Risk-on

NO FLIP modified

It was clear in December the feds’ new down payment rules would goose the housing market, at least in those cities where metrosexual moisters Vespa their way through lefty, over-educated lives. So, now we have proof. Starting in ten days the minimum doubles for houses over $500,000. Combined with dirt-cheap rates, this has hockey-sticked Van and the GTA, further disconnecting those two markets from the economy beneath.

You probably know the numbers. In Toronto January was extreme, especially in the soulless burbs where average prices jumped more than 20% year/year. In YVR the average detached house ended up 27% above last year’s mark, with the urban area now averaging $1.8 million. Sales volumes were ahead by a third, underscoring the little stampede that the T2 government’s announcement caused.

After all, there was no other explanation.

The Bank of Canada didn’t drop its key rate. The big chartered banks actually increased most of their mortgage costs, both fixed and variable. The dollar, oil and financial assets all took a drubbing. And the economy blew.

Proof of that lies in the unemployment numbers delivered Friday. Canada lost 5,700 net positions and Alberta was whacked. The overall jobless rate went up – it’s increased steadily over the past year while that in the US has continuously fallen. Today we have the greatest discrepancy between the labour picture in our two counties in 14 years. Meanwhile, for the first time in 28 years (back when I was a mere boy), the unemployment rate is higher in Alberta than the rest of the nation.

The country needs 1% net job growth a year just to keep up with the population increase, and we’re not there. Meanwhile joblessness in the States has dropped from more than 10% during the GFC, when we all felt superior, our dollar was at par (or above) and Yanks were losing their houses, to a mere 4.9%. The latest stats showed that growth continues unabated.

So on Friday the US dollar spiked more, driving down ours along with oil. American equities stumbled, as the likelihood of a rate increase in March bumped higher. That the cost of money will be greater in the States as 2016 progresses should be a question in nobody’s mind. It’s gonna happen. And it probably means Canadian rates won’t fall again. Maybe ever. This will be cemented by the March 22nd federal budget, set to unleash the rapacious hounds of liberal deficit spending.

The point is risk. Financial markets have just shed a ton of it, with assets like preferreds, equity ETFs and REITs cheap compared to year-ago levels. With the Fed on its resolute course higher, there’s a ton of logic in trading bonds for equities, although people already with a balanced portfolio need do nothing. The recovery’s coming to you.

So while financial assets are risk-off, real estate – at least where the prices are steaming – is pure risk-on. The foundation upon which this gossamer structure is constructed is unstable. As CIBC economist Avery Shenfeld points out, there are more job losses to come as our rocks-‘n-trees country copes with the lowest commodity prices since the Nineties. The economy’s stopped growing. And taxes are going up.

Meanwhile the signs of a market top keep piling up. Panic buying in the suburbs surrounding Toronto and Vancouver. Price surges seven and even eight times the rate of inflation. The public’s unshakeable (and false) belief foreign buyers are stealing our houses (leading to ‘buy-now-or-buy-never’.) Real estate and construction’s swelling proportion of the economy. Political pandering to house lust (check out the coming BC budget). A sharp resurgence in household debt levels. And this…

VAN CHART

Dig out an old chart of Nortel. Or the TSX during the dot-com days. Or the NASDAQ before it lost 80% of its value. Or house values in Phoenix, prior to the collapse. They all look like the squiggles above, because they chart the same thing – human nature. We buy on euphoria. We sell in panic. The higher prices go, the more invested everyone becomes, the greater the risk.

In your heart you know this. Unless you vape.

259 comments ↓

#1 Jommy on 02.05.16 at 6:34 pm

About time!!
First!!

#2 Eva on 02.05.16 at 6:37 pm

Gret timing…first!

#3 Kreditanstalt on 02.05.16 at 6:38 pm

“Today we have the greatest discrepancy between the labour picture in our two counties in 14 years.”

…which is so peculiar that one should question either the (outdated) methodology, the (false) “US recovery” meme or the idea that central planners can even measure “aggregate statistics” in the first place…

To believe in the US “data” one must also believe in the “US decoupling” and “US exceptionalism” ideas.

Take a look at Rest-of-the-World trade figures or shipping charts.

#4 Freedom First on 02.05.16 at 6:39 pm

First…Freedom that is! I’m the best!

#5 I am the Babbler on 02.05.16 at 6:40 pm

Toronto will continue it’s upward trajectory for RE prices. Nothing will stop it. Everybody should just accept it. Predictions of an impending correction are just silly.

#6 Freedom First on 02.05.16 at 6:41 pm

I’m free like a bird, twinkling in the winter sun. Freedom First.

#7 Eva on 02.05.16 at 6:45 pm

Unfortunately there are very few listings in YVR, which further fuels the cause of the crazy prices. I suppose when the job disappear the listings will swell. Popcorn anyone…

#8 TFSA question on 02.05.16 at 6:47 pm

It appears that TFSA is not so clear cut – one can get a call from the CRA asking to pay income tax on one’s profits there – articles below mention even advisors complaining. In the light of that, anyone knows what’s the approximate max number of trades per year and which instrument types one can trade and not get a call after being profitable beyond 5%?

Articles:

(1) Who gets audited? Advisors demand clarity from CRA on TFSA ‘businesses’
http://www.bnn.ca/News/2014/12/4/Who-gets-audited-Advisers-demand-clarity-from-CRA-on-TFSA-businesses-.aspx

(2) Canadians with too many wins in their TFSA are being targeted by CRA
http://business.financialpost.com/personal-finance/tfsa/canadians-with-too-many-wins-in-their-tfsa-being-targetted-by-cra?__lsa=f82f-78bd

(3) Here’s what will get your TFSA audited by the Canada Revenue Agency
http://business.financialpost.com/personal-finance/tfsa/heres-what-will-get-your-tfsa-audited-by-the-canada-revenue-agency?__lsa=4fcb-6e1f

Thank you in advance for sharing your experiences including some links with answers.

#9 Doesn't Anyone Have a Memory ? on 02.05.16 at 6:48 pm

http://www.torontocondobubble.com/2013/02/toronto-housing-bubble-in-1980s.html

#10 Fed-up on 02.05.16 at 6:48 pm

Financial markets have just shed a ton of it, with assets like preferreds, equity ETFs and REITs cheap compared to year-ago levels

————————————————————————-

Great news for those of us who got in a year ago. We’ll spend the next 2-3 years recovering.

Why? A balanced portfolio is very modestly negative. That should worry only amateur investors. — Garth

#11 Caught In The Grip on 02.05.16 at 6:49 pm

S&P 500 is down 12% YTD
Nasdaq is down 17% YTD

More lows to come?

The S&P is down 7.8%, not 12%. NASDAQ down 12.7%, not 17%. — Garth

#12 Hicksville Alberta on 02.05.16 at 6:49 pm

Anecdotally there is a real sense of clutchiness around here about jobs, meaningful if any employment, any spending, not buying any real estate and stories of people unable to sell or rent out because they are still trying to get the old price.
Also lots of realization about things like government fees. insurance premium ripoffs, credit cards and banks for everything and anything.
And of course there seems to be a fundamental hatred developing for the Nothead Party.
I don’t talk, just listen to what’s proffered.
Should make for interesting times going forward.

There’s an old saying from long ago that goes something like ………. ” Teach them how to hate …… Killing comes easy after that ” ………….

I can almost sense that in some people about now.

#13 espressobob on 02.05.16 at 6:49 pm

Equity markets are safer to buy during a correction than the ascending periods.

Hate to bitch, but more downside would be most welcome! Who doesn’t like a good bargooon?

#14 Retired Boomer WI on 02.05.16 at 6:50 pm

Another Friday at hand! End of a weak week. Oil still struggles, the wired world takes investments in its shorts, but people still buying cleaning products & butt wipes.

Know the customers who will keep coming back. Another day, another Boomer $ made….

#15 Doug t on 02.05.16 at 6:51 pm

FIRSTLY

#16 When will they raise rates? on 02.05.16 at 6:51 pm

Simply astounding.

People truly are imbeciles in this country.

Nice post today Garth.

#17 Freedum First on 02.05.16 at 6:52 pm

#4 Not me!
An imposter!
I am still too busy admiring myself.

#18 Caught In The Grip on 02.05.16 at 6:53 pm

Sorry not YTD, from the highs…

#19 Mike in the Okanagan on 02.05.16 at 6:53 pm

Beware of parabolic charts. They never end well.

#20 WallOfWorry on 02.05.16 at 6:54 pm

Clearly the markets are signaling risk off. Consider these facts:

• Of the 151,000 jobs added in January, 70% were minimum wage jobs.
• The US Labor Force Participation Rate has fallen to nearly 62%, a level not seen since the late 1970s.
• The Institute for Supply Management (ISM) said U.S. manufacturing activity fell in January for the fourth straight month.
• The ISM gauge of nonmanufacturing activity dropped from 55.8 in December to 53.5 in January.
• According to Moody’s, stress in the high-yield bond market has risen to a six-year high
• Deutsche Bank announced a $7.3 billion annual loss. Credit Suisse announced a nearly $6 billion quarterly loss.
• US Government Debt-to-GDP has been above 100% since 2012
• More than 6 years into the “recovery”, over 45 million Americans remain on food stamps

#21 Scumop on 02.05.16 at 6:55 pm

Bring on the foreign house buyers.
There are very few, but each time one coughs a mill or two, or more, for a house that should be under 500K, the Canadian economy and the seller get a boost.

How can anyone portray this Hot {Asian, American, Australian, Austrian, African, etc} Money arriving as a bad thing? Bring more. There is no downside. Start ad campaigns in other lands…

“Come buy our slum housing at 5, 10, 15, even 20X its value!”

With foreign buyers being a fraction of 1% of all buyers, clearly more work needs to be done.

Take that massive profit when selling a 2.4 million dollar slum house and start a business elsewhere in Canada. It’ll be fun. Its like free money.

#22 james on 02.05.16 at 6:56 pm

“Dig out an old chart of Nortel. Or the TSX during the dot-com days. Or the NASDAQ before it lost 80% of its value. Or house values in Phoenix, prior to the collapse.”

Actually, I was reminded of the Argentine Peso against the USD. It goes from a nice exponential curve to vertical at some point. Looks much like detached housing in Canada.

#23 prairiegopher on 02.05.16 at 6:56 pm

With the current government we are doomed. Spending money like a drunken sailor now is very dangerous. The NDP will tax us to death or steal the last cent by saving the planet. What a mess! Who voted in these clowns??

#24 MilkandVodka on 02.05.16 at 6:57 pm

Received a letter from my doctor today, he has decided to move to Michigan. He will be closing his Toronto office in March and has provided the options available to me.

Soon if Canadians wants to see a doctor they will have to cross the border for the day.

#25 Freedom First on 02.05.16 at 6:58 pm

DELETED

#26 Calgary is nuts on 02.05.16 at 6:58 pm

We’ve been reading your blog for a little over a year now.

I finally convinced my husband to sell, showing him evidence the market is overpriced and we should rent until prices come back to Earth.

We listed for a price we thought it would sell at, but not what I would consider low. The next day we had 3 offers and accepted one well over list!?!?

Now, I’m feeling like a fool. Will market forces actually come into play at some point?

#27 Freedom First on 02.05.16 at 6:59 pm

Yes. In my heart I do know this. Seen it before and profited off of it. As I will again. Just like shooting ducks in a barrel.

#28 Freedom Fist on 02.05.16 at 7:04 pm

#5
Not me! An imposter!
Come on guys. Be nor more original.

#29 tundra pete on 02.05.16 at 7:08 pm

Imagine the fallout. Housing in East Van and Toronto selling in the millions, clueless folks financed to the gills and helpless homeowners building a basement suite to try afford the payments.

Would you ever have to be aware of the DIY virgin dishwasher wiring job, the garden hose/copper/plastic ready to blow waterline and the soil and waste pipe one stripped clamp away from spraying the rental unit in nasty sludge.

Clearly the building development authorities are on top of this making sure no work is done by an unskilled worker. The home reno business is a big thing and I’m sure homeowners hire the properly licensed contractors and trades people to properly spend their hard earned dollars.

#30 LJ on 02.05.16 at 7:09 pm

At least the traffic has improved in Calgary.

#31 What the world needs now… on 02.05.16 at 7:10 pm

Bill Gross (co-founder Pimco), on Japan….

“Since the fiscal (Abe) and the monetary (Kuroda) authorities are basically one and the same, in some future year the debt will likely be “forgiven” via conversion to 0% 50-year bonds that effectively never come due.”

btw, the L is silent in BLS.

#32 common sense on 02.05.16 at 7:10 pm

Take a good look at the chart for the S & P from 1995 to date…

See anything interesting?

#33 Warren - the lagging indicator on 02.05.16 at 7:11 pm

With respect to the discussion on the fairness and equality of the TFSA account, I guess the crux of the argument is how one perceives fairness and equality. When one looks at oneself as a person unable to fund the TFSA limit he/she feels like the rich are getting special treatment and this is inherently unfair. When one looks at him or herself as someone with enough money to max out the TFSA and RRSP, I would hope that they realize that they have enough money already that a drop in the RRSP limit should be irrelevant to them. More likely, I suppose, they feel like they want more tax free money for their retirement and someday, maybe, the poor or less fortunate can work hard like them or win the lottery or an inheritance and they too can participate….see, fair and equal. The fact that the TFSA is egalitarian and fair and equal in an tangible, equatable sense in that everyone has the same potential investment room and therefore outcomes are not skewed toward the rich is accurate but not true. I could say that a TFSA rule where those that are unable to fully contribute to the TFSA get an refund at the end of the year for the unused room in say a food or grocery credit. See, this too is fair and equal for all but those with investment money would wisely fully invest to take advantage of tax free compounding and criticize the free welfare-like food credits to the poor. Of course I am only looking at this through a snapshot in time. I all actuality, the TFSA is quite more beneficial to the young and in that way, not fair.

#34 Warren - the lagging indicator on 02.05.16 at 7:16 pm

Hey, why not try to buy risky stuff you don’t understand and then ask people on the Internet (who think Nine Eleven was a hoax, climate change is a fraud and America is collapsing) to instruct you? What could go wrong? — Garth

__++__

Hey, watch, I can do that too. I can not believe you try to buy risky stuff you don’t understand and then ask people on the Internet (who think Nine Eleven was a hoax, Peak oil is a fraud and America is collapsing) to instruct you? What could go wrong?

ps- Garth, I am glad your pet is doing fine. He looks like a good friend to have.

#35 Doug t on 02.05.16 at 7:18 pm

I’m starting to think if you buy a house in Vancouver now and sell it in 8 months you could well make a BIG chunk of casholla – it’s like a pyramid- you just don’t want to be last in

#36 acdel on 02.05.16 at 7:19 pm

I don’t think that anybody on this planet with any business sense believes in the U.S. numbers; the truth will come out after the election.
Meanwhile Canadian’s are hoarding 75 billion in excess in cash for a good reason. They get it!

#37 Smartalox on 02.05.16 at 7:19 pm

Can we all agree to call those that “vape” vapid?

#38 Caught In The Grip on 02.05.16 at 7:27 pm

All of the pundits are currently saying “flat is the new norm”. Soon they will be saying “bear market” & “crash”. It’s looking very bad…

#39 SWL1976 on 02.05.16 at 7:28 pm

The blue line on that chart looks eerily similar to a chart I was looking at the other day regarding th US National debt

#40 What the world needs now… on 02.05.16 at 7:31 pm

#11 common sense

“Take a good look at the chart for the S & P from 1995 to date…See anything interesting?”

hey buddy, HFT rocks, can you say liquidity…..

well yes, till you can’t…..haha….

strap in folks, 2016 should be interesting…..

#41 Panhead on 02.05.16 at 7:31 pm

Wonder how steep that curve is gonna be on the other side. Out here in my sunny burb of the 604 everything selling in a few days for ridiculous prices. No questions asked and no conditions. What a time to sell if you have a house with issues. Leaky underground oil tanks, asbestos, poly B piping, and all … bring it on. Greaterfools indeed … as Russell Peters would say “somebody gonna get a hurt real bad.”

#42 Joe on 02.05.16 at 7:41 pm

You have been predicting a crash in Vancouver for about 8 years now yet it never seems to happen it just continually goes higher. You also say prices aren’t due to speculation, yet what else can explain that we have higher prices thAn almost anywhere on the world? It certainly isn’t the number of head offices or large companies or high paying jobs in Vancouver.

Nope. Just guys like you. BTW, I have not called for a Van crash. But it will melt. — Garth

#43 Freedom First on 02.05.16 at 7:43 pm

#25

Not me, an impostor. Who shoots ducks in a barrel? Seriously guys, can’t you come up with something more original than this?

#44 Freedom First on 02.05.16 at 7:44 pm

I think I have made a big mistake in how I live my life. I have been selfish and thus have missed out on the true joys of life. Luckily there is still time to fix the errors of my ways. Time I settle down find a good woman have a couple of kids so I can get the most out of life. I could put all of my money into a beautiful house for my wife and kids and give them the life they deserve. That is what real men do.

#45 Rick on 02.05.16 at 7:44 pm

Conrad Black is selling his mansion in Toronto. Might be the top of the market??

#46 Prairieboy43 on 02.05.16 at 7:45 pm

Talked to realtor today in Edmonton Area. Greater 10,000 listings. Prices are readjusting downwards. This realtor has been in Edmonton area > 25 years. So for 2016 he has 15% more listings in January than ever before. Summer will be crazy. Then reality sets in.
PB43

#47 Standard Deviation on 02.05.16 at 7:46 pm

Entropy prevails.

#48 A belieber on 02.05.16 at 7:47 pm

designer skinny jeans – $79.99
metro vespa – $4,999.00
particle-board condo – $458,000.00

cost of getting a date on tinder – $463,080.00

I mean….priceless.

#49 Caught In The Grip on 02.05.16 at 7:50 pm

We’re in a bear market for global equities that will probably take the S&P 500 down a minimum of 20%.

These are hard times.

Always amusing how when asset values fall from record levels people lose their nerve and sense of perspective. — Garth

#50 Harbour on 02.05.16 at 7:52 pm

#11 Caught In The Grip on 02.05.16 at 6:49 pm
S&P 500 is down 12% YTD
Nasdaq is down 17% YTD

More lows to come?

The S&P is down 7.8%, not 12%. NASDAQ down 12.7%, not 17%. — Garth
…………………………………………………………………….

Technology rout pushes Nasdaq to lowest close since 2014

http://finance.yahoo.com/news/futures-little-changed-ahead-u-122152321.html

#51 Caught In The Grip on 02.05.16 at 7:58 pm

The fact that gold broke out this week more or less confirmed that we’re in a global bear market.

We are not. — Garth

#52 Rick Stevens on 02.05.16 at 8:07 pm

I searched with Google GIC rates and an ad for 8% scured by real estate came up in the list of GIC rates and other related GIC information.

People should be weary of the ad by dealmaker and it has a video about syndicated mortgages and that the 8% is an investor acts like the bank and lends money to different projects.

The problem is these are borrowers that the big 5 Canadian banks and others would not lend to. In this real estate market with highest prices in history and not a meaningful correction in 20 years with economic storm clouds increasing day by day, this is going to get alot of people n trouble that are either desperate or greedy.

They should not be together with GIC ads and info.Caveat Emptor, buyer beware.

#53 Larry on 02.05.16 at 8:08 pm

I received a call from some realtor asking if I wanted to sell my house or if I know anyones who are thinking of listing their homes just 2 days ago.

It looks like realtors are running out of house to sell?

#54 IKnow on 02.05.16 at 8:11 pm

In vancouver and even Toronto, surge in prices is mainly for detached houses which already are 7 figures. That change in down payment rule is a significant factor? Very laughable!

In vancouver people are seriously think no more detached houses will be available, for so strong a land owning culture that has both been nourished and imported.

Until more people are willing to move to Surrey, not much hope left for affordability.

#55 running out of... on 02.05.16 at 8:19 pm

#53 Larry on 02.05.16 at 8:08 pm

I received a call from some realtor asking if I wanted to sell my house or if I know anyones who are thinking of listing their homes just 2 days ago.

It looks like realtors are running out of house to sell?

It has been like that in the past 15 years, when I bought my house in Toronto. I am sure I didn’t trigger it.

#56 Chris on 02.05.16 at 8:32 pm

GTA burbs are starting to hit the affordability ceiling, even for condos, etc. But it seems people are willing to accept lower and lower living standards to stay in GTA. Why is that? Cannot leave the “beloved” 401 and DVP or 400 behind? Sooner or later people still start to move out of GTA due to the impossible housing costs coupled and impossible commute to work. Ottawa should benefit from this.

#57 Ace Goodheart on 02.05.16 at 8:33 pm

This asks more questions that it answers. Why do all these people suddenly need houses? In the States just prior to the meltdown, you could buy a house with no credit, no background check, no income, if you were on parole or bailed out for something, basically any person who was over 18 and could read and sign a document, could own their own house. This was the genius behind the “collateralized debt obligation”. You could package and sell risk. So who cared if people had money or not, you weren’t risking your own cash, you were loaning out money, and then selling the risk portion as a bundled “asset” to pension funds and the like, branded as triple A debt.

We don’t have that in Canada. And it appears that other than a few exceptions, people who are buying houses are actually qualifying financially. These new home owners, though saddled with debt and headed towards 25 years of “I hate my life”, can still actually make their payments.

So why are there so many of them, all wanting houses down town? Do they know the same houses, 4 hours drive North of here (where all the good 100K per year mining jobs are, and forestry jobs, and tons of lucrative government work if you have a ticket in something) cost around 50K? (I am not kidding you, you can buy a four bedroom brick house in Ontario for 50K, just not in Toronto).

The situation still makes no sense. I continue to be on the fence about this.

#58 For those about to flop... on 02.05.16 at 8:39 pm

Hey MF,I see you are getting on well with Joking Man.
You seem interested in him teaching you life lessons but I’m afraid one day you’ll realize the biggest lesson he taught you was the difference between a person and a persona.
I just don’t want you to be disappointed ,like my buddy Freedom First who last summer invited Bruce Jenner around for a powder party.He was mightily disappointed when Caitlyn Jenner turned up with with a case of foundation and some concealer…
Things aren’t always what they seem…

M41BC

#59 Risk-on - Realties.ca on 02.05.16 at 8:40 pm

[…] Source: http://www.greaterfool.ca/2016/02/05/risk-on-2/ […]

#60 Caught In The Grip on 02.05.16 at 8:44 pm

Bear Market! Ahhhhhhh! Ahhhhhhh!! :)

Who knows…

#61 common sense on 02.05.16 at 8:48 pm

Question:

What would be the effect on markets, FX, interest rates rising in US, etc if China noticeably devalues their money say another 10-20%?

Thank you.

#62 Freedom First on 02.05.16 at 8:50 pm

#44

I have not been selfish. I did was best for me, cause I’m the best. Nothing selfish about being the best is there?

#63 GenXer on 02.05.16 at 8:50 pm

I vape and I know it. Never would have thought you old hippies would be so close minded. Keep on drinking that alcohol and we’ll see who lasts longer.

#64 Nagraj on 02.05.16 at 8:50 pm

I was gonna give a bit of a boost to those, who like me, worry that maybe (stress maybe) our gracious host is overly optimistic about certain things . . . but then I realized it was more important to use this little space to speak definitively rather than speculatively, SO: we should offer to

SELL ALBERTA TO CHINA

that way we could just get rid of the irksome place, after all, it is “whacked”, and so empty, and there’s all those poor Chinese choking by the untold millions in smoggy megalopolises.
(We could throw in that “Newfoundland” misery as well, lotsa empty space there too.)

At the handing-over ceremony Sophie Gregoire-Trudeau could serenade Albertans by singing the Roy Rogers and Dale Evans sign-off theme, “Happy trails to you!”

#65 nonplused on 02.05.16 at 8:59 pm

I’m looking to get in on the vape market because once Glam Boy legalizes pot I see this as the preferred delivery mechanism.

#66 Shawn on 02.05.16 at 9:01 pm

Read His Mind?

#32 common sense on 02.05.16 at 7:10 pm
Take a good look at the chart for the S & P from 1995 to date…

See anything interesting?

****************************************
Well, the S&P 500 was at almost exactly 500 in January 1995 and now its 1880 so up 3.76 times. (Not counting gains from dividends)

It did not rise in a straight line and had two horrendous crashes along the way so it’s not for wimps.

Is that what you see?

If you are not skilled and brave then stay off the XXX runs!

#67 acdel on 02.05.16 at 9:01 pm

#64 Nagraj
I was gonna give a bit of a boost to those, who like me, worry that maybe (stress maybe) our gracious host is overly optimistic about certain things . . . but then I realized it was more important to use this little space to speak definitively rather than speculatively, SO: we should offer to

SELL ALBERTA TO CHINA

that way we could just get rid of the irksome place, after all, it is “whacked”, and so empty, and there’s all those poor Chinese choking by the untold millions in smoggy megalopolises.
(We could throw in that “Newfoundland” misery as well, lotsa empty space there too.)

At the handing-over ceremony Sophie Gregoire-Trudeau could serenade Albertans by singing the Roy Rogers and Dale Evans sign-off theme, “Happy trails to you!”
—————————————————————–
Please, on behalf of Newfoundlander s (we love you in AB, Lord tundering) and AB; we beg you, please take your meds, we really do worry for you. After all we are all in this together. We are really concerned for you, love AB and NL.

#68 Joe2.0 on 02.05.16 at 9:05 pm

Stagflation look it up.
And then buckle up.
Watch your money go up in Vape.

#69 Jeff B on 02.05.16 at 9:09 pm

Re: #3 from Kreditanstalt

“… one should question either the (outdated) methodology … [snip] … or the idea that central planners can even measure ‘aggregate statistics’ in the first place …”

I agree — it should be questioned. I will answer.

Labour force measures can be had with reliable accuracy. The methodology is sophisticated, it is not outdated, and it is rigorous. Statistics Canada carries out the Labour Force Survey on a continuous basis. The Bureau of Labor Statistics in the US is capable of doing the same.

Disclosure: I am a professional statistician. I do not work for Statistics Canada, I have no fondness whatsoever for the insipidly boring work they do, but I have a healthy admiration for their skill in performing it and whatever psychological makeup they possess to not run screaming from it. For further information on the Labour Force Survey, visit the Statistics Canada web site.

#70 Prairie oysters for all on 02.05.16 at 9:10 pm

#64 Nagraj on 02.05.16 at 8:50 pm
I was gonna give a bit of a boost to those, who like me, worry that maybe (stress maybe) our gracious host is overly optimistic about certain things . . . but then I realized it was more important to use this little space to speak definitively rather than speculatively, SO: we should offer to

SELL ALBERTA TO CHINA

that way we could just get rid of the irksome place, after all, it is “whacked”, and so empty, and there’s all those poor Chinese choking by the untold millions in smoggy megalopolises.
(We could throw in that “Newfoundland” misery as well, lotsa empty space there too.)

At the handing-over ceremony Sophie Gregoire-Trudeau could serenade Albertans by singing the Roy Rogers and Dale Evans sign-off theme, “Happy trails to you!”

I’ll take a cowboy over an effeminate metrosexual from TO. That all you got you slimy hypocrite.

#71 Bill on 02.05.16 at 9:10 pm

“at least in those cities where metrosexual moisters Vespa their way through lefty, over-educated lives.”

Thats frigging awesome right there….spit my water all over my ukelele!!!!

#72 ww1 on 02.05.16 at 9:18 pm

#67 acdel
Please, on behalf of Newfoundlander s (we love you in AB, Lord tundering) and AB; we beg you, please take your meds, we really do worry for you. After all we are all in this together. We are really concerned for you, love AB and NL.
—————————————————————–

Some of us will always remember that bumper sticker from the 1980’s. You remeber that one right? Something about “Let the Eastern bastards freeze in the dark.”

#73 Freeman on 02.05.16 at 9:20 pm

Okay, WW3 is starting this weekend.

“Published on Feb 5, 2016:
Russia says Saudi Arabia’s proposed troop deployment in Syria could be regarded as a declaration of war. ”

https://www.youtube.com/watch?v=efmOMDp-kV0

Meanwhile, Russia has just increased their military presence in Syria by 10-TIMES in the past week:

“ANNIHILATION: 7 DAYS OF RUSSIAN DESTRUCTION”
Russian warplanes have carried out 468 sorties, destroying over 1,300 terrorist targets in eight Syrian provinces in one week.

https://www.youtube.com/watch?v=r4gXKPp6FzI

If this fighting between Russian, Turkish, and Arab forces starts, the stock markets will fall quite a lot. Best to keep your money in cash.

#74 Leo Trollstoy on 02.05.16 at 9:23 pm

In Toronto January was extreme, especially in the soulless burbs where average prices jumped more than 20% year/year. In YVR the average detached house ended up 27% above last year’s mark

as ive always said, vancouver and toronto re prices keep going up up up unsustainably. gartho has a great term for it. hockey stick prices. higher higher higher

#75 common sense on 02.05.16 at 9:27 pm

#66 Shawn

Yes I see what you see and read a couple articles saying the S & P has breached 200 and 320 day moving averages to the downside which since 1995 has been the start of a big drop off…

Past performance….

#76 Victor P on 02.05.16 at 9:28 pm

The blind leading the blind…

#77 lee on 02.05.16 at 9:31 pm

Caught in the grip,

I hope it drops 40 per cent. That’s good eats.

#78 Optimist on 02.05.16 at 9:40 pm

@42 – joe: “Nope. Just guys like you. BTW, I have not called for a Van crash. But it will melt. — Garth”

No Crash, No Melt – News Flash: That Ziggy-Ziggy virus is going to ALL Americas EXCEPT our “Home & Native Land” (and Peru); Say the scientists.

No one is going to Peru – So more “refugees” here, meaning house prices have no direction but to go up…..

#79 mike harrison on 02.05.16 at 9:44 pm

#63
Ya exactly!
Keep drinking your hard booze, wearing your cowboy boots and riding a harley. Oh and looking in the mirror a bit too often.

#80 Chris on 02.05.16 at 9:46 pm

And apparently, what people don’t have tied up in their houses, they’re hiding in their mattresses. $75B worth. Nobody learns.

http://www.cbc.ca/news/business/cash-investors-cibc-1.3419271

#81 acdel on 02.05.16 at 9:49 pm

#72 ww1
#67 acdel
Please, on behalf of Newfoundlander s (we love you in AB, Lord tundering) and AB; we beg you, please take your meds, we really do worry for you. After all we are all in this together. We are really concerned for you, love AB and NL.
—————————————————————–

Some of us will always remember that bumper sticker from the 1980’s. You remeber that one right? Something about “Let the Eastern bastards freeze in the dark.”
—————————————————————–
You know, I am so tired of people like you. There was a good reason why Lougheed said what he said; it was unfair and it crippled the West through Canadians working against Canadians; this is why Jr. said that he would not go down the same footsteps as his father, he realizes that it was a mistake. My challenge for you is to do the research and understand what really took place and how many lost their livelihoods through bankruptcy, suicides for no good reason; so eff-off!

#82 Ryan on 02.05.16 at 9:51 pm

Garth,
The recovery is on the way…
Food Basics has cauliflower on for $1.88 a head this week.

Let it be known.
The sky is back up where it should be.
Pass the vapes!

#83 juno on 02.05.16 at 9:51 pm

Only one difference.

You have to borrow money to buy a house. Nortel, your risking money you already have

Ever heard of margin? Investment loans? HELOCs? — Garth

#84 Investx on 02.05.16 at 9:57 pm

Nope. Just guys like you. BTW, I have not called for a Van crash. But it will melt. — Garth

Why no crash? With the high debt levels, quickly rising prices, subprime mortgages, etc.?

I guess it’s different in Vancouver?

#85 espressobob on 02.05.16 at 9:58 pm

Again, why do DIY investors look short term? Any investment should be at least a decade or more with disposable capital for that period. Otherwise, what’s the point?

Short term speculators get creamed most of the time, and look to negativity to justify losses usually realized when they panic. Ignore the hype, and buy!

Yeesh.

http://www.multpl.com/s-p-500-historical-prices

#86 neo on 02.05.16 at 10:01 pm

Two things Garth.

1.) I don’t know how this is possible but Ontario has the biggest job growth in the country adding 20,000. Relatively speaking Ontario has been doing well on the job front.

2.) I had to do a double take when I read this, but Milton was actually hotter than even Vancouver and possibly the country in January. Prices are up 30% YOY!! $467,317 VS $607,309.

I agree some of this has do to with the new rules but honestly I don’t think it is that simple. The job market in the GTA is good and interest rates remain low. We would need at least one of those not to be the case to see any meaningful drop in prices.

#87 TurnerNation on 02.05.16 at 10:02 pm

Buying a house in Toronto seems as much fun as a date with J. Gomeshie. But they keep coming back for more?
Dazed and confused.

#88 ozy - Some top areas of Toronto are still underpriced on 02.05.16 at 10:07 pm

Some top areas of Toronto are still underpriced

Would ya like to find out

#89 Should have bought on 02.05.16 at 10:14 pm

I look at that graph and all I can think about is the mother of all missed opportunities. I had several opportunities to buy in the Vancouver market the first being in the mid 90’s……and once almost pulled the trigger. Each time passed because real estate was not a good return or that the market was over valued (both my opinion and that of so called experts of the day). Boy was I wrong…….yes I remained mobile, made some returns in the stock market, but sure is hard not to second guess and think about what could have been….

#90 45north on 02.05.16 at 10:16 pm

Meanwhile the signs of a market top keep piling up. Panic buying in the suburbs surrounding Toronto and Vancouver. Price surges seven and even eight times the rate of inflation.

A sharp resurgence in household debt levels.

as you say risk is on. This is an unprecedented surge! The risk is huge. There is nothing to compare it to. However the government could act now to reduce the risk: raise interest rates and tighten lending standards. I mean the Federal Government.

#91 RimJabba on 02.05.16 at 10:18 pm

Holy sh** Garth, that chart scared me to death.
This is a classic blow-off-top before the bottom falls out. Anyone with any stock/commodity trading experience would look at that chart and say SELL SELL SELL!! run to the hills! Hide your wife, hide the kids, holy beep beep beep!

Thanks for ruining my sleep tonight, we are literally sitting on an atomic bomb housing market if that chart behaves like parabolic move. Yikes! Yikes!

#92 Smoking Man on 02.05.16 at 10:22 pm

20 years ago who would have thought Russia would be the moral leader of the world And the usa desending to total socialism under obumer.

Tami Russia has got this.

https://youtu.be/ABrauM7yvco

#93 Smartalox on 02.05.16 at 10:26 pm

@ GenXer,

I’m probably younger than you, but I still like my chances. That vapour you ‘vape’ is composed of ethylene glycol – a compound used in automotive anti-freeze (coolant), in your lungs!

At least, if I drink alcohol, the damage accumulates in my liver: when you drink in moderation, your liver can regenerate itself.

Not so the lungs.

#94 Sheane Wallace on 02.05.16 at 10:30 pm

Combined with dirt-cheap rates on crap currency,

that does not even deserve the privilege to wipe one’s behind with it.

glad that moved away from Poloz’s confetti on time.

1.8 million confetti is not much for a house.
the fact that they pay you in confetti sucks.

#95 Observer on 02.05.16 at 10:33 pm

Nope. Just guys like you. BTW, I have not called for a Van crash. But it will melt. — Garth

Taking a look at your graph there Garth, that was more than a “melt” in ’08. Then “emergency” rates kicked in….

#96 Sheane Wallace on 02.05.16 at 10:35 pm

#91 RimJabba

markets will not tank. Currency will, Specially the loonie.
It is called loonie for a reason.

#97 Prairie Oysters for all on 02.05.16 at 10:46 pm

92 Smoking Man on 02.05.16 at 10:22 pm

20 years ago who would have thought Russia would be the moral leader of the world And the usa desending to total socialism under obumer.

Tami Russia has got this.

https://youtu.be/ABrauM7yvco

___
I thought you moved there!.. to get away from all the owetario commies!

#98 ANON on 02.05.16 at 10:56 pm

Bah, just use a log scale on those charts. There, no reason to worry. :)

#99 Bottoms_Up on 02.05.16 at 10:56 pm

So, current price of an attached unit equals what a SFH cost in 2006. A condo now costs what a SFH did in 2003.

This isn’t going to end well for vancouverites.

#100 vancitygirl on 02.05.16 at 11:09 pm

Prices are bidding up on average 500,000-900,000 on the Westside of Yvr

#101 GetReal on 02.05.16 at 11:16 pm

Interesting…….

“Documents from the British Columbia Finance Ministry say the province would lose $1 billion in residential real estate sales and almost 4,000 construction jobs if government moved to reduce foreign investment in the housing market.”

#102 ROCK BEATS PAPER on 02.05.16 at 11:19 pm

Garth,

The jobs report down south was aweful, confirming to the market that the US economy is softening.

Market participants are not fooled by the headline number, that is why there was a flight to the safety of the US $, against all currencies not just our piddly petro currency.

“Meanwhile joblessness in the States has dropped from more than 10% during the GFC…”

Core population jobs (24-55 year olds) is down to 2000 levels and several million below 2007 (not even accounting for the extra 5 million people. There are a few more crappy part timer and gig jobs, but the participation rate is horrible and trending really badly.

What was worse is that wages were up and productivity sank like a rock. The market choked on this because employment was one of the last pillars in the FED narrative holding it together.

“The latest stats showed that growth continues unabated.” – Just wrong.

“So on Friday the US dollar spiked more, driving down ours along with oil. American equities stumbled, as the likelihood of a rate increase in March bumped higher.”

Wrong again. The liklihood of a rate increase dropped. Both the bond market, the equity market and now the gold market are calling the FED out. The futures market is pricing in NO RATE INCREASE for 2016

http://www.cnbc.com/2016/01/29/fed-funds-futures-pricing-no-rate-hikes-in-2016-cme-data.html

The US $ (DXY) is actually showing signs of weakness since it topped in March, almost one year ago.

The report was as forecast, and satisfactory, causing the dollar to advance on expectations of monetary tightening. Don’t bet against America. BTW, did I not throw you off this blog? — Garth

#103 joe on 02.05.16 at 11:27 pm

Dear Canadians …. if oil price stays 30 US you are doomed……
your particle board shacks will show real value…..

Big housing crash!!!!!!!!!!!!!! reset

#104 WUL on 02.05.16 at 11:30 pm

Bre-Xcouver is a beautiful city.

Can’t wait to see CREB’s stats tomorrow morning. YOY for the first 4 days of Feb saw a big jump in sales in Cowburg.

Must be the effect of the PM saying he was cutting a cheque for a billion payable to Alberta.

#105 Brian on 02.05.16 at 11:34 pm

The reason SFH are doing so well is because Ham is buying them as a place to park cash. Have I told you about the time me and wifey were being outbid by cash bully offers in port moody last summer?

It’s the fact that you believe this to be happening, rather than whether it is or not, that helps drive Van people to spend insanely. A city trapped in its own mythology, blaming others. Fascinating. — Garth

#106 Rexx Rock on 02.05.16 at 11:43 pm

High houses prices reflect a strong wage growth, confident society and a strong economy.The land of milk and honey come with a high cost of living for the lower middle class.I think 2 or 3 more years of higher house prices before it flat lines.

#107 TurnerNation on 02.05.16 at 11:47 pm

TLT.US’s slow march to/above 130 likely is signalling another leg down in US.

#108 Juxtapose on 02.05.16 at 11:48 pm

House prices in YVR will not fall 80%. Not 50%, not 20%. So, it much adjust to positions from two years ago? So what? It certainly won’t go back to when this pathetic blog was calling for an adjustment in 2008. Not criticizing heavily on GT, I was calling the same. I just realize I was wrong.

#109 Love my Kia on 02.05.16 at 11:52 pm

Million dollar dream homes in Vancouver,

http://www.buzzfeed.com/tanyachen/garbage-million-dollars-homes-in-vancouver?bffbcanada&utm_term=.hnV8p3drA#.ordZKlN9R

#110 WUL on 02.05.16 at 11:56 pm

Re: The four day trend in house sales numbers in YYC (+11%) Feb/Feb.

Two additional reasons. First, insiders in the airlines industry trading in advance of today’s announcement of a new direct flight from Beijing to Calgary. Secondly, those pesky locals in Vancouver pricing out foreign billionaires.

If you want more delusional thoughts, just ask.

#111 Mishmarc on 02.05.16 at 11:57 pm

Absolute genius, thank you for your sobering perspective.

#112 In Van on 02.05.16 at 11:58 pm

I have never seen the housing mania as intense as it is right now.

#113 DON on 02.06.16 at 12:01 am

#164 BG on 02.05.16 at 8:48 am

#151 DON on 02.05.16 at 2:06 am

Nope!

Some people just know when they are being bull shitted. I make it a point of not blindly believing anyone or anything. What if money was at stake. Yikes!
————————————————————

Having second thoughts because of a bad feeling is fine.
Humans function like that. Sometimes this 6th sense is accurate, sometimes not.
Now calling this feeling the absolute truth is pretty dumb.

I have known someone for a very long time who thinks this way.
He enters a conversation or debate only to convince, never to actually debate, learn and possibly change his mind.
Any argument is good for him if it can make him “win” the debate.
What do I have to learn from someone who never put their opinion in perspective and just cannot be wrong?

Not much

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

Who said anything about calling one’s gut feeling the absolute truth? One should always keep an open mind…the earth is flat…a plane will never fly…

You assume to much and seem to read into things…I am not similar to your buddy, nor do I think in his manner. I keep an open mind on every subject – a little humility helps keep the ego in check.

And when I debate I use facts and never resort to name calling, using words, like dumb, stupid, ignorant. But I sure as hell would like to.

#114 tkid on 02.06.16 at 12:11 am

You could package and sell risk … selling the risk portion as a bundled “asset” to pension funds and the like, branded as triple A debt.

Canadian mortgages are absolutely packaged and sold as bundled assets.

https://www.investorsedge.cibc.com/ie/education-centre/topics/fixed-income/mbs-description.html

Mortgage-backed securities (MBSs) are fixed-income investments that represent an ownership interest in a pool of mortgages fully insured under the National Housing Act (NHA). Residential first mortgages are pooled together by approved mortgage lenders, such as major Canadian banks, credit unions, caisses populaires and mortgage brokers, who then issue separate securities to investors. MBSs are either “non-prepayable” (closed) or “prepayable” (open).

#115 duffy on 02.06.16 at 12:12 am

It’s that age old dilemma . . . . should I drink alcohol before I get ready to go to the bar and risk becoming to hammered to put on my shoes . . . .or should I vape and run the risk of forgetting how to tie my laces . . . . maybe that’s why those God awful flip flops are still trendy.

#116 Sandy Oh on 02.06.16 at 12:19 am

It’s a historical fact that no one inside a bubble ( save the rare few outcasts) is aware that a bubble exists. Every runaway post-bubble analysis proves this. The parabolic chart provided says it all.

No bubble in history has ever sustained such a breathless ascent without avoiding an inevitable collapse. The idea that the Trudeau Liberals can sustain this behavior with increases in deficit spending and tax increases is ludicrous.

It’s Pyramid Math 101…there simply aren’t enough dollars or people in the world to sustain an eternal bubble. Those persons buying into a bubble always get burned. Only those who cash out and don’t reinvest ever win. Anyone buying at this point should be researching recipes for tulip bulbs.

Think about it folks….at 27% increases YOY we have 5 million dollar houses in 4 years…are you kidding me?

#117 GenXer on 02.06.16 at 12:23 am

I guess your silly play on words kind of annoyed me. Now that I’m home with my all natural vape I’m much more relaxed. Please don’t try and fool yourself though, alcohol is a poison that your body fights to get rid of as soon as you consume it. Don’t just buy the “facts” a billion dollar industry been feeding you for years.

#118 DON on 02.06.16 at 12:42 am

#58 For those about to flop… on 02.05.16 at 8:39 pm

Hey MF,I see you are getting on well with Joking Man.
You seem interested in him teaching you life lessons but I’m afraid one day you’ll realize the biggest lesson he taught you was the difference between a person and a persona.
I just don’t want you to be disappointed ,like my buddy Freedom First who last summer invited Bruce Jenner around for a powder party.He was mightily disappointed when Caitlyn Jenner turned up with with a case of foundation and some concealer…
Things aren’t always what they seem…

M41BC
***************

Nice take on things floopy.

MF it is not like Freedom first and Smoking Man don’t have good things to offer. Take the good things and adapt them for your use. At least both of them have their eyes wide open and are grounded in reason. You’ve got a good head on you – observe others and walk your own path. Now Garth could be considered a premium role model and I’m not trying to blow sunshine up his a$$ his daily blog numbers must parallel corporate media. I think I may have an addiction problem myself.

M44BC

#119 bcweatherman on 02.06.16 at 1:01 am

Evidently a detached home in Van is seen as an investment by many. It’s evident from the graph that condos and town houses haven’t gone anywhere much price wise since the run up in the early 2000s… so maybe no crash..

#120 Entrepreneur on 02.06.16 at 1:02 am

We will see after this is all over, the truth will surface or not. We will hope for a correction, a little easier on all of us.

#23 prairegopher…all political parties tax us to death not just the NDP.

#121 AB Boxster on 02.06.16 at 1:32 am


A city trapped in its own mythology, blaming others. – Garth

————————————————
Plenty of blame to go around.
Offshore funds – certainly
Unethical realtors – obviously
greedy sellers – yup
Pathetic laws governing real estate transactions – sure

And the game continues.
Pathetic!

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

#122 JP on 02.06.16 at 1:33 am

Excellent article about YVR housing

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

#123 Westsider on 02.06.16 at 1:39 am

My next door neighbour listed his house last Saturday for $3.1 mil.It sold on Wednesday for $3.65 mil….$500,000 over asking.Crazy market in YVR…….. although the house is an old timer, well kept and has a nice shed.

#124 SquareNinja on 02.06.16 at 1:56 am

#33 Warren – the lagging indicator on 02.05.16 at 7:11 pm

I agree with you. While the TFSA and other stuff seem to be fair, upon further inspection are not that fair at all.

#125 Mark on 02.06.16 at 2:14 am

“Can’t wait to see CREB’s stats tomorrow morning. YOY for the first 4 days of Feb saw a big jump in sales in Cowburg.”

Calgary’s easily down 20-25% if the RE boards were actually honest and forthright on what an identical unimproved house would sell for today, versus what it sold for in 2013.

“raise interest rates and tighten lending standards. I mean the Federal Government.”

The Bank of Canada operates independently from government, and works on an inflation targeting mandate. Their role is not to target asset prices, either high or low, in any sector, but only to maintain CPI at its 2% target.

Given that the CAD$ is now on a strengthening path, and housing is now entering its 3rd year of declines across Canada (including Toronto/Vancouver), keeping CPI even as ‘high’ 2% will prove to be an increasing policy challenge.

#126 David Lee on 02.06.16 at 2:14 am

I just love the smell of truth in the morning:

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

Looking forward to reading all of the dismissive comments.

It will also be interesting to see how our different levels of government tap dance around this one. Unfortunately, Canadians are too polite and collectively, we won’t demand anything be done about it.

#127 Mark on 02.06.16 at 2:16 am

“The reason SFH are doing so well is because Ham is buying them as a place to park cash. “

Park cash, yet most of the high-end SFH in Vancouver being bought are being bought with significant mortgages?

Sure doesn’t look or smell like HAM at all. Has the fingerprints of Canadian credit junkies (some of whom may be of Asian ethnicity, some not) all over it though.

Go look at that BIV-cited study I posted the link to the other day.

#128 Mark on 02.06.16 at 2:31 am

” if China noticeably devalues their money say another 10-20%?”

A more likely scenario is the Yuan rising substantially in value (despite official efforts at devaluation). After all, China has reserves and more than adequate domestic production. China needs a high Yuan to transition away from excess export capacity and towards domestic consumption. But I do get a good laugh out of the US-centric economists who swear up and down that China “needs” to devalue to save itself. Economists that are so out of touch with the reality of private sector debt deflation and the significant impossibility of devaluing under such circumstances sustainably.

“Why no crash? With the high debt levels, quickly rising prices, subprime mortgages, etc.?”

Vancouver prices stopped rising 2-3 years ago, like the rest of the country (what you’re just seeing right now is the transactional mix shifting so significantly to a narrow section of the high-end). And there is significant countercyclical industry in Vancouver which will be a significant beneficiary of future circumstances. Thus the cataclysmic declines, as predicted by traditional metrics, probably won’t occur in Vancouver. At least in the prime areas. However, that won’t save the over-leveraged current owners from the up-and-coming wealthy class.

The very low prices on precious metals stocks, the significant use of equity and options to pay employees during the sector’s period of distress over the past few years, and the conversion of debt to equity to pay professionals for services rendered in Vancouver will breed an entirely new class of domestic millionaires. Its not all doom and gloom in Vancouver, but opportunity and financing costs will be significant for those who have one-asset portfolios and no exposure to one of the significant long-term drivers of Vancouver’s economy.

#129 Scully on 02.06.16 at 2:34 am

Garth, I see it too. Hockey stick spring. Lots of speculation- playing a shell game. Those on side lines feeling emotional – desperation. Reminds me of the blizzard back east a couple weeks ago. People madly grabbing at food items, store shelves bare. Enough food stocked for weeks! Irrational. Only items that should have been hoarded were JD and condoms. But that’s just my opinion.

#130 SickofBC on 02.06.16 at 2:37 am

This is interesting

The real estate technique fuelling Vancouver’s housing market

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/?cmpid=rss1&google_editors_picks=true

#131 SickofBC on 02.06.16 at 2:38 am

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/?cmpid=rss1&google_editors_picks=true

#132 SickofBC on 02.06.16 at 2:40 am

sorry wrong link
this is the proper link
This is interesting

The real estate technique fuelling Vancouver’s housing market

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/?cmpid=rss1&google_editors_picks=true

#133 Mark on 02.06.16 at 3:10 am

“And apparently, what people don’t have tied up in their houses, they’re hiding in their mattresses. $75B worth. Nobody learns.”

You do realize that much of that $75B is basically being lent out to housing market participants in the form of adjustable rate loans, right? After all, every dollar lent out by the banks requires that a dollar be borrowed by the banks, from depositors/shareholders/the bond market.

So if those people allegedly hoarding cash take the advice of CIBC et al and “invest” their money, voila, the housing finance market (and many other forms of credit) will develop a serious problem with liquidity.

In an investment universe worth what, $10T, $75B doesn’t seem like much of a cash allocation at all. If anything, the number seems low and exposes the Canadian economy to quite a significant probability of quite adverse outcomes of deflation.

#134 Randy Randerson on 02.06.16 at 3:20 am

So, Chinese new year is upon us on the 8th. I have yet to see any realturds promoting the meme that the Chinese are here to buy condos to celebrate CNY, or fake Chinese sisters pretending they are from mainland China, buying condos in Dampcouver for their parents.

#135 family beagle on 02.06.16 at 5:20 am

#93 Smartalox on 02.05.16 at 10:26 pm
@ GenXer,

I’m probably younger than you, but I still like my chances. That vapour you ‘vape’ is composed of ethylene glycol – a compound used in automotive anti-freeze (coolant), in your lungs!

Propylene glycol. A different compound altogether. You consumed it at some point today. It’s food safe, but do please continue baffling the audience with your science accumen.

#136 Kit Schicker on 02.06.16 at 7:20 am

Not much ‘bank of mom’ in this Globe & Mail report:

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

#137 Market man on 02.06.16 at 7:30 am

Don’t think the new mortgage rules had anything to do with it. It’s such a nominal increase and if they are buying before they need to put an extra 25k then it proves that carrying cost have more to with the increase in prices

We will see next month….

#138 Nobleton Bill on 02.06.16 at 7:55 am

RETWEET-Amazingly accurate logic

#21 Scumop on 02.05.16 at 6:55 p
Bring on the foreign house buyers.
There are very few, but each time one coughs a mill or two, or more, for a house that should be under 500K, the Canadian economy and the seller get a boost.

How can anyone portray this Hot {Asian, American, Australian, Austrian, African, etc} Money arriving as a bad thing? Bring more. There is no downside. Start ad campaigns in other lands…

“Come buy our slum housing at 5, 10, 15, even 20X its value!”

With foreign buyers being a fraction of 1% of all buyers, clearly more work needs to be done.

Take that massive profit when selling a 2.4 million dollar slum house and start a business elsewhere in Canada. It’ll be fun. Its like free money.

#139 When will they raise rates? on 02.06.16 at 8:07 am

Here is what is driving Vancouver RE prices:

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/comments/

So, there you have it.

#140 wtf on 02.06.16 at 8:37 am

You are looking at this very biased

Last 12 months

Alberta lost 45K jobs
Ontario gained 100K jobs
BC gained 25K

The housing market is reflecting that exactly. I don’t see your point today. People are working, homes are not underwater, debt service is low and people can afford to make the payments? How on earth do you see this as a sign of homes going down in “overheated markets” Remember that 1.8M home is easily 5+ incomes paying it off as people live in joint family homes and have some students in the basement. They are not paying tax either. Otherwise everyone is not telling the CRA the truth, so looking at income vs home price makes no sense. Toronto is big city with rich and diverse people. Bridle path/Rosedale/Forest Hill has been around longer then you and me….

#141 I'm stupid on 02.06.16 at 8:39 am

105 Brian

What you’re told and what actually happens are often two different things. If I were a realtor in Vancouver I would make sure to hire some Asians and park them in a nice SUV outside of my listing on offer day. Then I could tell your realtor I have interest from mainland Chinese and he will get you to up your bid.

Don’t be a fool, I remember going to a time share presentation in Las Vegas just as the bubble was bursting. When I told the salesman things don’t look good right now for Realestate in the US he was so defensive. I remember him saying it cost $55million an acre on the strip. The salesman was so convinced of the value it blinded him to reality. Classic bubble, those inside can’t see it.

It’s not the things you know that get you in trouble, it’s the things you know for sure that simply aren’t true that do. Don’t be a fool!

#142 Ontario's Left Coast on 02.06.16 at 8:42 am

Have you read this? I swear this crap should involve prison time…

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

Such naivete on display here daily. — Garth

#143 economictsunami on 02.06.16 at 8:50 am

Some do a Pro’s/Con’s analysis. I’m at the age that I prefer to call it my risk/reward model.

The conundrum being in today’s (still emergency/ lower for longer) financial rate environment, data continues to be both distorted/ flawed and long term economic relationship models have become broken.

The Flaw In The Fed Model: Recession Odds Are Far Higher Than Widely Believed: (analysis by Deutsche Bank’s Dominic Konstam)

http://www.zerohedge.com/news/2016-02-02/flaw-feds-calculation-recession-odds-are-far-higher-widely-believed

Four reasons the January jobs report is fishy:

“By virtually all accounts, U.S. manufacturers are struggling to grow amid a decline in exports and a big drop in demand among energy producers. Yet the industry supposedly added 29,000 new jobs in January to mark the biggest gain in 14 months.

Believable? Many economists are skeptical. And even if the job increases are real, some predict hiring will slow again next month. After all, manufacturers only added 33,000 jobs all of 2015.”

http://www.marketwatch.com/story/heres-four-reasons-the-january-jobs-report-is-fishy-2016-02-05

When the “Captain’s of Industry” are hampered by the global fog of central bank monetary policy …

#144 Bottoms_Up on 02.06.16 at 8:55 am

#93 Smartalox on 02.05.16 at 10:26 pm
———————
Actually the lungs will regenerate too, but one must quit smoking first.

#145 Ace Goodheart on 02.06.16 at 9:04 am

Flip side of this is if you bought two or three houses in Vancouver in the early 2000’s for 3 or 4 hundred thousand each, you would be now retiring a multi millionaire.

So for those of us who are right now, in 2016, buying houses in unpopular neighbourhoods in Toronto, for prices in the mid 400s, are we going to then cash out in ten years time for a few mil?

#146 Leo Trollstoy on 02.06.16 at 9:13 am

u.s. economy rocks. full employment girls and boys.

http://fortune.com/2016/02/05/full-employment/

#147 JamesA on 02.06.16 at 9:16 am

@GenXer

Humans have been drinking alcohol for thousands of years so a health argument is probably not the best tactic.

There may be real problems with the vape industry:

http://www.telegraph.co.uk/news/science/science-news/12037518/E-cigarettes-contain-flavouring-chemical-linked-to-deadly-popcorn-lung.html

Don’t get me wrong, I am not against drugs, I have many a great time in a mind altered state. The problem with pot is that most people just waste the prime of their lives laughing at bad jokes and eating too much. If you produce or consume art, or meditate, or go out exploring, a mind altered state can be great (so long as other’s lives are not put at risk).

That vape stuff is very new and those people cough a lot. Lung cancer is a game over situation. Just make pot cookies.

#148 Smoking Man on 02.06.16 at 9:16 am

Attention migrants with groping tenancies best to stay in feminized European countries.

Some of your pals tried to do in Moscow what they did in Germany on New years eve.

You got to places where men are still men.

http://dailycaller.com/2016/02/04/refugees-go-clubbing-in-russia-harass-girls-wake-up-in-hospital-the-next-morning/

#149 Leo Trollstoy on 02.06.16 at 9:18 am

Vancouver prices stopped rising 2-3 years ago…

no

WalMark selling his discounted opinion again. price check in isle 4

#150 Mark on 02.06.16 at 9:19 am

“Here is what is driving Vancouver RE prices:”

“It worries me a lot that this could all come crashing down. I worry about it all the time,” said one Re/Max agent, Khalid Hasan, who said he owns or co-owns 15 to 20 properties, all destined for resale.

Quoted without comment…

#151 wtf on 02.06.16 at 9:22 am

#139

Great article in the globe, too bad they referenced that clown Ben Rabidoux – the clown has no clue what he is talking about. These are not call options on real estate. It’s the same as buying a stock and flipping it, the end assignment person has to buy the stock, in an option you only lose the premium. If you sell you stock at 80$ and watch it go to 100$, well too bad. Same thing here.

#152 Dominoes Lining Up on 02.06.16 at 9:28 am

This exposure of the self-dealing and corruption of realtors goes a long way towards explaining what’s been going on in Vancouver, not all the HAM that everyone blames.

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

But not to worry, one realtor was suspended.

For 14 days.

That should fix everything.

As this becomes more publicly known, expect a real melt in public confidence in realtors but more importantly, the value of housing stock.

What an insider racket. Sad.

#153 Daryl on 02.06.16 at 9:29 am

The chart looks like the old tulip wars graph.
And why is it different?
I suspect the outcome as you predict will be the same.

#154 BG on 02.06.16 at 9:38 am

#113 DON on 02.06.16 at 12:01 am

Who said anything about calling one’s gut feeling the absolute truth? One should always keep an open mind…the earth is flat…a plane will never fly…

You assume to much and seem to read into things…I am not similar to your buddy, nor do I think in his manner. I keep an open mind on every subject – a little humility helps keep the ego in check.

And when I debate I use facts and never resort to name calling, using words, like dumb, stupid, ignorant. But I sure as hell would like to.
————————————————————-

Sorry buddy but you are the one assuming a lot here and jumping on flying bullets…

I was merely talking about a way of thinking and calling it dumb.
This was not meant to be a personal attack at all.
Nor did I suggest you think like the person I mentioned.

#155 crowdedelevatorfartz on 02.06.16 at 9:45 am

Garth?
No comment on the Globe and Mail article that previous posters have linked?
About “assignment clauses”…….?

Assignment clauses are commonplace there’s not a condo sold in the GTA without one. Just because the Globe discovered it, this is not news. — Garth

#156 Bytor the Snow Dog on 02.06.16 at 9:49 am

@Freedom First’s Imposter-

You continue to prove his point with every post. Keep up the good work!

Just can’t stand it when the slaves become aware and leave the plantation eh?

#157 Herb on 02.06.16 at 10:09 am

#136 and #139,

the technique is not the problem. How it’s done doesn’t matter as long as there are buyers who can pay those prices.

The question is who these buyers are and how they got the money – and what happens to the ponzi when such buyers run out.

Do we really want to know? Our three levels of government have the means to find out. Municipalities have tax assessments and property tax records, provinces have land registries, and the CRA can compel any financial institution to disclose the holdings and transactions of any individual. The information could be assembled, but then governments might have to do something or throw up their hands, and either would disappoint a lot of supporters.

#158 WUL on 02.06.16 at 10:10 am

I am going to stop day trading in Calgary real estate. The Flash Boys are whipsawing me.

I am having fun working out the litigation permutations of the multiple assignments of real estate paper in Vancouver as reported in the Globe and Mail.

Especially when the last assignee, a resident of Mumbai, refuses to close.

Unfortunately, popcorn is not allowed in courtrooms.

#159 For those about to flop... on 02.06.16 at 10:17 am

Well it is Super Bowl weekend, lets get the party started.
I know who Bandit is going for …the Broncos obviously…he hates cats and he can relate to Peyton Manning as they both have had life changing surgery and have to have a bucket on their heads when they go out to play.
I hope it goes better for the Broncos than the last Super Bowl outing when O.J Simpson got his Bronco out of first gear faster ,but not by much during that infamous police chase down the freeway…

Go Broncos!

M41BC

#160 Timing is Everything on 02.06.16 at 10:20 am

#93 Smartalox

propylene glycol NOT ethylene glycol…Jeezus…and I don’t even vape (or ingest ethanol for that matter)

Just 4 u. Risk-on…

http://tinyurl.com/cesr7t2
http://tinyurl.com/hqwjw9e

#161 genbizx on 02.06.16 at 10:23 am

#21 scumop

“Bring on the foreign house buyers.
There are very few, but each time one coughs a mill or two, or more, for a house that should be under 500K, the Canadian economy and the seller get a boost.”

This comment shows the shortsighted thinking and staggering lack of financial understanding in this
country….
You go start that business and try to sell to people who have seen the price of everything (pulled along by ridiculous housing prices) inflate beyond their income. People don’t buy much when wages are stagnant and housing costs are barely manageable..that is the effect of bloated housing prices supported by outside money. You think those foreign buyers care one iota about Canada and our future?

#162 For those about to flop... on 02.06.16 at 10:44 am

Mark the Migraine wrote at 128,

Vancouver prices stopped rising 2-3 years ago, like the rest of the country (what you’re just seeing right now is the transactional mix shifting so significantly to a narrow section of the high-end).

/////////////////////////////////
Third time this week you’ve trotted out this bollocks.
There are knockdown houses East Van that 2 years ago were going for 900k ….last year 1.1,a few recent sales in my hood went for 1.3.. This is not high end housing but at least I know now your eyes are brown because you are so full of poop.
I can’t wait til your next post when you state the CAD hardly went down compared to the USD last year.
You should come and buy a house in Van as you are a perfect candidate …detached from reality and beyond delusional ….on second thoughts don’t come here ,there are enough prats already.

M41BC

#stoplying

#163 For those about to flop... on 02.06.16 at 11:12 am

If I ever start smoking I hope it does have some ethylene glycol in it just to get the poisoning of the body over and done with.
Why you want to kill yourself slowly for?
Half a cup of ethylene glycol and you’ll have the best nights sleep you’ve ever had ….it wil feel like you were asleep forever…

M41BC

#164 MF on 02.06.16 at 11:17 am

#118 DON on 02.06.16 at 12:42 am

Flop, DON

Thanks for that

MF

#165 Ronaldo on 02.06.16 at 11:43 am

#151 Dominoes Lining Up on 02.06.16 at 9:28 am

”This exposure of the self-dealing and corruption of realtors goes a long way towards explaining what’s been going on in Vancouver, not all the HAM that everyone blames.”

Something similar was happening in the early 70’s as well in Vancouver which may have caused prices to rise over 100% in an 18 month period. A small place I bought in Pt. Coquitlam for $26,000 in March of 73 rose in price to $49,000 in Summer of 74 at the peak. Then the bottom fell out of the market. Rates increased from 10 to 12% and nothing was selling. I recall an investigation taking place involving realtors, and appraisers. Same thing was happening where realtors were going door to door making offers to buy their homes (many involved older people) and turning around and flipping to other realtors and so on and so on. We compared it back then to a ”chain letter”. This thing will come to an end as well especially if the government has the gonnads to do something about it. They know that they’ve allowed this to go on too long and now they have a problem on their hands. To kill it now, would kill the economy plus they wouldn’t want to see those nice gains in their homes disappear would they? Like Kristy for example. This is going to end really badly.

#166 Ace Goodheart on 02.06.16 at 11:48 am

Food for thought:

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

Noticed this happening a lot in my neighbourhood in Toronto. Old house gets sold, bought by an agent who then renovates and re-sells. Often they “live” in the house following renovations, I guess in an effort to make it into a principal residence to avoid capital gains tax

Nope, that is not how it works. — Garth

#167 Timing is Everything on 02.06.16 at 11:54 am

Garth, somebody will post this here. May as well be me. Ya used the same chart too. Jeez man…

http://tinyurl.com/zzxcx32

The zero guy is the most vapid of commentators, normally wrong and extreme. The chart is from the Vancouver real estate board. — Garth

#168 Smartalox on 02.06.16 at 11:57 am

@the ENTIRE comments section: I stand corrected on the propylene glycol vs. Ethylene glycol debate. Thanks for setting me straight. Still not endorsing vapid gaping, though.

Re: the Globe and Mail article on assignment flipping, won’t these mega-markups drive the vertically of the chart, as final, marked up prices for property are the ones that are eventually counted in the statistics? Could it explain why only 5% of houses CLOSE with registration to foreign HAM, but with all this flipping, the amount of HAM seems much larger?

The properties described in this article represent a small proportion of the Greater Vancouver market, but if local buyers start thinking the ENTIRE market is rigged like this, even if it isn’t, that pop can come sooner than we might expect.

Also, more support for the premise of cracking down on personal corporations. Doctors and lawyers have lots of legitimate expenses related to their corporations, assignment flippers, perhaps not so much.

Finally, my read on that article, is that the long time residents who were offered impromptu ‘deals’ numbered in the millions, were portrayed as having been ‘cheated’ or ‘swindled’. Seems to me, a multi-million dollar tax free windfall should cushion the landing a bit. Having done nothing wrong, they should take their cash and stop complaining.

Now if the south china morning post were to reprint this story, and the wealthy off shore investors were to really recognize how inflated the prices THEY pay are, well, that might pop the bubble for once and for all!

#169 Ronaldo on 02.06.16 at 12:00 pm

#129 Scully

”Only items that should have been hoarded were JD and condoms. But that’s just my opinion.”

JD and condoms? Too much JD=condoms pointless, imho. Remember the joke, ‘What is the most useless thing on a woman?’ answer: a drunk

#170 Caught In The Grip on 02.06.16 at 12:06 pm

CPD is down 41% since inception. Pref shares are through their 2008 lows in Canada.

What a favourable time to buy, then. 12-month trailing yield is 5.96%, plus a tax credit. — Garth

#171 waiting on the westcoast on 02.06.16 at 12:24 pm

Mark – you can take some remedial economics classes at Khan Academy. Your three posts in the 120-135 range were way off-base. Wishing something were true is far different than what is actually taking place. It really makes your look bad defending a thesis (with unsubstantiated and inaccurate data) that has been proven wrong over and over for the past couple of years.

Hey – I live in Van and think the market is overvalued. I have believed that prices should correct (but haven’t due to some pretty extreme central bank responses to the GFC). But – I recognize that the market is still rising (although it looks like may finally be at the summit).

#172 JimH on 02.06.16 at 12:31 pm

#20 WallOfWorry on 02.05.16 at 6:54 pm

Couple of points here that won’t do a thing to adjust your constant nagging negativity, but might educate you a little:

1. “The US Labor Force Participation Rate has fallen to nearly 62%, a level not seen since the late 1970s.”

This comment of yours is either totally disingenuous, or you are totally ignorant of what the number implies. The civilian labor force participation rate is the number of employed and unemployed but looking for a job as a percentage of the total population aged 16 years and over. Thus, that total includes students and the retired etc., etc.
You might have noted, had you attempted a modicum of basic honesty, that the rate was below 60% throughout the 1950’s and 1960’s. It stood at a low of 58.2% in the mid 1950’s.

2. “The ISM gauge of nonmanufacturing activity dropped from 55.8 in December to 53.5 in January.”

Are you aware that any rate above 50 denotes an expanding economy? The US economy is one of a very few that continues to expand, albeit slowly. It’s the best looking house on a block of ugly houses.

3. “More than 6 years into the “recovery”, over 45 million Americans remain on food stamps.”

Let me educate you of what being on food stamps (the SNAP program) in the US. Many in Canada make the false assumption that the number of Americans on the program would roughly equate to the number of Canadians on welfare.

Here are the requirements for entry onto the program in my state of Arizona: “Arizona SNAP eligibility is greatly determined by a strict income requirements test and number of people living in your household. These tests take into consideration both the gross monthly income and net monthly income. The gross is considered 130 percent of poverty and the net, 100 percent of poverty. For example a single family household can gross up to $1,174.00 per month with a net of $903 and still be eligible to receive food stamps. A family of six making $3,200.00 per month with a net of $2,461.00 will receive almost three times the amount in food stamp benefits.”

As you can see, this program was designed to assist primarily the working poor. A family of six with an annual household income of $38,400 ($53,400 CAD) is eligible for food stamps in Arizona.

http://www.benefitsapplication.com/program_info/AZ/Food%20Stamps/?gclid=m

#173 WallOfWorry on 02.06.16 at 12:35 pm

#146…Leo Trollstoy,

Hate to break it to you….but 70% of the jobs in January for the US were part-time and minimum wage was increased. If the US is at full employment how do you possibly explain the meager 2% GDP growth and 45 million Americans on food stamps?

Why don’t you worry about unemployment rising here while it falls there? Weird. — Garth

#174 WallOfWorry on 02.06.16 at 12:44 pm

#167…Garth….Tyler Durden of Zerohedge is a pseudonym used from the main character of Fight Club, it is not one person as you allude. While you may disagree with many of the opinions, the purpose of zerohedge is to pick up articles that the mainstream media would not normally cover because they too are equally biased and controlled by big money. So while CNBC and the likes pump out stories that portray a particular perspective they ignore other stories that might bring more balance. As such, the financial calamity of 2008 “surprises” the followers. I would recommend that you read Nicolas Taleb’s the Black Swan for some additional insight.

I understand zero is an amalgam of misinformed losers and extremists who think research is tedious. I have also read Mr. Taleb’s work. — Garth

#175 WallOfWorry on 02.06.16 at 12:51 pm

Garth…#173….I have never posted on here suggesting that Canadians shouldn’t be worried. However, I respond to posts that suggests that the US is in great shape and Canada is in dire straits. From my perspective, there is a global wall of worry that this site should be focused on. We are seeing global debt levels far exceeding the global growth rate. The bond market is pricing in no further Fed rate hikes. If groupies like Leo Trollstoy want to post articles that suggest a position based upon fact the for you to object to a counter perspective equally based upon fact is what would strike me as weird?

#176 anybody listening? on 02.06.16 at 12:52 pm

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

#177 waiting on the westcoast on 02.06.16 at 1:07 pm

Read the globe and mail article. While it is apparent that the realtors are dancing on a fine line and in a number of cases actively going over the line, I would say a lot of people are also demonstrating sour grapes at selling for less than they “may” have been able to. The fact that they don’t have relationships with others who would pay a higher price is also an issue.

If I have some jewelry that has an appraisal for 10k, it doesn’t mean that if I take it to the store, they will give me 10k. They want to make money for finding another buyer. If I had a way to find a retail buyer, then I would not need a middleman who could exploit the gap between what I am being offered and what another buyer may pay. Note: I get that the some of the examples were is realtors breaching their rules and not getting the best price for their clients.

#178 Chris on 02.06.16 at 1:16 pm

Don’t think we will see a big crash in housing. Probably just going to stagnate for a long while with a tight supply still. Supply is tight yet people would not be able to buy. People are overwhelmed with debt. This will tie them to their houses. High housing costs, long commute, high debt, competitive job market, congested traffic, sounds like being in a pressure cooker.

#179 BS on 02.06.16 at 1:35 pm

Mark on 02.06.16 at 9:19 am
“Here is what is driving Vancouver RE prices:”

“It worries me a lot that this could all come crashing down. I worry about it all the time,” said one Re/Max agent, Khalid Hasan, who said he owns or co-owns 15 to 20 properties, all destined for resale.

Quoted without comment…

The article pretty much lays out that 90% of the transactions are locals (often with Chinese names). Sure there might be a real Chinese guy buying some of the end product but the speculation part is locals. When the music stops there are going to be a lot of properties being held by locals who were planning on a flip and cannot pay for them without that greater fool. No way this ends in a slow melt. Those properties, like the 20 the realtor quoted holds, will be liquidated. The problem is there will be no buyers once it reverses. This thing could easily crash 50% within a year, followed by a slow melt for another 5 years or more. I can see a 75% decline from peak to trough in Van West and West Van. Maybe more if this thing continues going parabolic for any longer.

The politicians have to be freaking out right now. If they do something to stop it, it will collapse. If they don’t do something it will pop and the collapse will be even bigger. Jr. Trudeau is going to be at the helm during the biggest RE crash in North American history. I wonder if he will drop by YVR for a selfie in front of a foreclosure sign?

#180 rawdiswar on 02.06.16 at 1:37 pm

Too much ego jerking and gnashing of teeth on here as of late.

How do I get filthy rich off the impending RE collapse, dollar collapse, bond collapse, etc?

I don’t want to live in a micro-home and pretend its cool because I’m broke. Doing alright currently but looking to take on more risk for commensurate reward.

Oh, and Mark, put down the thesaurus for one night and try to talk like you type on here to real people. Does your type of autism allow for that?

#181 BS on 02.06.16 at 1:48 pm

101 GetReal on 02.05.16 at 11:16 pm

Interesting…….

“Documents from the British Columbia Finance Ministry say the province would lose $1 billion in residential real estate sales and almost 4,000 construction jobs if government moved to reduce foreign investment in the housing market.”

I am not sure where you got that quote from, but if accurate then foreign investment is next to nothing in BC. $1 billion and 4000 construction jobs is rounding error in the BC real estate industry.

#182 tundra pete on 02.06.16 at 1:51 pm

#105 brian

You didn’t get outbid by a cash bully, that was just what the crooked, corrupt real estate agent told you. Almost had you!

Could you imagine the frequency with which this is happening. Hence the prices the ignorant are paying.

#183 Big Dipper on 02.06.16 at 1:54 pm

Risk-on February 5th, 2016

“Sales volumes were ahead by a third, underscoring the little stampede that the T2 government’s announcement caused.

After all, there was no other explanation.”

———————————–

Not any that Garth’s ideological anti-T2 rant wants to hear anyway! There is not the slightest evidence that the increased DP’s requirements for properties over $500k caused any stampede.

The real reason is identified on todays G&M front page. A brilliant Ponzi-like scheme perpetuated by realtors and associates feeding on off-shore money. This pretty well demolishes the tenuous propaganda that it is the ($70k per year income) greedy locals causes the Vancouver SFH hyperinflation.

Granted, the Vancouver locals who bought 20-30 years ago benefit enormously from the scheme. Much better than a balanced portfolio! They would be well advised to sell soon though.

Meanwhile the real estate price manipulation spreads to Alberta as well. Different scheme – similar result. In the Alberta town where I live the recent muni tax property evaluation arrived in the mail. SFH houses assessed 8-9% over 2015 values! What recession! What lay-offs! We’re richer then we thought!

I constantly see local houses being listed about 10% over even 2014 values. RE agents fighting over fewer listings and getting them listed at completely unrealistic prices. Nevertheless, it works – as the CREB stats show minimal year to year SFH price reductions.

#184 Metaxa on 02.06.16 at 2:19 pm

Boy howdy!
If the knowledge and opinions exhibited here on vape ingredients and such extends to the investment and socio-political matters usually commented on then no wonder I often leave these comment sections shaking my head.

You know that premie babies are placed into closed bassinets and surrounded with a warm, medicated mist so their lungs can develop? The material creating that mist and carrying the meds is polypropylene glycol.

You know that hospitals, old folks homes, extended care facilities, etc all douse the HVAC vents with a mist to prevent Legionnaires Disease. Can you guess what is used for this? Polypropylene glycol.

Polypropylene glycol is classified as an organic alcohol and has been used by humans for many years with benefit, not harm

Azzholes drive BMW and Audis badly but we don’t prevent you from buying and using those vehicles.
Azzholes drive motorcycles poorly but you can still get and use one.
Azzholes vape, get in your face but you see all the time efforts to prevent me from getting and using mine.

In my case, 50 years of smoking with 20 years of trying to quit via any method that presented itself was finally done in 4 days after procuring my first vape rig.
I’m three years tobacco free now and have never felt better, emotionally, physically, spiritually.

The vapor released or blown out has been scientifically proven to contain water vapor and minute traces of the remaining constituent ingredients. So minute you need highly specialized equipment to detect it.
these are not vape friendly sites making stuff up but rather published papers on peer reviewed bona fide medical research sites.

#185 For those about to flop... on 02.06.16 at 2:19 pm

#178 Chris on 02.06.16 at 1:16 pm
Don’t think we will see a big crash in housing. Probably just going to stagnate for a long while with a tight supply still. Supply is tight yet people would not be able to buy. People are overwhelmed with debt. This will tie them to their houses. High housing costs, long commute, high debt, competitive job market, congested traffic, sounds like being in a pressure cooker.

//////////////////////////
I am not disagreeing with you but we have choices if we run our own race.
I was working on a Westside house last week,there were a couple of carpenters and an electrician.The three of them commuted in from Surrey because they bought ” affordable housing ” out there ,whilst I drove 15 minutes from my rental suite.
They are building equity, supposedly and I am saving and investing money for memories and options.
I do regret not buying a place in the mid 2000s but now I am over it.
There are decent houses for sale in mid size Australian cities for less than 400k just like other people have written here about other cities in Ontario and B.C.
But all you ever hear about is how expensive houses are in Sydney and Melbourne.
Buy the house ,not the hype…

M41BC

#186 maxx on 02.06.16 at 2:23 pm

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

Canada has well and truly lost its marbles. Our economy is a growing disaster.

RE is completely off the rails.

#187 WallOfWorry on 02.06.16 at 2:27 pm

#178 Chris…I think that many here (Garth included) expect some sort of correction but not a big crash. Garth calls it a melt…not sure what that means but certainly we are due for a 20% correction and everyone should be prepared for that. However, I would suggest that we are seeing other global/macro factors that might suggest that some markets may not be hit as hard…markets like the Beaches in Toronto that attract a lot of investment from a buyer group that are focused more long term and do not fret about a melt? For those groupies here who have followed Garth for the last 8 years they have missed one of the best bull markets. The only other thing that they missed was the best gold market in gold, which over the last 15 years has outperformed every stock indices.

#188 Bram on 02.06.16 at 2:43 pm

#155 crowdedelevatorfartz on 02.06.16 at 9:45 am
Assignment clauses are commonplace there’s not a condo sold in the GTA without one. Just because the Globe discovered it, this is not news. — Garth

Come on Garth, don’t be a sour loser when Globe scooped the news right from under your feet. They did a good job.

The truth is: such a shadow market distorts the prices.

Sellers don’t have direct access to Asian buyer: they receive less.

Asian buyer does not have direct access to sellers: they pay more.

The broker in between stands to pocket a @#$% load of money for very little work.

On the whole: very unhealthy for the market. If it is all legal: fine. If realtors don’t fulfil duties to client: they should suffer a LOT more than a few weeks of suspension.

bram

#189 BS on 02.06.16 at 3:00 pm

The Globe article gives a great example of how over valued the Van West market is right now.

From the Globe Article:

The Rappaports’ home, on Vancouver’s West Side, would net the couple $5.2-million last year. Jo and her husband had bought the stately Craftsman home in 1987 for $362,000. They raised their sons there and loved it. But the neighbourhood had changed. Investors were razing the houses and it was time to move on…

Three months after the deal closed, the new broker-owner relisted the house – which he then had a stake in – and resold it for $6.2-million, a substantial if not unusual price increase that works out to roughly $11,000 a day. Mr. Du is now advertising the house for sale again for $6.58-million.

We have a house that sold for $362K in 1987 selling for $6.2 million last year and now advertised at $6.58 million. Robert Shiller proved over the long term RE will track inflation. If this house just tracked 3% inflation over the past 29 years it would be worth $863K today. Even if prices tanked 75% to $1.6 million the house would have still gone up double inflation over 29 years. Even that has never happened. Remember this is in a neighbourhood that has not changed much. It is no nicer today than 29 years ago and there is no density increase on the land. There were Chinese guys buying in YVR in 1987 and Vancouver was out of land at that time too. Incomes and rent have also just tracked inflation at best. There is no reason for the house to increase over inflation. The downside on this market is staggering. Whether it is next year or 10 years from now it is going down. Way down.

#190 Smartalox on 02.06.16 at 3:05 pm

Where are the Vancouver Real Estate trolls in light of this Globe and Mail article? Nobody eager to defend their industry? Or too busy kicking themselves for not thinking of it, and racing to catch up?

Folks here sure jump on things that confirm their bias. Assignments are not new, people. And this surge of usage in some Van hoods is hardly enough to explain the market. The anti-Chinese bent of the Globe sure pushed your buttons. — Garth

#191 Hopelessly devoted to you on 02.06.16 at 3:08 pm

Took your advice from your post on Feb 4th and took out a $5k RRSP loan from tangerine at 1.5% interest. Interest on loan = $40 :) Will use my tax refund to pay down loan. Thanks for your ongoing invaluable advice! Thanks to you I went from house horny to somewhat happy renter in Canmore.

#192 Caught In The Grip on 02.06.16 at 3:08 pm

85% of preferred shares are issued by banks and financials. They carry the most risk in the event of a worsening Canadian recession accompanied by a severe housing correction.

Absolutely false. Housing risk is carried by CMHC, not the banks. Even in the GFC no bank suspended or even reduced a dividend. — Garth

#193 Ray Skunk on 02.06.16 at 3:09 pm

Apparently there was an article in the G&M today about Vancouver Real Estate.

I don’t suppose anyone has seen it?
If only I could find a link somewhere…

#194 Caught In The Grip on 02.06.16 at 3:23 pm

Leading sectors in the US (tech, biotech & consumer stocks) have finally toppled. US banks are down some 25%+ since the correction began. Small caps, mid caps, transports, energy & basic materials are already deep in bear markets.

In addition, the VIX is trending higher.

I fear this could be a milder version of the 1980-82 recession during which the last oil collapse occurred.

Nope. No recession. — Garth

#195 Caught In The Grip on 02.06.16 at 3:34 pm

Traders don’t care if the CMHC carries the risk. During the GFC bank stocks & pref shares were crushed with the housing market – many of which did not come back. In the event of a global recession (possibly ex US but it will feel like one there) & a severe housing correction in Canada, financials & Cad pref shares will be brought down. CS & DB in Europe went through their 2008 lows last week on a worsening economic outlook and the expectation of prolonged negative interest rates.

I don’t want this to happen but it is possible.

It won’t. No 2008 (which turned out to be a spectacular buying opp). — Garth

#196 WUL on 02.06.16 at 3:50 pm

MIKE IN EDMONTON:

Garth, if I may.

Mike, I enjoy your comments from Leduc/Nisku where the computer guided lathes are threading drill stem and the x-rays are taken on the pipes to protect the roughnecks from disasters while plumbing the depths for crude.

What comes thru is positivity. Also, surviving a couple of rounds of layoffs tells of a strong workout.

Chin up. Sorry about the layoff.

And a note that you probably do not need. Exercise outperforms anything that big pharma has ever produced to keep your spirits high.

Signed,

A Supporter in Ft. Mac

#197 WUL on 02.06.16 at 3:52 pm

MIKE,

Should read work ethic.

WUL

#198 Lillooet, BC on 02.06.16 at 3:54 pm

#75 common sense on 02.05.16 at 9:27 pm
#66 Shawn

Yes I see what you see and read a couple articles saying the S & P has breached 200 and 320 day moving averages to the downside which since 1995 has been the start of a big drop off…

Past performance….
*******************

I like Shawn’s view on those technical charts and anlyses

#199 Caught In The Grip on 02.06.16 at 3:57 pm

The last 2 major housing corrections in Canada coincided with bear markets in the US. The 1980s housing correction was accompanied by a 25% correction for the S&P 500 & the early 1990s housing correction was accompanied by a 19% correction in the S&P 500. TSX corrections were worse in both cases.

The S&P 500 is down 12% and falling. So I we’ll get our housing correction here.

…And the ensuing Canadian housing correction will likely be deeper & more prolonged than the correction in the S&P 500.

I just don’t see how the Cad banks won’t get hit in the process.

#200 Dan on 02.06.16 at 4:09 pm

And nobody has money to buy furniture. I have a store where I try to sell it. Heck no enough money left for food.
After mortgage payments. And prices for made-up shacks are climbing… Pressed dust is a state of mind and it’s a building material (or it is ingredients) of a home. Home?

#201 45north on 02.06.16 at 4:52 pm

RimJabba: This is a classic blow-off-top before the bottom falls out.

Thanks for ruining my sleep tonight, we are literally sitting on an atomic bomb housing market if that chart behaves like parabolic move.

I think RimJabba says it best. But consider for a moment Justin Trudeau who brought a 1000 people with him to Paris to talk about climate change /global warming. The point of the Paris conference was to first describe the potential harm and then measures to prevent the harm.

I don’t think it’s a stretch to say that an “atomic bomb housing market” will cause harm. I mean the harm is going to be a lot more immediate and more directly harmful to Canadians than climate change.

However the Government is just going to let it happen even though it has a lot more control of the housing market than the earth’s climate.

#202 zee on 02.06.16 at 4:57 pm

Hey

Prices going higher has nothing to do with the changes that are to come in effect this month.

It has to do with sentiment. Everyone in GTA and Vancouver feels that the only way to make money in Canada is through Real Estate. Its has proven to be correct over the last 15 years.

These days they are buying a home not as a place to live but to make money.

That’s called speculation. It breeds risk. — Garth

#203 Mark on 02.06.16 at 5:02 pm

“Mark – you can take some remedial economics classes at Khan Academy. Your three posts in the 120-135 range were way off-base. Wishing something were true is far different than what is actually taking place. It really makes your look bad defending a thesis (with unsubstantiated and inaccurate data) that has been proven wrong over and over for the past couple of years.”

Its not just me coming to the conclusion. Its also CIBC’s research, and its also Ross Kay’s research, both well respected and highly credible, that has found a dramatic shift in Vancouver’s sales mix being responsible for most of the alleged “price increases”. I’ve posted the links in the past to some of their work (some of which is available publicly), but I don’t want to get all annoying like Victoria RE update and come up with a FAQ that I re-paste ad nauseum with the same stuff every time around.

Basically put, the statistically ignorant are being played for fools with these claims that ‘house prices are rising’ in GTA/GVR when all that has changed was the nature of the increasingly narrow segment of the market that the Realtors are actually transacting in. Even Garth is guilty of referring to Realtors’ averages as “house prices”, rather than simply averages of Realtors’ transactions at a quoted interval. Its a very important distinction and it behooves you to understand it before you contribute further.

#204 46 and 2 on 02.06.16 at 5:16 pm

Calgary is dying….

#205 gut check on 02.06.16 at 5:18 pm

JREF….
that’s what has happened. I think the JREF crowd found us.

I don’t think I can read the comments anymore. Will still read the blog tho.

#206 When will they raise rates? on 02.06.16 at 5:22 pm

To me, the most interesting thing about the Globe article (great piece of investigative journalism btw) isn’t what they uncovered per se, but the fact that it is now public knowledge, and what will be the fallout of this revelation?

I’m sure that every Van RE agent knew exactly what was going on, and certainly the Van, BC and Canadian governments knew (or should have known) the game as well. But now, the “cat” is out of the bag and there are going to be a LOT of pissed of Vancouverites demanding that the government do something about it!

The Globe just ruined the government’s political cover of “let’s study this”. Now, the people will be demanding an immediate end to the practice of “the real estate technique”.

The political fallout from the Globe article will be fun to watch… And the effect on the Van RE bubble… could the Globe article be the pin?

There will be no fallout. Real estate speculation is rampant in Vancouver (and Toronto) and assignment clauses have been used for years. I’m finding it hard to believe people did not understand this. In any case, speckers only flip where big profits are possible, so it is generally (at least in YVR) a top-of-market practice. BTW, it’s all perfectly legal. — Garth

#207 Mark on 02.06.16 at 5:24 pm

“I just don’t see how the Cad banks won’t get hit in the process.”

They will be hit at some point, but it will be largely based on a question of confidence in further CMHC bailouts. Rather than anything ‘technical’ about their portfolios.

The election of Trudeau, and his willingness to blithely and arbitrarily say, “Because its 2015” leads me to believe that there will be some limitations enacted at some point on the banks collecting in full on CMHC insurance. The enaction of such limitations, or even the credible threat of such limitations, will have a significant impact, over time, on pricing of Canadian CMHC/NHA-insured MBS, and the price of Canadian banking stocks.

Rank, uninformed and useless speculation. Nothing of the sort will happen. — Garth

#208 Big Dipper on 02.06.16 at 5:24 pm

“That’s called speculation. It breeds risk. — Garth”

————————————-

It’s gambling based on historical data. The RE agents can point their clients to historical uninterrupted increases in house values. Everybody knows that you don’t leave a winning table at a casino. Just ask Smokey.

#209 Paul at No Pension, Will Travel on 02.06.16 at 5:51 pm

I guess you’ve seen this one about ‘assignments’ in Vancouver – boggles the mind: http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

#210 jess on 02.06.16 at 5:55 pm

Did Financial Giant Goldman Sachs Just Admit the System is Rigged?

Bill Black explains why one of world’s largest investment firms Goldman Sachs is questioning the “efficacy of capitalism”

Did Financial Giant Goldman Sachs Just Admit the System is Rigged?
https://www.youtube.com/watch?v=xm_RMtD66z0

The Vampire Squid Tells Us How to Vote
Lloyd Blankfein charges for investment advice — but his political wisdom is free
By Matt Taibbi February 5, 2016

Read more: http://www.rollingstone.com/politics/news/the-vampire-squid-tells-us-how-to-vote-20160205#ixzz3zPi9SX2o

#211 Joe2.0 on 02.06.16 at 5:57 pm

Negative rates are coming to the USA in the near future.
So expect the same in Canada down the road.
They are all following the same template.
Print money, drop rates, print more money, drop rates…
Soon Trudeau will start to inject large amounts of money into Canada’s broken industries.
AKA debt, with inflationary symptoms followled up by stagflation.
My previous dribble over the past two years has telegraphed what’s coming.
The markets are broken and the only thing that will rebalance them will cause a whole lotta pain.
The downward spiral will only gain momentum.
The whole blame it on oil is ridiculous, it’s what isn’t using oil that’s the issue.
It’s a bad joke sheeple.

Negative rates are not coming. — Garth

#212 When will they raise rates? on 02.06.16 at 5:58 pm

There will be no fallout. Real estate speculation is rampant in Vancouver (and Toronto) and assignment clauses have been used for years. I’m finding it hard to believe people did not understand this. In any case, speckers only flip where big profits are possible, so it is generally (at least in YVR) a top-of-market practice. BTW, it’s all perfectly legal. — Garth

I agree, the revelation itself should not come as a surprise to anyone, and as you point out it is totally legal… That’s why I said it is not what was uncovered that’s the real story here…

I suspect that the facts that you mentioned will be irrelevant in the minds of angry Vancouverites who are now armed with what they will view as “solid proof” confirming in their minds what they that had suspected all along: That they are being “ripped off” by an “elaborate scam” involving “dishonest, greedy RE agents” and “Overseas Chinese money”!

The article pushes all the right emotional buttons to cause a full blown s*#% show with rabid “don’t have a million” crowd!

#213 Ronaldo on 02.06.16 at 6:02 pm

Hitler learns about real estate gimmicks.

https://www.youtube.com/watch?v=BjIVmb1JMUE

#214 DON on 02.06.16 at 6:16 pm

#154 BG on 02.06.16 at 9:38 am

#113 DON on 02.06.16 at 12:01 am

Who said anything about calling one’s gut feeling the absolute truth? One should always keep an open mind…the earth is flat…a plane will never fly…

You assume to much and seem to read into things…I am not similar to your buddy, nor do I think in his manner. I keep an open mind on every subject – a little humility helps keep the ego in check.

And when I debate I use facts and never resort to name calling, using words, like dumb, stupid, ignorant. But I sure as hell would like to.
————————————————————-

Sorry buddy but you are the one assuming a lot here and jumping on flying bullets…

I was merely talking about a way of thinking and calling it dumb.
This was not meant to be a personal attack at all.
Nor did I suggest you think like the person I mentioned.
*********************

Thanks…no harm done. Jumping on flying bullets – I like that. cheers

#215 TurnerNation on 02.06.16 at 6:34 pm

Great tip on the Tangerine RSP loan at 1.5% variable natch. 5k is $6.25 interest each month. Less then one pint of beer costs.

I checked they have five sht mutual funds. But buy when indices are lower than now and catch a nice run later this year/early next year.

#216 Ronaldo on 02.06.16 at 7:13 pm

If you think the government will make any moves to halt the runaway prices in Vancouver and elsewhere in Canada think again. The following is one of the reasons. The ones who could all have a vested interest.

http://thetyee.ca/News/2016/01/11/Finance-Minister-Well-Invested/

#217 For those about to flop... on 02.06.16 at 7:18 pm

Hey Washed Up,I would never call a hockey player weak for wearing protective clothing but have a look at our version of football compared to the American version people will be watching tomorrow.
We don’t wear any padding .
I played ten years semi professionally …still got all my teeth …must have been doing something right!
Enjoy!

M41BC

https://m.youtube.com/watch?v=s1aU0hz5Tf8

#218 Smoking Man on 02.06.16 at 7:27 pm

Christ we are family again.

Might need to quit smoking and drinking to prolong this feeling.

They have come along way.. this feels wierd.

#219 Oops - Forgot There Will be Capital Gains Taxes Oweing on 02.06.16 at 7:29 pm

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

OK, that’s enough times to link one sad story. — Garth

#220 kommykim on 02.06.16 at 7:38 pm

RE: #213 Ronaldo on 02.06.16 at 6:02 pm
Hitler learns about real estate gimmicks.

LOL! Good one. Here’s another:
https://youtu.be/x-2JwlLPCIA

#221 West Coast on 02.06.16 at 8:13 pm

Term of the day: “assignment sales” = “an opaque and speculative realm of the housing market, in which properties are traded one or more times before a deal closes – legal but controversial flipping that creates opportunities for agents to make multiple commissions and investors to profit tax-free from houses that are not yet technically in their possession”
read on…………
http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

Assignments are a fact of everyday life in modern real estate. In most cases there is little speculative about them. — Garth

#222 KABOOM 2016 on 02.06.16 at 8:14 pm

It’s all sunshine and roses…. til its not……….

http://www.telegraph.co.uk/finance/economics/12138466/when-is-the-next-financial-crash-coming-oil-prices-markets-recession.html

#223 Grey Dog on 02.06.16 at 8:31 pm

Very interesting article in Globe and Mail regarding Vancouver Real estate shenanigans. It is also happening here in Unionville. My enclave neighbourhood was originally an IBM ghetto being just north of company headquarters. Originally built 33 years ago housed ‘old stock’ whose children have now grown and flown, a great place, the most diverse community in Canada according to our Mayor Frank Scarpitti. Anyhow, the past year there is a two tier pricing of homes. Old stock invariably gets sold for a couple 100k less than homes that were sold a couple years ago and have been vacant since. As recently as September, my old IBM neighbour with a ravine lot (just one neighbor to the west) sold for less than an abandoned corner lot house with no backyard just 8 houses down the street. There are other examples that had the old stock scratching their heads in the past two years.

Speak in code much? — Garth

#224 John Prine on 02.06.16 at 8:34 pm

#101 GetReal on 02.05.16 at 11:16 pm
Interesting…….

“Documents from the British Columbia Finance Ministry say the province would lose $1 billion in residential real estate sales and almost 4,000 construction jobs if government moved to reduce foreign investment in the housing market.”

Pretty obvious to anybody that lives in Vancouver, so many empty houses in what used to be vibrant and friendly neighbourhoods.

#225 Mark on 02.06.16 at 8:39 pm

“The following is one of the reasons. The ones who could all have a vested interest.”

Yet Canada’s current Prime Minister was (and technically remains, as a guest of the GoC/NCC) a renter. Despite obviously having enough money to be an owner. And it only takes a brief glance at the USA to realize that excess investment in RE is not only unsustainable, is a path to economic ruin, high unemployment, and a very weak economy that foments social instability.

“legal but controversial flipping that creates opportunities for agents to make multiple commissions and investors to profit tax-free from houses that are not yet technically in their possession””

The ‘tax-free’ part of assignments refers to land transfer tax. Not income tax. Those who engage in such transactions, as ‘dealers’ in housing are required to report, as income, their gains to the CRA. And pay income tax in the usual fashion. No capital gains treatment even for the assignment flippers.

#226 Freeman on 02.06.16 at 8:52 pm

Funny how the Vancouver house prices go up 20% in one year, yet the Nasdaq stock market has gone down 8% in one year ( from 4750 to 4363 )

http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=1&mn=0&dy=0&id=p95696037966

Enough to make you wonder which is the smarter investment choice ?

Like people take out $800,000 mortgages and invest their life savings in the Nasdaq. Too funny. — Garth

#227 WUL on 02.06.16 at 8:57 pm

217 FLOP

Crikey! I had no idea. Looks like a good sport for a Jackaroo or a Digger. No place for a Bludger or Sheila.

WUL

#228 For those about flop... on 02.06.16 at 9:32 pm

Hey Washed Up ,I’m glad you liked it,Maybe the Flames should sign up this guy.

M41BC

http://www.dailystar.co.uk/news/latest-news/492976/Kangaroo-poses-for-pictures-with-bulging-biceps

#229 Sugar Man on 02.06.16 at 9:45 pm

Garth, you won’t like this.

http://www.telegraph.co.uk/finance/economics/12138466/when-is-the-next-financial-crash-coming-oil-prices-markets-recession.html

Not everyone agrees that the global economy is improving, and they have the research to back it up. Global recession is on the way. Obama is manipulating like crazy to go out on a ‘legacy’ standing, but wait for both shoes to drop once the phony dollar/rate policy is off the table.

I believe saving cash and buying gold bullion, along with a 5% weighting in a basket of gold stocks, for at least the next two years will be my savings grace. I believe that we haven’t seen the worst for the oil industry on the corporate side and we’ll see a lot more bankruptcies.

Out course, out of the fires, we’ll see opportunity, but as T Boone Pickens has said “I’m outta there until better times are evident”.

I understand scared people being conservative, but hoarding an intensely volatile, speculative commodity like gold, which has delivered four years of losses, is just silly. — Garth

#230 Julie K. on 02.06.16 at 10:24 pm

Increase of “- Garth” italics tonight.

#231 Sugar Man on 02.06.16 at 10:37 pm

Foreign buyers using local agents as ‘Canadian proxies’ to flip contracts cited as main reason for rapid price appreciation in Vancouver says G&M. The practice is keeping the identity of the foreigners hidden while making it appear to be locally driven buying. Not so say the locals.

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

I believe gold will go thermo nuclear when the economic collapse becomes evident to a greater proportion of the public. People in Asia are buying two fisted. I walked past a huge gold shop yesterday and you had to take a number to be served. It was at 478 and the crowd spilled down the concourse for at least a quarter mile. Obviously people here think it’s silly not to own old. After all China has been stockpiling, last buy announced, 250 tons.

#232 Sheane Wallace on 02.06.16 at 10:37 pm

Nope. No recession. — Garth
—————————
Recession is part of the business/credit cycle.

We are long overdue for one.

Unless we believe that central bankers have conquered the business cycle… which they believe in… and in which they will be proven wrong again.

Nobody is stronger than the market.

‘Long overdue’? Canada was in recession last year. — Garth

#233 For those about to flop... on 02.06.16 at 10:42 pm

Hey Washed Up ,maybe the Flames should sign up this guy.

M41BC

http://www.dailystar.co.uk/news/latest-news/492976/Kangaroo-poses-for-pictures-with-bulging-biceps

#234 Sheane Wallace on 02.06.16 at 10:46 pm

I understand scared people being conservative, but hoarding an intensely volatile, speculative commodity like gold, which has delivered four years of losses, is just silly. — Garth
—————————–
gold is a strange commodity that along with silver goes up when other commodities tank and lately behaves like currency/money and is actually stronger than the USD.

interesting commodity.
—————————
I really do not understand the need to constantly pay attention to and to trash such useless worthless commodity.

#235 Silent the people on 02.06.16 at 10:50 pm

Garth, I think you have to start admitting the YVR real estate market has been a good investment! How long this continues baffles all of us but profits beyond the markets have occurred! They have proved us wrong! Real estate in Vancouver and Toronto have been a great investment! It’s a hard argument and we don’t know how this will end! The Feds will do their best to keep it going. Who knows, it may prove us wrong!

#236 Sugar Man on 02.06.16 at 11:14 pm

“China’s gold reserves rose to $63.57-billion at the end of January, from $60.19-billion at end-2015, the PBOC said.

They stood at 57.18 million fine troy ounces at the end of January, up from 56.66 million fine troy ounces in December.”

Gold has been brutally cyclical in my lifetime, you would have had to live through the peaks and valleys over a 50 year stretch to know this. I got lucky with two waves in the mid to late seventies and late 80’s through mid 90’s. I paid for my kids private school and university education by putting nothing but gold in my self directed RESP’s.

Of course, that doesn’t seem possible if looking through the eyes of a 35 year old who knows nothing of histories lessons.

The recency effect over 4 years certainly makes it seem like gold will never come back from the dead, that government has defeated the business cycle with ZIRP controls, and, that real estate will continue to appreciate ad perpetuum. But we know that’s not the case over the longer term.

I see the hyper inflation set up a sure bet to bat gold into the stratosphere once again once the Obama led Ponzi scheme collapses. Many foreign governments seem to agree, as evidenced by the reports of massive stockpiling.

#237 liquidincalgary on 02.06.16 at 11:22 pm

Freedom First on 02.05.16 at 7:43 pm
#25

Not me, an impostor. Who shoots ducks in a barrel? Seriously guys, can’t you come up with something more original than this?

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

he asked for it.

keep ’em coming.

hilarious!

#238 Sheane Wallace on 02.06.16 at 11:51 pm

‘Long overdue’? Canada was in recession last year. — Garth
—————–
I meant US and Europe.
——————————–
#234 Sugar Man.
there will be no hyperinflation in USD. Gold will go higher along with US and probably much higher.

For Poloz’s confetti the chance for runaway inflation is much higher, looking at the prices of the absolutely crappy houses in To and Van where no one has money and wealth is generated by debt, there is no way in hell loonie is not going down the drain big time.

BOC will institute deeply negative rates. Stay away from anything nominated in CAD,

#239 Leo Trollstoy on 02.07.16 at 12:11 am

Rank, uninformed and useless speculation. Nothing of the sort will happen. — Garth

WalMark is wrong. again

#240 I am the Babbler on 02.07.16 at 1:19 am

Vancouver will melt? Yeah, maybe after it goes up another 200% or so in the next eight years.

#241 Smartalox on 02.07.16 at 2:04 am

@Garth in response to #190:

I’m actually not anti-Asian in my mindset, just baiting the trolls.

I was actually surprised by the high pressure sales tactics directed towards the (eventual) Asian buyers, including directives not to leave them alone, including “picking them up at the airport”!?!

Makes me think of the long BC tradition of promoting penny stocks, usually with boiler room conditions. The high intensity sales pitch will work an alarming percentage of the time, buying OR selling.

Personally, I’m happy to be renting from a (multi-generational Asian-) Canadian landlord, for less than the interest on an equivalent mortgage.

But I’ll be happy to see Vancouver prices revert to the mean sooner, rather than later. If this helps increase affordability for me, that’s great.

If not, I’ll keep paying rent and feathering my Nest Egg.

#242 Robert on 02.07.16 at 7:30 am

HAM headlines the Globe. http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/?cmpid=rss1&google_editors_picks=true
Is Canada Revenue Agency asleep at the switch still? There is a tip line to report tax evaders. Do you think I could claim a prize if I email them the above link?

Nothing illegal about assignments, nor is there any evidence of tax evasion here. — Garth

#243 Rachel Krinos on 02.07.16 at 7:37 am

We have been a clients with Duca Credit Union for 30 years now and have RRSP’s with them. They said they have unlimited DICO deposit insurance for years RRSP’s now.

They discussed with us at the branch here in Newmarket that our $1,200,000 in RRSP’s and LIRA’s will accrue compound interest of $261,378 by Auhust-2022.

This works out $754 a week which is about 40% of our current weekly gross paychecks. It would cover 2.7 years of our employment gross income.

They have been in business since 1954 and have 15 branch locations in Ontario. We keep hearing that banks are protected by CMHC for their mortgages so we don’t see how DICO will not protect RRSP GIC depositors and other financial institutions would buy out Duca Credit Union if sold later down the road.

#244 Apocalypse2016 on 02.07.16 at 8:05 am

Folks, hug your families this morning. Terrible stuff is happening, in real time.

North Korea is launching missiles, with a bunch more ready to go.

http://www.cnn.com/2016/02/07/asia/north-korea-rocket-launch-window/index.html

UN Security Council holding an emergency meeting in mere hours from now:

http://www.bbc.com/news/world-asia-35516278

This is also just what the Russians want, a cover and pretext for nuclear war.

My apocalypse analytics confirm that there is now a 37% chance, and rising, that we will not live to see the Super Bowl tonight.

Sorry, but it’s the truth.

Prepare.

#245 TurnerNation on 02.07.16 at 8:09 am

Some are speculating what stunt the elites might pull at this year’s Sooper Bowl. Power outage? Crisis?

Nothing is left to chance. At any time you have maybe $50 million in salaries running around the field.
Ditto for the half time show performers.

Everyone out there is playing their role
Each second of ad time is worth how much?

Of course this game’s score will be kept tight to the end for maximum viewing effect.

#246 Robert on 02.07.16 at 8:12 am

If we all contact CRA tip line with leads to assignment flipping in YVR do we get to claim a prize? http://www.cra-arc.gc.ca/gncy/cmplnc/otip-pdife/menu-eng.html

#247 Steerage bilge on 02.07.16 at 8:34 am

#242 Apocalypse2016 on 02.07.16 at 8:05 am
Folks, hug your families this morning. Terrible stuff is happening, in real time.

North Korea is launching missiles, with a bunch more ready to go.

http://www.cnn.com/2016/02/07/asia/north-korea-rocket-launch-window/index.html

UN Security Council holding an emergency meeting in mere hours from now:

http://www.bbc.com/news/world-asia-35516278

This is also just what the Russians want, a cover and pretext for nuclear war.

My apocalypse analytics confirm that there is now a 37% chance, and rising, that we will not live to see the Super Bowl tonight.

Sorry, but it’s the truth.

Prepare.
-/
There is a 100 % chance you will have a new name in 11 months.

#248 Victor V on 02.07.16 at 9:03 am

From $200,000 a year to zero for some oil patch workers

http://m.thestar.com/#/article/business/economy/2016/02/06/from-200000-a-year-to-zero-for-some-oil-patch-workers.html

#249 Victor V on 02.07.16 at 9:14 am

Saskatchewan unemployment rate ‘skyrocketing’ as population grows faster than job creation

http://www.nationalpost.com/m/wp/news/blog.html?b=news.nationalpost.com/news/canada/saskatchewan-unemployment-rate-skyrocketing-as-population-grows-faster-than-job-creation&pubdate=2016-02-07

#250 Sugarlips on 02.07.16 at 9:19 am

Sure hope you’re right about gold Garth, this tweet from Jim Rickards just landed:

According to IMF, Canada sold 1.3 tonnes of #gold reserves (43.3% of its gold reserves) in January 2016. pic.twitter.com/CJkJfTSrNd

Why would they do that if – as you say – we are at a 4 year low?

As a reference point The UK government sold gold reserves at a cyclical low 15 years ago and (anecdotally) their citizens have berated them for it ever since..still I’m sure T2 knows what he’s doing…

#251 common sense on 02.07.16 at 9:34 am

#242 Apocalypse

What is the over under on this?

Should be a hell of a half time show.

Garth, Why do you let this junk on here?

We need comedy. — Garth

#252 Jules on 02.07.16 at 10:08 am

Is this a thing? Are they selling houses with children videos now?

http://www.youtube.com/watch?v=V4vh4S0pQuI&sns=em

#253 common sense on 02.07.16 at 10:18 am

yes..comic relief indeed…

#254 last in looses on 02.07.16 at 10:32 am

Here’s an article showing that Garth is RIGHT. Real Estate needs to be more transparent.

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

#255 Sideshow Rob on 02.07.16 at 11:32 am

Here is what I don’t get about this article that’s been linked far too many times….No one is mentioning the massive conflict of interest going on here. RE agents are supposed to be working for the seller to get the best price period. So when the agent buys the place and resells it 3 months later for 20% more, how on planet earth did the seller get the best price and how did this agent work for anyone but himself? This smells really bad.

The seller got the best price (which the seller agreed to) on the day the offer was accepted. Not the unknown market price three months later. If the seller waited to sell into a future market, he would be accepting the same as risk the person buying the assignment – that prices might rise or fall. Can’t suck and blow. — Garth

#256 Ronaldo on 02.07.16 at 1:24 pm

#239 Smartalox

”I was actually surprised by the high pressure sales tactics directed towards the (eventual) Asian buyers, including directives not to leave them alone, including “picking them up at the airport”!?!”

Same tactics were employed during the 70’s when pyramid schemes were rampant and many new immigrants were lured into them thinking this was the Canadian dream and that it was easy money. Little did they realize that they were all about to be scammed.

#257 understood by few on 02.07.16 at 1:41 pm

Wtf is with all this linking to the same article?

Some home owners are butt hurt because someone made a profit buying their house? How’s that an article? Car dealership made 4k off a friend’s trade in after dropping at most a few hundred on cleaning it up (and the detailers are a sunk cost.. Gotta have lot boys). Call the cops, call the media, let’s get the government to write legislation to prevent this fraud!

So basically your commentors consist of gold nuts, 911 conspiracy theorists, doomers (recession here, us, world.. ) and those that think capitalism is illegal. All of whom decide whether to use then or than by flipping a coin.

The signal to noise ratio is low. I hope it’s just because you attract crazies. If this is a reflection of the general population……

#258 Ronaldo on 02.07.16 at 1:43 pm

#248 Sugarlips on 02.07.16 at 9:19 am

”Sure hope you’re right about gold Garth, this tweet from Jim Rickards just landed:

According to IMF, Canada sold 1.3 tonnes of #gold reserves (43.3% of its gold reserves) in January 2016.”

Insignificant. That amount would fit in your microwave. Did he say in what form it was sold? Coins?

#259 Wowza on 02.08.16 at 4:30 pm

Insane speculation by buyers who don’t even have the money to do it on their own.

https://www.facebook.com/Outbuildings/posts/1225358730826404

“Entrepreneurial Couple seeks a Co-Owner / Investment Partner to purchase a property in the Lower Lonsdale / Moodyville area of North Vancouver.
Significant development is occurring in the surrounding neighbourhood. The plan would be to hold the property for 12-24 months with the intent to flip the property to a developer should the opportunity arise.
The property is NOT on the market but may be soon. The property consists of a NON-Strata duplex which is fully liveable.
Pending OCP Changes will allow for the re-zoning of the property to a FOURPLEX.
Property Specifics
Usage: Non-Strata Duplex
Lots Size: 6,011 sq/ft
Floor Area: 2024 sq/ft (1020 per side)
Exceptional City Views
Estimated Purchase Price: $1.4-1.5M
PLEASE NOTE:
Our colleague owns the adjoining Non-Strata Duplex so this is the start of a property assembly. Joining the two properties may allow for a 1.0 FSR or 9 Units or 1.25 FSR with underground parking.
Estimated 12-24 month flip $1.7M if sold with adjoining property.
If you are interested, please contact me for further details.”