his time on that, even though it would sell a lot of tickets.
“Prices are flat in Oakville…”
Link?
Homeowners becoming “accidental landlords”.
http://jugglingdynamite.com/2015/10/05/accidental-landlords-surging-in-calgary/
People who thought their home was part of their retirement plan were dissappointed and went back to their job where they retired from.
#167 lee on 10.05.15 at 4:47 pm
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The only teachers that can afford a house in the gta are retired ones.
https://ca.finance.yahoo.com/blogs/pay-day-/canadians-are-reluctant-to-give-up-cash-in-170743065.html
Sad. — Garth
#122 bdy sktrn on 10.05.15 at 10:24 am
#94 family beagle on 10.05.15 at 1:40 am
I’ve travelled all over and Vancouver is the anus of the Fraser.
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and you live somewhere happening like williams lake?
van beats any city in NA and most on the planet in most every way …
enjoy your time in red deer or moncton or whatever place you feel is #1.
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I have owned/resided in a condo on Haro and Jervis, West End,
An office/den in the Mews on Blood Alley, Gastown
An apt off Third in North Van
An apartment near Kingsway and Imperial, BBy
A five acre farm in Port Coquitlam
A lake view lodge in Penticton
A cabin across from a provincial park with my own wee mountain in Thompson Nicola.
I’ve worked in offices on Pender, Granville, and West Fourth, consulted on the Lions Gate Bridge upgrade, worked with the design team for the Hwy 1 upgrade, and operated three registered businesses in Vancouver, two of which consulted major publishing and advertising firms in Vancouver. I have consulted realty firms with implication on multiple millions of dollars in advertising expenditure. I have a degree in business and numerous mentions in the Georgia Strait, the old Computer Paper, the Westender, and I have been called in for interviews with Larry and Willy when they jerked at the Fox, annnnnd I’ve jammed guitar on Granville Street, and played gigs at the Niagra, the NBI, and half a dozen others.
Vancouver has one thing… people and all the disgusting self absorbed filth they generate. That neon glow draws rats, crows, cockroaches, criminals, pinnochios, johns, carpet baggers and moths. However, I’m glad there is a Vancouver, for now, because it keeps like minds herded into a small area and leaves the rest of the map for the rest of us. Vancouver has always been a dingy port city and no matter how many people you cram in with painted smiles and glossed over vinyl siding, that fact won’t change. Now say you’re sorry for dissing all those other nice places.
Ps. I vote to raise your taxes.
having to vote for the lesser of two evils or three evils, is a characteristic of democracies in the THIRD world…
we don’t have to take this press button every couple of years “democracy”
let’s vote blank…