Go for it

HARLEY modified

Earlier this week a famous bank economist who has way less hair than me, which might cloud his judgment (just a hunch), suggested real estate bears are nuts. “Hey,” said Doug Porter, “forecasting is hard.” He then detailed what cheap rates and house lust have done to prices over the last nine years. “Da Bears may some day be right, especially on the hottest markets, but getting the timing down is half the challenge,” he gloated.

Of course, Doug (I know him well) wasn’t actually talking about me. Nor does he, himself, offer long-term predictions. And he works for an outfit (BeeMo) that makes zillions papering the nation in mortgages. So a little context is helpful. Even with CMHC backstopping things, a housing correction of any magnitude would be really crappy news for our banking buddies.

Will the Canadian housing market crash?

Nah, it won’t. I’ve said this consistently for more than five years on this pathetic blog. There are a host of reasons a US-style rapid meltdown ain’t going to happen, most of them financial. But that’s not the point. House prices can (and will) flatline and then decline, and the potential impact becomes more consequential the higher prices migrate. Doug Porter is being your usual, irresponsible mainstream econo-banker for suggesting prices either keep catapulting, or they plummet. Neither’s likely. And I think he knows it.

Let’s recall that in 2005 it took only 8% of recent homebuyers in the US to get into trouble for the entire market to wobble. And that was with a household debt-to-income ratio lower than ours, plus a more robust economy. To suggest we don’t have risks today – when the average family can’t afford the average house in several markets – is naïve. Or on purpose.

Assessing that risk, in the context of your own life, is what matters. After all, real estate isn’t evil. I love it. And I own some, both residential and commercial. But what’s important with any asset – from Bombardier stock, to an ETF, gold or a house – is not to have too much of your net worth parked there. Balance and diversification don’t apply only to a financial portfolio, but your entire life. And the stupider house prices get, the more you should be rebalancing your exposure.

This is why somebody with a nice property that’s escalated in value to $2 million but very little else is delusional if they don’t cash out. They may feel rich, but they’re not. Having almost everything in one asset is the very definition of risk – unless that asset is cash. I also see lots of folks sacrificing cash flow and eschewing investing so they can pour every dollar into paying off a mortgage with a 2.5% rate. Bad idea. That’s concentrating net worth into one thing which today comes with substantial market and rate risk. Throttle back on payments and spread your eggs.

I know this is all confusing. So does Stephen, a millennial in Calgary. “I’ve been reading your blog for about 4 years now, since then I have seen many friends and family purchase homes as I’ve continued to rent,” he moans. “My question, which I haven’t seen you address much, is when is it right to buy?? If I can buy a house using your rule of 90 right now with a 20% down payment, is now a good time?

“Is your message that as long are you aren’t fully vested in your house, you maintain your diversification that any time would be a good time to buy?? I am just looking for advice and when is the right time, like you say you can never time the bottom of market and that’s risky, should you just buy when you can completely afford and stay diversified in your investments? Really hope this gets a response, I know many people my age (born in the 80’s) are wondering these same things.”

(There were people born in the Eighties?)

Actually, this is exactly what my Rule of 90’s all about – a simple guide to ensuring that a house doesn’t eat you. Ninety less your age should equal the percentage of your net worth to keep in real estate. So, kids can afford to romance substantial debt, while wrinklies can’t. You also need to factor in shelter costs, since you gotta live somewhere. Having said that, in major cities today it’s still cheaper to rent than to own – especially with an urban condo. Given the fact most condo units are no longer yielding capital gains, why would anyone want to purchase one? And, of course, buying a condo ‘as an investment’ to rent out is a formula for pissing away money. Instead go to Brantford or Nanaimo and grab a duplex.

So, I have nothing bad to say about Stevo buying a place. If he has enough money for a down and still maintains investment capital, if this stabilizes his shelter costs, if he buys something under market value that can be fixed, or a detached place with cap gains potential, and if he doesn’t try to turn it into a financial strategy and a retirement plan while being able to emotionally and financially withstand a lengthy correction, then go for it. But don’t expect to make 17% a year. And don’t wait for a crash. Just until you’re ready.

There, Doug. See how easy it is to be reasonable?

138 comments ↓

#1 Delwin McFulture on 03.17.16 at 6:02 pm

First!

#2 pathcontrolmonk on 03.17.16 at 6:04 pm

The irony is that if we had all bought crusty bungalows anywhere West of Main in YVR 5 years ago we would all be retired instead of reading this pathetic blog.

Rear-view investing is useless, nor does the past foretell the future. — Garth

#3 Goofy 2 Shoes on 03.17.16 at 6:04 pm

If you want an interesting read, check out the mini book called ‘On Rumour’. Here is an excerpt of the first chapter. It’s about how good and bad information travels and is accepted. It helps explain a lot of things that are happening lately.

http://press.princeton.edu/chapters/s10237.pdf

#4 LostIt on 03.17.16 at 6:07 pm

I won a bidding war but lost the house because the next best offer was cash. I was pre-approved but my offer was subject to financing on that specific property. How much of a premium do I need to bid to win over cash? Should I be submitting my t4 with my offer? What’s the worst that could happen if I didn’t make it subject to financing and it fell through?

#5 pathcontrolmonk on 03.17.16 at 6:11 pm

and ICYMI, an article in the SCMP detailing how the recent report about empty homes in Van is flawed. Seems they didnt include 2,000 houses whose electricity meters had been turned off for more than a year.

http://www.scmp.com/comment/blogs/article/1926280/vancouvers-vacancy-study-key-finding-it-didnt-find-and-vacant-homes-it

#6 pathcontrolmonk on 03.17.16 at 6:17 pm

Rear-view investing is useless, nor does the past foretell the future. — Garth

Indeed. Happy St. Patrick’s Day!

#7 Frank on 03.17.16 at 6:18 pm

That advice go for Vancouver or Toronto.

#8 Ronaldo on 03.17.16 at 6:23 pm

#4 LostIt on 03.17.16 at 6:07 pm

”I won a bidding war but lost the house because the next best offer was cash. I was pre-approved but my offer was subject to financing on that specific property. How much of a premium do I need to bid to win over cash? Should I be submitting my t4 with my offer? What’s the worst that could happen if I didn’t make it subject to financing and it fell through?”
——————————————————————
You will likely be thanking the guy who paid with cash in the not too distant future.

#9 Don't Believe The Hype on 03.17.16 at 6:30 pm

Friend of mine just sold his McMansion just outside the city this week (~$800K range). He’s divorced, grown kids. Talked to him about renting a place for now because the house closes in 3 weeks. He doesn’t want to rent, even for a short while. “I want to build equity”, he says. I tell him that it took nearly TWO years to sell his house…almost 10% lower than 2 years ago, that the market may be entering a correction–to what extent no one knows, that rushing a buy of another house under pressure may not be a great idea, but he’s adamant: “I want to be able to fix it up the way I want to”, he says. Did I mention he’s 55?
I’ve been happily renting for two years. No rush to buy a house since my own divorce two years ago. There was a $20,000 special assessment last year for each owner of the development I live in. Didn’t hurt my pocketbook one bit. But my landlord, however…
Because we’ve been conditioned to believe that owning is so much better than renting, it’s damn hard to convince anyone to do otherwise…

#10 WalMark of Sadkatoon on 03.17.16 at 6:31 pm

https://www.roberthalf.ca/sites/roberthalf.ca/files/rht-pdfs/robert_half_technology_2016_salary_guide.pdf

In Toronto is even higher. Look up in that PDF for the “Local Variance” in Toronto.

unfortunately these stats don’t include failures like WalMark. if a person can’t get hr to call them Ina booming industry like tech, the candidate is a loser.

#11 Bad Advice Guy on 03.17.16 at 6:31 pm

Stevie. Don’t do it. It’s flatlining. House prices. The goal of life is not a house. Go do something interesting. Quit your job. Get yolo tattooed on your ass. Live a little. None of us are getting out of here alive. Guaranteed.

#12 Sebee on 03.17.16 at 6:33 pm

Wives say when we have to buy a house. Wives say when it’s OK to buy a bike. I’m starting to understand gay guys!

#13 Freedom First on 03.17.16 at 6:35 pm

Yes. Unbalanced. The only thing I could do to be more high risk/unbalanced than placing everything into 1 asset, is to get married or live with someone. 50/50 chance of major tragic life changing consequences.

Or, like the sign today says, have to ask someone for permission to do what I want when I want. I can’t imagine.

Notice to Freedom First impostor: Thank you! I take it as a compliment. If I was a watch, I’d be a Rolex. And while you may look like a Rolex, inside, well, you’d still be just another piece of crap.

#14 Mean Gene on 03.17.16 at 6:35 pm

http://www.greaterfool.ca/2013/08/13/renting/

http://www.investopedia.com/terms/p/price-to-rent-ratio.asp

Price-to-rent ratio = Average list price / (Average Rent * 12)

Trulia establishes thresholds for the ratios as follows:

•Price-to-rent ratio of 1 to 15 = much better to buy than rent

•Price-to-rent ratio of 16 to 20 = typically better to rent than buy

•Price-to-rent ratio of 21 or more = much better to rent than buy

#15 jess on 03.17.16 at 6:39 pm

…forecasting is hard”

maybe try this one a poverty calculator!
http://chasingthedream.ciserrsch.cornell.edu/Calculators

#16 powder_hound86 on 03.17.16 at 6:40 pm

I’m glad someone asked this question.

I’m sitting in Edmonton at 29 years old with 100k liquid between me and my soon to be wife.

Despite the realtor stats, we are seeing some nicely discounted properties pop up in the listings and I gotta admit, its getting tempting to stop renting. There is also an offer from my exteremely well off (pops founded an oil exploration company and cashed out in 2011) parents to match a downpayment…..

Then again we rent a 2 bedroom condo and our total shelter cost is around 1300/month while we are bringing in around 200k income allowing us to save near 60% of our income

#17 Victoria Real Estate Update on 03.17.16 at 6:40 pm

CANADA’S FALLING INTEREST RATE HOUSING PRICE RUN-UP (2008-2016)

. . . . . . . . . . . House Prices. . . . . . . . . . . .
. .Percent Above/Below June 2008 Price Level.
. . . . . . . x = Canada, * = Victoria . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+35%. . . . . . . . . . . . . . . . . . . . . . . x . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+30% . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+25%. . . . . . . . . . . . . . . . . . .x . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+20% . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+15%. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+10% . . . . . . . . . . x. . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+ 5%. . . . . . . . . . . . . . . . . . . . . . . .*. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
….0%. . . x*. . . . . . *. . . . . . .*. . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 5%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
————————————————————————–
. . . . . . June. . . . .June. . . . .Aug . . Feb. . .
. . . . . . 2008. . . . 2011. . . . 2014. . 2016. . .

(source: Teranet’s index)

From June 2008 to February 2016, house prices in Canada had increased 34.5%, based on Teranet’s data. It’s absolutely shocking that house prices in Victoria had increased by only 6% over the same period of time, based on the same data.

A STRONG NEGATIVE CORRELATION: HOUSE PRICES RISE AS RATES FALL

Canada’s massive housing price run-up from 2008-2016 wouldn’t have happened if interest rates hadn’t dropped dramatically in 2009 and then continued to fall until this year.

In 2008, Canadian 5-year fixed mortgage rates were as high as 5.74%. In 2009, rates dropped to as low as 3.59%, then 2.84% in 2012, 2.68% in 2014, 2.36% in 2015 and 2.34% in 2016 (record low). (see second chart)

VICTORIA’S HOUSING MARKET FAILED TO POST STRONG PRICE GAINS IN THIS HIGHLY STIMULATIVE FALLING RATE ENVIRONMENT

If interest rates had remained at 2008 levels (5.74%), how much would house prices have fallen in Victoria from 2008 to 2016?

The answer is a lot, perhaps 30% or more.

This shows us the future direction of house prices in Victoria as 5-year fixed mortgage rates begin their upward normalization journey this year that will push them north of 5% within 2-3 years.

That mortgage rates have fallen since 2008 has prevented Victoria’s housing bubble from deflating.

Currently, house prices in Victoria are only slightly higher than in 2008. How low will Victoria’s price bottom be as higher and higher rates cause buyers to become less and less confident in the housing market?

CANADA’S 30 YEAR RUN OF FALLING INTEREST RATES WILL END IN 2016

Fixed mortgage rates are controlled by the bond market and will begin moving higher soon in Canada regardless of what the bank of Canada does with its key rate.

CANADA’S UPWARD HOUSING PRICE CYCLE WILL END AND IT WILL BE REPLACED BY A DOWN CYCLE

Rising 5-year mortgage rates in Canada will contribute to this as buyers will qualify for smaller and smaller mortgages and become less and less confident in the housing market.

Another strong negative correlation: house prices fall as rates rise.

IT’S A GOOD TIME TO SELL A HOUSE IN VICTORIA

Market conditions currently favour sellers. Getting a deal done before market conditions change would be wise.

Sales/listings conditions are never permanent and history has shown us that these conditions can change quickly from favouring sellers to favouring buyers within a matter of months. We saw this happen in Victoria in 2010.

#18 Sixtyfourk on 03.17.16 at 6:41 pm

Re: #4 – what is the worst case:

If you make an offer without a “subject to financing”, and you can’t get financing you are in a world of hurt.

You are contractually obligated to produce the entire purchase price of the house on the closing date.

If you weren’t able to secure alternate financing from another lender, I guess the end result is bankruptcy for you.

#19 Doug t on 03.17.16 at 6:42 pm

So Garth – would I be wise to buy another house and rent it out.

#20 Lee on 03.17.16 at 6:43 pm

Try selling that duplex in Brantford in under three years.

#21 paul on 03.17.16 at 6:48 pm

#4 LostIt on 03.17.16 at 6:07 pm

I won a bidding war but lost the house because the next best offer was cash. I was pre-approved but my offer was subject to financing on that specific property. How much of a premium do I need to bid to win over cash? Should I be submitting my t4 with my offer? What’s the worst that could happen if I didn’t make it subject to financing and it fell through?
———————————————————-
The SELLER would say the worst that could happen is you walk away and they need to find another Greater fool. After the the big offers in a weak punch up is gone.

#22 Clearwater on 03.17.16 at 6:49 pm

@ Mark
You mentioned a few days ago that agents in Calgary wont list unless you list 20% less than 2013 prices. I seriously doubt this statement, its not what I see in my neighborhood. What are you basing this statement on? I’m seeing most listings 20-30% over 2012 prices at the moment but I don’t know what they are actually getting sold for.

#23 Retired Boomer WI on 03.17.16 at 7:09 pm

WOW a column with a good question, and a reasoned responsible answer. Garth’s ‘rule of 90’ seems quite reasonable, and workable. Gives you shelter, and a life.

How quaint it seems.

Enjoyed the picture heading up tonight’s post, seems ALL to ACCURATE for those who followed the ‘rule of 90’

Moderation Diversification Enjoyment – all needed for life

#24 crowdedelevatorfartz on 03.17.16 at 7:14 pm

@#16 powder hound

Keep renting.
Have a retired friend in Edmonton who’s very knowledgeable about the oil patch and he’s seen several “Albertageddons” before and he thinks this one has a way longer to run yet……prices will still be dropping for at least a year there if not longer.

#25 Melt down on 03.17.16 at 7:15 pm

Please, booms go bust, bubbles pop. Flatline, then slow decline, don’t bet your well balanced portfolio on it.

#26 Randy on 03.17.16 at 7:22 pm

Buy gold or silver.

Why? — Garth

#27 Bram on 03.17.16 at 7:33 pm

If you are in it for the long haul, I find Garth’s emphasis on diversification a little overreacted.

A house, or individual stocks, or a single stock exchange will go up and down, but meh… keep it for 20 yrs, and you really don’t need to be diversified. All of them go up over a period of 2 decades.

Granted, on average the house will only keep pace with inflation. But it does save you rent, which a portfolio does not.

If you are not certain on how long you’ll stay in the house, then a portfolio is a better bet, and much more liquid.

Bram

You forgot a key element. Emotion. Most people cannot withstand a loss, even temporary, and fold. Hence, a volatility-reducing balanced portfolio is crucial. — Garth

#28 Freedom First on 03.17.16 at 7:49 pm

The thing that I don’t understand about women, is why don’t more men catch on sooner? I never went through broken marriages or break ups with women, in order to figure what they were up to. What I now know in my 60’s, I knew in my teens and 20’s. I never had my trust broken or my heart ripped out. I was never dragged through the court system and taken to the cleaners. I knew all these things as a teenager. I put my Freedom First. I love being me.

#29 RayofLight on 03.17.16 at 7:55 pm

To day is David Suzuki’s 80th birthday. David Suzuki is highlighting the biggest scientific trend currently facing people on Earth. Climate Change. It is the biggest elephant in the room. Today, the atmospheric concentration of CO2 is 404 ppm. It was about 280 ppm in 1700 pre industrialization. After 450 ppm, scientists believe the ‘positive feedback mechanisms “, E.g. Tundra decomposing releasing additional CO2 & Methane ,or reduced ice coverage surface area decreasing sun reflection and consequently increased water surface area increasing sun absorption will start to “snowball” , depriving us the ability to prevent run away global temperature increases. Read “Climate Wars” by Gwynne Dyer. Maybe Canada should allow Trump to build a fence between Canada and the US. It will help prevent the US climate refugees from entering Canada in 30 years .

#30 Brett on 03.17.16 at 8:04 pm

David Suzuki is a clown. My granddad is 90 and way cooler than Dave.

#31 common sense on 03.17.16 at 8:05 pm

#32 Freedom First

Sincerely write a book about your choices for the young male masses so they will be more aware to make choices…

Your basically preaching to an over 45 crowd here.

#32 Freedom First on 03.17.16 at 8:06 pm

#28 Freedom First Impostor

Fail. I have said numerous times over the years that if I was a woman I would be living the same lifestyle.

The real Freedom First.

#33 Nodebt on 03.17.16 at 8:06 pm

#4 lost it

How did u win the bidding war numnuts? Cash offer got it! U take a knife to a gun fight?

#34 hope & ruin on 03.17.16 at 8:09 pm

#29 RayofLight on 03.17.16 at 7:55 pm
Maybe Canada should allow Trump to build a fence between Canada and the US. It will help prevent the US climate refugees from entering Canada in 30 years .
_________________________________

Why would I be better off in Canada? as opposed to America?

#35 Mark on 03.17.16 at 8:12 pm

“if a person can’t get hr to call them Ina booming industry like tech, the candidate is a loser.”

Tech is not a booming industry by any stretch of the imagination, and you just make things up as you go along. You are clearly the loser. Something is severely wrong with you — go get help!

You mentioned a few days ago that agents in Calgary wont list unless you list 20% less than 2013 prices.

The Calgary pricing peak was ~2012 or so. And the comment that the ‘good’ Realtors were requiring people to list at 20% less than peak prices was a comment of a friend of mine who had their house on the market for ~2012 pricing (it was delivered pretty much at the peak) and has been forced to sell it on account of the breakdown of his relationship.

Of course, there might be Realtors who keep listing at insane prices (ie: as you state). Those houses are unlikely to sell and it will be a waste of the time, gas, advertising resources of everyone involved.

#36 TCContrarian on 03.17.16 at 8:20 pm

#26 Randy on 03.17.16 at 7:22 pm

Buy gold or silver.
******************************
Why? — Garth

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

Using a contrarian approach, buy gold/silver/commodities/Energy…precisely because they’ve been hated for 2-5+ years (depending).
Of course, the ‘best’ prices are now behind us – so I’d wait for a meaningful correction (15-25%).

Was an aggressive buyer of all the above last year and have enjoyed nice gains over the past several weeks (dare I say +20%).

Even won a ‘bet’ with a friend (that crude oil would stay <$40 for 1-2 years, at least!)
Like taking candy from a baby… LOL

#37 Blacksheep on 03.17.16 at 8:23 pm

Ray #29,

How many houses does, Dave S. or Leo D. own?

Flying jets all over hell, to preach the fake gospel?

The Cattle sure are suckers for celebrity.

#38 WalMark of Sadkatoon on 03.17.16 at 8:35 pm

#22 Clearwater on 03.17.16 at 6:49 pm

WalMark is from Sadkatoon so he doesn’t know what he’s talking about. Calgary is hurting but prices aren’t that bad yet

#39 jay on 03.17.16 at 8:38 pm

Hey Alberta, Quebec has $2 billion surplus,I guess $10 billion in equalization payments doesn’t hurt. Merci.

#40 eddy on 03.17.16 at 8:48 pm

@rayoflight

Spare us.
Global warming is a proven hoax designed to transfer your wealth to others elsewhere.
google ‘max ratt’
100% fraud

#41 cramar on 03.17.16 at 9:06 pm

On the other hand, why wouldn’t anyone who can afford to buy in Calgary today, not want to wait for the full measure of financial hardship to hit? One year after oil’s collapse is not going to show much of a correction in RE where prices lag the reality of job losses. He might look more like a genius by waiting and capturing more gains in his portfolio this year, while prices continue to drop in the housing market.

Reassess every 6 months. Patience is the antithesis of house lust!

#42 BG on 03.17.16 at 9:07 pm

#28 Freedom First on 03.17.16 at 7:49 pm
The thing that I don’t understand about women, is why don’t more men catch on sooner? I never went through broken marriages or break ups with women, in order to figure what they were up to. What I now know in my 60’s, I knew in my teens and 20’s. I never had my trust broken or my heart ripped out. I was never dragged through the court system and taken to the cleaners. I knew all these things as a teenager. I put my Freedom First. I love being me.

————————————————————-

Oh my! I just realized you are Barney Stinson in his 60s!

Seriously, just trade your usual catchphrase for “I’m awesome!” and you are 100% an older version of Barney Stinson.

#43 BG on 03.17.16 at 9:10 pm

Doug Porter: “Da Bears may some day be right, especially on the hottest markets, but getting the timing down is half the challenge”

The guy is absolutely right.
Don’t call him out for hat particular quote because that’s the simple, brutal truth.

#44 Sheane Wallace on 03.17.16 at 9:20 pm

1.4 mil for a cardboard house in Maple. Up from 1.1 mil 2 years ago, Used to sell for 310 k in 2002.

Sure there can’t be a significant price correction. Everyone’s income has jumped at least 5 times since 2002, right?

If you ask me houses are overpriced at least 3 times in Toronto and Vancouver. maybe 2 times elsewhere.

But again, what do I know? BTW I still have more hair then Doug.

#45 WalMark of Sadkatoon on 03.17.16 at 9:21 pm

for those who are in the booming tech industry:

http://qz.com/641324/how-to-get-your-job-application-noticed-every-time/

WalMark need not apply.

#46 Sheane Wallace on 03.17.16 at 9:21 pm

What I do know is that banks package the high and moderate ratio mortgages and sell them immediately as ‘investment grade’ securities to investors including pension funds. Making 15-25 % on the sale immediately.

Everything backstopped by taxpayers/CMHC so banks bear no risk.

The movie ‘Big short’ is nothing compared to the risk we face with the CMHC sub-primes.

When (not if) it blows, the government will have no choice but to offload some of the risk to banks. Hence the bail out legislation.

#47 Sheane Wallace on 03.17.16 at 9:26 pm

#43 BG

It does not matter any more. It mattered in 2009 when the little guy with the fat fingers (may god have mercy on his sole) introduced 0/40 sub-primes backed by CMHC.

Since then we were only postponing the inevitable. The total destruction of the currency. It is an absolute certainty and it would be potentially catastrophic.

#48 Sheane Wallace on 03.17.16 at 9:28 pm

‘may god have mercy on his soul’ damn it. That Irish whiskey!

Happy St Patrick’s day!

#49 common sense on 03.17.16 at 9:39 pm

Well the fun is now officially starting in the US elections..

at 8:37pm The Donald tweeted..

Hillary Clinton has been involved with corruption for most of her professional life!

And if he does have the goods on her…..woo hoo…

#50 preet89 on 03.17.16 at 9:42 pm

I don’t understand why Vancouver has to be affordable to the general public. As long as it’s affordable to SOMEONE, that’s all that matters.

It’s the same as someone saying that everything on Rodeo Drive should be affordable to the general public. It isn’t.

Some things are expensive that take some borrowing to get. So what? That’s life. If you can’t borrow enough to get it then that’s not everyone else’s fault is it?

Buy the knockoff purse or get an android phone if you can’t afford the iphone. You have your choices still. Not everyone can afford filet mignon, but some can and the restaurants cater to those who can.

This isn’t the 80’s anymore everyone.

#51 Denver Hollar on 03.17.16 at 9:49 pm

Canadians now reduced to eating pig food and animal fodder.

http://www.vancouversun.com/news/metro/ugly+fruit+vegetables+coming+store+near/11792300/story.html

You’ve seen ‘Jamies’ recipes for those who can’t afford fresh vegetables, well now we’ll be competing with the pig food purveyors for substandard produce and fruits unsaleable in any retail market south of the border. Truly, this is Trudeau Liberal policy gone too far.

Once again our Liberal propagandists are trying to put lipstick on a pig. With the economy in the tank, hyperinflation starving millions, Trudy and the Turds incompetence flailing on selfie campaigns about Canada’s getting a junior security council seat in 2030, HUH?

The smoke and mirrors campaign of Trudy’s Beauty Walk to Washington lasted a weekend after it was obvious Obama and Biden had him bent over the table rather than sat.

Where the rubber hits the road is how Canadians are faring, and it ain’t good.

#52 Sheane Wallace on 03.17.16 at 9:50 pm

#50 preet89 on 03.17.16 at 9:42 pm
I don’t understand why Vancouver has to be affordable to the general public. As long as it’s affordable to SOMEONE, that’s all that matters.

It’s the same as someone saying that everything on Rodeo Drive should be affordable to the general public. It isn’t.

Some things are expensive that take some borrowing to get. So what? That’s life. If you can’t borrow enough to get it then that’s not everyone else’s fault is it?

Buy the knockoff purse or get an android phone if you can’t afford the iphone. You have your choices still. Not everyone can afford filet mignon, but some can and the restaurants cater to those who can.

This isn’t the 80’s anymore everyone.

——————————

Except that Vancouver is not the filet mignon as you claim, but a mouldy long forgotten cold sh.t sandwich scrapped from the bottom of a crappy fridge at a convenience store in the middle of the f….ng nowhere.

Miami and Barcelona are far better places. Vancouver is world class city only in the mind of the local idiots.

#53 common sense on 03.17.16 at 9:56 pm

#50 preet89

Yes, exactly.

It’s this weird thing called Supply and Demand.

#54 Freedom First on 03.17.16 at 10:09 pm

Dear Freedom First Imposter,

I am merely stating that I never had any failed relationships over the last 45 years. I knew about the pitfalls of marriage and have avoided it for my whole life. I was smarter than most people even in my teens. I’m the best.

The real Freedom First.

#55 Rational Optimist on 03.17.16 at 10:10 pm

Smoking Man- you posted an excerpt earlier from a National Review article about the defeatist mostly white nominally male U.S. voters supporting the reality tv star for president. You asked where these voters should take their U-Hauls.

The answer: anywhere where there might be opportunity. Out of Appalachia or the Ozarks or the Smokey Mountains, for sure. That article was espousing a lot of what you say: these people need to hustle, and to go where they need to and to do what they need to in order to make money. Instead, they’re voting for anyone who will feed their delusions that someone else- the immigrants, whoever- caused their problems and, worse, that government will fix them.

These whiners so willing to blame foreigners for their lot need to grow a pair and start hustling and winning. If the foreigners are winning, it’s because they’re not whining. These people are losing because they’re losers who think their dying villages in the rural rust belt are important, and are unwilling to leave them.

#56 RIP Rob Ford on 03.17.16 at 10:23 pm

It’s sad to see anyone go like this. If there is any saving grace, his wife can soon breathe easy, knowing she won’t be beaten and have to call the police again. And maybe his children now have a chance to grow up without becoming drug addicts themselves.

Still, he was strangely entertaining, not unlike Trump.

#57 LS in Arbutus on 03.17.16 at 10:32 pm

powder_hound86

My advice, if you are young and if you can rent, all in for $1,300 a month, why buy right now? I don’t really see a down side to waiting. Either prices are crazy stupid in some areas of the country or they are slowly deflating. Either way, waiting is OK. As you get more established and with kids, buying becomes more of a necessity and you need to spend more to live. But when you have no kids and are flexible, sock away as much $$$ as you can and live BELOW your means. You don’t need a house when you’re 29. When the kids come, and you’re saving a LOT less, you won’t worry about it as much and will be happy that you did live frugally and socked it away.

#58 Saskatchewanite on 03.17.16 at 10:46 pm

Quick Question:
Rule of 90: Age – 90 = % of net worth in real estate.

% = Down payment?
% = Down payment + mortgage amount?

#59 Saskatchewanite on 03.17.16 at 10:48 pm

Woops, correction:

Quick Question:
Rule of 90: 90 – Age = % of net worth in real estate

% = down payment?
% = down payment + mortgage amount?

#60 RayofLight on 03.17.16 at 10:56 pm

#40 eddy on 03.17.16 at 8:48 pm
@RayofLight
Spare us.
Global warming is a proven hoax designed to transfer your wealth to others elsewhere.
google ‘max ratt’
100% fraud

I’m a retired engineer and am interested in long term trends. In the end, science doesn’t care what you believe. Canada and Russia are projected to suffer less from climate change because of their Northern Latitudes. The refugee exodus from Syria today could be insignificant compared to the climate refugee migration from Mexico and the southern states in 20-40 years. India is already building a fence between it and Bangladesh to circumvent climate refugees it anticipates in a few decades time. Me, my best case scenario is I will be senile by the time this stuff happens, but I worry about my son’s life and definitely about my grandchildren’s

#61 canuck on 03.17.16 at 10:57 pm

powder_hound86 on 03.17.16 at 6:40 pm

I’m glad someone asked this question.

I’m sitting in Edmonton at 29 years old with 100k liquid between me and my soon to be wife.

Despite the realtor stats, we are seeing some nicely discounted properties pop up in the listings and I gotta admit, its getting tempting to stop renting. There is also an offer from my exteremely well off (pops founded an oil exploration company and cashed out in 2011) parents to match a downpayment…..

Then again we rent a 2 bedroom condo and our total shelter cost is around 1300/month while we are bringing in around 200k income allowing us to save near 60% of our income
____________________________________________

So? Do you have a point to make or just want to brag?

#62 canuck on 03.17.16 at 10:59 pm

Freedom First on 03.17.16 at 10:09 pm

Dear Freedom First Imposter,

I am merely stating that I never had any failed relationships over the last 45 years. I knew about the pitfalls of marriage and have avoided it for my whole life. I was smarter than most people even in my teens. I’m the best.

The real Freedom First.
____________________________________________

So you’re smarter because your self absorbed and can’t make a long term commitment to anyone other than yourself… and you brag about that on a real estate blog?
Yeah, you sure are the best…

#63 ROCK BEATS PAPER on 03.17.16 at 11:07 pm

“Will the Canadian housing market crash? Nah, it won’t. I’ve said this consistently for more than five years on this pathetic blog. There are a host of reasons…” why it is different here…

“So, I have nothing bad to say about Stevo buying a place.”
——————————————————————
That is about as close as we can get to capitulation by the last bear.

The main problem is that when you said it 5 and 4 years ago you were correct, but when you hit the parabolic rise, as in the last couple of years in YVR and parts of GTA it would be very unusual to not have a major dislocation.

It is not different this time or in these places. Bubbles may have different styles but the same basic ingredients and the same basic outcomes.

Too bad their is no good direct way to short this asset class!
___________________________________________

#27 Bram on 03.17.16 at 7:33 pm

Houses are cash flow negative, as in a depreciating asset. A balanced portfolio has income. Even gold does not wear down. Or have you never had to replace a furnace, roof, etc…

#64 Smoking Man on 03.17.16 at 11:12 pm

#55 Rational Optimist on 03.17.16 at 10:10 pm
Smoking Man- you posted an excerpt earlier from a National Review article about the defeatist mostly white nominally male U.S. voters supporting the reality tv star for president. You asked where these voters should take their U-Hauls.

The answer: anywhere where there might be opportunity. Out of Appalachia or the Ozarks or the Smokey Mountains, for sure. That article was espousing a lot of what you say: these people need to hustle, and to go where they need to and to do what they need to in order to make money. Instead, they’re voting for anyone who will feed their delusions that someone else- the immigrants, whoever- caused their problems and, worse, that government will fix them.

These whiners so willing to blame foreigners for their lot need to grow a pair and start hustling and winning. If the foreigners are winning, it’s because they’re not whining. These people are losing because they’re losers who think their dying villages in the rural rust belt are important, and are unwilling to leave them.
.

Rationalize it the way you want. Someone sold a white picket fence. the head opens eyes, and its black.

There will be a re-set in NWO agenda and monopoly no matter how you schooled are programmed.

Trump wins, it’s not to violent. he loses, learn to shoot a gun.

I’m killing Chapter 8 Gut Check. best one ever. I love you.

#65 Smoking Man on 03.17.16 at 11:28 pm

Time away from writing chapter 8, I’m on an orgasmic roll.

Trump is not a racist painted by the MSM that is embarrassed about lucky Larry’s last fk up.

We designed wtc7 in 2000. before he owned the properties.

That aside, strait white misogynist horny men with ak47’s and no understanding why they are in the cross hairs of the NWO and radical lesbions will shoot, then aim.

I just call it like I see it. God prove me wrong and take me out if you have the guts.

Me and you are having words, my nephew Mark. You crossed the line god.

Your not getting away with this. Take me now if you have a set.

#66 Sheane Wallace on 03.17.16 at 11:36 pm

Let’s face it: In the last 10 years Real estate was the best leveraged investment out there where you can with 5-10 % down-payment on a 1 million shack gain 300-400 % windfall profit in just few years from house appreciation.

I spoke to a friend of mine this week, paid 600k for a freehold town + parking in very good Toronto location, 2 years ago, with 100 k down-payment, the townhouse will be ready this spring and he is approached with offer for the townhous alone for 825 k (without the garage). It ensures profit of 325k + garage on a 100 k investment.

Nice eh?

With the CMHC enabling this insanity my answer is this: F..k you, I am moving south and collapsing my RRSP. Tax the stupid as much as you can,

#67 SWL1976 on 03.17.16 at 11:41 pm

Well dogs,

Here I sit in Calgary airport making my journey back to the best (west) coast one last time. After 4-1/2 years of making the commute to Northern Alberta working in the oil sands I finally find myself walking away. I wasn’t laid off or squeezed out, but rather decided to quit after receiving and very tempting offer to work close to home. I must say I am a little nervous, but also looking forward to starting my next chapter with regards to weaving my way through this sometimes mixed up world.

I am a firm believer that sometimes when a door opens you have to go through it. I know and understand I am not your average wage slave who finds a simple comfort in the security that comes with an undefined sense of ownership and servitude in being just another number in one of the big corporate cogs.

I am thankful for the experience and wisdom I have gained along the way, but also knew it was time to go. Walking away from a cakey contract in this environment is not a decision that is made without some serious thought, but in the long run I feel its for the best. I actually felt good about opening up a position for someone in Alberta, but it seems anyone with any serious talent is still gainfully employed

I thought I had seen it all before venturing to the Canadian oils sands, but little did I realize the show was just getting started. Plenty of panic setting in, in a largely inefficient environment where ego Trumps logic.

Sound familiar?

The big players will be fine, but the average Joe best sharpen their pencils and their skill set, otherwise they may find someone else eating their lunch.

Anyways, I’m looking forward to the next chapter

Thanks always Garth, for giving us eccentrics a place on the web to ramble on

Nice work on the store

#68 Smoking Man on 03.17.16 at 11:52 pm

#56 RIP Rob Ford on 03.17.16 at 10:23 pm
It’s sad to see anyone go like this. If there is any saving grace, his wife can soon breathe easy, knowing she won’t be beaten and have to call the police again. And maybe his children now have a chance to grow up without becoming drug addicts themselves.

Still, he was strangely entertaining, not unlike Trump.
……….

Shit did he bight it…. fk

#69 Sheane Wallace on 03.17.16 at 11:58 pm

Does crowd-sourcing project to pay for lawyers to sue personally all financial ministers and CMHC heads in the last 10 years as liable in the CMHC scam make sense?

#70 Big Dipper on 03.17.16 at 11:59 pm

What!? No outcry over the age eligibility for OAS?

I expected to see a fine anti-T2 rant. Lots of hand-wringing on giving tax payers money to the useless elderly instead of the top earners.

C`mon Garth. Give it your best.

#71 Sheane Wallace on 03.18.16 at 12:03 am

CMHC exposed as the insurance scam it is:

http://www.livingintdot.com/2014/03/07/cmhc-premiums-latest-government-scam

If any of the private insurers adopt their practices for risk assessment they would be bankrupt or in jail,

Bankrupt CMHC will be. I would like to see a finance minister, event 2, and CMHC heads and some prime ministers in jail.

#72 Ronaldo on 03.18.16 at 12:04 am

#50 preet89 on 03.17.16 at 9:42 pm

This isn’t the 80’s anymore everyone.

——————————

Your right. It’s much worse than that. Highest prices in history along with lowest interest rates in history. Ripe for disaster. There’s a very good reason for the low supply at this time. People are trapped in their million dollar plus homes with nowhere to go. First time buyers are priced out, the next level won’t sell because they’re afraid that they won’t be able to afford to get back in or they think the market will go higher. If these investigations that are taking place on the housing situation in Vancouver should reveal a gigantic ponzi scheme or massive corruption, the party will come to an abrupt end. It may be sooner than you think. When those entities that are sitting on a supply of empty homes decide to unload when the heat gets to hot for them, this ponzi scheme will start to unravel very quickly. The whole situation makes no sense whatsoever. On paper in the lower mainland, we probably have the greatest number of millionaires per capita and if prices suddenly correct downwards, the herd will rush to the gates to get out but it will be too late. There will be no buyers.

#73 Sheane Wallace on 03.18.16 at 12:11 am

You have to read this stupidity:

http://www.cmhc-schl.gc.ca/en/corp/nero/jufa/jufa_018.cfm

In Canada, the sub-prime market did not take hold to the extent that it did in the U.S.; estimates place it at less than 5 per cent of the Canadian market at its peak. Most mortgages in Canada are originated and retained by institutions whose goal is to maintain a long-term, broad relationship with their customers, also offering credit cards, car loans and investments. Lenders thus have a financial interest in ensuring that borrowers do not take on unmanageable debt, which reinforces their motivation to prudently underwrite mortgages.

It is an absolute and outrages lie as the majority of the mortgages are immediately packed as MBS and sold to your pension fund or international investors.

Almost nothing stays on the balance sheet of the banks

#74 JamesA on 03.18.16 at 12:14 am

Garth’s thinking is correct. But, it’s hard hard to predict what level and duration of bread and circuses the politicians will do to keep the party going. Timing this is impossible. I like the argument for mobility better now. Being able to get to a better situation as needed.

http://www.businessinsider.com/high-salary-jobs-will-be-automated-2016-3

If we come up with artificial general intelligence even the programmers will be out of work. We mustn’t let that happen. Whomever discovers it will be taken behind the cubicle and beaten with their own mechanical keyboard a la Office Space printer.

If the FBI email thing is too much for the Clinton’s Teflon leathery hides, what does a B. Sanders vs trump look like? Trump wins. Ugh. If he does, I have a recommendation for our southern cousins. Once trumpy enters the White House, hide all his baseball caps (in the same place you hide the big red button), surround the building with a combo of powerful fans and live cameras. The fear of wind + cameras should keep him contained in a sort of douchbag force field. Then we develop an insult AI that bombards his Twitter account. He can spend his days counter attacking with his remedial grade 10 command of the language. Your welcome.

#75 No sir on 03.18.16 at 12:19 am

You forgot to mention the big elephant in the room, oil prices.

There likely won’t go past $50 this year, and there is a chance they will be under $50 for a few years. The meetings to cut production mainly involve Russia and the Saudis. As soon as they cut production the Americans will start fracking again, then the Saudis will have to start pumping again to maintain market share. For the Russia-Saudi market cap to work the oil price needs to stay low, like under $50 for a little while, so not to attract the other players and make those oil sectors die out.

It takes a while to forget how to drill and frac economically, so it will take a while for the price to rebound.

With that said why would you buy a house when the correction in Calgary has just started?

The house prices in Cowtown are sticky and are waiting for that $70 oil, but not every one can wait that long.

#76 Seattle vs Toronto on 03.18.16 at 12:19 am

I just had to chime in after reading a litany of comments about how Seattle is so superior to Toronto in every way. As a Vancouverite, I must say I disagree. I think I have a pretty objective opinion as I am really not biased in favour of Toronto or Seattle. I have spent time in both Toronto and Seattle and I think Toronto has more to offer in a city. Toronto is just a way more vibrant scene with more restaurants and more bars and clubs than Seattle. Toronto is the heart of culture in English Canada and it has Much Music and and the Film Festival and CBC and so much television and art is done in Toronto. Toronto gets a lot because it is the biggest city in Canada–it is the biggest fish in a small tank. Seattle, on the other hand, is the 15th largest metro area in the US–it is way down the urban hierarchy in the US. Toronto is at the top of Canada’s urban hierarchy, it is the New York of Canada. If Toronto happened to be in the US it wouldn’t have nearly as much going for it because it wouldn’t really stand out, it would just be another moderately big sized city. The finance sector is way bigger in Toronto. Seattle doesn’t even have an NHL team. As bad as transit is in Toronto right now, it’s better than Seattle. Seattle did not have any rapid transit or subway until recently. I believe they just recently got light rail but it is still under developed and does not go far. The monorail from the 60s looks sad. Toronto has had subways since the 50s I believe. Toronto is a way more transit-oriented city than Seattle. I love the streetcars of Toronto. I believe Seattle has no streetcars, although they may still have trolley buses. Toronto’s CN Tower is taller and more beautiful than the Space Needle. Also, Seattle is in an earthquake zone and Mount Rainier is an active volcano that actually could send a lahar flow to some Seattle suburbs as well as most definitely ash to the entire region. Toronto is actually pretty safe from more natural hazards.

#77 assets and ROIs on 03.18.16 at 12:22 am

#27 Bram on 03.17.16 at 7:33 pm

Houses are cash flow negative, as in a depreciating asset. A balanced portfolio has income. Even gold does not wear down. Or have you never had to replace a furnace, roof, etc…

A paid off house (like a paid off balanced portfolio, to compare apples to apples) is cash flow positive if you compare it to renting.

A paid off house is actually not a single asset, it is a portfolio of assets.

The biggest value in the “asset portfolio of a house” has always been the land, not the furnace, the roof or even the house itself.

The real comparison of ROI is the return on a paid off house vs the return of a (fully invested) investment portfolio.

You win 2 million dollars, you buy a house for 1 million and you buy a balanced investment portfolio at a cost of 1 million dollar on the same day, outside of RRSP and TFSA.

Don’t invest any extra money in the two original assets, liquidate both of them 10 years later on the same day.

Add up the taxes related to own each assets over 10 years and at the time of liquidation, plus the cost of acquiring and liquidating them.

That gives a better apples to apples comparison on ROI (excluding investment management portfolio fees and rental income, to make it less complicated.)

#78 BS on 03.18.16 at 12:23 am

“Da Bears may some day be right, especially on the hottest markets, but getting the timing down is half the challenge,” he gloated.

For a bear to be “right” they only need to pay less when they buy than they would if they bought now. Why even bother quoting a paid shill.

Doug’s logic is like saying a smoker who lives 15 years is right smoking won’t kill them because the smoker hasn’t died yet. Being right 19 years out of 20 when you die on the 20th year doesn’t mean much. With Doug’s logic there would be no point in quitting to smoke because you can never predict the timing on when it will kill you. A bears logic is it will kill you at some point so why bother. And all the time it doesn’t kill you it cost you more to smoke than not smoke with no real benefits. I think I will stay a bear and non smoker.

#79 A Yank in BC on 03.18.16 at 12:38 am

#29 RayofLight on 03.17.16 at 7:55 pm

“Maybe Canada should allow Trump to build a fence between Canada and the US.”

Trump has never suggested any such thing. In fact he says he loves Canada. It was the governor of Wisconsin who suggested the wall. Oh.. and btw.. since when did the U.S. need Canada’s permission to do anything?

#80 fisherman on 03.18.16 at 12:59 am

Good work Sheanne Wallace. Spread the word, down south. back east, Vancouver is the sh*t in the B.C.sh*t sandwich.
Not that there’s anyplace to stay this summer. All the govt. campsites are booked. The booking site crashed the first hour. Private places are stlll around ,if your a zillionaire. 0% vacancy rates ,the damn place is jammed & they keep coming, more every week. Albertan’s, oil’s going up, everything will be OK,stay home. Refugees, immigrants you can’t afford us. Crappy place only for rich Asians coming over to drive their luxury cars to dim sum & us nativist sellout idiots.

#81 Siva on 03.18.16 at 1:11 am

Trump says he sees ship loads of cars from Japan at L.A harbour that are taking away American jobs but he never sees ship loads of cars from Germany. His supporters then wonder why he is called a race baiter.

#82 Freedom First on 03.18.16 at 1:50 am

Garth was right. It is very difficult to tell if it is me posting, or if it is one of the many Freedom First Impostors.

Only I am able to keep track of which posts are mine and which ones aren’t. The Feminazis, White Knights, Manginas, and SJ warriors are better Freedom First writers than I am. I could never be such an a$$hole.

My only option is to go Ghost online, same as I do in my private life. So, thank you everyone, I really enjoy Garth’s Blog, which I will continue reading, but I will no longer be posting. To the majority of the Blog Dawgs, Love you, and God bless.

#83 Double Standard on 03.18.16 at 2:10 am

#32 Freedom First on 03.17.16 at 8:06 pm

#28 Freedom First Impostor

Fail. I have said numerous times over the years that if I was a woman I would be living the same lifestyle.

The real Freedom First.

The odds are pretty slim because in our society if a woman behaves that way she is called a ho. Men get to call it notches on the bedpost, women are considered loose.

#84 Powder Boy on 03.18.16 at 2:38 am

Powder_hound you make 200 a year and your Dad is going to match…. Your Dads an idiot, or Moms wearing the pants. Be a man. I didn’t get a handout, stronger for it, too. Also, is that it for savings. You’re joking, right?

#85 M on 03.18.16 at 2:44 am

Gartho baby…you are incorrigible…
Of course housing will crater (like a big black hole in the ground)… of course at least two biggies canadian banks will go under (one or both will be bailed out) with 450 Bil exposure to housing and probably as much to oil-turned-to-$hit…

..of course Jenny Down South will wet another pair of depends while REDUCING the interest rates back to ZERO …AND hitting the emergency button for QE4…

…Jenny will wet a second pair of depends by apologizing for lifting the interest rates to begin with..

Gartho baby.. where are my vodka bottles ?

#86 M on 03.18.16 at 3:01 am

..and the jobs down south ?.. lots..maybe but 25% are part-time-$hit jobs. Change the “35 hrs/week=full time”
and allthose jobs thinghy..is bye bye

http://www.bls.gov/news.release/empsit.nr0.htm
here..
http://www.bls.gov/news.release/empsit.t09.htm

..just through away the damn TV. Not good for you

#87 M on 03.18.16 at 3:03 am

“throw” .. I meant :(

#88 End Immigration on 03.18.16 at 3:21 am

This is the only solution to rising home prices.

Join an anti-immigrant organization. Don’t let them think it has anything to do with race. It’s about managing population growth. And don’t believe the statscan BS..they don’t count the permanent temps.

#89 Reasonable... on 03.18.16 at 3:38 am

Reasonable that RE will not devalue quickly, so says conventional wisdom and history going back to the 80s.

But none of the crashes to date have been predictable nor conventional.

That makes the likelihood of a flash crash possible.

Expect the unexpected?

If ever there was a, never before seen, highly leveraged RE bubble that exists in Canada today…its bursting may well be catastrophic.

#90 No Canada, No on 03.18.16 at 4:03 am

(when oil 100) oil won’t crash
60: nah, it can’t decline further, will stabilize at 50
35: omg, is oil crashing?
26: we’re all screwed…

When a shak house in scarborough 700k: nah, for obvious reasons, mostly financial, it can’t and won’t crash

#91 George on 03.18.16 at 4:39 am

Garth is wrong again. The market will crash. He used to say this in the 00´s but changed his mind as markets continued to defy predictions. The crash will happen sooner than you think.

#92 hope & ruin on 03.18.16 at 4:58 am

#58 Saskatchewanite on 03.17.16 at 10:46 pm

Rule of 90: Age – 90 = % of net worth in real estate.

_________________________________________

if you buy in 2016 “Age – 90” might be the percentage of your net worth in real estate lol.

#93 Buy? Curious? on 03.18.16 at 5:13 am

Hey Garth! Happy Anniversary! It’s been 8 years that I’ve been coming to this blog, almost everyday, occasionally leaving a comment or two, and I’ve just noticed something. Now allow me to explain, if you’ve got residential AND commerical, at today’s prices, and using your Rule of 90, you must worth about $50million! Am I right? You’ve got to be at least a 0.01 percenter with all those finanical strategies. You even worked in the government on the tax side of things! I don’t know why people are not listening to you.

(Smoking Man, where’s this book of yours, gawdamnit!)

#94 Freeman on 03.18.16 at 5:47 am

Renting should be only a ‘Temporary’ state in life.

A man without land is nothing.

#95 eddy on 03.18.16 at 8:12 am

@RayofLight

In the end, science doesn’t care what you believe.


Belief has no place in science.
The red flag, no pun intended, is when they call people who don’t believe them ‘deniers’, that’s a linguistic trick.
Climate change is not a fact, or a singular event, it’s a narrative that keeps changing. If I question one aspect of the narrative , I’m called a denier. Bolshevism is alive and well
‘science’ is being used by financial interests, and weather is being manipulated by people with financial interests

#96 Mr. Frugal on 03.18.16 at 8:18 am

#29 RayofLight on 03.17.16 at 7:55 pm
To day is David Suzuki’s 80th birthday. …

————————————————————

I have to hand it to Suzuki, he’s been scamming the system for longer than anyone. He probably has a carbon footprint the size of PEI and yet he lectures the rest of us about how we need to live. Just jetting around the country spewing crap and pushing his CBC socialist liberal agenda. Funny how the herd can’t see what’s right in front of them. He lines his pockets with tax payers cash and you fools trip over yourselves as you line up to worship him.

#97 pBrasseur on 03.18.16 at 8:31 am

Canadian housing market is unsustainable and for that reason alone you can be certain it will correct.

Whether the correction occurs via a crash or a slow meltdown is another question. Both outcomes are possible in Canada but I guess Garth favors the slow meltdown theory because he figures the banking system will hold (mainly because already backed by government), financing will still be available for most and that should prevent a sudden crash.

That’s equivalent to comparing a slow decaying with a bombardment, neither is a very pleasant option. A crash would be very disruptive and painful but at least the correction would be shorter and the economy could recover sooner, likely on sounder footings.

A slow meltdown means the correction will take much longer to unfold, which means among other things that the unbalances caused by the misplacement of housing in the Canadian economy will remain with us longer, in other words Canadian productivity will take longer to recover as we stay longer with the illusion of prosperity provided by debt.

In short the reason a slow meltdown is more likely le in Canada in simply because our economy is less responsible, less adaptive than in the US, markets still get the last word here but it takes longer. In a free market economy those aren’t qualities, they are defects and in the end we’ll only be poorer for it because debt will grow longer.

#98 YVR Money Laundering on 03.18.16 at 8:52 am

like a realtor is really gonna dig into where his chinese client got the $2 million in the briefcase??

http://www.theglobeandmail.com/news/national/vancouver-housing-market-vulnerable-to-money-laundering/article29285770/

#99 Willdaman on 03.18.16 at 8:56 am

“Rear-view investing is useless, nor does the past foretell the future. — Garth”

Does this mean we can expect you to stop referring to how balanced portfolios in the past have yielded 7% as your way of justifying investing?

No, because that reflects a decades-long return on balanced portfolios, in stark contrast to the short-term record people celebrate with real estate. Over the last half-century housing has paced inflation while financial assets have far exceeded it. Learn more. — Garth

#100 Seattle vs Toronto on 03.18.16 at 9:13 am

One more thing. Someone said that Lake Ontario is polluted. Well, I wouldn’t want to go swimming in Seattle’s Puget Sound either as it is polluted with raw sewage from Victoria.

#101 hope & ruin on 03.18.16 at 9:44 am

#76 Seattle vs Toronto on 03.18.16 at 12:19 am

Toronto is the heart of culture in English Canada and it has Much Music

yep. Toronto just lost.

#102 Powder_hound on 03.18.16 at 10:02 am

Lol @ the haters

#103 Lucifer on 03.18.16 at 10:23 am

#65 Smoking Man on 03.17.16 at 11:28 pm
Time away from writing chapter 8, I’m on an orgasmic roll. Trump is not a racist painted by the MSM that is embarrassed about lucky Larry’s last fk up.
We designed wtc7 in 2000. before he owned the properties.
That aside, strait white misogynist horny men with ak47’s and no understanding why they are in the cross hairs of the NWO and radical lesbions will shoot, then aim.
I just call it like I see it. God prove me wrong and take me out if you have the guts.
Me and you are having words, my nephew Mark. You crossed the line god.
Your not getting away with this. Take me now if you have a set.
………………………………………………………………….
God doesn’t need you nor does he want you but I do.
Ive got the balls and your my bitch.

Pleased to meet you
Hope you guessed my name, oh yeah
But what’s confusing you
Is just the nature of my game

Just as every cop is a criminal
And all the sinners saints
As heads is tails
Just call me Lucifer
‘Cause I’m in need of some restraint

So if you meet me
Have some courtesy
Have some sympathy, and some taste
Use all your well-learned politesse
Or I’ll lay your soul to waste, mm yeah

#104 tkid on 03.18.16 at 10:23 am

since when did the U.S. need Canada’s permission to do anything?

Since the last time we tussled, and then set up a series of agreements so we never had to tussle again. Dig?

#105 Daisy Mae on 03.18.16 at 10:32 am

#93: “Now allow me to explain, if you’ve got residential AND commerical, at today’s prices, and using your Rule of 90….”

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

Is it small wonder Garth plays it ‘close to the vest’? ;-)

#106 Willdaman on 03.18.16 at 10:34 am

“Rear-view investing is useless, nor does the past foretell the future. — Garth”

Does this mean we can expect you to stop referring to how balanced portfolios in the past have yielded 7% as your way of justifying investing?

No, because that reflects a decades-long return on balanced portfolios, in stark contrast to the short-term record people celebrate with real estate. Over the last half-century housing has paced inflation while financial assets have far exceeded it. Learn more. — Garth
___

So now you’re making a distinction between long term rear-view vs. short term rear-view?

I agree 100% that you can’t use past performance as any sort of indicator of future, and the distinction you seem to be making makes 0% sense.

I’m not saying investing in a balanced portfolio isn’t prudent, just that referencing how it’s performed in the past is completely immaterial to what can be expected in the future, so telling people that having $Xmillion in a balanced portfolio down the road and expect to have returns with reference to how a balanced portfolio has performed before (be it years, decades), is misleading.

I’m not a housing bull/bear or doomer hiding my money, just calling it as I see it when something seems off…

Decades of performance numbers are the best guide we have to forecasting expected future outcomes. If you want to assume everything going forward is totally unknown and impossible to frame, good luck with financial planning. — Garth

#107 Rational Optimist on 03.18.16 at 10:49 am

64 Smoking Man on 03.17.16 at 11:12 pm

“Rationalize it the way you want. Someone sold a white picket fence. the head opens eyes, and its black.
There will be a re-set in NWO agenda and monopoly no matter how you schooled are programmed.
Trump wins, it’s not to violent. he loses, learn to shoot a gun.
I’m killing Chapter 8 Gut Check. best one ever. I love you.”

So someone sold them a white picket fence. You sell, or you’re sold. If these people chose to buy some idea of a white picket fence, that’s their problem. The article you excerpted was telling them to act like individuals and make their own fortunes, but that’s hard and being poor is easy so they’re going to stick with that. They’d prefer to buy someone else’s ideas- again. I can’t see that working out for them this time, either.

I love you, too.

#108 Moller on 03.18.16 at 10:49 am

I don’t see how these stories, about foreign investments into the Canadian housing market and foreigners buying houses with cash, make any sense.

If this were true, wouldn’t we see a huge demand for the Canadian dollar, and a better exchange rate than we do now? After all, foreigners do need our dollar to buy real estate. In reality, the Canadian dollar is worth a lot less now than before.

I do understand that the oil bust had a major factor in causing the decline in the value of the dollar. But with all this “supposed” foreign money coming in, shouldn’t we see a raising demand for the dollar?

#109 The Time To Buy Is Now In YYC on 03.18.16 at 11:00 am

You guys are still blind to it. I posted here a few days back about my recent purchase in Cowtown. 27% below the price paid in 2015. 5% below the BUILDER’S COST.

How do I know this? I phoned the builder directly and asked for his assistance with some work on the house. He clued me in that we had paid less for the house than it cost him to build it.

You can rant and rave all you want about how Calgary is going to fall off of a cliff. That doesn’t mean there aren’t deals to be had right now. If you find the place you want to live in for 15-20, why play around with that falling knife?

#110 Bram on 03.18.16 at 11:09 am

#71 Sheane Wallace on 03.18.16 at 12:03 am
CMHC exposed as the insurance scam it is

Calm down.
That insurance is not as nefarious as you think.
Yes, you pay it, not the bank, because why would the bank take on extra costs just because YOU don’t have a downpayment?

Without CMHC you would either:
1) Not be able to buy a home (good thing, really.)
2) Get charged double the interest to make up for the bank’s extra risk. Say 6% for 5yr fixed, instead of 3%. That’s how US banks do it.

It’s frankly ridiculous that you expect the same treatment from the bank with your 5% down, as someone with 20% down would get. Without savings, you pay more.

No evil conspiracy here. Now put your tinfoil hat back on.

Bram

#111 max on 03.18.16 at 11:15 am

I wouldn’t say Toronto is the head of Canadian English culture. Growing up I knew Toronto existed, but that was about it. Despite the silly Canadian culture laws, I knew more about American pop culture and even politics, then I did Canadian. In fact Seattle and Los Angeles are the head of Vancouver culture influence, more so then Toronto ever was or could be!

#112 BS on 03.18.16 at 11:35 am

Big Dipper on 03.17.16 at 11:59 pm

What!? No outcry over the age eligibility for OAS?

I expected to see a fine anti-T2 rant. Lots of hand-wringing on giving tax payers money to the useless elderly instead of the top earners.

1. Top earners and the elderly are sometimes the same people. Not too many spring chickens on this list.

http://www.canadianbusiness.com/lists-and-rankings/richest-people/top-100-richest-canadians-2015/

2. The top earners pay the government, not the other way around.

Big Dipper when you cash that government cheque every month it may have the governments name on it but most of the money originated and was earned from the top earners. You should show more respect. One day you may actually have to earn your own money once T2 is done his spending spree and chases away all the top earners. Those government cheques may not be forever. T2 is making promises he expects someone else to pay for. A lot can change once he is thrown out and or there is no money available to borrow. Just ask a Greek.

#113 Not Tonight Honey on 03.18.16 at 11:46 am

#109 The Time To Buy Is Now In YYC on 03.18.16 at 11:00 am

Hey, Time to Buy, I’m wondering if it was a realtor mediated sale or was it a private sale? That is a huge discount, I assume the seller was in distress…? I have my eye on a very modest home which is more or less a lateral financial move from our condo townhome to sfh (we want our own dirt-tired of condo crazies). However the list price is hanging tough at peak price….argh! It’s been on the market for months….. I’m noting very little movement on prices in the mid-range homes but the >800k are getting discounted (and the slummy rentals).
I suspect there are quite a number of us cowtowners waiting on the sidelines to improve the value/quality of the equity invested in our home.
How did you secure such a good ‘deal’?!
:-)

cheers!

NTH

#114 gut check on 03.18.16 at 11:50 am

#82 Freedom First on 03.18.16 at 1:50 am
Garth was right. It is very difficult to tell if it is me posting, or if it is one of the many Freedom First Impostors.

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

that ought to tell you something.

i have been watching the insanity – whoever is trolling you has a really big chip, too much time on his/her hands, and a mean streak. I have no respect for them or what they’re doing.

that all being said – seriously FF – if you recognize them as making hateful statements and simultaneously admit that it’s impossible to disnguish your legit comments from their fake ones then you know what that means, don’t you?

Instead of leaving the board entirely, you could choose to come back with another username and not use that one to daily proclaim how much you love putting yourself first.

just a suggestion.

#115 Retired Boomer WI on 03.18.16 at 12:02 pm

Poor old Willdaman (106) & (99).

The guy doesn’t trust decades of past performance as a “guideline” to expectations in the future.

Just suppose he believes he will lose weight eating 3,000 salaries a day? If he has a tapeworm maybe, otherwise, calorie guidelines says he will get a fat ass.

The fact that a balanced portfolio HAS delivered an average of ~7% a year based on all of market history, there IS no guarantee you will it going forward -agreed- but it certainly seems likely, huh?…..

That said, sometimes you get +30% other years -30%.
Ready for the roller coaster ride big boy?

My none too evenly balanced portfolio is having a GREAT year now! From being down at first, I bought some ‘down’ some stuff, then took $17 grand out for the checkbook, now the dam thing is well ahead of where last year ended. – Who Knew?

One thing I did NOT do was “sell” when the market was having its hissy fit. “Safe Money” is a bullshit concept…

#116 Slammin' Jimmy on 03.18.16 at 12:31 pm

Sorry Garth, but your theory has at least another five years in the wilderness woodshed you’ve built for yourself.

http://business.financialpost.com/investing/global-investor/three-sobering-predictions-for-a-world-of-lower-for-longer-energy-prices-inflation-and-interest-rates

As they say, hyperinflation will increase, governments will continue to print and borrow, prices have no where but up to go, with money becoming devalued at a rapid pace.

I think you’re right on the macro, but there will be a spectacular explosion after this hyperbolic increase, not a slow meltdown when the last money laundering foreigner is arrested by his homeland and carted off in chains, but for the locals, it will be chaos when a quarter point hits and debt to income ratio’s have exceeded 200% and the mortgage average exceeds 2 million in working class suburban ghetto’s.

Prediction, look for Justins Union Backers to demand and get big wage increases before the Liberals lose the next election.

#117 Brazil ex-pat on 03.18.16 at 12:31 pm

#111 max on 03.18.16 at 11:15 am
I wouldn’t say Toronto is the head of Canadian English culture. Growing up I knew Toronto existed, but that was about it. Despite the silly Canadian culture laws, I knew more about American pop culture and even politics, then I did Canadian. In fact Seattle and Los Angeles are the head of Vancouver culture influence, more so then Toronto ever was or could be!

#112 BS on 03.18.16 at 11:35 am
Big Dipper on 03.17.16 at 11:59 pm

What!? No outcry over the age eligibility for OAS?

I expected to see a fine anti-T2 rant. Lots of hand-wringing on giving tax payers money to the useless elderly instead of the top earners.

1. Top earners and the elderly are sometimes the same people. Not too many spring chickens on this list.

http://www.canadianbusiness.com/lists-and-rankings/richest-people/top-100-richest-canadians-2015/

2. The top earners pay the government, not the other way around.

Big Dipper when you cash that government cheque every month it may have the governments name on it but most of the money originated and was earned from the top earners. You should show more respect. One day you may actually have to earn your own money once T2 is done his spending spree and chases away all the top earners. Those government cheques may not be forever. T2 is making promises he expects someone else to pay for. A lot can change once he is thrown out and or there is no money available to borrow. Just ask a Greek.

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

Most tax money comes from top earners? Do you have evidence of this? I don’t believe that for a second in a country where everything goes to “General Revenue”.

Everyone pays MSP, GST, PST, Carbon Tax, Gas Tax, Property Tax, Transfer Tax, Income Tax, Environmental Tax, Battery Tax, Tire Tax and many other taxes. No matter whether you are driving a lambo or not…..everyone pays these regressive taxes. Oh and don’t forget the “commodity royalty taxes” that the govt of Canada collects in the billions of dollars…..but yet we seem to be taxed into oblivion somehow. So many reasons why we left Canada……..

#118 Brazil ex-pat on 03.18.16 at 12:38 pm

#99 Willdaman on 03.18.16 at 8:56 am
“Rear-view investing is useless, nor does the past foretell the future. — Garth”

Does this mean we can expect you to stop referring to how balanced portfolios in the past have yielded 7% as your way of justifying investing?

No, because that reflects a decades-long return on balanced portfolios, in stark contrast to the short-term record people celebrate with real estate. Over the last half-century housing has paced inflation while financial assets have far exceeded it. Learn more. — Garth

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

In the last 1/2 century I have seen BOTH paper and RE investment has changed. They are both manipulated and those in charge only care about making money. The housing today is 100% garbage. You can make the same argument for companies worth billions because of “social media” and 5 dollar electronics selling for $1100.

I’m out of both and enjoy a nice 13% cash return in R$. The Real is UP against the CDN by the way…..

#119 More Hotdogs on 03.18.16 at 12:56 pm

We seem to be in fine company:

Many countries have not yet introduced laws allowing regulators to write down banks’ debts to avoid taxpayer bailouts and prevent them from being “too big to fail.” The Financial Stability Board, which can “name and shame” those which do not yet comply with its rules, said countries that do not yet have these laws include Argentina, Australia, Brazil, Canada, China, Hong Kong, India, Indonesia, Korea, Mexico, Russia and Saudi Arabia. Membership of the G20 includes a commitment to implement all agreed upon financial rules.

#120 Smoking Man on 03.18.16 at 1:14 pm

Dear Justin.

I know it’s taboo with use the word Islamic extremest in the liberal narrative of everything is wonderful fantasy story.

Perhaps you or some of your intellectual followers can come up with a less offensive word, worthy of a safe space.

I’m all for free enterprise but sometimes you need to man up, I know that’s going to be very tough one for you.

It’s common knowledge that Saudi Arabia and Turkey arms ISIS

This is what ISIS does with those arms

http://www.breitbart.com/national-security/2016/03/18/gruesome-details-emerge-of-islamic-state-slaughter-of-four-nuns-in-yemen/

So I’m having a difficult time trying to rationalize, understand why in hell you would sell Saudi Arabia arms.

#121 understood by few on 03.18.16 at 1:22 pm

Ha, you post something (unambiguously) housing purchase positive and it’s nearly crickets in the comment section. The usual suspects, but even they were rolling in a lot slower last night.

Of course VREU pastes his usual unreadable wall of garbage. Protip: if you are going to read a post by VREU (not recommended), read it in the voice of Frankie MacDonald (aka dogsandwolves): https://www.youtube.com/watch?v=nbsq68J7xiI

#122 Doug, back in London on 03.18.16 at 1:26 pm

@Freedom First, post #28:
I’m 55 years old and what you said looks a lot like something I would write. I also put very high value on my freedom and flexibility.

#123 The Time To Buy Is Now In YYC on 03.18.16 at 2:01 pm

#113 Not Tonight Honey on 03.18.16 at 11:46 am

IMHO, it seems to be dependent on the neighbourhood. Altadore sellers seem to be delusional about the value of what they’re sitting on. Similar homes in Capitol Hill or Bowness are selling at a decent discount to the SW infill neighbourhoods.

I presume that it is the Altadore sellers you’re speaking with who are sticky with the prices. They’re also likely sitting on more cash than the sellers in other hoods. I would honestly encourage you to look in the NW. Not deep NW, but just cross the river. There is great value to be found.

Our sale was not private, though as I mentioned previously it seems the seller’s realtor just removed the listing rather than marking it sold in the MLS system. Sneaky…….

#124 chapter 9 on 03.18.16 at 2:02 pm

#120 Smoking Man
So I’m having a difficult time trying to rationalize,understand why in hell would you sell Saudi Arabia arms.

I guess it’s the same reason that he wants to reinstate funding to UNRWA(United Nations Relief and Works Agency) which has direct ties to Hamas. The Harper government cut funding in 2013 to this organization mainly because Canadian taxpayers should not fund terrorists.
Or specifically, it is a direct violation of the Canadian Criminal Code Section 83.01,83.03,83.05

Section 83.03 Every one who, directly or indirectly, collects property,provides or invites a person to provide, or makes available or financial or other related services.
(a) intending that they be used, or knowing that they will be used, in whole or in part, for the purpose of facilitating or carrying out any terrorist activity, or for the purpose of benefiting any person who is facilitating or carrying out such an activity,or
(b) knowing that, inwhole or part, they will be used by or will benefit a terrorist group.
Pursuant to section 83.05 Hamas has been listed as a “terrorist entity”.
Justin wants to kick in $15 million!!!

#125 Okanagan Man on 03.18.16 at 2:12 pm

No more freedom first posts? I hope this is not a joke? I think he must have gotten married.

What could make for a better day? No more graphs from VREU or incomprehensible posts from smoking goof.

#126 Vundo on 03.18.16 at 2:30 pm

#82 FF: the imposter(s) have an obvious tell in the way they write. I would be surprised if I was the only one who can spot the fakes so easily. That being said, your financial philosophy is sound and you are the first “red pill” guy I have ever seen who isn’t a bitter, resentful, sad man who goes around blaming women for his own problems. I have to stop short of agreeing with your complete lifestyle as a choice I would make for myself, but I can respect you for being true to yourself and avoiding the pitfall of being consumed by hate. Please come back and post a link if you start your own blog or something.

#127 MF on 03.18.16 at 2:57 pm

#124 chapter 9 on 03.18.16 at 2:02 pm

Yup. 100%

Nothing from the pathetic boycott movements about that though. F those movements.

MF

#128 Smartlox on 03.18.16 at 3:45 pm

@ Ray of Light #60:

You may be right that climate change may be more tolerable in northern-latitude countries like Canada and Russia, but this doesn’t mean that these countries won’t be affected.

If you have a background in engineering, you may appreciate the following positive feedback mechanism.

Warming temperatures will actually spur the rate of global warming as methane from decomposing biomass, currently trapped in northern countries’ permafrost, begins to leak into the atmosphere in large quantities as the permafrost begins to thaw.

Methane is four times more potent greenhouse gas, compared to carbon dioxide, which will raise temperatures further, even as carbon dioxide emissions are reduced.

#129 salonist on 03.18.16 at 4:37 pm

once upon a time my daughter wanted to be a vulcanolgist
she says there’s a fault line running through lake Ontario.
goodbye cn tower, niagara falls (fallsview casino ) hamilton

http://www.zetatalk.com/index/lou0629y.htm

#130 GS in T.O on 03.18.16 at 4:37 pm

Hi Garth
What do you make of Wynne’s proposal for a Guaranteed Annual Income (GAIN)? Where’s the motivation to work? Better yet; where’s the motivation to save? Sounds to me that the first half million accumulated in an RRSP is wasted effort. Is it best to collapse it, store your money in between the mattress, max your TFSA and then collect CPP, GIS and now the minimum income? Why even pay into the CPP when you can now collect an income after one year in the province? Are we now to be calling each other comrade?

#131 ROCK BEATS PAPER on 03.18.16 at 5:35 pm

#106 Willdaman on 03.18.16 at 10:34 am

The one concept that over-rides balance in a portfolio is common sense. Bonds, the “safe kind” (oxymoron) are in a multi-decade bubble, and in some cases a multi century bubble.

We are in one of those situations where neither bonds nor stocks (nor real estate) are cheap.

#132 Sheane Wallace on 03.18.16 at 5:54 pm

#110 Bram

You are incredibly stupid. Brainwashed as well. Typical product of the Canadian educational system. Your teacher should be proud of himself.

If not for CMHC ‘insurance’ the house prices would be 1/3 of what they are now, as the banks will not loan you unreasonable amount of money as they do now (as they are not on the hook now with CMHC).

Houses will sell but for 300 k in Toronto, not 1 mil. Capishe?

CMHC has nothing to do with interest rates, BOC has, go and educate yourself as here you are really, really out of touch with reality.

The problem is 80-90 % of the populace is exactly as stupid and brainwashed as you and thinks that CMHC and government meddling with markets is good thing.

So repeat with me: 300 k is better then 1 mil, houses will still sell, 300 k is more affordable than 1 mil and there would be no need to bankrupt savers and retirees with idiotic ZRIP and NIRP policies.

#133 Sheane Wallace on 03.18.16 at 5:57 pm

#110 Bram

If mortgage ‘insurance’ is a good thing, how come only we in Canada have it? And no one else in the world?

As we are smarter?

I have seen cows with more brains.

#134 harden on 03.18.16 at 6:00 pm

“There is so much money coming in (to Vancouver), it’s unbelievable. I’ve got overseas clients who say, ‘Andrew, I have money to spend. If you could find me a 20,000- to 30,000-square-foot lot on the west side, let me know.’”

http://www.theglobeandmail.com/life/home-and-garden/real-estate/private-sales-rising-across-all-ends-of-the-vancouver-real-estate-market/article29289929/

#135 Sheane Wallace on 03.18.16 at 6:03 pm

#110 Bram

And finally: go get 10 + years experience in the real insurance business (underwriting, ERM (specially), claims,…), with at least 3-4 top world companies and then come back so we can have a discussion.

Repeat with me:
1. Insurance is about pricing risk. If you mis-price it, you are screwed.
2. If ‘insuring’ mortgages was lucrative and profitable, banks and insurance companies would do it.
3. Why I make big fuss out of it? Because I am a taxpayer and on the hook for their stupidity.
It pays to be concerned when your money are on the hook.

#136 Bram on 03.18.16 at 6:34 pm

#133 Sheane Wallace on 03.18.16 at 5:57 pm

I didn’t say mortgage insurance is a good thing.
It would be better if no loan was given at <20% down.

However, given that there is insurance, it is only normal that the borrower pays premium, not the bank.

#137 Tony on 03.18.16 at 6:39 pm

Stephen should worry about being able to get a job instead of buying a house that will keep on devaluating in price. Long term a house will always be a bad investment but he should wait until prices in Canada and America come back into balance.

#138 Investx on 03.19.16 at 12:55 pm

No crash in probably the most inflated market?

It’s different here.