Now what?

STATUE modified

As predicted, no cut. The central bank boys decided Wednesday rates are as low as they’ll go. Ever. In fact the next move, when it comes (probably next year) will be up, not down. In the meantime, mortgages are likely to tick higher – but not yet.

The big news in the last two months is what’s happened to the economy, and how it’s rewarding investors. First we had some bullish economic stats from January. Then the March job numbers were so off-the-chart a mess of economists just don’t believe them. Too good. Over forty thousand, most of them full-time and mostly created by the private sector. Huh? What about the unraveling of Albertastan?

Speaking of which, oil at $42 a can means this stuff has exploded in value 60% since Valentine’s Day. That’s propelled the dollar to over 78 cents US, which is a 15% appreciation in just a few weeks. And it’s all led to a mild cavort on Bay Street, where the TSX index is now 5.08% into positive territory for the year. (That compares with a 1.88% advance for the S&P 500.)

Hey, even the trade numbers suck less. And our share of crude oil shipped into the US has just hit a new high of 43%, while that country’s imports from the rest of the world decline. Even without a fat new pipeline.

And then there’s our tax-and-spend PM. Without a torrent of deficit spending about to be unleashed by the feds, says the Bank of Canada, interest rates might have been cut again this week, instead of eventually heading in the other direction. Because of the red ink, Governor Poloz predicts the economy will grow 1.7% this year and 2.3% next year – higher than previously forecast by about a third – despite investment in the energy business plunging 60%.

Here’s what this means:

There’s a good chance the commodities bear market is finished. That would be huge news. Normally downturns last just over two decades and drop prices by half. This one has been ongoing since 2008, and values have dipped by two-thirds. As I said the other day, done and done. Not quite time to back the truck up on more maple, but at least look for the keys.

Speaking of owning Canadian stuff, you might remember that back in the winter you were warned here not to abandon that asset class. The reason a balanced and diversified portfolio works is because you never know what’s lurking around the corner. So, never bail out of losing things or load up on whatever’s rising (the opposite to real estate). Maintaining about 17% of your growth assets in beaver bits has proven to be the correct action. It may soon be appropriate to increase that. But not yet. As Poloz warned reporters this week: “The global economy retains the capacity to disappoint further.” And if that doesn’t scare you, just think of Donald Trump.

Another consequence of our changed fortunes is the cost of money. Rates won’t be doing anything for a few months, but markets still believe the Fed will pull the trigger twice by the end of the year. If it happens, there will have been three rate increases in the US. Remember that history tells us 92% of the time our central bank follows theirs. So if you want to gamble this is the 8% when it won’t happen, good luck.

The changed rate environment, changed economic prospects and changed commodities situation will probably see preferred share prices and REITs regain most of the ground they lost last year when Poloz chopped the cost of money twice. The TSX is certainly poised to continue its advance, even though it’s looking pricey compared to US markets.

As for real estate, not much more to speculate on. Most Canadian markets have done exactly what this pathetic blog predicted – flatlined over the past year and entered into a slow melt that will erode sales and moderate prices, especially when mortgage costs start to change. In Toronto and the GTA, severely reduced supply has boosted prices – a situation unlikely to change unless Ottawa cools things off (which is being actively considered). The real risk lies with Vancouver and the Lower Mainland, where the buy-now-or-buy-never meme has led to panic purchases, bidding orgies, absurd prices and rapidly escalating debt levels. It’s obvious nothing will save the natives now.

So here’s some stuff for the To Do list on your fridge:

  • Convert the VRM to fixed by Labour Day.
  • Better yet, sell the house to a greater fool for an embarrassing, obscene amount. Now.
  • Brim your TFSA with growth assets.
  • Make sure your daughter does not buy that condo. Get her a Corvette Z06 instead.
  • Put your house proceeds in a reasonable and diversified portfolio, and let it pay the rent.
  • No individual stocks (too risky), no mutual funds (too costly).
  • Ignore the media. Ignore realtors. Get new friends. Homeless people are always a good choice.
  • And lay off Trudeau, eh? Sheesh.

183 comments ↓

#1 Salutations Sally on 04.13.16 at 7:20 pm

First?

#2 TRUMP on 04.13.16 at 7:21 pm

SCAM ALERT…..SCAM ALERT………

The Bank of Canada wants you recent and current Vancouver real estate buyers to bite off more than you can chew…..

Your heads will soon be handed to you.

Don’t say we didn’t warn you.

#3 Insurance on 04.13.16 at 7:24 pm

Something that isn’t talked about a lot on this blog but is a part of financial planning is insurance (life, critical illness, disability, health, drug, dental, long term care.)

For us folks who have irregular employment/low salary self employment, what do the blog dogs recommend? Between our universal health care, drug programs like Pharmacare in BC and the opportunity to get health and dental during times when you have corporate employment, is it worth it to get any extra insurance?

#4 Victoria Real Estate Update on 04.13.16 at 7:24 pm

Yesterday someone wrote a comment under the name “off with your head” (#75). It was obviously directed at me.

I don’t think anyone who has been reading the comments section of Garth’s blog lately would disagree that this comment was probably written by one of the following three commenters: “understood by few”, “Move on VREU” or “Okanagan Man” (all three will deny it).

My guess is that most would think it was “understood by few”.

That someone wrote a comment under that threatening name is just another example of a some of the bizarre comments that have been directed at me lately, most of these coming from the three names mentioned above.

You’ve probably read some of the nutbar comments that have been directed at me containing false claims such as:

• There is a “global capital scourge” going on that is, apparently, the reason that we will have rising prices forever in Victoria.

• That prices in the core areas of Greater Victoria are 40% higher than at the peak in 2010.

• That I wrote yesterday that a major price decline will start in April in Victoria.

All of these things are bizarre. That it was likely one of these commenters who wrote a comment which was obviously directed at me under the name “off with your head” is simply disturbing. But it won’t stop me.

These three have proven to readers many times that they are unworthy of any credibility.

It’s likely that these three want me to stop posting comments warning Victorians that Victoria’s current market conditions (supply/demand) could change to conditions that favour buyers and falling prices within months. We’ve seen this happen in recent years in Victoria and that’s why recent data from 2010-14 is relevant.

They have whined, cried and stomped their feet in protest against the valuable information contained in my comments. They think that I should stop talking about Victoria’s recent significant price decline and one of them is likely guilty of writing quotes that are threatening in nature.

Unable to produce a quote that discredits me, they’ve grown frustrated and angry.

There have also been immature comments and false accusations directed at me from “prairie person” and “Frank”.

Do they view me as a threat? Perhaps they prefer that the only real
estate information locals read is from the local board or quotes from realtors in “news” released by the local media. Many of you will recall the claims made by real estate “professionals” that wealthy buyers from Asia were moving Victoria’s market. This, of course, was proven false by stats showing only 0.68% of local real estate deals went to buyers from Asia.

In the past, a long-time commenter on this blog, “OMG the original”, had written comments directed at me that sound a lot like those of “understood by few”. Of course “OMG the original” eventually crashed and burned on this site in a frustrated rage. Is this individual back under another name? This individual will deny it. It’s interesting that “understood by few” began posting the same information in a similar style shortly after “OMG the original” disappeared.

Victoria’s housing market has disappointed many in recent years. Rising markets in 2008 and 2010 were talked about by estate “professionals” as permanent and unstoppable. Then prices began to fall and these “professionals” were proven wrong by the market.

It isn’t different this time. Prices will begin to fall again in Victoria.

Unfortunately many families who have taken on massive and dangerous mortgages at today’s bubble prices will be subject to the devastating financial consequences of buying near the peak before a major price decline takes place.

Buying near the peak in 2010 turned out really bad for many Victoria families who had to sell at significant losses after prices fell.

When prices begin to fall again, rates will not be falling to limit the price decline. Unfortunately for today’s buyers , falling prices will be accompanied by rising rates – which, of course, push prices down.

Many Victoria families will learn the hard way that buying real estate always comes with risk. They will learn this the same way millions of American families did. It will change the way an entire generation views buying real estate.

#5 retail investor on 04.13.16 at 7:29 pm

Garth, thoughts on the Two Minute portfolio that is published in the Globe and Mail?

Canada is small potatoes on the world stage. Buying 20 companies, two from each sector on the TSX, based on dividend and market cap. This would limit exposure to the heavy weighted financial/oil that dominate the index funds. Seems like more upside opportunity and less downside, until the cult of dividends is over.

#6 Ogopogo on 04.13.16 at 7:32 pm

Rob Carrick is once again taking a page out of Garth’s book with “Your parents likely made a mint off housing, but you won’t.”

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/four-thoughts-to-cool-gen-ys-lust-for-housing/article29607105/

The comments section is particularly bustling with this one, now trending #1 among G&M articles. The comments section is filled with housing cultists and the usual sewage spewed by realtors and their ilk. However, many commenters use maths and devastating logic to skewer the cultists. Worth a read.

#7 Chris in Nanaimo on 04.13.16 at 7:33 pm

I’ll be flipping dancing in the streets if ZPR.TO gains the 22% it lost in the 10 months or so I’ve held it. I know it’s for income but sheeeesh I’ve gotta sell it as some point before I die.

#8 understood by few on 04.13.16 at 7:37 pm

“Convert the VRM to fixed”
Unless you are planning on selling before the term is up.

VRM is 3 months interest max (for a closed term). FRM? Read your wordings, it can be nasty.

For me it’d be 3-4 rate hikes before I’m at current FRM interest rates and I have a lot of term left.

#9 Ogopogo on 04.13.16 at 7:38 pm

#4 Victoria Real Estate Update on 04.13.16 at 7:24 pm

The shrill tone and rhetoric of the housing cult lobby just keeps getting more desperate. You’re using numbers and stats to show the decline in the Victoria RE market and these pathetic little souls hate anything that deviates from the RE cartel’s script.

Keep doing what you’re doing and know that many of us see right through these clownish creatures. They’re likely just barely-literate realtors anyways.

Remember DA? He would use the same tactics to try to discredit those of us who use stats to show the declining Kelowna market. He eventually ran out of here with his tail between his legs. These bottom feeders only last for so long after we expose their trolling.

#10 Rainclouds on 04.13.16 at 7:39 pm

Note to the Corpse. RE: NHL Playoffs.

Bob Cole is a doddering, senile, confused man who is well past his best before date. What he describes and what is actually happening are completely different.

Please, Please, Please. Cut him a cheque, back to the Granite Planet where he can take his well earned place in front of the TV in the St John’s home for septuagenarians.

The R.O.C. (Except Taranna) thanks you in advance for your consideration on this matter

#11 bdy sktrn on 04.13.16 at 7:39 pm

#4 Victoria Real Estate Update on 04.13.16 at 7:24 pm
————————
obsessed.

pretty weird too.
vic will be going up from here.

#12 Scotty on 04.13.16 at 7:42 pm

VREU….please stop. You are obsessing over something that literally no one cares about. Please…save your effort for something more productive.

#13 Kreditanstalt on 04.13.16 at 7:46 pm

” In fact the next move, when it comes (probably next year) will be up, not down. In the meantime, mortgages are likely to tick higher – but not yet.”

We’ve been hearing this again and again for some years now…and it never happens.

It won’t, ever.

Rates will never be “normalized” – unless central banks actually shrink their balance sheets, governments quit deficit spending, the (fake) money supply is allowed to contract, financial asset prices are allowed to fall and REAL government austerity takes root.

The last thing, the very last thing, governments will EVER do is stop expanding credit. They dare not.

#14 BOOM! on 04.13.16 at 7:48 pm

BOOM!! That appears to be the cycle we are enjoying right now!
Took some more money off the table today (selling a very swollen tech ETF). Me thinks it bought it at too high a price a while back, and it has finally expanded out of the trading range. Good Riddance! Never have done well with techie crap anyway.

Well markets performing very nicely! A bit valued on the high side just now, as earnings season isn’t setting many records. At least the commodity rout seems to be breaking…

Time to think about 2016-2017 purchasing. Those 2 Lots, a new roof, new car even. It seems it always costs money. Why is that?

Well a decent year of returns could perform all of the above.

#15 understood by few on 04.13.16 at 7:49 pm

My guess is that most would think it was “understood by few”.

————-

More with the delusions of persecution I see.

No pseudonyms for me. I am only “understood by few” (care to confirm Garth?). Which is admittedly a stupid handle, but all I had handy was a thesaurus.

Now can someone stop the CAD from creeping up? Someone say something bad about the Canadian economy! Pump more oil so prices drop.. anything. CAD being in the low 70s has been a dream. Might have switch to bourbon, if we get back to par I’ll be on rye and domestic (non-micro) beer. Yeah, my Canadian equities are chooching along, but my cash flow…….

#16 Suede on 04.13.16 at 7:50 pm

Where’s smoking man’s take on all of this good news for Canada.

Hope he’s doing well out there…

#17 Victor Y on 04.13.16 at 7:51 pm

Hi Garth, what about buying a ETF in USD tracking S&P 500 index such as SPY? thanks

#18 Snowboid on 04.13.16 at 7:54 pm

#4 Victoria Real Estate Update on 04.13.16 at 7:24 pm…

I agree, a couple of days back one of them insisted you and I are one in the same person!

Not a single one of them has responded to my posts about VREBs’ own statistics published on their site clearly show that prices for SFHs should be at over $ 780,000 in March 2016 just to keep up with inflation since 2010 , but instead sit at $ 663,000.

Maybe prices have gone up 15% in the last two weeks, but I doubt it.

In any case, I’m perfectly willing to have the esteemed professor share the location of my IP address.

I challenge the posters you mention to do the same.

#19 For those about to flop... on 04.13.16 at 7:57 pm

Ah VREU, you seem to misunderstand.
The person you thought was attacking you, was actually attacking me for my post joking about your charts.

I thought it might be you getting back at me.

You didn’t respond and I didn’t get kicked by you today so maybe you laughed?

In your post you speak of people taking on other names , I always thought you might have one day been ” Vancouverpricedrop.” I thought they might have gotten sick of the game being played in Vancouver and moved to the island.

I also find it comical that a lot of the conversations you guys have go something like this ” I’m not a realtor ,you are a the one who is a realtor”.

Just because someone dosen’t have the same point of view as you dosen’t make them a realtor as a poster just pointed out.

Anyway ,your gonna keep doing what your doing and I’ll keep ” off with your head “busy.

Happy Charting…

M41BC

#20 Dups on 04.13.16 at 7:58 pm

People hunting for real estate deals in London ON is getting heated. Good houses are selling with 4-6 multiple offers even up to 20 to 30k over asking. Who thought London would behave like Toronto. Rumors are that London will revamp their public transport to light rail. And there is hope that one day high speed train will connect this region to GTA and further. Interesting times.

#21 pierre on 04.13.16 at 7:59 pm

VRUE – I appreciate the necessity for your lengthy rearguard action in defence of assaults on your character. That said, you have never even attempted to provide any evidence of Victoria price declines during the period referenced. Perhaps a chart would be of aid, however primitive.

#22 Carly in Cabbagetown on 04.13.16 at 7:59 pm

WUL on 04.13.16 at 6:38 pm

I have felt sheepish for a few days after Carly from Cabbagetown reprimanded me, and rightly so, for an ignorant and hurtful comment I posted a few days ago. Carly was right and served to educate me.

I apologize and will strive to be better. The first thing I will do is attempt to remain on topic.

Thank you Carly.

I come here for the intelligent, lively and generally civil discourse that our host has fostered and I do not want to impair that.

Thank you Garth.

____________________________________________

WUL, you are a very decent fellow, very bright and erudite and often quite amusing. Off topic or not, I always read your comments. I don’t consider myself remotely qualified to demonize you, for I too can be judged and can make risqué comments and edgy references. Your apology is like a bright ray of sincerity in these comments, for which I thank you very much.

My comments back to you (see below)were rather sharp, and I am sorry if too much so. It was the comments made, in the context, not you, and the sense that on the internet where there is so often much misogynist trolling, there might be more literal, and less detached or ironic understanding of what you referenced – that is what spurred me to respond. (Not ever sure if what I see online is photoshopped, but there seem to be numerous photos of the 2003 protester you referenced holding a sign saying “Iron my shirt…bitch”, that last word not in your recollection, which casts the memory you shared in a different light. Less playful shit-disturber, and more arrogant and bigoted ass, is my assessment of that “men’s rights” protestor. Such is the sorry state of discourse in the USA today, witness any Trump rally.

The overall scene that day was truly bizarre, as mentioned in the article below. KKK, Elvis impersonators, and women’s rights advocates all comingling. (Yet CBS chose not to cover any of the protests, something that was decried even in Sports Illustrated as an example of their dereliction of duty.)

Finally, at least one good thing happened at the 2003 Masters.

Mike Weir.

Best to you, WUL.

___________________________________________
WUL said:

“Years ago, a group of ladies (lead by an American feminist whose name I forget) were protesting outside Augusta National at the entry to Magnolia Lane. The thorny point that made them protest was the lack of a single female member of the venerable golf club.

Across the street was a male counter protest. One male protester held a placard that read:

“Iron My Shirt”. ”

—————————–

Gee, WUL, your thoughtful comment reminds me of a story. Let me share.

Years ago, a group of blacks were protesting in Alabama for equal rights and an end to discrimination and slavery.

Across the street, a group of whites held a counter protest, with placards saying “Do my laundry” and “Go back to picking cotton”, you ‘so-and-so’s’ (I’m sure you can fill in the blank, WUL).

So funny, huh!

It’s so great that we can celebrate misogyny here and congratulate ourselves for it :)
——————————————————————

http://usatoday30.usatoday.com/sports/columnist/oconnor/2003-04-12-oconnor-protest_x.htm

#23 Mark on 04.13.16 at 8:10 pm

“even though it’s looking pricey compared to US markets.”

Not sure where you come up with this Garth. The TSX hasn’t even returned to its 2008 highs. The TSX’s dividend yield blows the US markets away. The TSX’s P/E ratio is not even 15, while the S&P500 is trading at what, 23X earnings. The TSX’s earnings are ramping up on account of rising oil, gold prices and increasing risk premia in the banking sector. The opposite of what is occurring in much of the US economy.

Add to all of this, there is a huge amount of speculative energy in the Canadian markets to eventually become vested with stocks. The Canadian cyclicals (ie: energy/gold stocks) are not much off of their lows. While speculation is probably close to its peak in the US, with their cyclicals, the Amazons, Google’s, Netflix’s, and Facebooks mostly close to all-time highs.

Very little about the US markets is ‘cheap’. While Canada’s stock market is a bastion of relative value. Add in the significant possibility of future policy rate cuts in response to the deflating Canadian housing market, and its a recipe for the TSX to be dramatically higher a year or two from now and a new long-term bull market.

#24 For those about to flop... on 04.13.16 at 8:11 pm

I can’t wait until we land a human on Mars.
Find out what happened to Amelia Earheart.
Justin Beiber releases some real music.

Global bc will still lead with a real estate story…

M41BC

#25 Curious on 04.13.16 at 8:12 pm

I have a question for Garth and the blog dogs. Let’s say that i have my TFSA maxed out while at the same time i have $50k room in my RRSP. Should I
Scenario 1: every year gradually fill up my RRSP room while maxing out my TFSA
OR
scenario 2: transfer the money from my TFSA to my RRSP and then use the refund to refill my TFSA

#26 Mark on 04.13.16 at 8:15 pm

“For us folks who have irregular employment/low salary self employment, what do the blog dogs recommend?”

Build yourself a decent emergency fund and investment account (see Garth’s many posts on “balanced portfolios”), and don’t worry about “health” insurance for the ongoing day-to-day stuff. Catastrophic insurance is quite worthwhile, but seriously, paying an insurance company monthly so you can get a little bit of money back getting an eye exam? Statistically there’s almost no probability that an individual is going to come out ahead buying health insurance for routine healthcare items in Canada.

In the US, where health insurance companies actively negotiate bulk purchasing arrangements and lower prices, insurance can be quite worthwhile in such a context. But in Canada, healthcare service provider compensation and prescription drug prices are so tightly regulated that paying extra money for routine item insurance doesn’t make a lot of sense. Unless one is the sort of person who just can’t rub two nickels together if there is an unexpected prescription needed, or it comes time for an eye exam.

#27 Bottoms_Up on 04.13.16 at 8:18 pm

#4 Victoria Real Estate Update on 04.13.16 at 7:24 pm
————————-
Your detractors have a good point: you are living in the past (2010-2014). Why?

Embrace the new age; you can’t ignore two years of data like it never happened.

#28 Mike in Edm on 04.13.16 at 8:19 pm

Thur will be a very interesting day in Alberta when Notley’s budget is finally released. They keep touting “job creation” but if their great ideas are anything like the last “$5k for each new job” that they expected to create 27k jobs and I think created zero before they scrapped it last week, we’re in for a further bumpy ride. I’m guessing a lot will be put towards job training, but qualified employees doesn’t create jobs. We have an abundance of qualified employees right now.

#29 Metaxa on 04.13.16 at 8:20 pm

Harper Sighting!

While collecting full MP pay for representing his Calgary constituency, Stephen Harper formerly leader of Stephen Harper’s Conservative Party of Canada, came out of hiding this week only to appear in Las Vegas.

Speaking to the monied elite of the GOP, he regaled the crowd on the topic of how to unify the right. Riviting stuff I’m sure.

The policy wonk in him must have been gushing endorphin’s because the sewer rat, reptile part of his brain sure didn’t vet the optics of this little excursion.

Meanwhile, back home, the Harperites rush to deny the new Liberal government any praise at all based on the excellent numbers referred to in today’s blog. In fact they will now conveniently forget all the past months of dire predictions altogether.

Just like Stephen Harper “forgot” his political promise to do away with cushy political pensions. Never mind the price of real estate in Vancouver…what about the price of a washed up neo-liberal policy wonk’s pension?

#30 Victoria Real Estate Update on 04.13.16 at 8:21 pm

# 21 pierre

What period are you talking about?

#31 Bottoms_Up on 04.13.16 at 8:21 pm

#25 Curious on 04.13.16 at 8:12 pm
————————
I think this would depend on your current salary. Are you wealthy and earning in the top 10% of Canadians? If so, RRSP contributions could make sense. However, if you are closer to middle income, maximizing RRSP contributions could bite you as you’ll save too much and therefore pay more tax in retirement. Look at the RRSP as a vehicle for people that earn high salaries as a way to defer tax and pay less tax in retirement.

#32 TFSA contest on 04.13.16 at 8:22 pm

Let’s take a poll and see who is winning with their TFSA amounts (no cheating if you over contributed).

$55k

#33 Victoria Real Estate Update on 04.13.16 at 8:23 pm

# 19

Who are you referring to? Find the quote that has me calling someone a realtor recently.

#34 Binder Dundat on 04.13.16 at 8:26 pm

VREU

I don’t comment often, but I feel I must tonight. I am starting to become seriously worried about your mental health. Who care what some random losers on a blog accuse you of? Walk away, go outside, and breathe deeply.

All the best.

#35 Mike in Edm on 04.13.16 at 8:26 pm

And a couple updates from Calgary from my close friend…Housing and jobs….

1) We have a mutual friend that has a high $300k downtown fairly nice condo that’s been on the market for several months. They finally just got their first offer… For $50k less than asking, so they turned it down. BAD MOVE. I’ll update all of you when they finally sell. My guess is it’ll be 6 months+ and they’ll end up taking less than this first offer. Their reasoning for not selling is because it would leave them with barely any profit. They are in for a massive reality check!

2) He talks with a lot of people in the EPCM industries. He figures the only way anyone is really getting hired these days is if they know someone. Many HR dept’s have been cut drastically, and when there’s hundreds or thousands of very qualified applicants applying for a single job, how do they sift through them? They don’t. They hire a friend or someone they know instead. I’ll back this. The job market is basically non-existent in Edmonton right now. There might be 3 supply chain jobs I apply for a week, and I haven’t received even an initial call back in 5 weeks.

2)

#36 WalMark of Sadkatoon on 04.13.16 at 8:33 pm

Better yet, sell the house to a greater fool for an embarrassing, obscene

it’s time for the homeowners in YVR and YYZ to make out like bandits. prices have risen for years but u never know what’s around the corner

#37 off with your head on 04.13.16 at 8:34 pm

#4 Victoria Real Estate Update on 04.13.16 at 7:24 pm
///////////////////////////////////////////////
My apologies to you , VREU. My comment was supposed to be directed at M41BC , not you.
Please continue posting your updates , some people do read them.

#38 WalMark of Sadkatoon on 04.13.16 at 8:38 pm

even though it’s looking pricey compared to US markets

Gartho is correct. The P/E ratio of the tsx is over 20 and the US is financially stronger than Canada

#39 WalMark of Sadkatoon on 04.13.16 at 8:42 pm

Now can someone stop the CAD from creeping up?

Why? The oil rout is largely behind us. Financially astute blog dogs like SM made their money when the USDCAD climbed to $1.46. Everybody that predicted the opposite sat on their hands. Lol

#40 Scumop on 04.13.16 at 8:44 pm

#4 Victoria Real Estate Update on 04.13.16 at 7:24 pm
————
Keep fighting the good fight. Van and TO people too often assume that their cities are the center of the Canadian universe, and therefore only news and commentary on these centers of the universe matter. By population, theirs is a minority position. Of course, if they are trolling for the RE biz or flogging bad numbers, it is usually obvious and reduces their credibility further.

————-

As for me, I’m not caring much about RE for now. Working out how to trade using options for a fat irregular income. Much more interesting. Market volatility expected. Yum! Not something for the nervous or lazy. Requires lots of study + work + discipline, just like anything else worth doing.

#41 wallflower on 04.13.16 at 8:44 pm

Will any outcome affect anything? buy side or sell side

http://www.theglobeandmail.com/real-estate/vancouver/harsher-penalties-more-transparency-needed-for-bc-real-estate-industry-superintendent/article29613454/

#42 Victoria Real Estate Update on 04.13.16 at 8:49 pm

If someone calls someone else a realtor and the person being accused denies it, it isn’t a false accusation and no credibility is lost.

The person being accused can’t prove that they’re not a realtor and they could be lying by denying it.

Calling someone a realtor when there obviously exists no proof that it’s true is really about pointing out that they talk like a realtor, say things a realtor would say, pump houses like a realtor, etc.

Those with an average amount of common sense should have been able to figure that out.

#43 vancouver bubbleman on 04.13.16 at 8:50 pm

https://www.realtor.ca/Residential/Single-Family/16757345/2556-W-16TH-AVENUE-Vancouver-British-Columbia-V5Y3K6

garth..look at this. this house is just listed for 2,899,000 by one our ‘top realtors’. it was last sold on august 13 , 2015 for 2,070,000 ( as seen on bc assessment site that shows the sale ).8 months and 800k higher. this is the type of crap thats going on. the ppl that sold it 8 months ago are an older couple in their 80’s. had been living in the house for decades. its criminal in my opinion. mr kwan will have this place sold within 3 weeks.

#44 Brazil ex-pat on 04.13.16 at 8:50 pm

I listened to some of the news clips today about the BOC.

something about……”the economy will be stronger because of the stimulus”

WHAT?????

That money is invented out of thin air….and interest is paid on it. The invented money that is. Yup…..we are at the height of the Roman Empire all right. How did that work out folks?

#45 Gregor Samsa on 04.13.16 at 8:52 pm

Wow, that was the easiest global recession ever! Party on guys. Buy stocks like it’s 1999. I heard there is a meeting coming up in Doha that will solve all the oil problems. Alberta will be booming again in a few months.

Damn, was that ever easy.

#46 KevinInCourtice on 04.13.16 at 8:52 pm

You had me at Corvette Z06

#47 Victoria Real Estate Update on 04.13.16 at 8:53 pm

# 34

I’m simply pointed out that there are those who lie a lot and have no motivation to post comments other than to attempt to discredit others and make them quit.

Worry about yourself thanks. If you had really been paying attention you would have noticed that I go days without posting comments sometimes.

Cheers

#48 Raincouver on 04.13.16 at 8:54 pm

Website run by Shanghai-based company lists Vancouver properties
http://vancouversun.com/business/real-estate/website-run-by-shanghai-based-company-lists-vancouver-properties

#49 slick on 04.13.16 at 8:57 pm

#7 Chris in Nanaimo;
draw a trendline under the rise.
I also use a 10 day moving avg.[currently $9.77]
cut 1/2 loose when each of these indicators is breached.
I just missed buying some May $10 puts yesterday.
{I think it has topped, for now.}

slick

#50 Tony on 04.13.16 at 8:58 pm

0.1 GDP in the first quarter in America? Obviously it was negative. A closed door meeting on the first day of first quarter earnings reporting in America? Overstating the jobs report each month in America while at the same time talking down the dollar? Money flowing into silver while at the same time gold falls because some big U.S. bank has a big short at the 1291 level U.S.? No, the next move will be an interest rate cut in America. Everything points to America already being in recession.

#51 conan on 04.13.16 at 9:08 pm

#25 Curious on 04.13.16 at 8:12 pm

Scenario two: CRA will release the hounds from Hades if you do this transaction incorrectly.

You must have a JANUARY 1 occur between the two transactions.

Meaning:

Transaction one happened in 2015 and transaction 2 happens in 2016. I am not talking RSSP year I am talking Julian calendar year.

#52 understood by few on 04.13.16 at 9:09 pm

#33 Victoria Real Estate Update on 04.13.16 at 8:23 pm
# 19

Who are you referring to? Find the quote that has me calling someone a realtor recently
——

Most recently? Yesterday when you stated I and others hadn’t proven we aren’t realtors. Seriously.

And woosh on Pierre’s post. Not so good with the sarcasm.

How about you focus on the topic of the blog? Balanced investments. Purchasing in Vic right now is not part of a good balanced portfolio, but it’s really off topic.

#53 slick on 04.13.16 at 9:12 pm

TFSA contest; $65K

Total Account
Value $65,009.19 0
Securities Market
Value $9,048.00
Cash Balance
$55,961.19
Margin Available
(as of yesterday)
N/A 0

Just so we both feel bad, I look after my mothers TFSA,
and it is at $65K also, but she still has 2 years $15,500 of room left.

slick

#54 Spectacle on 04.13.16 at 9:13 pm

Regarding ::
#3 Insurance on 04.13.16 at 7:24 pm
Something that isn’t talked about a lot on this blog but is a part of financial planning is insurance (life, critical illness, disability, health, drug, dental, long term care.)

For us folks who have irregular employment…..self employment, what do the blog dogs recommend? Between our universal health care, …………….., is it worth it to get any extra insurance?
———response——–

It’s called a PHSP, private health service plan. Certain a great accountant and private health insurance provider San come up with a financial plan that helps You out. If done right, the benefits of a health benefit plan are tax deductible to you, the premiums can be tax deductible in part. Do your research carefully, and avoid one of the financial pitfalls Garth a Turner warns us about, expensive management /administration fees. You can set up your own!
And check your blood pressure regularly ….

#55 conan on 04.13.16 at 9:14 pm

#3 Insurance on 04.13.16 at 7:24 pm

I do this type of work. You have asked for a lot of info…..pick one from your list and form a question around it.
I will answer,

P.S. Always self insure on dental

#56 fancy_pants on 04.13.16 at 9:16 pm

I could have sworn you used this picture in the past … I know I sound like a freak stalker, but am just a faithful reader of the blog.

#57 Pierre on 04.13.16 at 9:20 pm

VREU – anywhere around 2010-2014. I fear for your credibility absent specific evidence. Presented visually is best.

#58 fancy_pants on 04.13.16 at 9:22 pm

Nope, turns out I am a freak, it didn’t even take me that long to find it:
http://www.greaterfool.ca/2011/02/09/

Yes, you are freaky. So I just changed it. — Garth

#59 Tony on 04.13.16 at 9:25 pm

Re: #13 Kreditanstalt on 04.13.16 at 7:46 pm

Not normalized we’ll be seeing negative interest rates both in America and Canada by the middle of 2017 at the latest. America is already in recession but won’t admit anything in an election year. Look for the American dollar to “fall off the table” up until the start of October this year at which time the dollar will strengthen and money will flow into American dollars after the election as the bottom falls out of the worldwide stock markets.

#60 WUL on 04.13.16 at 9:26 pm

A few months ago, I commented that some analysts were saying that the Fort Hills Mine (Suncor, Teck Resources, Total E&P Canada) would be the last oil sands mine built. Now the same thoughts are coming from the horses’ mouths. The era of the mega-project up here on the banks of the mighty Athabasca may be coming to an end.

http://calgaryherald.com/business/energy/days-of-oilsands-megaprojects-are-probably-gone-say-top-executives

Average days on market for March home sales in Fort Mac (pop. ~76,000) = 203.

http://www.fortmcmurraytoday.com/2016/04/13/fort-mcmurray-homes-staying-longer-on-the-market-real-estate-board

I could not find the link to the other Fort McMurray Today newspaper article of this morning which stated that the rental vacancy rate here is about 30%.

These are not heady days up here in the Kitsilano of the North.

#61 understood by few on 04.13.16 at 9:27 pm

#39 WalMark of Sadkatoon on 04.13.16 at 8:42 pm
Now can someone stop the CAD from creeping up?

Why? The oil rout is largely behind us. Financially astute blog dogs like SM made their money when the USDCAD climbed to $1.46. Everybody that predicted the opposite sat on their hands. Lol

———
It was tongue and cheek.

Some of us have US income and got a nice free increase in cash flow. Yep, I converted all I could when we were above $1.40, but the money keeps rolling in. I was doing fine when cad was higher than usd, but the recent drop has been much appreciated.

I might have to be less lazy. Heaven forbid.

#62 BlackDog on 04.13.16 at 9:28 pm

@Insurance #3 My two cents re: ” … part of financial planning is insurance (life, critical illness, disability, health, drug, dental, long term care.)

For us folks who have irregular employment/low salary self employment, … is it worth it to get any extra insurance?”

For the most part, I consider insurance only for those situations where I’m really going to regret not having insurance should something bad happen. For example, I break my neck skiing and become paralyzed from the waist down. My life would be pretty F’d after that and having sufficient money would really help take some stress off myself and the family who would have to take care of me for the rest of my life. Coverage for such a scenario would be covered under “long term disability insurance” which people often get with a company benefits plan. If your situation is such that you don’t have regular access to employer based long term disability plans, you might want to investigate the costs of private long term disability insurance plans.

The other important catastrophic type of insurance to consider is life insurance. Who are the people in your life who would be in trouble financially if you were to die early? Life insurance is mostly for young people with dependent spouses and children. Once you get older, as life insurance becomes increasingly expensive, you should have less dependents, more assets, and less need for life insurance.

As others have suggested, regarding dental, extended health, prescription drugs, etc, you may be better off just to have some savings set aside to pay these expenses as they come up.

Oh, and if you do any out of country travelling, look into purchasing a good travel insurance policy.

#63 genbizx on 04.13.16 at 9:30 pm

metaxa 29

ya the numbers look great…yippee my favourite politician/political party has saved the day…again..again…again…again…

what an endless loop of garbage.

this is an economic system based on bubbles, debt, and continual inflation. sooner or later growth falters and bad things happen. politicians have little to do with it…the difference these days is nobody is willing to let the system do what it needs to do – deflate, default, rinse repeat…one half quarter of very weak quasi growth and people start to do backflips….when the economy is actually doing well and functioning, people aren’t spending time talking it up. brace yourself.

#64 Moi on 04.13.16 at 9:32 pm

Garth, what percentage should be invested in Canada safe stuff?

And a more esoterical question: if you weren’t Canadian, would you invest in Canada, and what percentage would you be invested in Canada?

#65 White Crock BC on 04.13.16 at 9:32 pm

TFSA contest…

You don’t want to do too well, you’ll have the “Gestapo” (CRA) breathing down your neck, incredible as that may seem.

but since you asked… 71.7

#66 salonist on 04.13.16 at 9:38 pm

curious, mr. turner
what have you done for a homeless person

Care to see my tax bill? — Garth

#67 not 1st on 04.13.16 at 9:38 pm

Garth, please dont tell me to try to keep up, but we have been in a commodities bear for 8 years? really? Oil was $100 for most of that.

The peak was in 2008. Down since then. — Garth

#68 conan on 04.13.16 at 9:39 pm

It took a second glance to find the yo-yo. Reddit had a piece on today about the infamous C3PO card from the 70″S.

http://i.kinja-img.com/gawker-media/image/upload/s–1juY6Eep–/17mvkaogzz332jpg.jpg

#69 Spectacle on 04.13.16 at 9:42 pm

#43 vancouver bubbleman on 04.13.16 at 8:50 pm
https://www.realtor.ca/Residential/Single-Family/16757345/2556-W-16TH-AVENUE-Vancouver-British-Columbia-V5Y3K6

” garth..look at this. this house is just listed for 2,899,000 by one our ‘top realtors’. it was last sold on august 13 , 2015 for 2,070,000 ( as seen on bc assessment site that shows the sale ).8 months and 800k higher. this is the type of crap thats going on……….its criminal in my opinion. mr kwan will have this place sold within 3 weeks.”
——– my unsolicted reply———
Yes, strange flipping going on. There is a nice Jewelers store that opens up the street, good cheap repairs! Back to the house, It will sell in a few weeks, uh ya….and a local will buy it, sure………

But the is still some lift in this area of Vancouver , in my best guess, because of overseas money securing a new place to park itself.

#70 For those about to flop... on 04.13.16 at 9:48 pm

Pierre…. A little present for you,does it not look familiar?

. . . . . . . Single Family Home Prices. . . . . . . . .
. .Percent Above/Below May 2010 Price Level. . .
. . . . . .x = Toronto, * = Victoria (City). . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+25%. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . x. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+20% . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+15%. . . . . . . . . . . . . . . .x. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+10% . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+ 5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
….0%. . . x*. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .*. . . .
——————————————————————————
. . . . . . .May . . . . . . . .May. . . . . .December.
. . . . . . .2010. . . . . . .. 2012. . . . . . .2013. . .

Keep posting hopefully you will get ” off your head ” off my tail,thanks brother…

M41BC

#71 broader mind on 04.13.16 at 9:56 pm

If I promise to spend lots of money on stimulating stuff do you think the government would give me permission to print myself money ?

#72 For those about to flop... on 04.13.16 at 9:58 pm

#65 White Crock BC on 04.13.16 at 9:32 pm
TFSA contest…

You don’t want to do too well, you’ll have the “Gestapo” (CRA) breathing down your neck, incredible as that may seem.

but since you asked… 71.7

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

In that case I have no chance of getting in trouble with the Cra.

In…46.5
Value…46

Only started last year and am slowly getting the hang of it…

M41BC

#73 Pierre on 04.13.16 at 9:59 pm

VREU – I was teasing you. Sorry.

#74 Westsider on 04.13.16 at 9:59 pm

The house that we rent was sold by the owner a couple of weeks ago, without us knowing.
This house was flipped before the deal that our landlord made closed. 2 Realtors in Kerrisdale did an in-house assignment, getting a “both end” deal.There is a new owner who got the “assignment” before that deal closed. He is now putting this house on the market for $4.5 million on April 30, with a Chinese realtor who has clients lining up in China. People are making $500,000 to a million in a week on flipping. Insane!!!

#75 Mark on 04.13.16 at 10:02 pm

“Gartho is correct. The P/E ratio of the tsx is over 20 and the US is financially stronger than Canada”

Nope. The P/E of the TSX is under 15.

http://www.blackrock.com/ca/institutional/en/products/239832/ishares-sptsx-60-index-etf?locale=en_CA&siteEntryPassthrough=true&fundSearch=true&qt=XIU

P/E = 14.70

Analysts expect the TSX Composite to earn in the neighbourhood of 1000 this year. So at the current index level, that’s a P/E ratio around 13.5. The TSX P/E ratio is nowhere near 20.

As for financial strength, the US has more than twice the per capita federal government debt. And runs a chronic trade deficit that makes Canada’s current cyclical weakness look like childs play.

#76 WalMark of Sadkatoon on 04.13.16 at 10:07 pm

Now can someone stop the CAD from creeping up?

maybe you’ll get your wish after all…

http://www.bnn.ca/News/2016/4/13/This-is-a-bank-with-an-agenda-Economist-says-Bank-of-Canada-is-looking-to-tame-soaring-loonie-.aspx

#77 Mark on 04.13.16 at 10:13 pm

“Scenario 1: every year gradually fill up my RRSP room while maxing out my TFSA
OR
scenario 2: transfer the money from my TFSA to my RRSP and then use the refund to refill my TFSA”

The ‘proper’ answer to such depends a lot on the assumptions one makes for future taxation of the RRSP, your age, marginal tax rate at the present, and predicted incremental tax rate at retirement. Garth takes a pretty extreme (but justifiable) view that RRSPs are “tax bombs”. I tend to agree, but it really wouldn’t be proper for anyone to make a blanket ‘rule’ about your sort of situation.

For instance, RRSPs can be useful for things other than retirement. A housing downpayment. Education savings. Even leveraged RE speculators should consider building a RRSP to some level for its creditor-proofness characteristic.

One thing I will note, is that one doesn’t have to actually ‘wait’ for a RRSP tax refund. If one does periodic pre-authorized RRSP contributions, and can show evidence of such to the CRA, the CRA will, upon application on form T1213, issue an instruction to your employer(s) to reduce tax withholding. So basically, you don’t have to wait for a tax ‘refund’ when you do your RRSP contributions — you can get it immediately.

Cumulatively, this can mean more money in your pocket if you have the sense to increase your contributions to your RRSP/TFSA with the greater payroll income you’ll receive. As opposed to essentially “lending” the government money interest-free until you file your tax return.

#78 Chris on 04.13.16 at 10:15 pm

Why is the commodity bear market over? China is not doing any better. Neither is the rest of the world. There is so much capacity to pump oil, right? It is all due to US pumping too much of the stuff too quickly that scared the middle east into dumping their oil on the market like there is no tomorrow. So what changed? Now Iran wants a piece of the action too. Wouldn’t everybody start pumping as much as possible again?

#79 Investx on 04.13.16 at 10:35 pm

“Speaking of owning Canadian stuff, you might remember that back in the winter you were warned here not to abandon that asset class. ”

Not quite. You kept warning about it:

“The fact Canada’s stock exchange has lost 12% in 2015, now among the world’s worst performers, should be a hint. Take it. Maple’s a dangerous place.”

Fail. I argued against home country bias and over-exposure. The current weighting in maple is identical to the recommendation then. — Garth

#80 WalMark of Sadkatoon on 04.13.16 at 10:47 pm

The P/E ratio of the TSX is over 20

http://www.financialpost.com/m/wp/blog.html?b=business.financialpost.com/investing/why-the-tsx-might-be-undervalued-despite-2016s-early-market-troubles

Economically the US is doing better than Canada. We’re going in opposite directions. The US is becoming increasingly fiscally strong while Canada is spasmodic. Clear as day.

#81 cramar on 04.13.16 at 10:48 pm

#32 TFSA contest on 04.13.16 at 8:22 pm

Let’s take a poll and see who is winning with their TFSA amounts (no cheating if you over contributed).

$55k

—————-

How can you over contribute?

The amount (and current investments) in the accord can depend on if you have been maxing out your yearly contribution from the day it was started, as opposed to someone who put the full amount in as a lump sum last year.

#82 WalMark of Sadkatoon on 04.13.16 at 10:50 pm

The US is becoming increasingly fiscally strong while Canada is spasmodic. Clear as day.

http://www.cbc.ca/beta/news/business/imf-canada-forecast-1.3531869

#83 RayofLight on 04.13.16 at 10:54 pm

#65 White Crock BC on 04.13.16 at 9:32 pm
TFSA contest…
You don’t want to do too well, you’ll have the “Gestapo” (CRA) breathing down your neck, incredible as that may seem.
but since you asked… 71.7
—————————————————
$86k, (averaging < 1 trade/month), but who’s counting?

#84 S.Bby on 04.13.16 at 10:55 pm

Bank of Mom and Dad:

https://www.blueshorefinancial.com/Campaign/Mortgage/

#85 S. on 04.13.16 at 11:13 pm

Hey VREU …stop with the long whiny posts.

#86 John in Mtl on 04.13.16 at 11:15 pm

I missed converting CAD$ when I could – I didn’t take Garths’ words seriously back then and I was wrong! Seeing CAD$ is going up and the BoC seems to want to put the brakes on its current climb, would you recommend converting some at this time or is it better to wait & see if it will rise past .80c ?

#87 Share Buyer on 04.13.16 at 11:15 pm

The reason I hold a higher percentage of ‘Maple’ in my portfolio ( and every stock I own pays a fat juicy dividend while I wait through the gyrations of market perception) is that the basis of all commerce is commodity. You can’t produce anything without hard and soft things, the idea to the contrary is mental masturbation. I use my dividends to buy stocks across the trough and hold, knowing that the future is food and the end products to sustain human existence. Everything else is just noise. Canada has been on a fire sale, it still is, time to back up the truck.

#88 Share Buyer on 04.13.16 at 11:17 pm

DELETED

#89 Okanagan Man on 04.13.16 at 11:27 pm

VREU, please feel free to apologize for your false accusations (post #4) against myself (issue clarified under post #37).

Having said that I will take a break from anymore commentary about your posts. You are taking it way too personally…….

#90 Love my Kia on 04.13.16 at 11:32 pm

66 salonist on 04.13.16 at 9:38 pm

curious, mr. turner
what have you done for a homeless person

Care to see my tax bill? — Garth
******************************
That’s wonderful Garth, I wish all righties were like you, but they aren’t.

Its also why I’m a leftie. Taking care of our fellow man is more than a voluntary act, we need to have government to ensure everyone puts in their fair share.

That being said, it would be nice that government can run more efficiently in the course of their duties administering social justice; but like all humans on both ends of the political spectrum, there are those who enjoy the trough feeding no matter which side it comes from.

#91 Wog on 04.13.16 at 11:40 pm

Markets still believe the fed will pull the trigger twice by the end of the year, but do you?
History tells us Yellen’s game is one of smoke and mirrors. She influences the economy through words rather than action. The US economy is not healthy. Their citizens are in a state of unrest. They look to Trumps and Sanders’es for change, not for the status quo because “they are doing so well.”
Love the blog Garth.

#92 Turtle on 04.13.16 at 11:47 pm

Strange things are happenning lately:

No matter how much I scroll I still see VREU posts on my screen. Am I crazy?

Also, no matter how hard I look I still can’t find Smoking Man’s World News Reports… Does my laptop have a virus or something??

#93 D.A. aka Devil's Advocate on 04.13.16 at 11:56 pm

#163 Ronaldo on 04.13.16 at 3:45 pm

#157 D.A. Aka Devil’s Advocate on 04.13.16 at 1:27 pm

”Kelowna residential market has gone NUTS! Absolutely pushin’ it with low supply, high demand resulting in bidding wars and rising prices. Been here, done this. Not fun.

SHIFT happens. Learn to ride the tide.”

So, it’s taken 8 years for prices to return to their 2008 high. Now we’ll see if people go as crazy as they did 8 years ago. Should be interesting.

——————————

Ronaldo and anyone else;

It feels like 2006/07. I am a firm believer in 7 to 10 year cycles. People forget, FTBs never knew and don’t know. Bernake called it right “irrational exuberance”. The momentum builds. Fear and Greed. “Gotta buy now before we’re priced out of the market”. No sellers because if they sell “there’s nothing to buy”. Supply and demand. Fear and Greed. Irrational Exuberance.

But, when it drops, it never drops nearly so much as it increased. It merely “corrects”. And then after it corrects it flatlines as people wait in anticipation of it falling yet further but it doesn’t. No one buys because they think it’s gotta go lower. No one sells because they bought high. And then, lo and behold, it starts to go up again, modest gains at first to be true but gains none-the-less. And then someone takes note that the market is picking up and then another and another and another and before you know it the whole thing has started over again.

Like George Carlin said “Your average person is really quite stupid… and half of them are dumber than that”.

SHIFT happens. Learn to ride the tide.

#94 abolitionist on 04.14.16 at 12:40 am

Speaking of value… 2015/2016 Corvette Z06 — best bang for the buck performance of any vehicle. Ever.

Made in America and hardly a tick over $100,000, so you’re not likely to see any fuerdai driving one in their supercar corrupt money club.

http://news.nationalpost.com/news/canada/in-vancouver-there-are-lots-of-kids-of-corrupt-chinese-officials-here-they-can-flaunt-their-money

#95 Rabbit One on 04.14.16 at 12:42 am

TFSA contest

$57,262 (cost $46,500)

Even with $5,500 top up in Jan-2016, I am still down about $5,000 from Jan-2015.

Thought I would be doing better than this.

#96 Victoria Real Estate Update on 04.14.16 at 12:46 am

# 52 understood by few (realtor?)

That doesn’t constitute calling you a realtor.

Are you a realtor? You’ll deny it. You write things that a realtor would write. You make outrageous claims without providing any proof….

I’d bet that a lot of readers assume they you’re a realtor.

Do you remember how weird “OMG the original” got before imploding on this site? You seem to be headed down the same road with your recent nutbar claim that prices are 40% higher in the core than at the peak in 2010.

Are you that individual? You’ll deny it.

#97 family beagle on 04.14.16 at 1:04 am

Topic: Yes, moved some game back into CAD at a buck three niner, after the skim. Bought some cheap toys. Hard to resist a couple rental boxes here in 604 Hinterland. 100k for bath/bed with speed holes.

#71 broader mind on 04.13.16 at 9:56 pm
If I promise to spend lots of money on stimulating stuff do you think the government would give me permission to print myself money ?

I don’t think you need permission to print your own IOU. You just can’t doctor theirs.

#76 WalMark of Sadkatoon on 04.13.16 at 10:07 pm
Now can someone stop the CAD from creeping up?

maybe you’ll get your wish after all…
http://www.bnn.ca/News/2016/4/13/This-is-a-bank-with-an-agenda-Economist-says-Bank-of-Canada-is-looking-to-tame-soaring-loonie-.aspx

This is a race to the bottom, correct?

#98 Karl hungus on 04.14.16 at 1:13 am

Not sure why anyone cares about dividends, it’s all about total return

#99 Tiger on 04.14.16 at 2:00 am

Garth are u still going to deny Chinese influence in Vancouver real estate,there article are in last 2 days by thre of the most respected and reputed news organization in the world ?

1)http://www.nytimes.com/2016/04/13/world/americas/canada-vancouver-chinese-immigrant-wealth.html

2)http://www.theprovince.com/touch/story.html?id=11847877

3)http://www.bloomberg.com/news/articles/2016-04-13/chinese-buyers-hungry-for-canadian-homes-with-inquiries-up-134

Obsessed. — Garth

#100 strange country canada on 04.14.16 at 2:24 am

Vanfun.com

MLS listings available in china before they are on MLS in Canada.
No HAM right garth ??????????????

Obsessed. — Garth

#101 ROCK BEATS PAPER on 04.14.16 at 3:19 am

What really happened yesterday.

Inventories and sales data out of the US really sucked = moar easing = equals stocks go up.

Back to the bad news is good news because the central bank gravy train can roll on.

#102 Koshy Alex on 04.14.16 at 3:41 am

“As I said the other day, done and done”

Hard to believe what you said about the commodities market. Both India and China won’t be able to consume as before because their strategy to create growth by pumping more credit has stopped working.

The below link will show that the interest rate cuts by emerging markets central banks are not working. The group mentioned is big industrial group in India with huge RE developments.

Jaypee offers 2,200-acre land to banks for loan settlement

http://economictimes.indiatimes.com/industry/indl-goods/svs/construction/jaypee-offers-2200-acre-land-to-banks-for-loan-settlement/articleshow/51822479.cms

#103 jane 24 on 04.14.16 at 3:50 am

I’ll tell you what it is time to do Garth.

With the TO stock market up and the Cdn dollar now at $1.80 rather than $2.20 to a GRP £ due to our EU referendum, it is time to cash in some Cdn RSSPs and go for a Med Cruise.

Thank you God as I had thought that I had missed the boat. In 40 years of investing I have never seen such day to day volatility caused I believe by modern computer trading. Too much daily stress for 60 year olds, better to have fun spending the money.

#104 TRT on 04.14.16 at 4:15 am

Bought my nephew a Corvette Z06 1 year ago.

Great investment as prices have gone up as our loonie tanked.

#105 Bing Gordon on 04.14.16 at 4:43 am

Canadian media has been trying to turn the tide on what it calls a ‘lack of respect’ for PM Trudeau. The fact is that T2 has brought the respect issue on himself.

He doesn’t do anything to deserve respect, no matter what the Toronto Star would like to do to raise the idea of a Rising Liberal Century. Trudeau’s a face, a puppet, a hindrance and a product of a nine year Hate Harper Campaign run like Joseph Goebbels ‘Big Lie’ by the back room union/green blob agenda of non Canadian players who couldn’t make Harper blink.

“Tell a big lie often often enough and eventually people will start to believe it”.

Lets make the call on Trudeau honestly, that he is a man of little intellectual heft and he’s making the gaffe prone Joe Biden look like Winston Churchill. T2 has made us a laughing stock and that fact is trumpeted around the world by journalists everywhere. Nothing we do to try and hide his timid intelligence is going to change that.

“Lay off Trudeau”, sure….as soon as he quits chasing international investors away by quitting for the sake of us all.

Now , the other bedbug problem, few people know that Vancouver is the bedbug capital of the world, more than any other city Vancouver is infested.

http://bedbugregistry.com/location/BC/

http://news.nationalpost.com/news/bedbugs-are-getting-harder-to-kill-and-australian-researchers-may-have-figured-out-why

#106 Kalergie on 04.14.16 at 5:33 am

@Garth: would you care to list some key questions to ask financial advisors to see if they know what they are talking about? You did that once but I can’t find that post anymore.

#107 cto on 04.14.16 at 7:20 am

#43 van bubble

Mr quanns house

Strategy, buy low from the old fossles that have lived there for 100 years,;put 100000 in to fix up house sell for 700000 more. Mr quanns client would not be able to sell said hiuse to a certain group of people with house looking old no bling. Now with bling and know the right channel of expoure quann will likely get over and above his price. The old canadian fossles don’t have the capacity or channels for this money making strategy and…its just a house to them…

#108 Bottoms_Up on 04.14.16 at 7:22 am

#98 Karl hungus on 04.14.16 at 1:13 am
————————————
I believe there is strong support that a stock is only worth what it will return you in dividends (over time) and, some people are looking for cash flow (retirees, the wealthy), and dividends provide a nice stream of cash flow for them.

Lots to love about dividends…..

#109 Smoking Man on 04.14.16 at 7:33 am

Suede my crystal ball is broke.

Try to find my mojo next week in the desert.
14 days in an unconcious state of mind needs to be healed and brought back to health.

#110 Smoking Man on 04.14.16 at 7:42 am

Your University fees at work.

Being singled out and shamed, your crime. being white.

http://www.prisonplanet.com/universities-are-singling-out-white-students-for-education-sessions.html

#111 pBrasseur on 04.14.16 at 7:42 am

Sorry Garth but despite your newly found optimism the fundamentals about Canada haven’t changed.

We’re still one of the most indebted nation in the world and this economy is still running on debt growing unsustainably, both governments and household debt. This is hiding (and worsening) our real problem: poor productivity, in the end it is always about productivity.

For investors, except for the occasional good opportunity, and sure there are some (in non-cyclical sectors), Canada is still radioactive and will remain so for a long time.

IMO the CAD true value is about 85 cents, but that’s in normal times, not when dealing with a predictable debt crisis… Despite the recent «happy numbers» I still see no reason to be optimistic about this country in the long run.

#112 Dominoes Lining Up on 04.14.16 at 7:47 am

Canary meet coalmine?

When you gotta sell, you gotta sell:

http://www.thestar.com/business/2016/04/14/phil-kessel-sells-luxury-toronto-condo-for-565k-below-the-asking.html

Multiply this effect by thousands when the economy tips a little more in Calgary, Toronto and yes, Vancouver.

Interesting times ahead…..

#113 pBrasseur on 04.14.16 at 7:50 am

I also don’t buy that the commodity bear market is done.

This boat doesn’t move that fast, we’re talking big money, big projects with big machines, the massive past investments are still increasing output (even in the Canadian oil sands) and global demand is far from meeting the expectations that triggered those investments then.

So yes, speculation may move prices momentarily, but effects of investment pullbacks are largely still to be seen. This thing is far from over.

#114 earthboundmisfit on 04.14.16 at 7:57 am

@TRT ….. for the last friggin’ time, read and learn. A car is not an investment. It is a depreciating commodity. More so a GM product.

#115 pBrasseur on 04.14.16 at 8:02 am

#32 TFSA contest on 04.13.16 at 8:22 pm

Cool!

I put my money where my mouth is!

My TFSA is made of individual US stocks (portfolio managed by a Montreal company for a 1% fee), it was worth 82K in the last statement, been up to 85K before this year’s contribution. Good solid «Buffet like» companies.

#116 Bank of Millenial on 04.14.16 at 8:57 am

It became clear to me that were at peak housing in Canada when I read Rob Carricks “Millenial house buying guide.” The article was based on a couple 28,30 taking home 200k annually and their struggle to buy in Whitby.

I can’t tell what left a more sour taste in my mouth.. 1) a far from average 200k income couple was supposed to be a “guide” for millennials, or 2) the couple was actually stretched financially to buy in the suburbs of Toronto.

Let’s see how this turns out.

#117 Ole Doberman on 04.14.16 at 9:27 am

Gartho are you issuing a buy signal on gold? It is a commodity, or is it real money as some would argue…

Thx

No. — Garth

#118 Noel on 04.14.16 at 9:54 am

“As for real estate, not much more to speculate on. Most Canadian markets have done exactly what this pathetic blog predicted – flatlined over the past year and entered into a slow melt that will erode sales and moderate prices, especially when mortgage costs start to change. In Toronto and the GTA, severely reduced supply has boosted prices – a situation unlikely to change unless Ottawa cools things off (which is being actively considered). The real risk lies with Vancouver and the Lower Mainland, where the buy-now-or-buy-never meme has led to panic purchases, bidding orgies, absurd prices and rapidly escalating debt levels.”
________________________

I agree with all of this, except that this blog predicted it.

Your beginning of year predictions said that this would be the last year of appreciation in Toronto, now you’re saying appreciation is likely to continue unless Ottawa intervenes.

You’ve changed your tune on TO housing Garth, its okay to admit it. Admirable even.

No change. Not every market is the same. Duh. I indicated most would flatline and then slowly melt. They are. And, yes, this could well be the last romp in the GTA. — Garth

#119 Scoop Johnson on 04.14.16 at 9:55 am

Prima Donna Poloz lashes out at his critics. I think he’d like to emulate the Dictator of Thailand and bring in his detractors for an ‘attitude adjustment’. This ‘tongue lashing’ is unseemly …even from a Froot Loop Bureaucrat.

http://www.bnn.ca/News/2016/4/13/Poloz-BoC-will-remain-cautious-been-psyched-out-before.aspx

Il Duce Poloz we can call him, caught with his pants down and outed by a real economist with an advanced understanding, which Prima Donna Poloz does not have.

#120 proud papa on 04.14.16 at 10:12 am

Now What?

When any welfare scheme is being proposed, its political sponsors always dwell on what a generous and compassionate government should pay to Paul; they neglect to mention that this additional money must be seized from Peter.
Henry Hazlitt

A government which robs Peter to pay Paul can always depend on the support of Paul.
George Bernard Shaw

Socialism destroys the incentive to produce, dampens the human spirit and results, ultimately, in less for everyone.
David Limbaugh

The evidence is thus crystal-clear. Modern welfare destroys. It does not build competence; it creates dependence.
Peter Drucker

#121 proud papa on 04.14.16 at 10:15 am

Different people rise to the top under socialism than under capitalism. The higher on the socialist hierarchy you look, the more you will find people who are too incompetent to do the job they are supposed to do.
Hans-Herman Hoppe

The way to maximize production is to maximize the incentives to production. And the way to do that, as the modern world has discovered, is through the system known as capitalism — the system of private property, free markets, and free enterprise.
Henry Hazlitt

#122 Canadian on 04.14.16 at 10:15 am

How often should a retail investor be re-balancing their portfolio in your opinion at this time?

Semi-annually is enough for most. — Garth

#123 iRent on 04.14.16 at 10:30 am

Hi Garth, Any point in holding USD in the portfolio or exchange them for CAD.

All portfolios should have roughly 20% USD content, all the time. — Garth

#124 Paul on 04.14.16 at 10:48 am

But what should I do with my USD Cash? Keep or exchange to CAD?

#125 pBrasseur on 04.14.16 at 10:50 am

#122 Canadian

«How often should a retail investor be re-balancing their portfolio in your opinion at this time?»

Never. A portfolio is like a garden, you just take care of it when needed, pull out the weeds, plant new seeds and replace those that disappoint. Overall if you choose carefully to begin with you shouldn’t have to move often.

I’m 100% individual stocks, I don’t rebalance (actually pay someone to do it), I maintain which is a much easier task than trying to time the markets or trying to bet on asset classes.

A thing to remember, in time of crisis great companies become predators… You must not fear bear markets you must appreciate them for what they can be: great opportunities!

#126 Sean on 04.14.16 at 10:51 am

If I own land and was hoping to build on in it the next few years. Is now the time to ramp that plan up and get a mortgage at these rates? Cheap money is still a good thing as long as I’m not using it to buy a house in Toronto, right?

#127 Roasted Gonads on 04.14.16 at 10:58 am

#115 pBrasseur on 04.14.16 at 8:02 am

#32 TFSA contest on 04.13.16 at 8:22 pm

Cool!

I put my money where my mouth is!

My TFSA is made of individual US stocks (portfolio managed by a Montreal company for a 1% fee), it was worth 82K in the last statement, been up to 85K before this year’s contribution. Good solid «Buffet like» companies.


Nice job!.. man do I ever suck! I thought US stocks in TFSA wasn’t best idea.. better in the RRSP for tax withholding

#128 lee on 04.14.16 at 11:03 am

If rents on condos are up, why aren’t condo builders raising their prices? It seems most developers with condo inventory aren’t raising prices. Why is this? If rents are up, shouldn’t developers raise prices? Maybe rents aren’t up. Anyone?

#129 Moller on 04.14.16 at 11:10 am

Toronto condo rents soar 6.8 per cent in first quarter of the year…

http://www.ctvnews.ca/business/toronto-condo-rents-soar-6-8-per-cent-in-first-quarter-of-the-year-urbanation-1.2858650

Yeah, let’s just keep renting.

#130 Bank of Millenial on 04.14.16 at 11:38 am

#129 Moller
There are rentals available in rent controlled buildings which by law have to follow inflation as the maximum rent increase (which we know is around 1-2%/year)

People don’t need to submit themselves to that situation if they don’t wish to. Most will due to horniness.

#131 Cheese on 04.14.16 at 12:15 pm

TFSA maxed at 45k at 34 yrs old. Negative growth for 1 year with tangerines Index equity growth mutual fund. Feels bad :(

#132 Briana on 04.14.16 at 12:19 pm

Hmmmm….Well, if I was a wealthy Chinese person I would want to park my money somewhere else than China. They say 80% of the water is polluted, people have to wear masks due to smog, the stock market is shaky, you can’t even own your own home there, and plus political risks and personal safety. No wonder so much Chinese wealth and people are flowing out of China.

It’s ok though, let them keep boosting other economies and supporting the lives of people elsewhere, why not?? We reap the benefits in overall society. I say too bad for China.

How long will this last though??? The Chinese government must be onto mass exodus of cash and people flow. Soon there will be a major pull back. It would only be in China’s best interests to keep wealth and money IN China!

#133 Sparky on 04.14.16 at 12:29 pm

I Love my Kia #90

******************************
“That’s wonderful Garth, I wish all righties were like you, but they aren’t.

Its also why I’m a leftie. Taking care of our fellow man is more than a voluntary act, we need to have government to ensure everyone puts in their fair share.”

Generalize much? How do you know most righties don’t give, whereas if it wasn’t for lefties we would live in a cruel world?

Most people I know are righties, and i also know they give throughout the course of the year without fail. I like dropping food off at the local food bank, anonymously. I dont need recognition.

You want generalization? How about the fact most lefties I know are the ones always blowing their own horn, “hey, look at me, I’m a caring and better person than you!”

People are people, regardless of political view point. There are good people and a-holes across the board. Come down off your high horse and maybe you would see it.

#134 mike from Mtl on 04.14.16 at 12:38 pm

#129 Moller on 04.14.16 at 11:10 am
Toronto condo rents soar 6.8 per cent in first quarter of the year…
=====================================

Perhaps that’s just headline news to scare the ppl into renting from the bank and keeping the bubble instead. In Mtl that would be cause for legal action and personally I’ve never known or head of such increases myself. But strada fees can be DRASTICALLY increased without any recourse and of course never reported… other then attempting to sell a box of air with a 10k per year fees.

Especially on the lower end here, even an increase of 100$ per year might cause a loss of current tenant. Folks are quite cheap and have a lot of mobility around here.

#135 AK on 04.14.16 at 12:41 pm

“Another consequence of our changed fortunes is the cost of money. Rates won’t be doing anything for a few months, but markets still believe the Fed will pull the trigger twice by the end of the year.”
====================================

Goldman is calling for 3 rate hikes this year. Will they be correct?

#136 lee on 04.14.16 at 12:53 pm

#129 Mollar,

I wonder what Garth thinks about Urbanation’s correlation between the S&P/TSX and condo sales?

There isn’t one. — Garth

#137 understood by few on 04.14.16 at 12:55 pm

#96 Victoria Real Estate Update on 04.14.16 at 12:46 am

That doesn’t constitute calling you a realtor.

Are you a realtor? You’ll deny it. You write things that a realtor would write. You make outrageous claims without providing any proof….

I’d bet that a lot of readers assume they you’re a realtor.

Do you remember how weird “OMG the original” got before imploding on this site? You seem to be headed down the same road with your recent nutbar claim that prices are 40% higher in the core than at the peak in 2010.

Are you that individual? You’ll deny it.
———————
OMFG stop.

Doesn’t constitute? Ah, that’s exactly what is implied when you state I (and others) haven’t yet proven we’re not realtors (“guilty” until innocent eh). You are calling me a realtor. Not explicitly but it is the exact same thing. Not to mention you have done so explicitly in the past and putting “(realtor?)” beside my handle? What does that imply? DO YOU KNOW HOW WORDS WORK? Obviously not. You can’t read. You’ve proven that repeatedly.

I’ve stated what industry I’m in previously. I’ll leave it at that.

My claim was 30-40% in my area. Which is true. Houses were selling low 500s in 2010 and are now selling in the low 700s. These are houses that were selling for mid 500s in late 2015. Realtor in the hood thought most recent would be high 500s maybe low 600s, but nope, 700s. Can I prove it? No. I’m not a realtor so I don’t have access to sales numbers that far back. I found out the sales prices as they sold by asking a realtor friend.

Did you see the example of the place on Kings I posted? No.. because you can’t read. Just accuse. That had history on BC assessment of a previous sale. Don’t know what it would have sold for in 2010, but it’s a safe bet it was low 500s at best (possibly high 400s). Just sold for 751. You’ll have to wait to verify that, I guess (since you refuse to look at actual current sales numbers). It’ll eventually show on on bc assessment. Seems to be the new norm for anything with a suite or suite potential (in core).

Pull your head out of the sand. Stuff in Victoria is crazy right now. Realtors I know are shocked. Of course that means it’s a horrid time to buy. Which I’ve repeated ad nauseum, but you still insist I’m “pumping” realty.

I’m cool with debate, even heated debate, but instead of an interesting conversation all you offer is ad hominem.

#138 Ace Goodheart on 04.14.16 at 12:58 pm

Here’s another weird and scary news story out of “Point Grey”, which is apparently one of Vancouver’s most posh and pricey neighbourhoods:

http://www.huffingtonpost.ca/2016/04/12/vancouver-mansions-corbie-fieldwalker-videos_n_9660550.html

So apparently, in yet another weird and bizarre twist happening in one of the world’s oddest and nonsensical real estate markets, people are paying upwards of 10 million Canadian dollars for mansions, in a posh, upper class neighbourhood, and then abandoning them and letting them be over run by vandals and the animal kingdom. Some of these “mansions” are now in such bad shape, that they will have to probably be torn down.

Weird gets weirder.

#139 understood by few on 04.14.16 at 1:11 pm

#90 Love my Kia on 04.13.16 at 11:32 pm
66 salonist on 04.13.16 at 9:38 pm

.. we need to have government to ensure everyone puts in their fair share..

———————–

I pay every cent required by Canadian tax law. I do use savings techniques not available to all due to corporate structure, but all totally legal and on the up and up. All income declared fully, only legit expenses claimed.

But what about bartenders that don’t declare all their tips, or trades that do cash work then don’t declare the income? What about the sole proprietor that claims a bit more of their household expenses for their “home business” than are legit to save a few bucks? Those are illegal.

But somehow the person doing the legal thing is the bad person, but the middle class person doing something illegal to save on taxes is ok. At least that’s the way I usually see it pan out in conversation.

I’m really curious how big a chunk of tax revenue the undeclared cash income is. I’m guessing it’s decent since we are seeing more govs push cashless societies.

#140 Ole Doberman on 04.14.16 at 1:13 pm

Gartho are you issuing a buy signal on gold? It is a commodity, or is it real money as some would argue…

Thx

No. — Garth
——————————————————-
Garth why the prejudice against gold, what gives?

In the last commodity bull from 2000-2011 gold turned out multi bagger returns.
This time it may top at 5K……

Not a chance. — Garth

#141 IHCTD9 on 04.14.16 at 1:13 pm

They keep touting “job creation” but if their great ideas are anything like the last “$5k for each new job” that they expected to create 27k jobs and I think created zero before they scrapped it last week
____________________________________

Notley was trying to uhh… buy jobs?

Good Grief…

#142 Karl hungus on 04.14.16 at 1:21 pm

#108 bottoms up

You do realize selling shares or collecting dividends is the same thing right ?

#143 IHCTD9 on 04.14.16 at 1:36 pm

#29 Metaxa on 04.13.16 at 8:20 pm

Harper Sighting!… etc…
________________

Harper finished up near 10 years in Oct 2015 at 941 Million in the hole.

Trudeau year #1 kicks things off 30 BILLION dollars in the hole LOL!!!

Yes, there is a steady hand on the rudder…

#144 Ole Doberman on 04.14.16 at 1:38 pm

Garth why the prejudice against gold, what gives?

In the last commodity bull from 2000-2011 gold turned out multi bagger returns.
This time it may top at 5K……

Not a chance. — Garth
——————————————————–
Well what about this latest interview with legendary investor Jim (James) Rickards?!

He see’s 10-50K gold in the next leg up. Sounds like big problems are on the way.

https://www.youtube.com/watch?v=R7enXdJAuHA

Blah, blah, blah. The gold story never changes. And it’s been a failure since 2011. — Garth

#145 Wrong on most counts on 04.14.16 at 1:41 pm

Foreign money?

The national association of real estate shows foreign Chinese made inquires on 2.5B in real estate, just in Vancouver.

With a detached housing stock of what? 30,000? It’s a huge distortion on the market

How come Garth continues to pretend this doesn’t happen?

There is no “national association of real estate.” — Garth

#146 Brazil ex-pat on 04.14.16 at 2:04 pm

https://www.rt.com/usa/339518-banks-disaster-readiness-regulators/?utm_source=browser&utm_medium=aplication_chrome&utm_campaign=chrome

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

The Big Short – part Duh…..

#147 Brazil ex-pat on 04.14.16 at 2:08 pm

#135 AK on 04.14.16 at 12:41 pm
“Another consequence of our changed fortunes is the cost of money. Rates won’t be doing anything for a few months, but markets still believe the Fed will pull the trigger twice by the end of the year.”
====================================

Goldman is calling for 3 rate hikes this year. Will they be correct?

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

Goldman is as credible as a career thief. They called for $200 oil and they “shorted” real estate against their own clients. Then they get a 5 billion dollar fine – you and I would get a 12 year prison sentence. So you can not believe anything they say.

#148 Mark on 04.14.16 at 2:09 pm

“If rents on condos are up, why aren’t condo builders raising their prices? It seems most developers with condo inventory aren’t raising prices. Why is this? If rents are up, shouldn’t developers raise prices? Maybe rents aren’t up. Anyone?”

Brand new higher-end units of course are going to skew the overall mix of units in the rental pool higher, without individual units renting for more.

Its sort of like the sales mix for actual ownership of RE. If you take a rental pool that hasn’t seen much investment over the past few decades, and add a whole bunch of brand new units (often with some pretty high end amenities which are included as rent) to the mix, of course rents probably are going to be higher. But that doesn’t mean a landlord of an existing unit can expect to be able to rent for a higher price.

Since rents and prices are so severely disconnected on account of a very low discount rate implied by the market on rents, it is perfectly reasonable for the two variables (rent and prices) not to move in lockstep.

#149 Wrong on most counts on 04.14.16 at 2:10 pm

“#138 Ace Goodheart”

More evidence of silly Millennials buying up Point Grey houses only to let them fall apart. Probably too busy running up credit card debt to mow the grass eh.

Horny Millenials eh! If only they invested in a diversified portfolio instead

#150 Mark on 04.14.16 at 2:14 pm

“He see’s 10-50K gold in the next leg up. Sounds like big problems are on the way.”

$32 to ~$800 was the move in the 1970s. ~$20 to $32 was the move in the 1930s, but the rest of the economy deflated severely.

The whole situation today smells far more of the 1930s, where the monetary base and credit is likely to collapse, than that of the 1970s where we had demand-driven near hyperinflation.

So I’d be inclined to agree that gold’s upside in nominal dollars may very well be limited. However very low production costs should allow the miners to do very well. Driving many of them to returns 100X that of the stock market, as occurred in the 1930s.

I believe Rickards assumes that the monetary base won’t contract in his book, hence, renders the $10-$50k calculation. Such an assumption is likely flawed.

#151 espressobob on 04.14.16 at 2:22 pm

It appears gold is up slightly yoy meanwhile the miners have had significant upside. Straight commodity plays usually disappoint.

http://www.blackrock.com/ca/individual/en/products/239848/ishares-sptsx-global-gold-index-etf

Then again instead of a sector play, the TSX composite and other major indices already have this weighting.

It’s good to be a global index investor. Less risk.

#152 Blacksheep on 04.14.16 at 2:25 pm

Briana # 132,

“How long will this last though??? The Chinese government must be onto mass exodus of cash and people flow. Soon there will be a major pull back. It would only be in China’s best interests to keep wealth and money IN China!”
—————————————————–
Of course the Chinese gov knows, how could they not.

People buying RE in Van are not doing so with suit cases of Yuan or gold bars in their pockets. Many (most?) Political / Corporate relationships are incestuous. The parties funnelling the funds from the country, are in bed with the parties pulling the levers.

But that’s not what they want the masses to believe: Just like hilary, presents as a defender of the Cattle, when billy boy was the one, who killed Glass-Steagall.

http://www.cbsnews.com/news/clinton-on-glass-steagall-right-or-wrong/

Just look at the Panama papers and the recent release by Oxfam on US corps off shoring 1.4 trillion $’s, in legal tax shelters.

http://www.fastcoexist.com/3058821/us-companies-dodge-paying-billions-in-taxes-and-youre-paying-them-to-do-it

This couldn’t happen with out political capitulation, motivated by corporate lobbyist $’s.

But don’t get me wrong, keep the dough coming boys, I’ll be bailing soon as my RE doubles in value from my buy price of just a couple of years ago.

Shouldn’t be long at this rate…

#153 Snowboid on 04.14.16 at 2:27 pm

#137 understood by few on 04.14.16 at 12:55 pm…

“in my area” – sure that’s the case anywhere I guess, when I look at my former area in Victoria (a couple of hundred feet from the Inner Harbour) the opposite is still true, sale prices are still slightly below what they were in 2011 when we sold.

However, When you look at the averages overall (sales mix) of SFHs in Victoria the peak in 2010 vs March 2016, how about the Victoria Real Estate Boards’ own published statistics?

2010 – $ 711,392
March 2016 – $ 663,300

Add inflation and the March 2016 sale price should be over $ 780,000.

So overall in Victoria things may be heating up, but Aprils’ stats should show a 20% increase from March 2016 just to keep up to the 2010 prices.

I do agree this a bad time to be a buyer in Victoria, Vancouver, Toronto and maybe even Kelowna soon (if you believe the Golden God of real estate).

#154 For those about to flop... on 04.14.16 at 2:39 pm

#145 Wrong on most counts on 04.14.16 at 1:41 pm
Foreign money?

The national association of real estate shows foreign Chinese made inquires on 2.5B in real estate, just in Vancouver.

With a detached housing stock of what? 30,000? It’s a huge distortion on the market

How come Garth continues to pretend this doesn’t happen?

There is no “national association of real estate.” — Garth

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

A couple of points.
I recall seeing the number of detached houses in Vancouver being around 45k.

That being said most of the high end sales….above 7/8 million are concentrated mainly in two areas….Point Gray and Shaughnessy.Im sure there would be a way to find out how many households are in these areas if you reall wanted to find out.

I guess you could roughly say they are only interested in 3-5 thousand homes/lots.

Yes there is foreign investment in the Dunbar/ Southlands even around Oakridge but not at the same level as the two previously mentioned suburbs.

Also I want to address the myth that foreign investors will over pay for property just to ” wash” their money.
Sometimes I work for one of the Westsides premier developers,they used to build luxury houses and if the buyer was Chinese or another foreigner so be it.

Around 5 years ago they changed their strategy and started catering to these types of buyers making the home more appealing….wok kitchens ,gold fittings , Fs,
Address changes amongst other things.

Even with these adaptations ,it still takes time to sell these houses north of 10 million and some of them went well below asking but you won’t see that on Global only the ones that go crazy over asking…

M41BC

#155 Bond Junkie on 04.14.16 at 2:57 pm

Gartho why you holding back on the family trust action?

#156 onpar22 on 04.14.16 at 3:00 pm

Regarding Toronto rental rates, here’s my anecdote. I owned a 1 BR condo a few years back. To carry it, my total monthly costs were $2350. Sold the joint. Presently, I rent a 1 BR in the same hood (but better overall location) that is about 100 sq/ft bigger for $1600 (all in). Each month I save roughly $750. I use this money to ensure my RRSP, TFSA, and non-registered accounts are actively added to and maxed out.

#157 understood by few on 04.14.16 at 3:17 pm

#153 Snowboid on 04.14.16 at 2:27 pm

“in my area” – sure that’s the case anywhere I guess, when I look at my former area in Victoria (a couple of hundred feet from the Inner Harbour) the opposite is still true, sale prices are still slightly below what they were in 2011 when we sold.

I only bother to look at SFD in areas I’m interested in (east saanich, cordova bay, cadboro bay). I look at pretty much everything that closes in that area though. So I have a skewed view for sure. They say realty is local. It’s interesting that in a city as small as victoria we get pockets that are a lot more popular.

Inner harbour? So Condo? Whole different kettle of fish then. I sold a condo in 2010. Have watched sales in the same building and no increase in prices. We sold one day in a bidding war. 17K over asking. I guess there is plenty of supply in the condo market right now?

A town house nearby just sold and super cheap. I know someone that sold theirs in the same strata in 2010 for a lot more than the most recent sale. I think at least 50K more? Same size, but not completely comparable (end unit vs not end unit). Still. Similar enough.

The horniness is freehold SFD and in specific areas.

However, When you look at the averages overall (sales mix) of SFHs in Victoria the peak in 2010 vs March 2016, how about the Victoria Real Estate Boards’ own published statistics?

2010 – $ 711,392
March 2016 – $ 663,300

You looking at the same stats?

March 2010 GVic SFD avg: $633,938
March 2016 GVic SFD avg: $748,481

So about an 18% increase?

Inflation calc says that 633 should be 697 now. So better than inflation. Use the 2015 numbers and I’m certain that wouldn’t be the case.

#158 family beagle on 04.14.16 at 3:23 pm

#140 Ole Doberman on 04.14.16 at 1:13 pm
“…a buy signal on gold? ”

If you game pm, the play is ratios. If you’re playing ratios, it’s long john silver. Ag for au touched 80:1

Aside, $20 for $20, $50, $100, with free shipping from the Mint… no brainer entry level wealth parking… for the kids. Just converted some loons into whales.

#159 Nemesis on 04.14.16 at 3:35 pm

#TheSwordOfConfucious?…

NoteToGT: The YoYoGuy – it’s probably just me, but at first glance the pommel and grip on his sword could be mistaken for something else…

#160 johnsaccy on 04.14.16 at 4:00 pm

Does any one know why Ottawa Real Estate Board has not published the home sales stats for the month of March? It is mid-April Already.

http://www2.ottawarealestate.org/home/NewsInformation/LatestNewsRelease.aspx

Thanks

#161 understood by few on 04.14.16 at 4:27 pm

#160 johnsaccy on 04.14.16 at 4:00 pm
Does any one know why Ottawa Real Estate Board has not published the home sales stats for the month of March? It is mid-April Already.

—————
They have contact links. Pretty trivial to send a friendly email asking when they’ll be available.

Could be they are trying to hide poor sales, could be the one person that is responsible for doing the stats is sick, or maybe their windows 98 machine crashed and destroyed their Microsoft Works spreadsheet.

#162 Bram on 04.14.16 at 4:28 pm

#160 johnsaccy on 04.14.16 at 4:00 pm
Does any one know why Ottawa Real Estate Board has not published the home sales stats for the month of March? It is mid-April Already.

Teranet is late too. I wonder what is going on?
http://www.housepriceindex.ca

bram

#163 WalMark of Sadkatoon on 04.14.16 at 4:51 pm

Blah, blah, blah. The gold story never changes. And it’s been a failure since 2011. — Garth

indeed gold has been a go-nowhere asset class purchased primarily by the poor

#164 WalMark of Sadkatoon on 04.14.16 at 4:54 pm

Toronto condo rents soar 6.8 per cent in first quarter of the year…

YYZ rents as well as prices are insane. there’s an obsession for condos there. not sure why. landlords are running negative cash flows in order to attempt to reap capital gains. it can’t last

#165 Porsche on 04.14.16 at 4:59 pm

#129 Moller on 04.14.16 at 11:10 am
Toronto condo rents soar 6.8 per cent in first quarter of the year…

………………………………………………………………………

Must be all the refugees, don’t they all go to TO ?

#166 Nemesis on 04.14.16 at 5:05 pm

#ShakenNotStirred…

[CBC] – Analysis – B.C. real estate: Can the public trust industry to govern itself?: Critics say tougher rules won’t restore public confidence in B.C.’s real estate regulation

…”In its interim report this week, an advisory group aimed at overhauling regulation of the industry says public confidence in the sector “has been shaken” by the barrage of revelations.”…

http://www.cbc.ca/news/canada/british-columbia/real-estate-realtors-regulation-rules-1.3534083

#DetoxGoingPoorlyForSmokingMan?…

[Independent] – Smoking Man accidentally ‘deletes his entire company’ with one line of bad code: ‘I feel sorry to say that your employer’s company is now essentially dead,’ one person on a coding forum advised beleaguered programmer

http://www.independent.co.uk/life-style/gadgets-and-tech/news/man-accidentally-deletes-his-entire-company-with-one-line-of-bad-code-a6984256.html

#167 Tom on 04.14.16 at 5:21 pm

Garth,

Under your balanced portfolio guidelines, should an investor have a portion of the fixed income side of the portfolio in US or International bonds?

#168 Metaxa on 04.14.16 at 5:29 pm

Oh, I’m not praising Trudeau, if you actually comprehend written English you could see that from my post.

No, I’m bashing Harper.

He’s like Sarah..a quitter.
Who then proceeds to monitize himself, while collecting a full MP paycheque.

That you right leaning folks would over look all that and continue to bash T2 six months in is kinda proving a point, no?

I’m a non active Progressive Conservative by the way…there isn’t a political party or leader in Canada that interests me in the least.

#29 Metaxa on 04.13.16 at 8:20 pm

Harper Sighting!… etc…
________________

Harper finished up near 10 years in Oct 2015 at 941 Million in the hole.

Trudeau year #1 kicks things off 30 BILLION dollars in the hole LOL!!!

Yes, there is a steady hand on the rudder…

Re-read my post, then re-read yours and listen for the whoosh…that would be the point going over your head, eh?

#169 Victoria Real Estate Update on 04.14.16 at 5:47 pm

# 137 understood by few

You have no verifiable proof that prices in the core are 40% higher than in 2010.

If prices in the core had actually increased by 40% since 2010 I’m sure the local board’s frankenumber price index would show an increase of at least 60%. That obviously isn’t the case.

Word of mouth from realtor friends doesn’t cut it.

Remember that houses that have undergone extensive renovations since 2010 can’t be included for comparison. Extensive renovations can cost hundreds of thousands of dollars. A fair comparison wouldn’t include such properties.

You claim you’re all about intelligent debate when in recent weeks you shot some borderline childish comments my way. Would you like me to post examples? I think it’s possible that you’re assessing your own behaviour with the same delusional judgement that you’ve assessed prices in the core.

That you can’t prove that you’re not a realtor obviously frustrates you.

Anyone who follows my comments knows that I’m all about business with my posts until someone like you becomes obsessed and starts acting childish. At that point I send childish comments back to them.

#170 Victoria Real Estate Update on 04.14.16 at 6:01 pm

# 27 Bottoms_Up

Perhaps you should pay attention. I’ve posted current charts as well.

As I’ve written many times, Victoria’s market has suddenly changed course in recent years, moving from an up market to a down market when realtors were sure that higher prices every month would be the new norm (think today).

The recent data that I post in charts is indeed valuable and relevant.

This chart is updated with Teranet’s most recent data.

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

(source: Teranet’s index)

Since 2008 house prices in Winnipeg have increased by 32.7%, based on Teranet’s index.

#171 Andrewt on 04.14.16 at 6:05 pm

#145 Wrong on most counts on 04.14.16 at 1:41 pm
Foreign money?

The national association of real estate shows foreign Chinese made inquires on 2.5B in real estate, just in Vancouver.

With a detached housing stock of what? 30,000? It’s a huge distortion on the market

How come Garth continues to pretend this doesn’t happen?

There is no “national association of real estate.” — Garth


I thought their offices were in the same complex as the Money Laundering Advisory Council and the Surname Institute of British Columbia.

#172 Wicked as it seems on 04.14.16 at 6:17 pm

#32 TFSA amounts

Got you beat! $60,030. With 7 k in cash ready to pounce again!

#173 ROCK BEATS PAPER on 04.14.16 at 6:32 pm

Blah, blah, blah. The gold story never changes. And it’s been a failure since 2011. — Garth
______________________________________________

You should take cavalier statements about gold with a grain of salt (a commodity). Gold is money because it has always sat on the Balance Sheet of Central Banks.

Gold is near $1600 now, off only about $200 or so from its last peak in 2011, hardly a failure, and certainly a diversifier, as it does not correlate with either bonds or stocks. 5-10 % improves your efficient frontier.

Picking 2011 as a starting point is not that useful. The start or end of a business cycle or era would be more useful, like 1982 (when Volker came in) and 2000 etc…

It is an important asset class and should not be ignored.

Gold is not money. — Garth

#174 understood by few on 04.14.16 at 6:44 pm

#169 Victoria Real Estate Update

—————-

It’s barely past 3pm. What’s your employer think about you posting on their dime?

I gave some examples of actual sales, which you’ve ignored. Is all of core up that much? Nope, but plenty of houses are. Not word of mouth, just watching the pending sales as they come in.

1791 Feltham Rd just went to pending at $825K (asking of 749K). Assessed at 568K (no sales in the past 3 years, so no clue what it sold for previously if it had sold). That’s nuts.

Think that’s only 6% over what it would have sold for in 2010? Ha. Current assessment is probably close to value in 2010 (can’t see you disagreeing with that, going by your graph). 45% increase. Yikes.

One data point doesn’t make data, of course. But it’s not an outlier. Houses are selling for these inflated prices every day. Mind you it’s only certain areas (Saanich East for sure) and only SFD.

#175 Peter on 04.14.16 at 6:46 pm

“Put your house proceeds in a reasonable and diversified portfolio, and let it pay the rent.”

Through a non-registered acct and TFSA (if room allowed)?

#176 };-) aka Devil's Advocate on 04.14.16 at 6:50 pm

HAM, Bologna, baloney… does it really matter where the money comes from… it’s real. Vancouver real estate has gone CRAZY and so too now are the outlying areas like Abbotsford, Kelowna, Nanaimo as those who sold out in Vancouver, to whoever it was, opt into a more relaxed lifestyle, real estate at less than half the price (for now) and a swack of cash in the bank.

It’s supply and demand. Population of the planet is increasing amid finite resources. Stay tuned… more (waves) to come.

People love crowds… ever notice how many show up for them. Line ups too.

SHIFT happens, learn to ride the tide.

};-)

#177 Ace Goodheart on 04.14.16 at 7:36 pm

RE: #149 Wrong on most counts:

“More evidence of silly Millennials buying up Point Grey houses only to let them fall apart. Probably too busy running up credit card debt to mow the grass eh.

Horny Millenials eh! If only they invested in a diversified portfolio instead”

Not sure who’s buying those houses, but that is just very weird. Why put 10 mil into something, then let it rot? The story goes on to talk about how the mansion in question is worth $11 million dollars. And as you can see, it’s being occupied by persons who probably don’t have $11.00 to their name. The juxtaposition is almost artistic. Which I think is the videographer’s point. We may not see such a bizarre situation again in our lifetimes. The $11,000,000 house that you cannot live in, that has its hydro and gas shut off and that is being occupied by squatters. So expensive that no one can live there (except rats, mice, and homeless people).

#178 espressobob on 04.14.16 at 7:51 pm

Other precious metals most gold bugs might consider currency?

Tellurium
Iridium
Osmium
ruthenium
platinum
palladium
rhodium
gem stones
cauliflower

Is any of this getting through?

#179 randman on 04.14.16 at 9:29 pm

Gartho are you issuing a buy signal on gold? It is a commodity, or is it real money as some would argue…

Thx

No. — Garth

Garth doesn’t make any commission on gold…therefore he doesn’t recommend it….even though it fits generally accepted investment principles of buy low…sell high

I don’t collect commission on anything. Including this blog. Gold is an excessively-speculative asset for most people to own. You are welcome here no longer. — Garth

#180 randman on 04.14.16 at 9:38 pm

BANNED

#181 V on 04.14.16 at 10:02 pm

Zero chance of a US rate hike this year. Zero

#182 V on 04.14.16 at 10:18 pm

Crab or Lobster Garth? If the market goes up I eat crab. If it goes down I eat lobster. Why don’t you teach these sheep that there is more than 1 way to trade. .

#183 Linky here on 04.15.16 at 2:28 pm

From your favourite conservative paper Gartho

http://business.financialpost.com/personal-finance/mortgages-real-estate/the-high-cost-of-buying-a-house-in-toronto-is-now-driving-up-rents