Suck it up

SELFIE modified

House porn’s big business. Cable television teems with ‘flip’ programs, ‘hot property’ segments and how-to reno shows telling you why a $50,000 investment will add a hundred grand to the property value. Guaranteed.

Agents and brokers routinely appear on Global, CTV and the CBC as housing experts. HGTV reality show stars have turned into seminar speakers, drawing big crowds of greedy people. Mainstream media, like the Globe and Mail, have discovered the way to stay relevant is to run daily front-page real estate stories. Politicians seeking election or attention promise to expand housing tax breaks or probe foreign buyers.

It’s everywhere. Permeating our society. Certainly all over this blog. Speculation, property fever, leverage and windfall profits – these are the new building blocks of perceived wealth.

“Bought a triplex a few months ago,” says a flipper in Guelph named Chris, “total demo, renoed and ready for spring. Will make $200k net or keep for major positive cashflow. You just have to ignore Garth’s advice and follow your own instincts. My biggest mistake was to think that some dude on the Internets was smarter than me.”

So we’re at a point now where surveys show 80% of Millennials don’t consider a mortgage to be debt. Almost everybody is convinced interest rates will never rise, because ‘the government wouldn’t dare, since we’d all be wiped out.’ In the bubble cities folks have come to expect double-digit annual increases in the value of their houses. And listings have plunged, as I showed you last week, because most can’t afford to move. A majority, in fact, understand they couldn’t buy their own homes. But they expect others to.

Speculation, fueled by destructively low interest rates, financial illiteracy, a fear of financial markets, media saturation and a cultural prejudice towards bricks have led to this level of historic house horniness. Add in the meme of foreign buyers munching their way through Vancouver and Toronto, deliberately amplified by realtors, and you have the kind of hostile panic on open display in the steerage section of this pathetic blog. It breeds racism, resentment of wealth, xenophobia and futile cries for authorities to do something about unaffordable houses.

At detailed here last week, this is the moment when greed (flipper Chris and his $200k instant profit) and fear (of the Chinese, buying a $9 million Westside house) co-mingle. Both are taking us to a worse place.

The reaction of so many on this site, and everywhere else, has been to bitch, moan and complain about foreigners and high prices or to pump the market and celebrate the easy, sure-thing money that real estate brings. Just like on Love It or List It, or the Property Brothers, or Masters of Flip.

But I think you’re all nuts.

Nobody’s about to do anything to change current market conditions. A damp economy will keep most markets stagnant while fear/greed fuel the bubbles elsewhere. The Bank of Canada will not alter things when it reviews interest rates on Wednesday. No cut, no increase. Certainly never negative rates. The cost of money will stay where it is until the federal stimulus program (coming March 22nd) has been announced and assessed. In fact the next moves by the central bank will be higher, not lower. When that happens, real estate everywhere will react.

The government isn’t going to assist in making houses cheaper, either. Can’t. Impossible. Counting the number of foreign buyers is interesting, but useless. There’ll be no meaningful speculation tax, anti-Chinese barrier or intervention. The whining from people who can’t afford what they want will fall on deaf ears. As it should. Government’s already played too big a role in goosing real estate (CMHC, RRSP home buyer’s plan, tax credits, low rates etc.) and we’re reaping the unhealthy harvest.

So mortgages won’t get cheaper. There’ll be no new laws preventing sales financed with offshore funds, no outlawing of flip-friendly assignment clauses, no special taxes rich people will care about. However, neither will the recent frenzy continue at the same pace in a country where economic growth is winding down, household debt’s at crisis levels, and where incomes and job creation are stagnant. As I wrote here on the weekend, this is a world you must get used to. Deal with it.

A lot of wealth has flowed into real estate. Lots of borrowing, too. Reaching to afford a house in Vancouver that was affordable twenty years ago can kill a family now. So they should not. The risk of a long and slow real estate decline has never been more acute. The certainty of a long and slow ascent in interest rates never more assured.

Smart people will follow the advice set out here often. Sell assets at the top. With real estate, that’s probably now. When the profits come free of capital gains tax, it’s all the sweeter. Invest the money wisely, prudently, in a balanced fashion, and let the windfall gains support you, pay the rent or ensure your future security. To stay invested, trying to squeeze out more speculative gains is a classic mistake. That’s murdered many a stock investor.

For those without houses, well, adapt. If you can’t afford one, don’t try. Especially if you have kids or an insufficient pension plan. Irresponsible. Look for a starter house, not a forever home. Relocate to a community where prices are more reasonable. Get a semi or a townhouse instead of detached. Rent and wait.

The goal of life is not a house. Grow up.

216 comments ↓

#1 Grantmi on 03.06.16 at 10:57 am

just doing this so no one can say the “F” word.

#2 Keith on 03.06.16 at 11:00 am

Forget Kitsilano 700k over asking, how about 1200 square feet in New Westminster? Getting tulip bulby out here.

http://www.newwestrecord.ca/news/queen-s-park-home-sale-historic-in-new-west-1.2190025

#3 sockeye sam on 03.06.16 at 11:04 am

The crowd at “no frills” is starting to look a lot more yuppyish than it was last year over here on the west side.

#4 common sense on 03.06.16 at 11:06 am

Very very well said Garth…

My only question is WHEN the rates finally start to raise.
Anywhere. It almost feels like a game of chicken waiting for one country to take a strong lead (not a one and done like the USA) and raise.

Maybe the USA will raise again AFTER or close to the election. As for now their “forward guidance” as to be near perfection in a non perfect world to keep raising.

#5 Penny Henny on 03.06.16 at 11:12 am

Does that guy taking the selfie have balls!
Or is he just nuts?

#6 jay on 03.06.16 at 11:14 am

#1 lesson is don’t trust the government.

#7 Siva on 03.06.16 at 11:26 am

Re #2:

“Although the successful purchaser already lives in New Westminster, Schlechtleitner said three offers appeared to have been from offshore or overseas’”

What does she mean by “appeared to have been from offshore?” Either it came from offshore or it did not. Which is it? If you are not sure why float the rumour?

#8 crappy armchair economist on 03.06.16 at 11:27 am

If interest rates rise, real estate prices decline.

If interest rates stay low, we’re battling deflation. Asset prices decline.

Yes/No/Maybe?

#9 Pathcontrolmonk on 03.06.16 at 11:28 am

For me it isn’t about affordability, it is about the death of a community. Vancouver is fried. Visiting YVR this weekend, I went to Kits and the place is a ghost town compared to when I lived there in the 90s. My elementary school has 35 kids enrolled because the neighborhood is empty! What is the point in having a city if nobody is living in it?

Wow. A changed neighbourhood after a quarter century. What a shock. — Garth

#10 Mean Gene on 03.06.16 at 11:28 am

The goals of Canadian life:

1.) Own a house
2.) Talk about hockey
3.) Buy lottery tickets
4.) Drink Timmy Ho’s coffee
5.) Bitch about government

#11 Ponzius Pilatus on 03.06.16 at 11:37 am

#199 Rabbit One on 03.06.16 at 8:31 am
> #177 IHCTD9
>we could do a whole lot worse than normal working, and especially, millionaire Chinese.

>They are culturally compatible, many even follow traditional Western Religion, even the same basic denominations thereof.

Maybe you mentioned about old modern Chinese immigrants who came mostly in ’70~’90’s from Hong Kong, Taiwan and some from Singapore- M’sia (Oversea Chinese)?

if you think Mainland China shares similar value to western worlds, you don’t know them well yet.
(it is due to to communist history. opposite of the western value)
Canadian naiveness?
—————–
Typical case of Cultural Relativity.
I’ll go with Merkel who declared MultiKulti “dead”.

#12 BRADFORD P. on 03.06.16 at 11:37 am

“My biggest mistake was to think that some dude on the Internets was smarter than me.”

Kinda reminds me of smoking man – calling for a 60 cent dollar and rates to go down.

#13 Ponzius Pilatus on 03.06.16 at 11:46 am

#3 sockeye sam on 03.06.16 at 11:04 am
The crowd at “no frills” is starting to look a lot more yuppyish than it was last year over here on the west side.
————-
Yep.
And Dolarama is expanding.
And now accepting Credit Cards.
The pitchfork vendors are setting up shops in the street.
This could get nasty, quick.

#14 Ponzius Pilatus on 03.06.16 at 11:50 am

I assume that most renters in BC vote NDP.
I think that next year’s election should be a cakewalk for the NDP.

#15 Ponzius Pilatus on 03.06.16 at 11:53 am

A young Indian Trudeau fan on his quest to become the next Prime Minister.

#16 Dominoes Lining Up on 03.06.16 at 11:53 am

Some reflections on the price of dirt………………

In the Friday post, Garth said:

“In time you won’t believe how much dirt is for sale.”

So true. Compare Canadian to American dirt, and your eyes will pop!

American home prices are still way down from 2006, closer to 2-4 times income in most areas now. Reasonable, at last. But Canadians think 7-12 times income is “reasonable” in Toronto and Vancouver.

And the USA actually has more “dirt” than we do – Canada’s non-water land mass is only 99% of the USA’s.

Their population is also about 9.2 times ours.

Forget that notion that our dirt is ‘worth more’ because we all cling to the border. Just not true, and we have lots of border areas that are not in a real estate bubble at all. Plus we just don’t have the population density. Even if you discounted 75% of our land mass as uninhabitable, we are still in a bubble!

(The USA also has many areas that are not suitable for real estate growth, deserts, river basins, colder spots, more mountains etc… Not really that much different.)

Except of course their broader, more diversified economy and better economic outlook. Plus the fact they actually dealt with their financial crisis – we just kept voting in Harper who played games to defer it all.

So what’s up with the price of dirt in Canada?

We should do ourselves a favour and take a drive once in a while outside of the GTA or GVRD and see just how much dirt there is, everywhere!

Dirt going on sale near you, very soon……

#17 CanMex on 03.06.16 at 11:57 am

I await the usual deluded comments. At some point after number 150 I will save this whole post and re-read it in five years’ time. It will be interesting.

#18 TurnerNation on 03.06.16 at 12:03 pm

And Warren Buffet was considered an idiot avoiding tech stocks during last bubble.

#19 Daisy Mae on 03.06.16 at 12:07 pm

“Almost everybody is convinced interest rates will never rise, because ‘the government wouldn’t dare, since everybody would be wiped out.’”

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

Amusing. They haven’t been around long to have experienced any downturns. They happen. And ‘everyone’ will not be ‘wiped out’ — only the dummies.

#20 GTA Girl on 03.06.16 at 12:13 pm

a big developer-investment company who likes to sue anyone who reminds the public of its many past builds that fleeced investors, and runs a multi-tiered 2nd mortgage company, is planning to build another glass monstrosity in Woodbridge Village (GTA).

They’re dealing with heritage houses currently on the property, that they promise to build around them. So the home that John A. Stayed in will be like a weird appendage on the side of a glass nightmare, containing mostly 1 bedroom units of 500sq ft. They claim these units will be geared to seniors. Their latest gag is to advertise these units having access to condo bicycles. Which is a sick joke. Because traffic is so bad due to the growing monstrosities in the area and zero transit. And the developer is extolling limited parking spaces as a environmental effort….what their not mentioning is that digging down isn’t possible because it’s a flood plain.

Poor granny, stuck in a glass coffin in the sky with her only out being to bike her way uphill to highway 7 for groceries. All for the price of $450k to start.

#21 paul on 03.06.16 at 12:13 pm

#10 Mean Gene on 03.06.16 at 11:28 am

The goals of Canadian life:

1.) Own a house
2.) Talk about hockey
3.) Buy lottery tickets
4.) Drink Timmy Ho’s coffee
5.) Bitch about government
———————————————————-
That hurt really hurt, You should be banned.
Lol

#22 preet89 on 03.06.16 at 12:13 pm

Borrowing to buy a house is not true debt. It is leveraging. The return far outweighs the cost. It’s being smart with money available. Anyone would be crazy not to pay 2% to return 10-20% in a year with real estate.

It not about borrowing it is about borrowing as much as you can to return the most possible.

People should be bragging about how much they can borrow instead of how much they are worth.

We are in awe of you. No, really. — Garth

#23 Linda on 03.06.16 at 12:16 pm

A house is a commodity. A home is where you live. If you are living in a house, sell & reap the profits now while you can. If you are living in a home & do not depending on it to provide current or future income OR have a humungous mortgage to pay, good for you. Enjoy your home, maintain it to give you the best experience possible both now & in the future.

I think a lot of the angst & unhappiness expressed by those trying to buy is that they want a home & feel they can’t have one. To those people I say home is what you make of it. It is who you have in your life, not what. I’ve friends who have never owned property. Wherever they are, that is where their home is.

#24 preet89 on 03.06.16 at 12:16 pm

Go to Japan and ask to speak to the great-great-great-grandfathers about the high interest rates they once had. That is how far back you have to go to find them.

Get your heads out of the sand people.

#25 Randy Randerson on 03.06.16 at 12:18 pm

Get ready to cue the “Anti-Chinese and Xenophobic Vancouverites” music, GT. A lot of WetCoast Rednecks will be coming out of the woodwork to shit on your post. Get ready!

#26 craig on 03.06.16 at 12:29 pm

Preet89: and because of suckers like you the day will come that you owe 2.5 million on assets (bricks and mortar) but yet they are worth a pathetic 1.5 million on the market. Keep trying to sell stupidity… Wheb it comes to needing repairs or re-mortgaging at renewal you should prepare to walk and throw away the keys. Great idea though pal… you best stick to watching HGTV where the unicorns play and puppies poop butterflies.

#27 craig on 03.06.16 at 12:34 pm

Also would like to see this house that Chris has… I live in guelph and can’t recall any property lately that would make that kind of improvement and profit… good for him if it’s true but I bet if you really peeled back the banana the expenses, real estate, taxes, lawyers, capital gains (can’t all be considered a principal residence if it’s a triplex can it garth?) etc I would assume that the REAL amount might be around 40-50k. Again. Great if it’s true… however highly unlikely here given the prices as of late.

#28 common sense on 03.06.16 at 12:37 pm

#22 Preet89

Please contact me. I have some great land and property to can leverage to the hilt to buy in bubble land and pay only say $500K over the listing price.

Limited time offer.

#29 Rexx Rock on 03.06.16 at 12:38 pm

My friend who has lived in Japan for over 25 years now says the elderly are committing suicide like crazy.He says the pensions are so low that you can’t survive and the only option is to kill themselves so not to be a burden on their families.This is what will happen to Canada in the next few years.Say a prayer to the seniors who retire in Canada.

#30 Ontario's Left Coast on 03.06.16 at 12:41 pm

It’s all cyclical, folks. I remember moving to our small Ontario town following the real estate wipe-out in the early ’90s. I would always hike through this abandoned phase of a subdivision just off Highway 21. One time, just for fun, I cleaned the leaves off of a long-forgotten for sale sign and jotted down the number to see if they were actually still for sale. Well to my surprise (and the shock of the guy on the other end of the phone) the fully serviced lots were indeed up for a whopping 10K apiece. I bought two, almost for a joke, and within a decade had sold both as ten-baggers.

Four lessons I learned:
1) when the for sale signs are practically buried in the dirt, it may actually be time to buy
2) cash truly is king (ie, if I was broke, no deal
3) I should have probably bought more
4) things we’re truly desperate back then for RE and it can and probably will be that way again

Cheers to Garth and all the dogs

#31 Sixtyfourk on 03.06.16 at 12:54 pm

Re: #22 preet89

This has to be a troll. Nobody could be that delusional, could they????

The Re/Max Rapid Response® Team. — Garth

#32 JRH on 03.06.16 at 1:03 pm

Housing is todays tulip bulb craze. We think we’re so much smarter then past generations because of technology advancements. People just have to look at zero interest rates as the new alchemy to realize we are not as smart as we think !

#33 Retired Boomer WI on 03.06.16 at 1:19 pm

“Speculation fueled by destructively low interest rates, financial illiteracy, a fear of financial markets, media saturation, and a cultural prejudice towards bricks have led to this level of historic house horniness.”

Wow. One of the most accurate statements yet penned by the blog’s wisdom sharer.

Landslides don’t often start by themselves. Excessive rain, freeze / thaw cycles precipitate the, or the rarer earthquake.

I have no idea what the final catalyst will be for Canadian Real Estate. It could be higher interest rates, assuming there WILL be higher interest rates…. jury’s still out there.

It could be China’s slowing economy.
It could beO&G could reverse, trying to at last achieve that $20 a barrel price.
It could be a massive U.S. slowdown after the election of Donald T. Rump, who has all the economic acumen and foresight of Mr. Magoo.
It could be the moribund economy.
It could be central banks zero bound range will choke future credit extensions.
It could be an unforeseen climate event.
It could be the Zombie apocalypse.
It could never happen here, we’re different…

It will change someday. Are you anticipating change?

Devil’s Advocate used to say “Shift Happens” what he never mentioned was “Downshift Happens” as well.

#34 Ray Skunk on 03.06.16 at 1:22 pm

#29 – I’m sure Ontario teachers, firefighters and police will be just fine in their sunset years.

#35 Nemesis on 03.06.16 at 1:30 pm

“Nobody’s about to do anything to change current market conditions.” – HonGT

#YouCanSayThatAgain…

[CTV] – Value of premier’s home up $160K as housing affordability woes deepen

…”B.C. Premier Christy Clark’s Vancouver half-duplex surged $160,000 in assessed value this week to $1.73 million, and she’s just one of several government members to see significant increases.

The six-digit rise in Clark’s home value – totaling $674,000 since 2009 – is prompting critics to worry that a market in the hands of those profiting substantially in real estate may not be fairly regulated.

“When you find out the premier’s got almost $700,000 in equity since she purchased it, it’s going to make you cynical about the political process,” said NDP Housing Critic David Eby.”…

http://bc.ctvnews.ca/mobile/value-of-premier-s-home-up-160k-as-housing-affordability-woes-deepen-1.2726890

#36 jess on 03.06.16 at 1:32 pm

Iran billionaire Babak Zanjani sentenced to death
bbc

Before the oil embargo imposed by the EU in 2012, one in every five barrels of crude Iran exported was sold to refineries in Europe.

… last year
Iranian businessman hanged over biggest bank fraud
Mahafarid Amir-Khosravi was executed at Tehran’s Evin prison on Saturday.

Amir-Khosravi was convicted over a scam which came to light in 2011 and involved using fake documents to obtain credit, leading to the embezzlement of around $2.6bn (£1.5bn)….
The case broke in September 2011 when an investment firm was accused of forging documents to obtain credit from at least seven Iranian banks over a four-year period….The money was reportedly used to buy state-owned companies under the government’s privatisation scheme.”

#37 hope & ruin on 03.06.16 at 1:34 pm

I still have friends buying into the market. Not all in the six but most are buying more house than necessary. Lots of dirt everywhere though.

I’m seeing some great deals in stocks now too. Two of my favourite companies are on sale. My friends are pouring money into down payments instead. I haven’t been following garths advice to a tee. But I like some risk right now. If I get screwed. F-ck it.

The bil is still trying to convince me to buy precious metals and a house. If I hear one more line from kiyosaki or Schiff on canada selling gold reserves. I swear to god. Apparently all the macroeconmists in my family are smarter than the BoC.

I wonder what the longterm impact of consistently going against what your peers and family say is. Not financially but mentally. Only thing I worry about.

#38 Randy on 03.06.16 at 1:40 pm

I’m disappointed. I was hoping that the Liberals would show me how to turn my Debt Bubble into Real Assets.

#39 Randy on 03.06.16 at 1:45 pm

Very creative how Liberals changed the name from Demographics based Debt into Climate Change, but I guess that Demographics sounds too Racist for Liberals !!

#40 Smoking Man's Old Man on 03.06.16 at 1:55 pm

My Dad, back in the 70’s had 40000 shares of Westmin Resources, this was his primary holding. He rode the stock up to $20/share. That was $800000, a lot of money in the 70’s.

The company experienced a tailing mines disaster which brought the stock down. My Dad held on, the share price continued to fall. Lost a small fortune.

Some of the lessons I personally learned from this that are discussed here on a regular basis;

-Having a balanced and diversified portfolio.
-Keeping greed and emotion in check ( he wasn’t selling until it rebounded back to $20/share)
-He was smart but not at the level of a financial expert that manages investments for a living.
-To know your limitations.

This current real estate bubble in Toronto and Vancouver certainly reminds me of my Dad’s Westmin Resources days when he was pretty high on himself and thought he was a savvy investor, until it all came undone.

#41 Smoking Man on 03.06.16 at 1:57 pm

This just about sums up usa politics and sentiment within the Herd

Must see

https://youtu.be/srGlyFyghRk

#42 TurnerNation on 03.06.16 at 2:01 pm

A friend of mine maybe five years ago bought a sht bung but on a huge lot near a northern subway station of Toronto. He calls it his Retirement Plan.

I have one of those too. It pays me cashflow rather then shoveling many thousands into it yearly – taxes, insurance, upkeep. We’ll see who wins.

#43 pathcontrolmonk on 03.06.16 at 2:44 pm

Wow. A changed neighbourhood after a quarter century. What a shock. — Garth

So if YVR was overrun by the Sinaloa Cartel, sanctimonious Vegans, or Neil Diamond impersonators, you would just say, “Change is inevitable, suck it up!” Not sure if you are a Libertarian, Anarchist or a Buddhist.

At least you seem to have tacitly accepted the demographics of the speculators driving YVR’s demise.

#44 Nodebt on 03.06.16 at 2:52 pm

Hey Garth, would warren buffet be better off if he cashed in all his stocks and bought etf’s?

#45 p123 on 03.06.16 at 2:54 pm

It might be next year Garth that the Market starts going down. You’ve recommended sell many times and the market has just kept on ascending.

Who knows this market is nuts.

#46 Conspiratard on 03.06.16 at 3:04 pm

Now Donald Trump has had Nancy Reagan killed.

He had to.

She knew about Building 7, as well as the truth behind KAL 007 and climate change.

Nothing will stop him now.

And with his newest creation, the Zika virus, Trump will arrange for the end of the rest of his enemies shortly.

This,on the 66th anniversary, to the day, of the invention of Silly Putty.

Coincidence? I think not.

I think not.

#47 unbalanced on 03.06.16 at 3:05 pm

To Ray Skunk. I just love reading jealous people. Makes my day

#48 Bobby on 03.06.16 at 3:06 pm

If anyone thinks property prices can’t fall, just take a look at Calgary. Unlike what most realtors tell you, property doesn’t always go up.

#49 Brett on 03.06.16 at 3:07 pm

preet89

“Go to Japan and ask to speak to the great-great-great-grandfathers about the high interest rates they once had. That is how far back you have to go to find them. Get your heads out of the sand people”.

But, you don’t have to go back quite as far to catch the housing bubble.

http://www.marketoracle.co.uk/images/2008/japan-house-prices–nov08.gif

#50 Brian Ripley on 03.06.16 at 3:12 pm

“The Bank of Canada will not alter things when it reviews interest rates on Wednesday. No cut, no increase. Certainly never negative rates.” Garth

I agree. One observation I can make is that with the surge in CPI some yields are indeed negative. My “real” 10 year chart: http://www.chpc.biz/real-10yr-rate.html

Negative real rates are adding to the perma-bull argument and I doubt if buyers in the GTA need to take any notice of my charts judging by the latest surge in GTA SFD prices:
chart: http://www.chpc.biz/toronto-housing.html

I keep having to adjust the price axis on both the Toronto and Vancouver housing charts as the plot lines literally go off the chart.

#51 crowdedelevatorfartz on 03.06.16 at 3:16 pm

@#5 Penny Henny
“Does that guy taking the selfie have balls!
Or is he just nuts?”
+++++++++++++++++++++++++++++++++++
No, just incredibally stupid.
Cobras can “spit” venom several feet into the eyes of what ever they are attacking to stun and blind….then the big , venom injecting , life ending, bite……

#52 nubbers on 03.06.16 at 3:22 pm

Ontario’s Left Coast @30

Cool story.

Another sign that it is time to buy is when a newspaper that normally pumps housing suggest that house prices are not going to rise.

I still have a clipping from the London (UK) Evening Standard, Homes & Property section, November 1997. The headline is ‘Have House Prices Peaked?’ and the article suggests that house prices are entering a period of ‘stability’.

This article came just 3 years after the lowest point of the UK housing market after the 90’s crash. After that article was written, there was no period of stability, just a massive increase up to the present day.

The time to buy will be when those who now condescend to renters, start warning others against buying.

#53 crowdedelevatorfartz on 03.06.16 at 3:23 pm

@#42 Conspiratard

Unfortunately, you’re the only one thats making sense…..

Over to you Godth.

#54 Bram on 03.06.16 at 3:24 pm

80% of Millennials don’t consider a mortgage to be debt.

It is debt of course. And, yes, you need to pay it back.
But I do agree with Millennials that it is not the same as consumer debt.

A person can always choose not to consume. Not to buy that car, not to go on that holiday.

If you choose not to have a mortgage, you still have to shelter yourself, and thus pay rent. And this rent, let’s face it, is often comparable to the interest portion of the payment. (Sure, the principle part makes the mortgage much more expensive than the rent, but theoretically, that money is not lost, as it adds equity.)

Of all the forms of debt, a mortgage debt is by far the most benign of those, together with maybe student debt.

#55 Retired Boomer WI on 03.06.16 at 3:31 pm

#37 Hope & Ruin

Never give following your OWN path a 2nd thought. You peers are NOT you, your family is NOT you either.

A bit of background here. I am an only child. I grew up many miles from any cousins, aunts, uncles. (no interference, no meddling, no input). At 17 after high school graduation left home to form my own life. I did bounce back a couple of times for a few months to re-group. Seems 17 yr olds really didn’t have all the answers, nor do we at any other age either…

As long as you can handle the success, or failure of your decisions you will be OK. You are responsible for them, not peers or family, right?

Sounds to me like you have a good vision for yourself.

#56 Dups on 03.06.16 at 3:33 pm

I case you forgot. Tim Hortons is not Canadian any longer. It is owned by the Americans. Second Cup is the last real Canadian coffee joint still left. Most of our beers are US owned as well. So are some of the banks and insurance companies. Main private employers are US companies. The government is what is left. So stop hating US so much you will just end up hating yourselves. Invest in them and usw their market in your advantage.

#57 Izzy_Bedibida on 03.06.16 at 3:34 pm

Lots of very good points. I have several friends in the burbs surrounding the GTA that bough “forever houses” to avoid a divorce. Now they are close to divorce because everything they make goes to mortgage payments. They can’t meet for a pint at the local bar because they “can’t afford the luxury of a $6.00 domestic pint”. That says a lot about the negative effects of high housing costs. Stories like this are never talked about or sent to the back pages of the business section.

#58 JWD on 03.06.16 at 3:35 pm

Specifically for Vancouver this advise has been wrong for too many years now. For those that bought 5 years ago prices would have to correct by 50%. A balanced portfolio is important but those that put off a purchase of a home year after year have been left behind. This has turned out to be terrible advice. It’s obviously been too late for about the last year after another 25% increase. It will be very interesting to see how this all unfolds. A slow reversal for many years or a violent correction.

A very similar country and market to Canada, the Australians have adopted a review board of foreign buyers. In typical Canadian style we are too slow and late to react. I think it’s worth a look and totally disagree with no intervention at all.

http://www.domain.com.au/news/are-you-a-foreign-property-investor-in-australia-what-you-now-need-to-know-20151201-glck5c/

#59 BK on 03.06.16 at 4:01 pm

The other day I was talking to my neighbor about housing affordability. ( He is a foreigner, I won’t say from where), been here 3-4 years. I told him things are too expensive and something has to change. He replied and said ” Prices are only going up, if you can’t afford it move somewhere else” He wasn’t talking hours outside of Van either…..1000’s kms away…. There you have it, the foreigners are telling the locals to move away! What a great city we all live in.

Maybe all the zombies are right? Garth just said nothing is going to change out there other than the slow slow rise of interest rates (eventually) and a recession (eventually/maybe/possibly??)

I’m thinking buy now like Chris, fix and sell for profits. Sounds like we have time. Everyone else is doing it. Why should I fall behind??

I use to think the other way. Starting to change my mind now after reading todays blog.

#60 Mark on 03.06.16 at 4:13 pm

“If interest rates rise, real estate prices decline.

If interest rates stay low, we’re battling deflation. Asset prices decline.

Yes/No/Maybe?

Sounds about right. With the past decade of abnormally high housing prices, oceans of new supply have appeared in the marketplace. The supply side has fattened up and invested enormously in inventories, factories and human resources devoted to bringing new housing to market. It will take many, many years of falling prices for the owners of these investments to fully utilize their investment and walk away.

Many people talk of ‘immigrants’ as being some saviour of the housing market with falling prices. But in fact, recent immigrants and refugees, on account of the nature of housing construction work, often become part of the construction sector.

“Anyone would be crazy not to pay 2% to return 10-20% in a year with real estate.”

Only problem with that idea is that RE pretty much nationwide has seen returns over the past 3 years less than the cost of financing. And if history is any indication, this is a long-term trend as the cost of financing RE usually, by a slight margin, exceeds the return on RE.

#61 Mr. Frugal on 03.06.16 at 4:18 pm

#41 Smoking Man on 03.06.16 at 1:57 pm
This just about sums up usa politics and sentiment within the Herd

Must see

https://youtu.be/srGlyFyghRk

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

That sums it up! The establishment just doesn’t get it. There is a grass roots revolution taking place in the US and anyone that stands in the way of that train is in for a world of hurt.

Kind of reminds me of a song…

Do you hear the people sing?
Singing the song of angry men?
It is the music of the people
Who will not be slaves again!

#62 For those about to flop... on 03.06.16 at 4:26 pm

Some one posted yesterday about how foreign ownership helped bloat prices in Australia too,but just like in Canada it is only a few cities.

Check out this listing in the suburbs of Adelaide a city of around a million people and about 2 hours away from Australia’s version of Napa Valley.

A place like this is my back up,back up,back up,back up plan.

By the way “granny flat ” is Oz,s version of a coach house.

4 bed 2 bath above ground pool and hot tub for around 400k,which is roughly worth the same here.

http://www.domain.com.au/13-lydia-avenue-ingle-farm-sa-5098-2012541687

#63 greyhound on 03.06.16 at 4:34 pm

“Will make $200k net”-Chris is betting on getting out before the music stops. He may well succeed — but that’s gambling, not investing. And a “long and slow real estate decline” isn’t a sure thing either. Down south in just one year, 2007, Case-Shiller index prices dropped more than 9%. Everybody’s really sure that can’t happen here?

#64 Caught In The Grip on 03.06.16 at 4:39 pm

The BMO housing report shows many markets are in already in decline:

Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Kingston, Kitchener/Waterloo, Ottawa, Montreal, Saint John, Halifax, PEI, Newfoundland

This is the beginning of the bear market in Canadian real estate.

In bear markets there is eventually nowhere to hide. They will get everyone eventually. What has gone up the most will fall the most. It’s the same in the stock market. A broad based real estate bear market will eventually bring down the majority of markets the same way the dot.com bubble & the financial crisis brought down all sectors in the stock market.

Bear markets are usually faster and shorter in duration than bull markets. The housing bull market has been in place for >15 years. The bear market will likely retrace the last 40-50% of the bull market price gains and last about 3/4 as long (i.e. 10 years).

#65 I Clued In on 03.06.16 at 4:42 pm

Single, late 30s, YVR. Decent job w/ pension. Was saddled with LOC/CC debt for a long time, but crawled out over a few years. No debt now. Last year suddenly inherited and sold family home in rural BC for just under $300,000. People were telling me to buy a YVR condo. I didn’t. Invested the money in a conservative-ish balanced portfolio. Global, diversified – only a modest amount of maple so as to not miss out on any recovery here. I continue to rent for almost the same amount I’d throw away each month on strata fees, interest, property tax, maintenance, and insurance.

Oddly enough, I won a modest lotto prize two months after the house sold. People told me to buy a new car, or (again) a condo. I didn’t. Immediately invested most of that as well. Kept a bit of cash aside for emergencies, remembering Garth’s posts about most Canadians having zero savings.

I sleep very well at night now, knowing that I’m not tied to a single asset, a single market. I have money free each month to live comfortably, rather than being stretched. I’m also confident I can handle an unexpected cost that might crop up. And I have Garth’s blog to thank. Really, I do. Thanks Garth.

#66 bill on 03.06.16 at 4:50 pm

#9 Pathcontrolmonk on 03.06.16 at 11:28 am
what part of kits were you from?
there are more people than ever at my end of kits and and when we walk down 8th ave towards the sfh end there are lots of people there too.very friendly folk they are too.
while I cant speak for your old school the two that I do see
[an R.C . primary school and Kits high school.]
both of these schools are/have been renovated much larger than before….indeed kits high looks like its going to be completely rebuilt.
they saved the facade but the rest is gone…

#67 Smoking Man on 03.06.16 at 4:54 pm

Wow Wynne s lost her marbles.

If you are concerd about the sex curriculum your a homophobe

If your a straight white male and find members of the opposite sex attractive, your sexist and a Misogynist.

The latest.
Your concerned that some of the Syrian refuges might be ISIS. Well you know wear the crowing jewel of shaming , she’s calling them rasists.

Really Kathleen . Canadians rasisits?

So glad Polital correctness is going out of fashion fast.

#68 Ace Goodheart on 03.06.16 at 4:56 pm

Own our house, don’t really care what it’s worth, never selling it anyway. No payments, no mortgage = happy stress free life. When we die, the estate can fight over it.

Would never use a house as an investment. Houses are for living in.

Buying Husky Energy preferred for a fraction of par value, REITs at below book value, banks at a 20% discount.

There’s more out there than real estate, folks

#69 bill on 03.06.16 at 4:59 pm

looks like the selfie snake…
https://en.wikipedia.org/wiki/Indian_cobra
and for the curious…
happhttps://en.wikipedia.org/wiki/Spitting_cobra
https://en.wikipedia.org/wiki/Cobra

#70 bill on 03.06.16 at 5:00 pm

hmmm that made me wonder if the snake sees itself in the phone and thinks there is another cobra…
now that might get interesting…

#71 bill on 03.06.16 at 5:04 pm

oh dear cocked up one of the links…
https://en.wikipedia.org/wiki/Spitting_cobra

#72 WalMark of Sadkatoon on 03.06.16 at 5:11 pm

#65 I Clued In on 03.06.16 at 4:42 pm

well done!

#73 tundra pete on 03.06.16 at 5:26 pm

Much the same as the evening the Titanic hit an iceberg. Was clear and a wee bit cool but it looked good. There didn’t seem to be any reason to worry. No siree. There sure wasn’t. Just a small iceberg. What could that possibly do to the worlds first unsinkable ship? And the band played on.

Well, we all know how that one played out. Just like the realtors saying to keep on buying. What could possibly go wrong. Houses always go up in price. That’s an investment. Listen to your Mom. Look how much money she has made. Quit throwing away your money on rent. And the band played on.

#74 gumboot princess on 03.06.16 at 5:35 pm

Ha ha. A mortgage is not a debt. Gasp. Ba ha ha.

In that vein, I am told, in car sales lingo that a car loan is now called “negative equity”.

There are going to be a lot of “woulda, coulda, shoulda” stories in the next few years. This is the best opportunity that I have ever seen in my lifetime to cash out and live large.

Two things will happen. A slow downturn or a black swan event that will tip the scales quickly.

#75 Tremblant 110 on 03.06.16 at 5:38 pm

Neighbour in Ottawa has had his house on the market for several months. He had bought another one. Gave up and rented it for 5 years. Market too soft was his words

#76 sugar daddy on 03.06.16 at 5:42 pm

18 TurnerNation on 03.06.16 at 12:03 pm

And Warren Buffet was considered an idiot avoiding tech stocks during last bubble.

—-

Instead of investing in risky innovation he sells safely sugar water, facilitating destroying people’s health around the globe.

Awesome role model.

#77 Doug t on 03.06.16 at 6:00 pm

I’m starting to think that old models such as investing and hanging in for the long hall are not really achievable any more to having success. The advancement of technology along with the changing way the world functions in an economic sense makes me think it’s an old outdated model not very applicable to the changes the world has and will under go. It’s not friendly out there for ordinary folk – banks don’t offer much, government penalize savers and Edward Jones is “really” concerned about you and values you LOL – it’s no wonder at all peeps hope and pray that their house keeps going up – it’s all they have – hope.

If you ‘invest’ through [email protected] and EJ, no wonder you’re depressed. — Garth

#78 Rick on 03.06.16 at 6:27 pm

#16 Dominoes Lining Up on 03.06.16 at 11:53 am
“They actually dealt with their financial crisis”.

Are you NUTS?? The USA has gone from the boggest creditor nation to the biggest debtor nation. They owe over 19 TRILLION!!!
What are you smoking?

#79 jess on 03.06.16 at 6:27 pm

» March 1st 2016
A.G. Schneiderman: Trump University Decision A Clear Victory In Effort To Combat Fraud

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement on today’s decision by the Appellate Division in the office’s lawsuit against Trump University:

“Today’s decision is a clear victory in our effort to hold Donald Trump and Trump University accountable for defrauding thousands of students. The state Supreme Court had already granted our request for summary judgment determining that Trump and his University are liable for operating illegally in New York as an unlicensed educational institution. Today’s decision means our entire fraud case can move forward, and confirms that the case is subject to a six year statute of limitations. As the state’s chief law enforcement officer, my job is to see that perpetrators of fraud are brought to justice. We look forward to demonstrating in a court of law that Donald Trump and his sham for-profit college defrauded more than 5,000 consumers out of millions of dollars.”

http://ag.ny.gov/press-release/ag-schneiderman-trump-university-decision-clear-victory-effort-combat-fraud

#80 For those about to flop... on 03.06.16 at 6:42 pm

I just went for a walk around the hood to get some fresh air and I seen this sign that wasn’t up yesterday.

1.6 million for this heap of crap.

Looks like someone is smart enough to cash in their chips…

M41BC

http://www.remax-performance-bc.com/listing.php?LID=262063411

#81 Entrepreneur on 03.06.16 at 6:45 pm

“deliberately amplifies by realtors…it breeds racism, resentment of wealth, xenophobia…” realtors, a controlled group that many rely on for information on “what to do.” Need I go on.

“Counting the number of foreign buyers is interesting but useless.” I agree but that is not the main issue; it is the illegality that is in question (and which can be hidden).

Thought Australia was similar to Canada in housing, and if so, what is the problem? Counting the number is futile as it is already in the system but maybe the name. One has to dig deeper to see what is really going on.

Google the B.C. real estate council names panel to investigate “shadow flipping” and looked further into individual background. Wonder how many shadow flipping they find and other illegal issues? This will be interesting and a report in sixty days so end of March beginning of April!?!

#82 Vancouver Update on 03.06.16 at 7:03 pm

Vancouver suburbs on fire. Home far away sells for $700,000 over asking. !!!! In a distance suburb!

http://www.newwestrecord.ca/news/queen-s-park-home-sale-historic-in-new-west-1.2190025

Not locals. The overseas masters have instructed their proxy realtors here to buy anything at any cost.

Millions of immigrants expected to make Vancouver home over the next few decades.

#83 For those about to flop... on 03.06.16 at 7:10 pm

As someone who is self employed ,if I ever get in trouble for reporting as to what’s going on in Vancouver on this blog I cannot get fired.
I just won’t get re-hired…

I’m sure the boss will hire me as a dog walker.
I hope Bandit doesn’t like going out in the snow because I’m allergic to the stuff…

M41BC

#prayforflop

#84 Estrella on 03.06.16 at 7:14 pm

Capital gains on the chopping block. Please say it ain’t so.

http://www.financialpost.com/m/wp/blog.html?b=business.financialpost.com/personal-finance/taxes/why-a-capital-gains-tax-hike-might-be-on-the-table-in-the-march-22-federal-budget

I imagine the Canadian dollar should go down with stimulus. Am I correct?

Capital gains tax breaks are not on the block. There is speculation the 50% exemption rate may be lowered, which would be the ultimate in bad moves by an government looking increasingly amateurish. — Garth

#85 Nobody on 03.06.16 at 7:28 pm

Australia is more flexible than Canada. 20years ago they were all worried that the entire country was being bought by the Japanese to be turned into a giant golf course. Today they have managed to switch to worrying that it is being bought by the Chinese to become a suburb of Beijing.

#86 Snowboid on 03.06.16 at 7:31 pm

#59 BK on 03.06.16 at 4:01 pm…

One of the first Canadians we met down in Phoenix in 2010 told us his personal story of the frenzy in 2005/06.

As a IT manager (Phoenix office of Canadian company) he even got his RE licence and lost about $ 400,000 US on two ‘guaranteed’ money makers.

The other (a current neighbour) was a golf pro, fancy house in Scottsdale, a MB and BMW in the garage, and bought two additional homes from a West Valley developer. One was leased back as a show-home, but the developer went bankrupt.

Shortly after they went bankrupt – they now rent across from us, drive an old van, he works part-time as a groundskeeper and she works at Walmart.

They lost their retirement funds – both in their mid-seventies expect to work until they die.

We’ve heard dozens of others with similar stories, all of them except the Canuck family weren’t foreigners – they got caught up in the frenzy and cashed in their investments – they found the money to buy additional homes.

The resemblance to what’s happening in Vancouver and to a lesser extent Toronto is uncanny and scary.

It’s no longer a question of ‘if’, but ‘when’ – sorry YVR RE trolls.

#87 Inflating our way out coming soon on 03.06.16 at 7:44 pm

New York condo now selling for $80 million…. Nuf sed…

#88 Panhead on 03.06.16 at 7:47 pm

PSSST … I just heard it’s beer week in Victoria (Mar 4-12) … but don’t be telling anyone so there’s still room for me to walk on the ferry and buy an all day bus pass for five bucks. Just hope we get a dry day … weather wise that is.

#89 Ex-Cowtown on 03.06.16 at 7:48 pm

How the definition of millionaire has changed through time:

1920’s – $1 million in shares (Gatsby)

1930’s – $ 1 million in cash ( Nobody)

1960’s – $ 1 million in business equity (The Greatest Generation)

1970’s – $ 1 million in coke (Yuppies)

1990’s – $ 1 million in net assets (Early Boomers)

2000 – $ 1 million net in cash and real estate (Mid Boomers)

2009 – $ 1 million net in real estate (Late Boomers)

2016 – $ 1 million in debt (Millenials)

It’s amazing that now having the ABILITY to get $1 million in debt makes you think your rich.

#90 Frank on 03.06.16 at 7:56 pm

I don’t think you appreciate fun.

Investing in RRSPs is boring. New countertops are fun.

#91 sockeye sam on 03.06.16 at 8:05 pm

#80 For those about to flop. You think that house is a piece of crap for 1.6. mil. That house is a palace compared to my 1926 shack for 3 mil over here on the bent side of la la land. We’ve had a wet winter and every thing’s gone green and slimy. Even my piece of crap pick up truck is growing green. But it’s Sunday the one day of the week the nail guns, excavators,dump trucks, sump pumps have all been turned off. It’s worse than a new sub division. At least with a new sub division you know in a few months the building is going to stop. Tomorrow is Monday that’s usually the day a another old house gets mowed and the cycle starts. “Son of a bitch, give me a drink”.

#92 Smoking Man on 03.06.16 at 8:06 pm

A shameless unskilled lousy liar, gives us that are in the master liars society a bad name.

Little Marco came out with this today. If MSM had anything on Trump it would be out instantly.

Unreal cockroach.

Republican presidential candidate Sen. Ted Cruz (Texas) said on Sunday that the media is sitting on explosive negative information about front-runner Donald Trump with plans to run it later in the year to tear the candidate apart.

#93 Brian on 03.06.16 at 8:07 pm

China helping commodities? Umm… there is the small thing about the 50 million people they are laying off! LOL

Yes oil went up and CDN $ with it – and yea the shorts got burned – called a short squeeze – adds momentum upward temporarily – not anything based on fundamentals.

Oh sure lots of McJobs and rosy FrankenNumbers in the US – working 2 part-time jobs @ minimum wage isn’t really helping the economy I don’t think – that is pay-the-rent starvation money.

Better go back to the drawing board

#94 Stanley Bridge on 03.06.16 at 8:09 pm

A sane person would move his/her money out of CAD and CAD nominated assets immediately and would wait it out.

CAD is sinking hard, judging by food prices at the grocery stores. The current dead cat bounce in CAD is just that, a dead cat bounce.

Oil’s recovery is uncertain. Oil could be in the teens soon and for a long time.

Negative interest rates will arrive in North America, maybe not nominal but absolutely deeply negative real interest rates are coming, inflation of 2-3 % is a given, it is an actual target, with interest rates at 0.5 % that are definitely not rising.

It is a big mess with further huge opportunity in carry trades in bonds and potentially gold.

Housing could go more bizarre and we could easily have 2-3 million dollar homes in Toronto, 3-4 in Vancouver as the politicos are stupid enough to continue with the CHMC policies. In real value (stable foreign currencies, equivalent goods purchasing value) we have past peak already and starting long and hard decline to probably 25-30 % of the valuations from the peak (in stable foreign currencies, equivalent goods purchasing value)

In nominal values the numbers do not matter already as the measure/CAD is flawed.

The alternative is to hold that house no matter what, the more leveraged the better as far as one can make the payments. In this case one still loses 60-70 % in real purchasing power but it is much better than losing all of it if saver.

Unfortunately savers in CAD and people on fixed income would be the most impacted, so don’t be one.

The real pain would be the increases taxes and fees and killer food prices at the stores. Imported real food
could double or triple in 4-5 years, by a pretty conservative estimate.

I won’t pity financiers and politicians, current and former when people come with the pitchforks.

As for government and corporate employees on fixed pensions I would recommend Vaseline. It works. Cat foods is still reasonably priced, so stock some.

#95 Nobody on 03.06.16 at 8:11 pm

#85 slight difference.
Phoenix is like the housing boom in Ireland at the same time, build massive new sub divisions with no demand and hope to sell them to “investors”. Until you notice that, in the case of Ireand, you have built more new houses than the population.

Vancouver is different to Phoenix, it is now a world city with a high demand for houses (from snowy Canada and elsewhere) and very limited space to build. When the USA crashed the average drop in Vegas and Phoenix didn’t extend to waitresses suddenly being able to buy on Manhattan’s west side.

#96 Daisy Mae on 03.06.16 at 8:14 pm

#22: “We are in awe of you. No, really. — Garth”

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

Good one. Stupidity knows no bounds, I guess.

#97 The American on 03.06.16 at 8:15 pm

At #56: Dups, I hate to break it to you, but Tim Hortons is indeed a CANADIAN-owned company. In 1995, the company was purchased by a better-known company, Wendy’s. The company was returned (sold back) to a Canadian in 2005.

#98 Ontario's Left Coast on 03.06.16 at 8:18 pm

Flop #62, Australian Listing

Go for it, Flop! We need a good location for the inaugural Greater Fool Blog Dawg Blowout meet-up. Seriously, it has to happen eventually.

#99 For those about to flop... on 03.06.16 at 8:29 pm

#91 sockeye sam on 03.06.16 at 8:05 pm
#80 For those about to flop. You think that house is a piece of crap for 1.6. mil. That house is a palace compared to my 1926 shack for 3 mil over here on the bent side of la la land. We’ve had a wet winter and every thing’s gone green and slimy. Even my piece of crap pick up truck is growing green. But it’s Sunday the one day of the week the nail guns, excavators,dump trucks, sump pumps have all been turned off. It’s worse than a new sub division. At least with a new sub division you know in a few months the building is going to stop. Tomorrow is Monday that’s usually the day a another old house gets mowed and the cycle starts. “Son of a bitch, give me a drink”.

/////////////////////////////
Yeah I know it’s getting pretty bad out west.
Give me a rough idea where you live and I’ll tell you how many houses I’ve help build in your hood.

I get your point about the house but 1.6 for east Van fixer ,you might as well pay 1.1 for a knock down bungalow and build new.

Someone bought a 1954 unrenovated bungelow out on Chancellor Blvd around a year and a half ago for around 7.5 million and I just laughed ,but the joke was on me obviously because now it’s probably closer to 10.

I don’t work Saturdays…so I give you two days of peace!

M41BC

#100 Mark on 03.06.16 at 8:31 pm

“The resemblance to what’s happening in Vancouver and to a lesser extent Toronto is uncanny and scary.”

Absolutely. Good comments about people cashing in their retirement portfolios and chasing the RE bubble. Its absolutely bizarre how much cynicism exists in Canada towards investment in business equity, as opposed to RE. Stocks are viewed as an incredibly risky proposition, not suitable for either the young or the old. While housing is viewed as a “can’t lose” proposition.

This setup is actually very good for stock investors, as we have the opportunity to re-invest our dividends in additional shares at relatively low prices. And when the stock market eventually does break out of its long-term slumber, the gains will be distributed amongst a relatively small chunk of the population. Any sort of investment that purports to make a large percentage of society “rich” probably isn’t an investment at all, but is rather some sort of Ponzi scheme.

Where does the contemporary TSX belong? Well if you draw a trendline going back to the 1980s, with historically normal average returns, the index value you compute today should be in the low to mid 30,000s. With so many of the cyclical components beaten to smithereens and, at some point, ripe for a doubling or tripling, this seems entirely plausible. If the 1990s repeat themselves, a TSX of 50,000 or even slightly more seems within the realm of possibility by 2023-2025 timeframe. Don’t know if the greaterfool blog will exist a decade from now, but if it does, it wouldn’t surprise me to see people urging people to sell their overpriced stocks (or at least lighten up their portfolios) and rotate into undervalued or fairly valued RE.

#101 acdel on 03.06.16 at 8:33 pm

This is going to be interesting in the next few months. Especially in the U.S., Fracking costs a bundle, and reserves deplete quickly. Saudi’s need 90 to 100 dollar oil to sustain their economy, population, no taxes, education, jobs, social structure, etc, not here to argue, just look it up.

http://www.cbc.ca/news/business/oil-gas-bank-watch-lists-1.3478204 – Keep in mind all producing oil countries.

Meanwhile an article surfaced on the National and no Canadians are discussing this.

http://business.financialpost.com/fp-comment/canada-may-already-be-carbon-neutral-so-why-are-we-keeping-it-a-secret

Why am I bringing this up? Because it affects all of us, we are getting screwed in every which way and form by a select minority.

Personally I think that this is the best country on this pathetic earth; we either unite or let us just get it over with and split up, this stupid system we have is like a bad marriage hoping for the best.

#102 Daisy Mae on 03.06.16 at 8:35 pm

#40: “This current real estate bubble in Toronto and Vancouver certainly reminds me of my Dad’s Westmin Resources days when he was pretty high on himself and thought he was a savvy investor, until it all came undone.”

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

“A man who represents himself in court, has a fool for a client.” Same holds true when investing. We’re not as smart as we like to think we are.

#103 For those about to flop... on 03.06.16 at 8:37 pm

#98 Ontario’s Left Coast on 03.06.16 at 8:18 pm
Flop #62, Australian Listing

Go for it, Flop! We need a good location for the inaugural Greater Fool Blog Dawg Blowout meet-up. Seriously, it has to happen eventually.

////////////////////////////

You like that one huh OLC.

The prices have actually gone up in that hood not that long ago you could have it for around 320k.

I think that pool would get destroyed at the blowout.
I will get flood insurance for that weekend…

M41BC

#104 GTA Girl on 03.06.16 at 8:42 pm

Mortgage debt is NOT benign debt. In Canada, with very few exceptions, a person cannot walk away from debt. It is an rotting albatross. It knows no job loss woes, no stupid investment faults. It is linked to your name, your being. Bankruptcy is not a cake walk, nor should it be.

If millennials believe mortgage debt is an asset, we all have failed.

#105 western observer on 03.06.16 at 8:50 pm

Suggestions Please:

Can anyone, someone please suggest an ETF that is directly linked to the price of crude oil.
Would prefer to purchase in Canadian funds.

Thank you in advance to those who reply

#106 IHCTD9 on 03.06.16 at 8:55 pm

#28 common sense on 03.06.16 at 12:37 pm
#22 Preet89

Please contact me. I have some great land and property to can leverage to the hilt to buy in bubble land and pay only say $500K over the listing price.

Limited time offer.
——

Whoa there common sense, I think Mr.Preet would much rather deal with me!

Mr. Preet, I will sell you my personal property for a much more attractive rate of only $400K over list price.

It’s never put a dime in my pocket the last 15 years, and I give up trying to make it pay. Sad as it is, it’s time to pass this great investment opportunity on to a real pro who knows how to make money in RE.

Let me know what you think buddy!

Looking forward to hearing from you!!

#107 john t on 03.06.16 at 9:00 pm

Garth when will you give up??? Interest will keep going down (to negative) and house prices will keep going up. Get over it already.

#108 common sense on 03.06.16 at 9:04 pm

#106 IHCED9

Bidding war huh?

I raise the bidding offer OVER $600,000 the asking price..

(see it feels good to spend even more in the bubble so you can brag to your friends how high you bid UP to “get a bargin)

#109 Lee on 03.06.16 at 9:05 pm

There hasn’t been a repeat of the US housing market collapse in Canada because there is one missing ingredient in the Canadian mortgage market: rampant fraud and NINJA loans. Since the subprime mortgage crisis, safeguards have been put in place to prevent mortgage fraud and NINJA loans everywhere. Without another mortgage meltdown, that American experience is unlikely to be repeated anywhere.

#110 AfterTheHouseSold on 03.06.16 at 9:11 pm

Where has the time gone? It seems like only yesterday (2012) that hubby and I were kneeling side by side, staining all 72 ft of our wrap-around porch and hundreds of railing spindles, when I turned to him and said “I never want to do this again. And you?”

At about the same time we stumbled upon this blog and had our eyes opened to all the opportunities that selling our house could offer. For us that meant freedom from work and travel, albeit on a budget. To make this happen, we had to choose between renting a place and limit our travel OR forgo the rental, purge our stuff and hit the open road. We chose the latter.

Our 40 day closing was apt as we embarked on a massive purge of biblical proportions. This included our house and three outbuildings (woodworking shop, farm machinery and storage). For 40 days and 40 nights, every item we owned passed through our hands, was decided upon; sold, donated or scrapped. Kitchen cupboards, closets, junk drawers, file cabinet all emptied, bags of clothes, boots and shoes, jewelry, books, furniture, garden tools, lawn tractor, power tools, loads of lumber, tractor, all gone via kijiji. What we kept: Precious. Little. Stored on 7 utility shelves in my MIL’s basement.

On closing day we drove out of our lane with 6 totes; 1 each of clothes, 4 of utility stuff. Our plan was to have no plan, instead to let life unfold. And unfold it has, in amazing and unimaginable ways.

Now, after almost 4 years on the road, our adventure will be winding down on our return from Florida as we tend to some family issues. We will rent until we see how this unfolds.

Garth, we can’t thank you enough for all that you do here. Your financial advice has had a huge impact on our lives and for that we will be forever grateful.

#111 pwn3d on 03.06.16 at 9:15 pm

#16 Dominoes Lining Up on 03.06.16 at 11:53 am

So what’s up with the price of dirt in Canada?

We should do ourselves a favour and take a drive once in a while outside of the GTA or GVRD and see just how much dirt there is, everywhere!

Dirt going on sale near you, very soon……
——————————–

dirt+jobs=$$$$$
dirt+no jobs=$

#112 common sense on 03.06.16 at 9:18 pm

#110 After the House Sold

Congrats on taking the leap and following your dreams!

Inspiring!

#113 Snowboid on 03.06.16 at 9:23 pm

95 Nobody on 03.06.16 at 8:11 pm…

US real estate lost 6 trillion dollars in value as a result of the RE crash, retail spending was down 8% from 2007-09, the worst in US history.

You think Vegas and Phoenix caused all that?

You are only a greater fool if you believe Vancouver is immune to the same, and while the wealthy will easily weather the storm, everyone else who over-extended themselves to feed in the frenzy will soon find themselves starving.

#114 lee on 03.06.16 at 9:35 pm

#89 ex-cowtown

You actually need an income of about $200000 a year to get a Million dollar mortgage. So you need to be doing pretty well to be one Million in debt.

#115 LP on 03.06.16 at 9:38 pm

#97 The American on 03.06.16 at 8:15 pm

Sorry, sometime last year Tim’s was bought by Burger King.

#116 Smoking Man on 03.06.16 at 9:39 pm

#12 BRADFORD P. on 03.06.16 at 11:37 am
“My biggest mistake was to think that some dude on the Internets was smarter than me.”

Kinda reminds me of smoking man – calling for a 60 cent dollar and rates to go down.
…………..

It’s coming.
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/25/20160225_hhmm.jpg

#117 Nemesis on 03.06.16 at 9:40 pm

#SuckingItUpComesEasierOnBelmont,Or… #WinSomeLoseSome?…

[G&M] – Canaccord posts worst loss in its history

http://www.theglobeandmail.com/report-on-business/canaccord-posts-worst-loss-in-its-history/article28735705/

[G&M] – Canacord Founder’s Vancouver mansion listed for $9.4-million over assessed value

“Last year, there were 910 detached houses that sold for at least $3-million within the City of Vancouver, compared with 300 sales in that same price category in the City of Toronto, according to Royal LePage.

If the Browns sell their property for anywhere close to their asking price, it will easily eclipse the most expensive sale on the Multiple Listing Service last year, when a waterfront property on Point Grey Road sold for $22-million.”

http://www.theglobeandmail.com/news/british-columbia/vancouver-mansion-listed-for-94-million-over-assessed-value/article29044534/

#118 Just Stooge on 03.06.16 at 9:42 pm

OMG, listen to the BS spin on ‘Junior goes to Washington’. While all US media has reported that weak and ineffective media born Trudy is coming down on bended knee to ‘burnish Obama’s legacy’, our CDN media is spinning an antipodal line, the Junior has a receptive audience, as if Canada matters suddenly to Obama, and Obama might think about redirecting the billion dollar ad campaign against Canada’s energy, infrastructure or transportation industries that he, Barack Obama, has personally attacked over the past 8 years.

Get some reality by people who care about these things enough to be involved.

https://twitter.com/FairQuestions

Wow, the CDN media really thinks you’re stupid. The Obama crowd is bringing in a stooge to kiss ass in an attempt to make Obama look presidential on his way out by sucking up Canada’s political capital.

#119 Snowboid on 03.06.16 at 9:48 pm

#109 Lee on 03.06.16 at 9:05 pm…

I agree the underlying causes may be slightly different and that a couple of years ago YVR may have experienced a soft landing, I believe now that Vancouver will crash.

You can argue that foreign money will support it, but the fact remains that the majority of the frenzy is fed by locals.

Once the prices start going down (and they will soon), the ‘herd’ (Trademark SM) will quickly head for the cliff.

BTW, none of the folks I know here that lost everything used Ninja loans or fraud – they used their own money, investment or otherwise.

#120 james on 03.06.16 at 9:50 pm

#85

“Vancouver is different to Phoenix, it is now a world city with a high demand for houses (from snowy Canada and elsewhere) and very limited space to build. When the USA crashed the average drop in Vegas and Phoenix didn’t extend to waitresses suddenly being able to buy on Manhattan’s west side.”

What is a ‘world city’ exactly?

Consider Miami. Limited land, better weather, higher in migration than Vancouver.

Prices went high, then crashed big time.

And yes, Seattle, SF and other cities experienced rather lage drops too. You cannot tell me with a straight face that Vancouver is more of a ‘world city’ than SF.

#121 Smoking Man on 03.06.16 at 9:52 pm

Lets face it, the lefties own the curriculum, they have pushed climate change up the asses of students for the last 20 years.

Naturally at the democratic debate, all going with climate change plat form for those dumb downed minds.

On the tread mill today, I’m doing a slow walk, checking out all those hotties in yoga paints.

These people are crazy, pumping weights, running lake mad men, people fighting for time on the elliptical machines.

Do they they working your ass off, grotesquely sweating and pushing it to the limit has a prize.

Ha most wont see a hundred, why not spend your free time enjoying life, eat big macs, drink in the after noon. Smoke if you like.

Cause I have watched my folks rot for the last 20 years, mom gone at 92, dad just turned 98, hes a walking zombie.

No for me, I hit 50 6 years ago, I crossed the that finish line in flying colors. All down hill from here on in.

Its time for fun now.

#122 james on 03.06.16 at 9:52 pm

#109

“There hasn’t been a repeat of the US housing market collapse in Canada because there is one missing ingredient in the Canadian mortgage market: rampant fraud and NINJA loans. Since the subprime mortgage crisis, safeguards have been put in place to prevent mortgage fraud and NINJA loans everywhere. ”

False. First you discounted the efforts by the federal government to avoid a crash, including 40 year amortizations, a 80+ billion dollar subsidy to the banks to buy their mortgage securities, etc etc.

Second, you have no evidence that there is not a massive amount of fraud. Remember the USA discovered fraud after the collapse, when people had an incentive to look for it.

With cash back mortgages and other ‘innovations’ in Canada, there is subprime here. We have already seen mortgage brokers committing fraud.

In short, barring an audit you don’t really have much evidence for your claim.

#123 TurnerNation on 03.06.16 at 9:54 pm

#57 Izzy_Bedibida please advise were you find $6 domestic ponts. Most everything in Toronto has gone upscale hipster.

#124 Lobster Man on 03.06.16 at 9:55 pm

#105 western observer

Try this one…….”but as usual, buyers beware!”
http://www.etfinsight.ca/?page_id=15045&symbol=CCX

#125 don on 03.06.16 at 9:57 pm

Mark 100 I usually agree with your basic premises. On this I think you are incorrect. The inflating, currency devaluation credit expansion really began in the 1980’s. I think you should look at the s&p returns from the fifties to the 80’s. If we are closing in on peak debt I think returns could be crappy for longer than we think

#126 TurnerNation on 03.06.16 at 10:00 pm

Advise today’s university grads take 3 more years and get a law degree.

Then place online, magazine ads toward men: Sharp Tough divorce lawyer will never back down on your side

And other ads targeting online and print females: Caring, Understanding divorce lawyer to protect your interests.

#smokingmen?

Am

#127 Ray Skunk on 03.06.16 at 10:03 pm

#94 – You paint a pretty bleak picture.

I have to take issue with one of your points, however. Cat food is not reasonably priced whatsoever. Every time I go to the vets (for my precious darlings eat the formulated vet-only crap I’ve been guilted into buying) the price has gone up. Every time, without fail. Twenty-four cans of the special dietary stuff that gently massages their intestinal tract has now cleared $60 and is heading who-knows-where.

I assume this stuff is imported from the US, hence the constant creep.
Therefore I looked into going down to Buffalo and stocking up at a vets there… gave one a call and they told me I needed to bring the cats in and have them on the roster before they’d sell me any food!
Amazing. In the US you can buy guns and ammo in Wal-mart, but you can’t get your cat any food at the vet without them being screened first.

#128 Tony on 03.06.16 at 10:04 pm

Re: #30 Ontario’s Left Coast on 03.06.16 at 12:41 pm

I remember lots on Major Mackenzie near what’s now Country Club Estates in Markham were 60 grand in 1984 apiece and were 20 baggers within a decade. I remember Ben Johnson owned at least one of them.

#129 Stanley Bridge on 03.06.16 at 10:06 pm

#114 lee

You actually need an income of about $200000 a year to get a Million dollar mortgage. So you need to be doing pretty well to be one Million in debt.
————-
You need 150 k before taxes, check any mortgage calculator. Largesse of BOC with stolen money from savers.

#130 Biggles on 03.06.16 at 10:07 pm

What people have to understand in Canada is that Vancouver is special, just like the City of London UK, New York, Sydney, San Francisco etc.
The foreign buyer loves these places and will always invest heavily in them and especially in real estate. Prices may dip slightly, but they will continue to rise as long as the city is there. This does not apply to the rest of Canada. Toronto has some appeal, but nothing like Vancouver.

Just as in the UK. London just keeps going up even though you can buy much more affordable and even cheap houses outside the City of London, especially when you go North. Same in Manhatten, the Bay in San Francisco etc. The rest of the housing Market in Canada is due for a serious correction , but the Downtown core of Vancouver is and will be immune as the majority of the properties are in forgiven hands and there are millions of investors waiting to get into the market in Vancouver. So forget Vancouver unless you have money and big money at that. It is not part of the normal Housing Market in Canada and never will be again. Just as Manhattan is not part of the US normal housing Market.

So there you have it and best to just forget about Vancouver if you want to buy and look over at the water and you are a local and not a multi millionaire. Cheers

#131 Stanley Bridge on 03.06.16 at 10:11 pm

#109 Lee on 03.06.16 at 9:05 pm
There hasn’t been a repeat of the US housing market collapse in Canada because there is one missing ingredient in the Canadian mortgage market: rampant fraud and NINJA loans. Since the subprime mortgage crisis, safeguards have been put in place to prevent mortgage fraud and NINJA loans everywhere. Without another mortgage meltdown, that American experience is unlikely to be repeated anywhere.

—————-
Sure. Let’s void then all CMHC ‘insurance’ and transfer risk back to the lenders.

Then fire Poloz and let the market determine the real interest rates.

#132 Lobster Man on 03.06.16 at 10:12 pm

Here is a view from our South:

http://www.marketwatch.com/story/5-reasons-to-flee-the-us-for-canada-2014-08-29

#133 Tony on 03.06.16 at 10:15 pm

Re: #109 Lee on 03.06.16 at 9:05 pm

The situation is much worst here in Canada than it ever was in America. Even the people who put 20 percent down are subprime. When the market collapses a 20 percent drop will likely happen in the first few months of the downturn.

#134 IHCTD9 on 03.06.16 at 10:18 pm

#108 common sense on 03.06.16 at 9:04 pm
#106 IHCED9

Bidding war huh?

I raise the bidding offer OVER $600,000 the asking price..

(see it feels good to spend even more in the bubble so you can brag to your friends how high you bid UP to “get a bargin)
—————

Ahh… Yes, did I say 400k? Haha, just a slip of the lip I assure you!

Make that 700,000K over Mr Preet, I meant no offence – as you said yourself: The bigger the debt, the bigger the profits!

Give me a call when you’re ready. It is clear I am offering you a much larger measure of insolvency than Mr. Common Sense ever could – think how jealous your buds will be!

#135 Brew on 03.06.16 at 10:23 pm

@115 LP

#97 The American on 03.06.16 at 8:15 pm

Sorry, sometime last year Tim’s was bought by Burger King.
——————————————————————–

And ultimately they are 51% owned by 3G Capital

#136 Bottoms_Up on 03.06.16 at 10:23 pm

Amazing post Garth. Nail meet head.

If anyone has made 1-2 mill on a vancouver house, now would be the time to cash in your lotto max ticket and relocate to somewhere much more affordable.

#137 FC16 on 03.06.16 at 10:27 pm

Maybe off topic.

Just did taxes for little nephew (17) after first summer working at camp. Made a little over $2k. Of course no taxes paid, no refund. Now why should a kid do this ecercise. Simple, life lesson. Also, he gets about $500 in RRSP contribution room to use later in life.

Showed him simple calculation in excel if he only puts the $500 every year in a balanced fund averaging 7% in his RRSP account until age 65, kid would have over $150-large. Should have seen the light bulb going on and eyes widening.

If you have working teenagers you owe it to them to at least teach them this. They’ll thank you later. Canada Post still has the return forms.

Thanks for a great blog, Garth.

#138 Nobody on 03.06.16 at 10:30 pm

#113 – the US crash was caused by predatory lending by banks that stood to make 10x as much from AIG if you defaulted than if you paid your mortgage. And a bunch of idiot policies like tax deductions and walk-away defaults which made it insane not to have a mortgage

Garth is correct about the insanity of ordinary families paying way more than you can afford in YVR/GTA in the hope of an ever rising market. But it is equally insane to imagine a crash that is going to turn Point Grey into an ghost town of foreclosures or let you snap up a West Van waterfront for Edmonton prices.

#139 Bottoms_Up on 03.06.16 at 10:32 pm

#127 Ray Skunk on 03.06.16 at 10:03 pm
——————–
$15 for 24 cans at walmart…it’s food man, give your head a shake.

#140 Smoking Man on 03.06.16 at 10:33 pm

#126 TurnerNation on 03.06.16 at 10:00 pm
Advise today’s university grads take 3 more years and get a law degree.

Then place online, magazine ads toward men: Sharp Tough divorce lawyer will never back down on your side

And other ads targeting online and print females: Caring, Understanding divorce lawyer to protect your interests.

#smokingmen?

Am

Ha..

No worries the safe space bunker and 3rd wave mental cases about to get nuked.

Humans are human. Men and woman have distinct properties not the same no matter how they spin it. No matter how much the machine trys to mind fk em chasing an evil agenda.

Nature always wins in long run.

And it’s #SmokingMan not Smokingmen

That puts me in a group.. I’m an individualist

#141 Randy Randerson on 03.06.16 at 10:40 pm

#130 Biggles on 03.06.16 at 10:07 pm

Not sure if you’re joking, or being serious.

#142 Bottoms_Up on 03.06.16 at 10:43 pm

#101 acdel on 03.06.16 at 8:33 pm
————————-
The fact we live on a giant land mass with lots of trees should not be a free license to burn fossil fuels. Every tonne of carbon released into the air contributes to the problem….

#143 Bottoms_Up on 03.06.16 at 10:45 pm

#97 The American on 03.06.16 at 8:15 pm
——————–
There was little outrage after burger king bought timmies in 2015, and zero outrage the day after they raised prices on everything. The Canadian way. ; )

#144 Bottoms_Up on 03.06.16 at 10:50 pm

#78 Rick on 03.06.16 at 6:27 pm
————————
So what? US GDP is $19 trillion per year….imagine being immortal, owing $100,000 but making $100,000 PER YEAR. Would that be a problem?

#145 Smoking Man on 03.06.16 at 10:54 pm

Every bit of knollage is free on the Web.

You send your application to a school of higher brain washing. Your accepted. You dance and high five your parents. We did it. Woo hoo.

Idiots.

Sell shit instead and get free intern labour to do the work. Make sure you pretend to like trees and the brain washed will move mountains for you.

#146 Bottoms_Up on 03.06.16 at 10:59 pm

#54 Bram on 03.06.16 at 3:24 pm
——————–
Yep totally agree, it is disingenious to discuss a mortgage simply as debt. All things being equal….with my own, i will pay off this “debt” in 20 years and have an asset worth maybe $750,000. Hardly simply just a debt.

#147 Bright Spark on 03.06.16 at 11:00 pm

“Add in the meme of foreign buyers munching their way through Vancouver and Toronto, deliberately amplified by realtors, and you have the kind of hostile panic on open display in the steerage section of this pathetic blog. It breeds racism, resentment of wealth, xenophobia and futile cries for authorities to do something about unaffordable houses.”

Garth, something being ‘deliberately amplified’ does not make it untrue. The news stories are coming from responsible journalists who do the due diligence, just as you once did. The stories are coming from governments and professionals.

The cognitive dissonance, or conversely the misplaced horror of the truth regarding hot money coming out of China you display is not going to hide the facts from everyone when China finally has it’s way and sends its police officers directly into the homes of the hundreds of thousands of foreign crooks hiding in Canada and begins arresting them on Canadian soil. The Liberals are weak, this will happen when Trudeau is offered a cash incentive to allow it.

#148 Ontario's Left Coast on 03.06.16 at 11:08 pm

#110 – After the House Sold

So happy for you guys, what a great story. It just goes to show there is so much more to life than a plot of dirt. I hope you continue to enjoy the adventure.

#149 Bright Spark on 03.06.16 at 11:20 pm

And BTW, China is already very active in ‘repatriating’ it’s crooks. Here’s a line gleaned from The Straits Times, Singapore’s national paper. So don’t think a cash strapped Canadian government won’t acquiesce to China’s reasonable requests, that have already been made.

The Trudeau Liberals are prepared to starve seniors into selling their life savings by furthering the pain of ZIRP, and increasing the tax on capital gains on life savings, why wouldn’t you think they will cash in on a few foreign crooks?

“More recently, Gui Minhai, of Beijing, went missing from his seaside apartment in Pattaya last October, only to resurface in China under police custody.”

#150 Captain Stun Doe on 03.06.16 at 11:21 pm

Buying a home in Canada is a total
Scam. Nobody makes money off a single
Family home. Once you factor in all the costs to service a mortgage all the extra bills property tax , insurance, maintaince etc you don’t make F all money. It’s all a lie for the sheep.

Honestly it’s so clear nobody makes money why do you think government allows no capital gains on primary residence ? Why because Big brother knows ain’t nobody making money hahah. They tax us on everything so why allow tax free capital gains on primary residence ? It’s all fluff is sounds good for us the people but big brother knows damn well nobody will actually have any gains.

#151 Smoking Man on 03.06.16 at 11:31 pm

If my melenial employees knew what kind of shit head I was. They would steal the customer list.

No worries. Thank you educational industrial complex for slaves free of charge.

We need to fight climate change. God damb big oil.

You see how easy it is to get rich my dogs.

#152 BK on 03.06.16 at 11:34 pm

Garths last comment???? Translation…..

“Buy now or forever be priced out of a detached home”

????

Garth did you just get bit by a YVR ZOMBIE?

I’m dissapointed

#153 Bram on 03.06.16 at 11:35 pm

#78 Rick on 03.06.16 at 6:27 pm
Are you NUTS?? The USA has gone from the boggest creditor nation to the biggest debtor nation. They owe over 19 TRILLION!!!

Debt is evaluated on a GDP-basis or per-capita, not on absolute basis.

There are a lot of countries with a larger debt to gdp ratio than the US of A.
I will list them:

Luxembourg, Iceland, Singapore, Sao Tome, Hong Kong, Netherlands, Belgium, Guinea-Bissau, Monaco, Switzerland, Portugal, France, Burundi, Austria, Sweden, Denmark, Greece, Spain, Puerto Rico, Congo, Seychelles, Germany, Norway, Cyprus, New Zealand, Italy, Hungary, Comoros.

US is #30.

https://en.wikipedia.org/wiki/List_of_countries_by_external_debt

Yeah, strangely the beacon of stability, Switzerland, is much worse off than the US.

Bram

#154 BG on 03.06.16 at 11:41 pm

You’re giving us tough love tonight Garth.

Unfortunately, or rather fortunately I’ve been too busy with freelance work lately to read the comments section.
Hope I’m not missing out too much.

Thought about you guys recently when a real estate lover colleague declined lunch out because finances are tight these days.
When you can’t spare 15 bucks for a kebab it is indeed time for a reality check.

I guess cash is king.
Oh yes it’s good to be liquid, oh la la!

#155 Biggles on 03.06.16 at 11:48 pm

#141 Randy Randerson on 03.06.16 at 10:40 pm

Hello Randy
No unfortunately I am being serious. Vancouver has become a victim of its own success and beauty. It has joined an exclusive club.
Unless, you move it to Alaska or knock the Rockies down Vancouver is now the world’s . If you live outside the Downtown core then you may get into problems, but then only temporarily. Just like Manhattan had a small dip in the crash but never really got touched. In Hong Kong they have investment companies purely devoted to Vancouver real estate where properties are traded over and over, but actually held by corporations in Canada. That’s the way it is and will be so in the future.

Vancouver is on the map and voted always one of the top places in the world. So buying real estate by the ultra wealthy follows. Just like Manchester UK will never be London so neither will Edmonton be Vancouver. Cheap to live in Edmonton or Manchester, but it is never cheap to live in London or Vancouver and never will be. Cheers Biggles

#156 Al on 03.06.16 at 11:52 pm

Big correction taking place in Hong Kong Real Estate as per this article; http://www.bloomberg.com/news/articles/2016-03-07/hong-kong-residential-sales-plunge-70-as-slowdown-intensifies

#157 fishman on 03.07.16 at 12:13 am

I see above that Peter (the Rabbit, cause he was 1st in & 1st out)Brown is selling his digs for a Van record.

Back in the day he rented a plane, loaded up all his brokers & flew them to Vegas. He then proceeded to the craps table & for three straight days threw dice & drank, & never left the table. When he passed out face down on the green they brought in the ambulance & gurney, figuring he had died. I guess he didn’t cause I saw him a few months ago getting picked up in his Rolls outside the Vancouver Club.

I know Senica ain’t Vegas, nevertheless, Smoking Man’s the only horse us dog bloggies got left in the race. As far as a handicap, the Rabbit was a few years younger then(not much), & of course a whole lot richer. Go for it SM.Somebody’s got to keep the tradition going.

#158 Kilby on 03.07.16 at 12:13 am

Interesting all the talk of interest rates rising, so many homes selling here on mid Vancouver Island are cash deals, no mortgages….At least around Parksville and Qualicum Beach. Used to be nearly 20% Albertans, now Lower Mainland escapees flush with cash from selling Vancouver…Nice new house, car, the requisite his ‘n hers Harleys and money in the bank.

#159 Damifino on 03.07.16 at 12:48 am

“There is speculation the 50% exemption rate may be lowered, which would be the ultimate in bad moves by an government looking increasingly amateurish. — Garth”

But wouldn’t that would be a profoundly aggravating, colossally stupid, mean spirited kick in the nuts for all Canadian savers and investors? Just wondering.

#160 juno on 03.07.16 at 1:09 am

#59 BK on 03.06.16 at 4:01 pm

===========
I agree with the foreigner. If you can’t afford then move out.

The government has mingled around with its policies and screwed up the Canadian dollar and allow people to go into infinite debt.

1) we have NIJA loan
2) 0 down payments known as cashback
3) complete government backing to allow minimum risk to banks.

Now we are selling not only our housing but resources and companies to foreign ownership

Now Canada is being taken over slowly.
In other countries such as mexico there are restriction in foreign ownership. Mabey the next election this will be something to get the next premier voted in

#161 Shelly Hardwood on 03.07.16 at 1:12 am

Garth, you’re not getting the point here.

For me it isn’t about affordability, it is about the death of a community. Vancouver is fried. Visiting YVR this weekend, I went to Kits and the place is a ghost town compared to when I lived there in the 90s. My elementary school has 35 kids enrolled because the neighborhood is empty! What is the point in having a city if nobody is living in it?

Wow. A changed neighbourhood after a quarter century. What a shock. — Garth”

Entire blocks are dark, overseas owners. Schools have no kids, stores along 49th have closed because there is no people living in the area. Hundreds in some areas, thousands in other areas are dark, unnocupied and owned by Overseas’ Chinese, many ( like Mayor Moonbeams almost mother in law before she was arrested in China for looting in Harbin) own dozens of houses and keep them dark and unoccupied. The neighborhood is a ghetto shambles, This isn’t change Garth, it’s destruction by invasion.

#162 ROCK BEATS PAPER on 03.07.16 at 1:43 am

Bloomberg reports today that Sydney’s property market is beyond its peak. They also report that Hong Kong sales are down a whopping 70%. That follows last years drop in Singapore.

A bubble is a bubble no matter where on the planet a massive over valuation exists.

Blaming foreigners is mean and hypocritical for a nation that has benefitted from and enjoyed open trade and massive export surpluses.

#163 Vancouver Update on 03.07.16 at 2:33 am

http://www.theglobeandmail.com/news/british-columbia/vancouver-mansion-listed-for-94-million-over-assessed-value/article29044534/?service=mobile

Told you guys about foreign influence in Vancouver for years. You denied it. Your loss.

This house just listed. $9 million over assessed value. Feng Shui !

Damn locals and CMHC! Not.

#164 Vancouver Update on 03.07.16 at 2:38 am

Hong prices went up 370% last 10 years. Vancouver 300%.

Still 70% to go. Watch and see. Nothing to with incomes now. All to do with parking wealth for future inmigrants.

#165 Ace Goodheart on 03.07.16 at 6:58 am

#114 Lee: “You actually need an income of about $200000 a year to get a Million dollar mortgage. So you need to be doing pretty well to be one Million in debt.”

I was reading through these comments thinking one is worse than the other and then I came upon this one. A person has to be doing “pretty well” to be putting in enough work to get 200K per year (bet you’re getting up at 5am and coming home from work way after dark) and carrying a million in debt.

Are you kidding me? A person doing that has to be nuts. Firstly, you are working too hard. And secondly, why are you borrowing a million dollars? To live in a house? Do you ever actually get to see your house in the daylight?

Nuts, I tell you. Absolutely nuts…..

#166 cropgrower on 03.07.16 at 8:31 am

hey…where’s Freedom First? I’m starting to like myself, and the choices I made in life……..

#167 Herb on 03.07.16 at 8:42 am

#118 Just Stooge,

“…you cannot let yourself be defined by the hopes that you will fulfill the darkest wishes of your opponents.” – http://www.cbsnews.com/news/60-minutes-prime-minister-trudeau/

That’s smarter than anything I heard Harper say in 10 years. Not bad for a snowboard instructor, whitewater river guide, nightclub bouncer and elementary school teacher.

Perhaps you CPC stooges are the dumb ones, blowing the same hostility horn that turned off voters.

#168 Herb on 03.07.16 at 8:54 am

#114 Lee and #162 Ace Goodheart,

the upper 20% of residents of our biggest cities make enough to keep the 1 M mortgage market going –

http://www.moneysense.ca/save/financial-planning/the-all-canadian-wealth-test-2015-charts/

#169 IHCTD9 on 03.07.16 at 8:59 am

#162 Ace Goodheart on 03.07.16 at 6:58 am
#114 Lee: “You actually need an income of about $200000 a year to get a Million dollar mortgage. So you need to be doing pretty well to be one Million in debt.”

I was reading through these comments thinking one is worse than the other and then I came upon this one. A person has to be doing “pretty well” to be putting in enough work to get 200K per year (bet you’re getting up at 5am and coming home from work way after dark) and carrying a million in debt.

Are you kidding me? A person doing that has to be nuts. Firstly, you are working too hard. And secondly, why are you borrowing a million dollars? To live in a house? Do you ever actually get to see your house in the daylight?

Nuts, I tell you. Absolutely nuts…..
_________________________________________

I seriously doubt there are many 200K families borrowing 7 figures to buy a Vancouver teardown. If there are, you are right; every last one of them is insane. 1 Million dollar houses do not belong in the hands of regular working folks .

I suspect the vast majority of these 1 million dollar YVR bombers are in the hands of the independently wealthy, those that had already cashed in their house lotto ticket, and those receiving financial assistance from family – both domestic, and abroad.

Keep in mind a million means no CMHC, and a six figure down payment. Be a long time before a 200K household can cough that up without help. Especially since a 200K household is probably a high paid couple earning a salary/wage – which means they are having the shit taxed right out of them.

#170 Siva on 03.07.16 at 8:59 am

Major cities in the world by GDP. Vancouver doesn’t even make it to the list and Toronto is at 10. Outside Canada nobody thinks about Vancouver, most of them don’t even know such a city exists. Bubble is created by Canucks selling properties to each other because of easy availability of low interest, monster mortgages. Don’t blame Chinese or anybody else for this mess.

http://www.citylab.com/work/2015/03/sorry-london-new-york-is-the-worlds-most-economically-powerful-city/386315/

#171 fancy_pants on 03.07.16 at 8:59 am

la, la, la, la … nothing to see here

http://www.bloomberg.com/news/articles/2016-03-07/hong-kong-residential-sales-plunge-70-as-slowdown-intensifies

#172 Ragioniere Irragionevole on 03.07.16 at 9:11 am

#68 Ace Goodheart on 03.06.16 at 4:56 pm

” Own our house, don’t really care what it’s worth, never selling it anyway. […]”

You seem to be anchored in a worldview that unfortunately is quickly fading away, if I may. “Don’t know” and “don’t care” are no longer viable mindsets within a new ghastly reality which is slowly but surely setting in. —R.I.

#173 Broadway Limited on 03.07.16 at 9:29 am

Garth –

The Bank of Canada under Governor Poloz hasn’t a clue what to do. Nor does Janet Yellen or Mario Draghi at the ECB. In Canada the default position is always to cut rates and debauch the currency and, given Mr. Poloz’s background at EDC, he’s holding true to form. As you have pointed out numerous times, T2 owes his election victory to over-indebted, over-educated, over-entitled and mortgage-poor millennials and he won’t risk upsetting that demographic. Besides, do you really think a guy born with his father’s arrogance and his mother’s brains would have even the remotest inking of fiscal policy, let alone monetary policy?

So status quo it will be, for the foreseeable future. In YVR and YYZ, house prices will continue ascending, only the rate of ascent will change. Anywhere else – who cares? It’s all rock or oil or wheat. Or snow.

#174 Penny Henny on 03.07.16 at 9:32 am

#74 gumboot princess on 03.06.16 at 5:35 pm
Ha ha. A mortgage is not a debt. Gasp. Ba ha ha.

In that vein, I am told, in car sales lingo that a car loan is now called “negative equity”.

/////////////////////////////

FYI- it’s only negative equity is the loan amount is higher than the wholesale value of the car.

#175 IHCTD9 on 03.07.16 at 9:55 am

#164 Herb on 03.07.16 at 8:42 am
#118 Just Stooge,

“…you cannot let yourself be defined by the hopes that you will fulfill the darkest wishes of your opponents.” – http://www.cbsnews.com/news/60-minutes-prime-minister-trudeau/

That’s smarter than anything I heard Harper say in 10 years. Not bad for a snowboard instructor, whitewater river guide, nightclub bouncer and elementary school teacher.

Perhaps you CPC stooges are the dumb ones, blowing the same hostility horn that turned off voters.
_____________________________________

So Trudeau will not let himself be “defined by the hopes that you will fulfill the darkest wishes of your opponents.”

What’s he going to do to avoid that happening?

He is already well along in fulfilling every “dark wish” his detractors could ever dream up.

Trudeau is a colossal failure, even this early in the game. We don’t hire snowboard instructors to design bridges where I work, we hire folks who have expertise in designing bridges.

I will admit, the drama experience is probably a benefit to him as PMOC.

#176 SunShowers on 03.07.16 at 10:13 am

There is speculation the 50% exemption rate may be lowered, which would be the ultimate in bad moves by an government looking increasingly amateurish. — Garth

———————————————————–

What’s so bad about lowering the exemption rate?

As the FP article states, unregistered accounts are used almost exclusively by the very top income earners, which can’t be said about RRSPs and TFSAs; precisely because these earners make enough to max out their registered investment vehicles (and those of their family), something the vast majority of Canadians can only dream of.

Even if the capital gains exemption were reduced to 0, people who can afford to do so would STILL invest using non-registered accounts, simply because it’s the only way to keep the money working and growing once they’ve maxed out their registered ones. People aren’t going to pull their money out of unregistered accounts to stuff into mattresses (or bank equivalents growing at ~0% for that matter) because all of a sudden they’re getting taxed more on what DOES grow at a respectable 6-7%. It’s still more money than they had before.

Simple. The top US capital gains tax rate, applicable on investments held for at least a year, is similar to the top rate here (25%). Increasing the Canadian toll would be an invitation for capital to move elsewhere, hurting domestic companies and ultimately reducing employment opportunities. Use your head. Taxes on risk capital are lower than earned income for a reason. — Garth

#177 Penny Henny on 03.07.16 at 10:14 am

#163 cropgrower on 03.07.16 at 8:31 am
hey…where’s Freedom First? I’m starting to like myself, and the choices I made in life……..

/////////////////////////////////

Never mind him. Where’s Tylenol and The Cat Food Lady?

#178 Hope & Change (Canada) on 03.07.16 at 10:14 am

Herb on 03.07.16 at 8:42 am
#118 Just Stooge,

“…you cannot let yourself be defined by the hopes that you will fulfill the darkest wishes of your opponents.” – http://www.cbsnews.com/news/60-minutes-prime-minister-trudeau/

That’s smarter than anything I heard Harper say in 10 years. Not bad for a snowboard instructor, whitewater river guide, nightclub bouncer and elementary school teacher.

That’s typical your deflection when you can’t counter an argument. Accuse the person making the argument of ‘darkest wishes’.

Nothing smart there.

I as well , don’t want others to define my singing career by their darkest wishes. Yet, I can’t escape the fact that my singing voice is akin to the sound coming out of a tub of drowning kittens.

#179 B. Marshall on 03.07.16 at 10:31 am

Historical low interest rates created bubbles in both house prices AND stock market prices. Sell the house bubble and buy into the equity bubble, say what? Don’t believe stated 7% return expectations FA’s push. Balanced portfolio presently sitting in negative territory.

Looks like more ETF pain ahead . . .

BIS Warns of ‘Gathering Storm’ For Markets

#180 Rainclouds on 03.07.16 at 10:56 am

#130 Biggles “What people have to understand in Canada is that Vancouver is special”

Ahhh yes the “its different here argument”

Golfing with a S Korean dude, turned out he owns an airline, a gazillionaire…..
Asked him if he lived here in Van or would like to? He looked at me like I had two heads, “No. too quiet”. Preferred Downtown Seoul.

Vancouver More “Special” than Seattle/Portland/San Fran/LA/Honolulu? I dont think so….

Dream on Re-max shill

#181 Mark on 03.07.16 at 11:01 am

“Historical low interest rates created bubbles in both house prices AND stock market prices. Sell the house bubble and buy into the equity bubble, say what?”

Actually the TSX is well beneath historic norms on P/E, P/B, and well above historic norms on dividend yield. Dividend yield and earnings normalized to long-term GoC bonds (ie: the 10-year) is at probably an all-time high at this point. And this is all with most of the cyclicals (ie: oil and gas, mining, or even the gold sector) barely contributing earnings or dividends.

Not only that, but the equity markets have barely risen much since 2000, despite 15+ years of retaining and re-investing 2/3rds of the constituents’ earnings.

Canadian housing, OTOH, at an average house price quoted around $400k, is at a P/E of roughly 35 (far worse in Toronto/Vancouver).

So no, no equity bubble at all. If anything, the housing bubble has sucked so much speculative capital away from the stock market that Canadian stocks are dirt cheap. And historically the Canadian market performs very well in the rising long-term interest rate environment on account of significant exposure to industries for which high costs of capital represent a significant economic hurdle to new investment. Telecom. Capex-intensive manufacturing. Mining, particularly gold mining.

#182 Bram on 03.07.16 at 11:24 am

#100 Mark on 03.06.16 at 8:31 pm
Where does the contemporary TSX belong? Well if you draw a trendline going back to the 1980s, with historically normal average returns, the index value you compute today should be in the low to mid 30,000s.

Wait, what?

TSX needs a 2.5x price increase for fair value?
I have to disagree strongly there, Mark.

Current P/E for TSX is 14.
14 times the earnings is a fair valuation of Canada’s Corporations.
Your claim that a P/E should be 42 is frankly ridiculous.

If I owned a motel that earned me $1M per year.
Would you buy my motel for $42M?
If so, you may just as well buy YVR houses and rent them out, you’ll get the same ROI :-)

Oh, and the index at 50K next decade? Will only happen with rampant inflation. Not in this low-inflation/deflationary environment we have now.
If you want to predict the future of Canada, look at Japan with a similarly old demographics.

Bram

#183 Rational Optimist on 03.07.16 at 11:32 am

Hey, the TSX has been doing well for the last couple of weeks. Might be time for those folks who sold back in January to jump back in. Much safer now, right?

#184 Herb on 03.07.16 at 12:29 pm

#172 IHCTD9

I know that Trudeau is responsible for a catastrophic disaster – he has kicked your “Party of One” to the curb. It doesn’t matter what else he may or not may do in your eyes, but for me that was only a good start.

I keep asking you to produce facts, for instance, what would have shown him to be “a colossal failure, even this early in the game”. Unfortunately you, as a Conservative blogger, don’t need facts. Divergence from party line or ideology is all you need to spit venom.

Yes, you do keep referring to a $100 B hole Trudeau is going to dig over his four year term. Talk to me when the results are in. Show where he’s wasted the billions he’s spent and, as promised, I’ll join in your condemnation.

Your darkest wish is that he will turn out to be a disaster, not just for you, but for Canada. How can he avoid that? Easy, by not turning out to have been a disaster.

Wait for it!

#185 lee on 03.07.16 at 12:31 pm

I am hearing a lot about raising the capital gains tax. Is something afoot in Ottawa?

#186 Another Phony Jobs Report on 03.07.16 at 12:33 pm

Garth, please don’t ignore this:

The monthly payroll jobs reports have become a bad joke.
No growth in real retail sales, but 55,000 retail trade new jobs in February.
No growth in real consumer income, but 40,000 more waitresses and bartenders.
86,000 new jobs in Education, health services, and social assistance. February is a strange
month to be hiring new teachers. If February brought a quarter million new jobs, how come a
big hike in social assistance jobs?
Manufacturing lost 16,000 jobs.

http://www.paulcraigroberts.org/2016/03/04/another-phony-jobs-report/

The machine is there and the propaganda is ON!

#187 Trey on 03.07.16 at 12:33 pm

Rates will rise as smart money leaves bonds and heads for stocks.

You heard it here first.

#188 common sense on 03.07.16 at 12:36 pm

Come on FED…

Confirm to us with a nice juicy interest rate hike that everything is just ducky…C’mon the shorts are getting squeezed to no end and everything is just upwards and onwards forward for the markets and growth.

Please, even .25% C’mon confirm stability to the world.

I double dare ya.

There will be no March increase. — Garth

#189 Binder Dundat on 03.07.16 at 12:44 pm

CMHC revs up hunt for foreign flows into torrid housing market

http://tinyurl.com/j5toc8c

“Canada’s housing agency, looking for new methods to track foreign ownership in the country’s soaring real estate markets, may tap money laundering police and classify international university students as foreign buyers, according to internal documents.”

#190 Lea on 03.07.16 at 12:56 pm

#95 Nobody

My neighborhood in Los Angeles got a 30% or more haircut in 2008. Prices are still below the insane highs of 2007.

There are no abandoned McMansions because, like Vancouver, there were no large tracts of land. The crash happened anyway and the effects are still being felt.

#191 Bottoms_Up on 03.07.16 at 12:59 pm

#180 Herb on 03.07.16 at 12:29 pm
———————————————-
That’s right, they never let fact get in the way of a good argument.

Here’s some fact for everyone, under Harper Canada ran $130 billion in deficits between 2008-2012:

http://www.cbc.ca/news2/interactives/canada-deficit/index.html

Let’s see what 2016-2020 looks like, with no financial crisis. — Garth

#192 The maid will buy your house on 03.07.16 at 1:01 pm

hence so many “home makers” on recent contracts..

The typical housing transaction in this latest housing bubble looks as follows:

The business owner creates a fake employment contract with his maid or driver, showing an impressive income to justify a high monthly mortgage.
The owner sells his property to his maid/driver at the highest price possible (as much as the bank will appraise for). Maid/driver doesn’t care about what the price is and accepts the asking
The owner gives his maid the money for the down payment of 30% (lowered recently as PBOC policy), while receiving the the full or above full value of the property
Maid/driver moves into the upscale property of the owner, which is why mainstream media is characterizing the boom as ‘upgrade buys’. And continue to live there until the actual owners decide to stop outlaying for the mortgage payment.
The owner cashes out of the property basically with PBOC’s help (ease of credit, lowered down payment etc), promptly moves the money out of China through import/export channels, contributing to capital outflows.
At some point in the future, the owners will stop making mortgage payment, since they’ve already cashed out of the property with a huge windfall. Bank goes to foreclose; maid/driver will go back to living where they lived before.

***

this is standard practice in China

#193 Herb on 03.07.16 at 1:06 pm

#175 Hope and Change (Canada),

You want crayons? OK.

Trudeau said that his critics hope that he will fulfill their darkest wishes, and that he is going to ignore this chaff. This reply was smart: on point, succinct and, if I may add, elegant. Now point me to the Harper sentence that was as smart.

Where is the argument he deflected from? That political opponents criticise him is a fact, not an argument, and saying that he is going to ignore it is sufficient answer. He was not asked about a specific criticism. He didn’t sing either.

Perhaps, like “Because it’s 2015” this line was also written by a staffer. — Garth

#194 A Canadian Abroad on 03.07.16 at 1:07 pm

“#155 Biggles on 03.06.16 at 11:48 pm
#141 Randy Randerson on 03.06.16 at 10:40 pm
Vancouver equals London”

It is a serious affront to Londoners to say Vancouver is even close to being in the same class with London, UK. Other than Vancouver RE prices are in a super bubble doesn’t make it world-class.

I’ve lived in London, UK (Mayfair and Knightsbridge) for many years.

The world sees Canada as mainly a tourist country and our cities insignificant. Which is fine for us Canadians.

Vancouver is a nice place, but don’t go insulting other world-class cities by saying you are in the same league.

#195 Hope & Change (Canada) on 03.07.16 at 1:39 pm

#180 Herb on 03.07.16 at 12:29 pm
#172 IHCTD9

Yes, you do keep referring to a $100 B hole Trudeau is going to dig over his four year term. Talk to me when the results are in. Show where he’s wasted the billions he’s spent and, as promised, I’ll join in your condemnation.

Wait for it!

Let’s wait and see.

Usually 1%ers that have inherited their wealth and employ multiple nannies (at taxpayer expense, while earning 300K+) to help out the stay at home wife, don’t really understand the value of a dollar.

I am sure the financial constraints of people that are trying to make it through life while saving something for their retirement doesn’t register very high with someone that’s never had, nor ever will, a financial worry.

So why wouldn’t he spend billions upon billions on anyone special interest group, foreign and domestic that requests it. It’s never going to impact him or his family, is it.

#196 James on 03.07.16 at 1:40 pm

#189 Herb on 03.07.16 at 1:06 pm

#175 Hope and Change (Canada),

You want crayons? OK.

Trudeau said that his critics hope that he will fulfill their darkest wishes, and that he is going to ignore this chaff. This reply was smart: on point, succinct and, if I may add, elegant. Now point me to the Harper sentence that was as smart.

Where is the argument he deflected from? That political opponents criticise him is a fact, not an argument, and saying that he is going to ignore it is sufficient answer. He was not asked about a specific criticism. He didn’t sing either.
…………………………………………………………………….
Hope and change, Jesus I’m hoping he doesn’t spend another 1 billion dollars of our hard earned money on some useless piece of crap land in the middle east. These people will turn on him in a moment.
Where are your priorities Selfy Boy! Spend the dam money here in Canada asshole.
1. Fix our native reserves.
2. Create employment i.e. infrastructure jobs.
3. Spend money on our military so they aren’t on assistance at home.
4. Help the poor and unemployed here via work programs targeting them specifically.
5. Help Alberta become an have province instead of a have not. Build some dam pipelines.
6. Stop being the poster boy to the world! The world doesn’t give a shit about you so get off your high horse.

http://www.international.gc.ca/development-developpement/humanitarian_response-situations_crises/syria-syrie.aspx?lang=eng

#197 Herb on 03.07.16 at 1:54 pm

“Let’s see what 2016-2020 looks like, with no financial crisis.” — Garth (at #187)

Good idea, Garth. All we have to worry about are low energy prices, a stagnant economy, and maybe a few people drowning in real estate debt. Since none of this requires government action, what could possibly go wrong?

#198 Herb on 03.07.16 at 1:58 pm

“Perhaps, like “Because it’s 2015” this line was also written by a staffer.” — Garth (at#189)

You mean poor Harper had no staffers?

#199 Andres on 03.07.16 at 1:59 pm

@ Biggles

I’ve never understood this argument that Vancouver is some sort of playground for the ultra-wealthy. Why? What’s the point of buying a house in a city with zero culture and arts scene where it rains ten months of the year? Go to San Diego and walk the seawall and you’ll see dozens upon dozens of giant yachts. Go take a walk around Vancouver – the only giant yacht belongs to Jimmy P.

#200 Retired Boomer WI on 03.07.16 at 2:12 pm

Ever heard of a “broke” politician, running for national office? Yeah, rare, not unheard of, but DAM rare.

Millionaires, Billionaires, may or may not identify with the work-a-day world. If they made, saved, invested to achieve their status, they probably do understand it.

They probably have a bit of a jaundiced eye to some people who earned an “average” salary, or better during their lifetimes, but rely totally on the government geezer funds in retirement. I can fully understand THAT sentiment.

Hard to know which politicians might understand economics. Hey, we don’t teach kids financial literacy in schools, they probably won’t get any, or sex education either, at home. So, what did you expect to elect, huh?

#201 meslippery on 03.07.16 at 2:19 pm

#57“can’t afford the luxury of a $6.00 domestic pint”

Plus 13% GST Plus 15% Tip so 2 beers $15.24
My Beer @ the beer store $1.27 each
Lets meet for 2 beer each and blow $30.48

#202 Vancouver update on 03.07.16 at 2:32 pm

“classify international university students as foreign buyers, ”

How the heck did this make it past the censors? The IIP program is dead. That’s all the sheep should know.

The student program is the new IIP. :). Much cheaper.

#203 Van is a joke on 03.07.16 at 2:48 pm

Compare Vancouver to London, NYC, SF, Seattle?
Please. London is one of the world’s premier financial centres. Its where the gold deals are done, worldwide metals exchange and the F/X centre of the world.NYC is the financial capital where the big deals are done.
SF is the downtown of Silicon Valley, the world’s brain in the IT age. Virtually every large cutting edge IT company has HQ within 40 miles, obvious ones like Apple and Google and less obvious ones like Oracle and Cisco.
Seattle has 5 or 6 world-leading companies: Microsoft, Amazon, Costco, Starbuck’s, Boeing, Weyerhauser.
All those cities have large numbers of very high earners.
What does Vancouver have other than mountains, rain and bubble real estate?

#204 IHCTD9 on 03.07.16 at 3:21 pm

#180 Herb on 03.07.16 at 12:29 pm
#172 IHCTD9

I know that Trudeau is responsible for a catastrophic disaster – he has kicked your “Party of One” to the curb. It doesn’t matter what else he may or not may do in your eyes, but for me that was only a good start.

I keep asking you to produce facts, for instance, what would have shown him to be “a colossal failure, even this early in the game”. Unfortunately you, as a Conservative blogger, don’t need facts. Divergence from party line or ideology is all you need to spit venom.

Yes, you do keep referring to a $100 B hole Trudeau is going to dig over his four year term. Talk to me when the results are in. Show where he’s wasted the billions he’s spent and, as promised, I’ll join in your condemnation.

Your darkest wish is that he will turn out to be a disaster, not just for you, but for Canada. How can he avoid that? Easy, by not turning out to have been a disaster.

Wait for it!

___________________________________________

I have repeated over and over right here on these pages the cement headed spending decisions and policies of Trudeau. It’s already in the history books.

You’re not stupid, you already know how many Billions have been flushed no? You know what things I am talking about, you read my every post, so you’ve read about the waste multiple times already.

I will repeat these again for you here if you need me to – but there will be a reparation requirement if so…

All of it cold, hard, facts too my friend.

You let me know if you need a reminder or not K?

PS – Trudeau already is a disaster – you know it, we all know it.

I was right about Wynne, and Notley (she’s looking at a PST now LOL!), and I am DAMN right about Trudeau.

You had better start rehearsing how to eat plate after steaming plate of roasted crow.

The killer is – I KNOW you know I am right. You’re hoping against hope that T2 will turn out good for Canadians. Buddy, you’ve been on this planet more than long enough to know that hoping means “less than optimal, cross your fingers”.

He’s a fool with money, an inexperienced, incompetent, coat-tail riding, center-fold shooting, gelatinous spined, twit, buffoon, celebrity wannabe blockhead masquerading as a Prime Minister.

How could he ever turn out good? Experience? Connections? Education? Qualifications? Luck?

No really – help me out here…

#205 IHCTD9 on 03.07.16 at 3:46 pm

#187 Bottoms_Up on 03.07.16 at 12:59 pm
#180 Herb on 03.07.16 at 12:29 pm
———————————————-
That’s right, they never let fact get in the way of a good argument.

Here’s some fact for everyone, under Harper Canada ran $130 billion in deficits between 2008-2012:

http://www.cbc.ca/news2/interactives/canada-deficit/index.html

____________________________________________

Ahh, I love it when the lefties modify easily attained, publically available facts – like adding up all the consecutive deficits, in the worst possible financial time since the great depression, in an effort to make someone look bad.

Hint: Don’t do it – too easy to refute.

Harpers final deficit number in October of 2015 was 941 Million. That’s what the deficit was when Harper was booted. That was Harper’s total contribution to the Federal debt in 2015.

Trudeau took that to a forecasted 3 billion by the end of 2015.

Trudeau now is forecasting an 18 BILLION deficit by the end of 2016 (LOL!)

IHCTD9 is forecasting 20-25 Billion by the end of 2016.

Now Herb, and Bottoms up, you both sound enraged that Harper added so much debt, and that he ran deficit after deficit.

I can really tell both of you just HATE a PM who piles on the debt and runs big deficits!

So gentlemen, say it with me, loud and clear, with voices raised to heaven:

“I HATE PRIME MINISTERS THAT SPEND LIKE CRAZY AND RACK UP DEBT AND BIG DEFICITS!!

Halleluiah my friends – let’s bring your true feelings out of the darkness and into the light, so that it may be seen by Men! (and put on the public record).

I’ll be clear as well – the return of Oil north of 40 will improve T2’s condition somewhat. So will T2 breaking more of his election spending promises. My forecasts are based on it doesn’t, and he doesn’t.

#206 TurnerNation on 03.07.16 at 3:57 pm

See in the First World we get economically bombed.
A de facto One Child policy like communist China’s.

Politicians will claim to help working families like you and I!!!!
Family is dead. Gender is disallowed. Zombie worker slaves staring at screens (like this one) is what we are to be.

http://www.thestar.com/news/gta/2016/03/07/daycare-nightmare-forces-mom-to-take-unpaid-leave.html

Even though she and her husband Glenn Attridge were prepared to fork out $3,400 a month for child care for their baby and pre-schooler — more than their monthly mortgage payments — the need far outstrips supply.

#207 IHCTD9 on 03.07.16 at 4:00 pm

#198 Herb on 03.07.16 at 1:58 pm
“Perhaps, like “Because it’s 2015” this line was also written by a staffer.” — Garth (at#189)

You mean poor Harper had no staffers?
_________________________________

Harper had the brains to hire good staff. Trudeau hires noobs to think up shit like:

“because it’s 2015”
“The budget will balance itself”
“probably quite a bit” (answering a question on cost)
“grow the economy from the heart outwards” (LOL, this one’s the best!)
“drop parkas, not bombs” (on ISIS)

Unless you want to admit Trudeau thought this garbage up on his own?

Shit, did he?

#208 Bottoms_Up on 03.07.16 at 4:51 pm

#201 meslippery on 03.07.16 at 2:19 pm
—————————–
$1.27 beer? You’re getting ripped off, tap water costs $0.005/litre!!!

#209 Bottoms_Up on 03.07.16 at 4:57 pm

#205 IHCTD9 on 03.07.16 at 3:46 pm
—————————–
What you really mean to say is that in an election year Harper had to steal money from veterans and public servants AND cook the books to claw his way to a $1 billion deficit. Again, don’t let facts get in the way of a good argument!!

#210 Mark on 03.07.16 at 5:02 pm

“Harpers final deficit number in October of 2015 was 941 Million. That’s what the deficit was when Harper was booted. That was Harper’s total contribution to the Federal debt in 2015.”

Not true. Harper added ~$16B of debt from the beginning of 2015 to end of October 2015.

http://www.bankofcanada.ca/markets/government-securities-auctions/goc-t-bills-and-bonds-outstanding/

December 31, 2014 = $629B
October 31, 2015 = $645B

The difference, the deficit, is entirely attributable to the Harper government. The BoC figures on the debt of Canada don’t lie.

#211 WalMark of Sadkatoon on 03.07.16 at 5:21 pm

Let’s see what 2016-2020 looks like, with no financial crisis. — Garth

bingo

it will be much worse. easily

#212 jess on 03.07.16 at 5:41 pm

Elizabeth Warren: Bad Behavior Is Still Too Common Among Financial Advisors

Senator Elizabeth Warren sites :(Egan, Mark and Matvos, Gregor and Seru, Amit, The Market for Financial Adviser Misconduct (March 1, 2016). Available at SSRN: http://ssrn.com/abstract=2739170 or http://dx.doi.org/10.2139/ssrn.2739170 )
…” used FINRA’s database to look at disclosures indicative of fraud and wrongdoing at nearly 4,000 securities firms, is the first large-scale evaluation of the industry’s behavior. It looked at the records of 1.2 million financial advisors working between 2005 and 2015
showing that stockbrokers with serial records of misconduct are allowed to remain in the industry.
“60 million in unpaid awards to investors dating back to 2013.”
http://www.theatlantic.com/business/archive/2016/03/financial-advisors-finra-warren/472191/
==

Theft of Your Money on Wall Street: Another GAO Report Won’t Help
By Pam Martens and Russ Martens: March 7, 2016
http://wallstreetonparade.com/

#213 Hope & Change (Canada) on 03.07.16 at 5:57 pm

#210 Mark on 03.07.16 at 5:02 pm
“Harpers final deficit number in October of 2015 was 941 Million. That’s what the deficit was when Harper was booted. That was Harper’s total contribution to the Federal debt in 2015.”

Not true. Harper added ~$16B of debt from the beginning of 2015 to end of October 2015.

http://www.bankofcanada.ca/markets/government-securities-auctions/goc-t-bills-and-bonds-outstanding/

December 31, 2014 = $629B
October 31, 2015 = $645B

The difference, the deficit, is entirely attributable to the Harper government. The BoC figures on the debt of Canada don’t lie.

Weird though that those figures show 649B for Dec 2013. (3 years ago).

So based on you logic, there have been no deficits since December 2013 (649B) vs Oct 2015 (645B). In fact, a 5B surplus?

http://www.bankofcanada.ca/stats/goc/results/26774

Maybe I’m missing something. These numbers don’t seem to add up in such a linear fashion as you think they are.

#214 Mark on 03.07.16 at 6:26 pm

“So based on you logic, there have been no deficits since December 2013 (649B) vs Oct 2015 (645B). In fact, a 5B surplus?”

I was attacking the specific claim that there wasn’t an increase in debt YTD under the Harper government.

Overall debt figures will vary from month to month, on account of seasonality, certain tax collections or legal settlements, and the timing of payments made by government arising out of appropriations.

So no, its not strictly accurate to state that an short-term increase in debt is automatically a ‘deficit’ when you have the volatility of the appropriations and payment cycle overlaid into the raw figures. I apologize if anyone was misled. However, when you add $260B in debt over a span of being 10 years in office, yet claim fiscal prudence, that strikes me as a giant problem. Especially when the predecessor government seemed to accomplish so much more and managed to run 10 years of little to no debt increases.

As far as Trudeau, only time will tell if he proves to be any better than Harper on the finance front. Like most others here, I’m highly skeptical.

#215 IHCTD9 on 03.07.16 at 7:04 pm

#210 Mark on 03.07.16 at 5:02 pm
“Harpers final deficit number in October of 2015 was 941 Million. That’s what the deficit was when Harper was booted. That was Harper’s total contribution to the Federal debt in 2015.”

Not true. Harper added ~$16B of debt from the beginning of 2015 to end of October 2015
——

We’ve already been thru this. You don’t like the official numbers because you think the government agency that posted them is a partisan collection of fools who can say whatever they want.

You prefer your own personal version of “deficit” calculation that suits your bias a little better. The one no one else on earth uses.

I said nothing about debt, only deficit (for the 10th time), you attacked a claim that was never made.

You blew it, add me to the list.

#216 Moller on 03.08.16 at 1:03 pm

Liberal government is planning to bring in a record of more than 305000 new permanent residents in 2016
http://news.nationalpost.com/news/world/liberal-government-is-planning-to-bring-in-a-record-of-more-than-305000-new-permanent-residents-in-2016

Get used to the new norm of high house prices.