Judith’s an accountant. (What does an accountant use for birth control? Personality.) “Every day I am feeling astounded and astonished at people’s financial illiteracy,” she tells me.
Worse, she’s an accountant in Vancouver, the current epicentre of dumb.
“I met with some clients today who between them have a household income of $120k, (they are “educated”), and have a SFH in Vancouver worth about $1m-$1.5m MORE than what they paid for it 15 years ago. So what do they do with their new-found wealth? Maybe sell, and rent? Retire (net worth is probably $2m including the sale of other real estate holdings)? NO! They…..buy MORE real estate, and mortgage it to boot, determined to be landlords in a market that will never fail (real estate in YVR always goes up, they tell me!).”
Remember what I said about higher prices? Yup. They breed higher prices – since human nature makes people greedy and speculative. This is the very essence of asset bubbles, when ‘everyone’ thinks the same way, when risk seems to float away and people crap on certain angelic and blameless bloggers for suggesting caution. Because houses are going up, people expect them to go up. They want to go up. They will go up. God commands this.
“If that doesn’t make you roll your eyes,” Judith continues, “this might. I had a nice conversation with the wife today about RRSPs (they had no idea RRSP contributions made today become taxable as RRIFs after age 71) and she told me she has no idea if her work has a pension plan. Um, ok? After ten years of working there, she has no idea if there is a company pension plan in place, and if it is defined contribution or defined benefit or? Just that she “thinks they have something upon retirement”, what it is, she has no clue (just two decades from retirement).
“Here is a case in point about the mentality in Vancouver these days. Who needs pesky things like pension plans when we have the all godly REAL ESTATE to save us? I fear for people in our city, and I am doubting this will continue much longer. I would say this is the peak, given what I’ve seen. I’m no expert but this is all downright scary, the infallible faith people have in just one asset class, and a government assures us that this is the way to go, debt be damned.”
The longer this goes on, the more insane the chart, the greater the house lust that Judith references, the more I’m coming to believe that the landing will be hard. Splintered-tail-fin-&-body-parts-in-a-smokey-hole hard. It’s not Chinese guys primarily responsible for this (there are far too few offshore buyers) but the unbridled house horniness that spreads in a city where everyone is real estate manic.
Look what they’ve done. Average detached price $1.817 million:
Those who want to blame others for what we’re doing to ourselves figure in a place with ho-hum wages that prices can only bloat because they’re being fed by foreign cash. But Judith says otherwise. People with real estate assets are leveraging them higher. Subprime lending is exploding as buyers stretch to make down payments on houses too dear for CMHC to insure. Family money is doubling down on a single asset class – real estate – as parents borrow against their illusory equity to buy more for their kids. And it’s all happening while people are oblivious to the fact interest rates have finally started their ascent. This is a far more dangerous situation than any invasion from Guangzhou.
The latest news from the US is compelling. The odds for a summer rate hike have increased from 4% to 58%, with central bankers now openly talking of two to four more increases in each of the next two years. Yikes. Inflation data. New home sales (an eight-year high). Labour stats. Everything’s suddenly pointing in the same direction. Normalization has begun.
I will leave you with this note from a husband-wife doctor team in joint practice, earning $800,000 a year. They own a million-dollar condo and a half-mill place in Whistler, plus $80,000 in watches, $60,000 in stocks and $120,000 in cash.
“Wife wants to sell condo and get into Vancouver detached home market. I am not opposed to this idea as we can comfortably finance a fairly large mortgage. However I’m quite annoyed by the value of the houses I see before me. I do not want to take out 2-4 million dollar loan for a tear down in Kits or a fixer upper. Annoying to see our colleagues living it up in large mansions in Shaugnessey because they were born 20 years earlier to a lower housing market. This and along with the possibly of a crash/correction leaving me high and dry with a mega mortgage is not a scenario that I relish. Other than that our goals are unclear.”
Doomed.
168 comments ↓
This is what’s really going to go down in the next U.S election.
Donny Rump is going to quit the Republican Party at the last minute and try to run as an independent but voters won’t go for it.
The Republicans will be left to scramble and all the people that were seeking the nomination before say “Forget about it” as they are over the mud slinging.
We will be left with two female candidates…one is a hardened criminal…desperate for money that will let nothing stop her from getting into the White
House…..and the other one is Martha Stewart…
M41BC
Buy now, or your grandchildren will be serfs
How the frakking frak does a couple making $800,000 a year only have $180,000 in non real estate assets? Don’t get me started on them including the watches in their net worth …
Both couples are completely clueless. Both couples need to knock it the frak off when it comes to further real estate purchases and START SAVING SOME FRAKKING MONEY in the bank account.
I can second the accountant’s experience re: pension knowledge. I know several co-workers who know absolutely nothing about their pension entitlements, several of them only a year or two from a ?planned? early retirement. How you can plan for retirement but not crack open your pension statements is an utter mystery to me.
Hey Boom,you seem like you’ve got it together ,but here is some new technology for your cohorts.
If you bite down too hard,you get blutooth…
M41BC
http://imgur.com/Zv0E7Jt
YVR seems to have taken a complete leave of their senses. Even if HAM is contributing to the craziness it is a fickle as a trophy wife. When the party ends it will be the first one out the door.
Oh well I suppose we have bigger things to worry about when we are down to Hitlery and Trump as the only obvious contenders for the leader of the biggest military machine on the planet. The election isn’t mentioned in Revelations but I for one think it must be a sign. Maybe all those $1.8 million dollar tear downs in YVR have secret bomb shelters under them and that is why they are so expensive?
I’M in C, let me fix that for you:
Buy now and your grandchildren will be serfs. To the bank, to your creditors, etc. Bound to lowly low-income jobs, unable to afford education, and opportunity, just to pay the interest on the cash advances you took on your credit cards to pay for heat in your million dollar box of cornflakes.
We’ve already seen the benefit of NOT buying into the RE madness: retirement at 31, travelling the world and beholden to no one. More SURF-dom, than serf-dom, I’d say.
I am so flabbergasted at the blatant swallowing of the real estate kool-aid. Everyone I talk to has the FOMO or thinks prices only go up and real estate is a sure fire way to invest for the future. They totally think there is no chance of a bubble here. Scary indeed!
I make just over 10% of what they make, I’m (I would guess, just from the writing) younger, and I have as much in savings as they do.
Priorities. These people blow my mind.
When you earn $800k per year why concern yourself with real estate? Why buy a place for $2 million and hope it goes to $2.5 million? Why bother? Just work at what you are good at and make the same gain in 6 months anyway, without the risk!
At 800k you can live in whatever luxury you prefer, drive what you wish, travel anywhere, build a legacy.
Real estate is for poor people. The doctors must have grown up poor and are slow learners.
#1 For those about to flop…
Why would Trump want to quit the Republican Party when he is their nominee? Do you know how much a Presidential election costs?
How do yo know what voters are going to do?
Vancouver, the current epicenter of dumb. LOL! with fall out as far as Ontario. This is just criminally insane . . .
Hey ho, got a letter from the kind of burgundy coloured bank (CIBC) that my unsecured LOC is now available at prime + 0% until October. They wouldn’t be trying to get as much debt on the books as possible before rates go up would they? No, they have our best interests at heart.
In other news, YOW’s real estate market is pretty slow. Our neighbour’s place that is a renovated SFD across from a park in a kid friendly neighbourhood, with good schools, and relatively near downtown is sitting. Price reduced after about a month on the market. They wanted a bidding war, and instead got crickets or low ball offers. They’ve already bought a bigger more expensive house (they have a large brood), so I hope things work out for them.
My grandmother saved like a squirrel hoarding nuts – her family didn’t have much but she still managed to put away a little here and there. If your not prepared for hard times then you deserve what you get period – I have little sympathy for the ignorant
Sucks to be a renter.
Little shit bungalow in Shlong Branch yields 1500 per week this past year.
Timing the top is going to be tricky. Not that I would sell.
Got to find the sweat spot where boomers unload to move to Windsor or some cheap place.
Then again Windsor prices about to lift off.
#11 Joseph R. on 05.24.16 at 6:56 pm
#1 For those about to flop…
Why would Trump want to quit the Republican Party when he is their nominee? Do you know how much a Presidential election costs?
How do yo know what voters are going to do?
/////////////////////////////////////////
Hey Joseph,are you new to the blog?
I will go easy on you then.
What are you having for dinner tonight?
I’m having a big bowl of Satire…
M41BC
That all can be blamed for lack of rules/regulations and creating a make-believe scenario, if that is the case. It doesn’t matter which way one thinks it is a matter of doubt and with that doubt the housing bubble.
Go by your gut feelings husband-wife doctor team, don’t want to take out 2-4 million for a fixer upper plus a possible housing correction/crash. I would get the jitters signing on the dotted line with the negatives flashing right in front of you. I would not!
Will have to google Bernie Sanders but he is up there. Trump does not say anything relevant and Clinton knows her stuff, she is good.
What bothers me is when Premier Christy Clark and Major Gregory Robertson both say that they do not want Trump’s name on his building. What, are they kidding! His name, his building, his business venture, what part of entrepreneurship do they not understand and they are our leaders. Does anyone else feel this way?
Item in the Globe and Mail today:
A new survey from Manulife reported that at least 37% of homeowners reported that they were ‘caught short’ or could not afford to pay their bills at least once in the past year. Sixty percent fear they won’t have enough to finance retirement.
That thirty-seven percent? Yeah, they’re the ones that are counting on real estate to manifest a retirement for them.
#5 Flopper….
No Bluetooth here. I have a 3 tooth partial but it isn’t wired. Hey, I don’t even both to carry a phone. Why bother, I’m not important anymore, and prefer to be difficult to locate.
Makes it a lot more fun, and interesting.
Besides, the cows are aware, and they never care about how HOT real estate prices are. Smart, like me.
Date day today, a lazy time in the hamlets of the driftless. Retirement is so good, don’t delay the dam thing!
The world must still be in one piece, I might have heard otherwise, huh. ….zzz
If anyone out there doubts these “vancouverites are financial illiterates” stories……
Think again.
90% of my co workers, 80% of my friends have all drank the Real Estate koolaid.
Its gonna drop and the landing wont be pretty….but… “Hey! It always goes back up further…..”
“The longer this goes on, the more insane the chart, the greater the house lust that Judith references, the more I’m coming to believe that the landing will be hard.”
You made my day, time for a beer…..!!!!!!!!:)
I can safely predict that the average price of a home in Vancouver in 25 years time will be higher than it is today.
Check back with me in the year 2041 if it isn’t and I will eat my 25 year mortgage paper.
“doomed”
Yes they are. Here In Van-delusional The Greedy aren’t fearful YET.
Prof Robert Schiller was asked for signs when the bubble is peaking. “Watch the media, when they start talking about bubbles, its close”. Its close….
When the panic sets in, listings mushroom, no more bidding wars, it will turn on a dime. Developments will shut down, tax revenue dries up, construction jobs are gone. The bank of Mom and politicians in particular will be soiling themselves. Much finger pointing will ensue.
On the flip side, there is a silent group lurking among the greater fools, waiting to pounce.
Then? Not even close to asking price. Grind, grind, grind.
Meanwhile the 60/40 swells. Waiting Patiently
All I can say is I hope that there are a lot of successful bidding war winners and they work like champs and really run those prices up for themselves. The more they can “borrow” from the “bank of mom” the better. She will be so proud.
Vancouver will be a nice place to live soon after all the professional people have been driven out of the city by high price real estate. Will just be a bunch of “students” driving Lamborghini’s to go shopping.
Yikes, if I was sitting on 1.5 million in gains I would cash out and be in Costa Rica in a heartbeat. These people are nuts.
It is a sad day for the “Firsters” when they get beat by a guy who types like a chicken.
Also Joseph, maybe I should have told you to google Martha Stewart insider trading or something like that.
You see ,what I did was, pretend is was talking about one lady and I was really talking about…
M41BC
Ok, I think I see It know. Mortgage rates are going to rise on people like a poorly structured bond portfolio weighted too heavily at the short end. People will struggle to make payments and dump superfluous assets until Kijiji explodes. People will really be struggling to make their monthly payments but will not sell their houses unless forced too. This should keep house prices in a modest deceleration during the rate rising cycle as long as it is tempered. Disposable income will be in the toilet so the consumer driven aspect of the economy will probably be lacklustre and people in general will be unhappy, stressed out and looking to Government for help.
In addition, I feel the precise timing of the VAN/TO housing bubble will occur when Garth capitulates and shutters the blog.
There is smart money.
There is dumb money.
There is money that is so idiotic it cries out for court ordered sterilization.
2 million at a six percent return doubles their annual income, looks like a no brainer….
a little slow educating their agents and non existent compliance officers
..” sample group tested by Fintrac had poor showing of complying with proper rules….At least 85 real estate companies have not implemented a plan showing how they are trying to detect money laundering and other suspicious transactions, nearly 15 years after they were required to do so.”
http://www.cbc.ca/news/business/fintrac-real-estate-1.3597226
#3 tkid on 05.24.16 at 6:29 pm
How the frakking frak does a couple making $800,000 a year only have $180,000 in non real estate assets? Don’t get me started on them including the watches in their net worth
===================
You missed the fine print: they are doctors.
Most doctors are dumb as a sack of hammers when it comes to money. We had many as clients in the real estate tax shelter days. Awesome earning power. Unlimited borrowing power. Spend all their money all year then borrow to the max to buy some useless tax shelter at year end so they don’t have to pay tax. Utterly refuse to take professional advice from anyone that actually knows anything and get their stellar investment ideas from fellow physicians at the Wednesday golf came.
The few that work as hard at investing as they did for their degree can become staggeringly rich. I met a doc from California in 1985 who never invested in anything unless his cash account was back up to $100 million. That was real money in those days.
DELETED
Funny how this is the topic today….
Was talking to a guy this afternoon who was saying that he was listening to cbc vancouver this morning. They were talking about how screwed the people are in Vancouver and how we are the largest un-affordable in North America,
He was saying that his friend sold a house last fall that was on the Vancouver Burnaby border for over a million. And today the same house resold for 1.5 and how his friend feels he lost close to 1/2 a million dollars.
I asked him if his friend is happy though, he said for the most part yes, but feels cheated…. (head scratch)
Then he went on to say his wife wants to sell the house they live in that he claims is worth over 1.3 mill. NEXT summer. He is on the fence, and feels that they should sell NOW and take the money and RUN….
I told him to list and NEVER look back. he agreed, for it will be the retirement time as he is over 60.
I also stated that if you list now before the rush happens you will be 100% guaranteed a sale and not chasing a falling market.
His parting shot was, tonight’s dinner conversation will be interesting.
Zieg Hiel Wynne Liberals
“http://news.nationalpost.com/news/canada/canadian-politics/ontario-liberal-to-apologize-for-calling-cops-on-mom-protesting-cuts-to-autism-therapy”
Don’t say anything to these Liberals or they’ll send the brownshirts to your house. Now get on your knees to the New Stalinist Empire of Ontario
BTW DOC,
“Annoying to see our colleagues living it up in large mansions in Shaugnessey because they were born 20 years earlier to a lower housing market. ”
I’d be annoyed to be paying those Shaugnessy property taxes at 20 grand a year.
#16 For those about to flop… on 05.24.16 at 7:07 pm
You fooled me!
In my defence, Trump blurred the line between reality and satire…
Clueless in Vaincouver.
It is offshore money that is driving the Vancouver market–no one here pays millions of dollars for a house. Why else is this city so much more expensive than anywhere else? Christy Clark has created a haven for offshore speculators to park there money. Why don’t you show posts that challenge your opinions instead of simply deleting them? You would have a lot more credibility. Don’t worry, you won’t lose your Asian clients.
That is why you get deleted. — Garth
Sucks to have bought a semi
Great post Garth. Hope you feel better soon. Keep up the great work, I appreciate it immensely
#1 For those about to flop… on 05.24.16 at 6:26 pm
This is what’s really going to go down in the next U.S election.
Donny Rump is going to quit the Republican Party at the last minute and try to run as an independent but voters won’t go for it.
The Republicans will be left to scramble and all the people that were seeking the nomination before say “Forget about it” as they are over the mud slinging.
We will be left with two female candidates…one is a hardened criminal…desperate for money that will let nothing stop her from getting into the White
House…..
+++++++++++++++++++++++++++++++++++++
and the other one is “a convicted criminal” Martha Stewart…
Aint “Murica” awesome !!!
“Splintered-tail-fin-&-body-parts-in-a-smokey-hole”
That’s the best line. Where’s it from?
That MD sounds just a little entitled.
No way. Vancouver is the biggest bubble since Japan. Japan is still down 75% from peak after 30 years. Vancouver will be worse off.
http://thejoyfulinvestor.blogspot.ca/2014/10/isit-time-to-invest-in-japanese-housing.html
oh great – now I hear that 37% of Canadians were “caught short” in the last year – along with a whole host of similar depressing and unbelievable statistics released by CHMC
Garth – I need some financial advice – isn’t “caught short” when your wife closes her dress in the car door? I didn’t think it had anything to do with money
This person doesn’t know if she has a pension plan or not?
I cannot believe how stupid people are – not the ignorant, but the ones who hire them.
How can they possibly add anything to any organization?
And I can’t get a job because their bloated carcasses are occupying the chair I should be in.
“With electric and autonomous vehicles on the way, are we in the eighth inning of the oil era?”
Written by an oil guy, not a greenie.
http://business.financialpost.com/news/energy/with-electric-and-autonomous-vehicles-on-the-way-are-we-in-the-eighth-inning-of-the-oil-era?__lsa=2f91-ba9c
Wow … so many RE haters on here ….
A poem for james.
The disposest and those oppressed who drink the holy water.
The teacher preacher filled their heads with a road that leads to slaughter.
The Smoking Man came on down to save there sorry ass.
The teacher preacher mad as hell sent em in to try and talk him down.
The Smoking Man laughs and smiles knowing they’re all insane.
The disposest and those oppressed will drink more holy water.
By Dr Smoking Man
60/40 is just digits on a computer ….
Vancouver may flop sometime in the distant future but the tsunami of diaspora money will continue for now. FINTRAC, CMHC, Revenue Canada, Govt. of BC, the charered banks, your elected (and unelected) representatives are addicted to the cash. A previous premier of BC was turfed out for taking a paper bag of cash from a realtor, the current premier entertains the “paper-baggers” at invite only receptions to collect her allowance. Interesting times we live in.
“…a husband-wife doctor team in joint practice, earning $800,000 a year. They own a million-dollar condo and a half-mill place in Whistler, plus $80,000 in watches, $60,000 in stocks and $120,000 in cash.”
**********************************************
These so-called ‘doctors’- I’m almost sure – got into medicine for $$$ and not as an innate calling to heal.
Can infer this from the lifestyle ‘clues’…
Hope we never cross paths!
Besides, a PhD. can just as easily stand for:
“Piled Higher & Deeper”
IQ and Brainwashing are NOT mutually exclusive
#30 Andrew, I would only need to earn $800,000 before taxes for one year before I was financially set to retire. One year, dude.
Two years, oh my God, I would be living so very very well.
I’m currently saving every penny I can, enduring the commute from hell in a work environment where everyone around me is being laid off one by one, just to make sure the nest egg is big enough for my retirement. The idea of muffing up a yearly salary of 800Gs just boggles the mind.
If either of the 800Gs’er are reading this, my only recommendation to you is to nix any more real estate/car purchases/etc until you have a million each in the bank saved for retirement.
#47 y+f
Wrong my young friend. Some of us have seen this movie before.
We know the ending.
We won’t spoil it for you..
Carry on.
When I see what’s happening in Vancouver (YVR, that is), the time tunnel sucked me in and shot me out to that cold night of Jan. 20, 2000 when I was quite bundled up outside watching the total lunar eclipse with my Bushnell 10 X 50 binoculars. Luckily I adjusted the focus before the grease in it got too cold and the adjustor went stiff. In the background I hear Livin’ la vida loca by Ricky Martin followed by Hows it gonna be by Third Eye Blind playing. So, why January 2000 you ask? Because what I saw of how tech stocks and the tech heavy NASDAQ (which 2 years later became known as the Nauseate DAQ) kept going up, up, up, up looked a lot like the chart I see above. Garth, are you a plagarist?
Right now, while enjoying the beautiful red-orange glow of the moon deep in the earth’s shadow, I recall how what was happening with tech stocks looked exactly like what happened with gold 20 years ago to right to the month. Oh no, now the time tunnel has sucked me all the way back to January 1980! What’s that new wave tune I hear for the first time by Gary Numan? Here in my car, I feel safest of all, I can lock all my doors, it’s the only way to live in cars………
Trudeau, what can you say about this wastrel? Could a PM make Canada look any worse? This is Nigerian style corruption.
“http://news.nationalpost.com/news/canada/canadian-politics/trudeau-says-taking-day-off-from-japan-trip-for-wedding-anniversary-about-work-life-balance”
He flies his ‘princess’ to Japan on the taxpayers dime on government business and then takes a shocking ‘time out’ for ‘work life balance’?
Sorry Junior, you don’t get to use the government jet to fly your ‘princess’ to Japan ( supposedly to conduct the nations business) and book a fairy tale resort hours away from all the other national representatives?
Look at how the Trudeau Liberals are trying to spin this. Did they even know that Junior was going to ‘go off’ again with this really arrogant obvious stupidity?
Ask yourself, if this had been Harper or any one associated with him wouldn’t the CBC and other crazies be setting their hair on fire? Was Bev Oda’s $20 orange juice expensive compared to what this wacko has just done to the public purse?
“….Annoying to see our colleagues living it up in large mansions in Shaugnessey because they were born 20 years earlier to a lower housing market…..”
_________________________
Yeah, but they spent $80,000 on watches!
That’s gotta be worth a couple of extra polo ponies on a golf shirt.
#29 jess on 05.24.16 at 7:50 pm
a little slow educating their agents and non existent compliance officers
..” sample group tested by Fintrac had poor showing of complying with proper rules….At least 85 real estate companies have not implemented a plan showing how they are trying to detect money laundering and other suspicious transactions, nearly 15 years after they were required to do so.”
———————————————————-
An agent sells a house fills out the Fin track form
Name, address,phone number, I.D. pass port.drivers license. That’s it ,what else can an agent ask for dna?
The bank get the application for the mortgage and the source of the down payment, If it is a cash deal the Lawyer deals with the money!! They are looking at the wrong place to find money laundering if they are looking at the Real-estate sales people or the broker !!
Lefty mind fkd students disrupt milo university tour.
The party of peace.
http://www.breitbart.com/tech/2016/05/24/milo-yiannopoulos-protesters-storm-stage-depaul-university/
#37 Dave on 05.24.16 at 8:19 pm
It is offshore money that is driving the Vancouver market–no one here pays millions of dollars for a house. Why else is this city so much more expensive than anywhere else? Christy Clark has created a haven for offshore speculators to park there money. Why don’t you show posts that challenge your opinions instead of simply deleting them? You would have a lot more credibility. Don’t worry, you won’t lose your Asian clients.
That is why you get deleted. — Garth
———————————————————-
Dave, you know better than that Mr. Turner does not have Asian clients because according to you they all have their money in Real estate ! Lol
YVR RE, who cares…. boring! people are nuts what else is new
Now more importantly
TAX by Albertan ass…. and at the end not a single new pipeline will be built.. .Hey, soon we’ll be as bad as owetario. …so which province is actually a ‘have” one??
http://www.theglobeandmail.com/news/alberta/alberta-introduces-ambitious-climate-change-legislation/article30131319/
Ever wonder what it would be like to live in a place where an unseen virus infected the thinking of otherwise normal, sane people? People like yourself, various ages, trades, talents, incomes. A few are not yet infects by this virus, which doesn’t kill the host directly, and will only be activated when many others of like mind say enough.
Yes, the disease is Real Estate covetousness. It begins simple enough, emulating what worked bore, and recency bias emboldens one to take more chances, more risks. Every day you hear of winners in this game. Just a bit further, a bit more. I should sell right now, I got this crazy dollar good offer, but where would I go?
Then, imperceptibly the market turns. No one saw it at first, the prices listed today are dead. They need trimming. There is talk of raising rates, but it hasn’t happened yet. The neighbor just bought another bigger place, hopes his sells by the end of the month…. Then it doesn’t.
Much like that fearful and loathsome creature, Mr. Market who takes us on a breathtaking run up, 20-30-35%. Gee we’re rich, sell some and capture some of them gains. Few ever do, it waddles, waffles falls 8%. Recovers. All is well. We go along making lower higher, and lower lows. You grumble when you get your statement. Then it is calm, until the outside force tumbles the market. It keeps going down, a bit here, more there. Now we’re down 22%. Oh shit! Why didn’t I bag those profits? Oh well.
You sit tight, it falls another 15% over the next few months. Now you’re off 37%.
Oh, sounds like you have seen this picture, too? I did 2008. Saw a similar one with Real Estate, starting in 2007, but didn’t get really interesting oil later on.
You gonna eat turkey, or be one?
It’s a yes, or no choice here. Timing for now, is in your hands.
I get a charge out of watching viruses spreading, and really there is no cure, except to refuse to be infected.
So, for those who never saw a real estate crash, they’re real, painful, end in BK for many. Go ahead, make your bets.
M64WI
#48 Smoking Man on 05.24.16 at 8:54 pm
A poem for james.
The disposest and those oppressed who drink the holy water.
The teacher preacher filled their heads with a road that leads to slaughter.
The Smoking Man came on down to save there sorry ass.
The teacher preacher mad as hell sent em in to try and talk him down.
The Smoking Man laughs and smiles knowing they’re all insane.
The disposest and those oppressed will drink more holy water.
By Dr Smoking Man
—
You can do better than that!…slug back a another bottle of what ever…. Let’s get the drunk version……
Tide may be turning in the GVRD………..completely anecdotal, but things are starting to feel different.
I’m starting to notice many more of those real estate agent directional signs on YVR suburb street corners now, and listing signs in the front of houses that don’t have a “sold” sticker slapped on the front in the first 24 hours.
Many condo developments still in the hole seem to have trades double shifting and working on the weekend. Might be some urgency to get the buildings done and listed now that there are so many builds going on.
Nearly everyone I know over the age of 40 who owns a house is depending on it for retiring. One friend is separated, bought her husband out of the place on the North Shore (he immediately bought a new condo at Lonsdale because the bank manager told him “prices will only go up”). She now has a massive mortgage is is just breaking even with help from her mother. She’s planning on selling seven years from now when the youngest kid graduates from grade 12 and retire, and is depending on her house price always going up.
Another friend has a fully paid up house in Burnaby, 65 years old and never really renovated. She’d like to sell but her husband says he “doesn’t want to move twice” before he retires in five years, and that they will make that much more money on the sale.
And this from the Vancouver Sun. –
http://vancouversun.com/news/local-news/extreme-makeover-volunteers-renovate-home-for-aldergrove-single-mom
And this advice to another low wage earner with not much in savings –
http://business.financialpost.com/personal-finance/family-finance/with-just-a-single-income-buying-a-home-and-retiring-in-10-years-will-be-a-struggle
I just don’t talk about real estate here any more. It’s started to feel like if you deviate from Received Wisdom you get mocked like Morgan Kelly in this video – remember Ireland?
https://www.youtube.com/watch?v=Gd6ZwqLePC0
Change the accents, and they could be talking about the lower mainland.
I’m just from Vancouver returning back to Bay Area. I have to admit that despite all denial of no offshore money influencing Van market, anecdotal shreds of evidence of opposite situation is quite noticeable.
A bunch of young Chinese driving all sorts of BMW/Audis in Richmond. Showing in the window off their hands holding cigarette, all fingers covered with gold. They look sooo just-of-the-boat.
Talked at the dealership to bmw rep, they push 200 cars a month. 10-15 min in sales. And even the lot boy knows that “rich people from china are buying everything and soon it will crash”. Wut?
But at the end – it doesn’t matter who’s pushing it (I’d say its stupid and greedy Canadian banks allowing this). It will crash hard for sure, it just against physical laws of Universe that Canadians would make 1.5 mil on a stupid house in 10 years and keep it.
Rofl with this pic Garth you’re the best !
I met with some clients today who between them have a household income of $120k, and have a SFH in Vancouver worth about $1m-$1.5m MORE than what they paid for it 15 years ago. So what do they do with their new-found wealth? Maybe sell, and rent? Retire NO! They…..buy MORE real estate, and mortgage it to boot
a lot of established professional people are selling and moving out.
Kevin O’Leary sounds a lot like Garth:
“In 36 months, three things will have occurred:
No. 1, there will be no wage inflation in this country — zero. For the 14th year, working Canadians will not have had any appreciable increase in what they make,” he predicts.
“No. 2, millennials in their 20s will still be working as interns at $8 an hour. There’ll be no jobs for them.
“No. 3, the value of your home — the No. 1 asset for Canadians — will either be stagnant or down.
http://news.nationalpost.com/news/canada/canadian-politics/john-ivison-kevin-olearys-mission-to-bring-adult-supervision-to-ottawa-is-about-to-start-in-earnest
US real estate crashed hard in 2006. You can read about it at whatever level of detail you like. It looks like it’s going to be worse in Canada.
What explains the low rental vacancy rate in YVR other than supply and demand for housing being out of balance?
“a husband-wife doctor team….$80,000 in watches”
Nothing more needs to be said.
I had a colleague that used to say to people:
“NO MORTGAGE, NO FUTURE!”
#47 young & foolish on 05.24.16 at 8:49 pm
Wow … so many RE haters on here ….
——————————————-
Yes! Don’t you hate it? You should. If not, you will…
(keep reading this blog)
Hey Garth
Does the Bank of Canada pay dividends to the treasury?
1.8 mil chart will be nothing compared to 2020.
3.4 mil is my prediction by 2020.
5.2 mil by 2025 and so on and so on……..
#67 dude
Airbnb /VRBO huge impact. Cities that attract a lot of tourism around the world are struggling with how to deal with them.
Speculators leaving apartments empty for whatever reason
Very little rental stock has been built in the past 20 yrs.
#15 Smoking Man on 05.24.16 at 7:06 pm
Sucks to be a renter.
Got to find the sweat spot where boomers unload to move to Windsor or some cheap place.
Then again Windsor prices about to lift off.
Windsor prices have already left the runway. 1200 new Chrysler jobs will do that to a market. Early bird Toronto landlords started buying properties 18 months ago. Great prices compared to the rest of Canada.
Damn
https://www.youtube.com/watch?v=LAZUsCONjIQ
You buggers think I’m kidding when I say Live for today.
Whenever I here his voice, I see the Canadian Flag, beer boats, and the beauty of a Canadian long weekend.
Americans will never understand this. They haven’t lived it the same way.
Damn it.
#62 Wild Albertan Gonads on 05.24.16 at 9:53 pm
New poem not coming after I’ve taken your advice. The news on Gord Downy got reflective.
A safe journey to the nursing home at the end of life is not in my plans. But I’ve seen it unravel before my eyes. I can’t do it to my kids no matter how much I hate em.
It maybe in others peoples plans, you know, the schooled.
Pay for obidiance certificate, follow someone else script, sacrifice, get old and die.
Got the Hip on the buds. A wee tear for Gord.
Break a leg
The sport people in this country are best at is gouging. Gouging only works when there is limited competition. Gouging has assisted the rise in housing price big time. Builder asking 200k more than last year for the same pre construction house. And this is in Oshawa. Not kidding. All the builders are in a cartel or something. Or maybe they have unionized in secrecy. The consumers are being screwed big time. By builders, Rogers, Ttc, Hydro one, …
Then again Windsor prices about to lift off.
———————————–
Been looking @ Windsor/ Sarina as a good place to rent
a nice hi rise after selling or leaving my paid off home.
You know when i get old.
It has the best weather in ontario.
Enjoy cross boarder shopping while enjoying our some
what free stuff, best of both worlds. short hop to Florida cheap gas, milk,beer,tires ect.
Free trade has not worked well for the workers.(ask them) Hence the Donald
#74 Cash is King on 05.24.16 at 10:48 pm
#15 Smoking Man on 05.24.16 at 7:06 pm
Sucks to be a renter.
Got to find the sweat spot where boomers unload to move to Windsor or some cheap place.
Then again Windsor prices about to lift off.
Windsor prices have already left the runway. 1200 new Chrysler jobs will do that to a market. Early bird Toronto landlords started buying properties 18 months ago. Great prices compared to the rest of Canada.
…..
Great now I will half to be an retired illegal living in trailer park in Arizona after I blow all my loot living.
How on earth can anyone work somewhere & not know if they have a pension plan or not? Does this woman never look at her pay information to see what her deductions are for? Even just to check that she IS getting paid for the hours worked & that her vacation time (if itemized) bears any resemblance to what she should be getting?
As for the couple buying now because they have friends who own in the desired area (& resent that those friends bought when things were relatively inexpensive) whoa Nellie. That mentality boggles – so if your friends jump off a bridge, will you do that too because otherwise they get something you don’t have? Try thinking instead of envying others for what they have that you don’t. Would you envy them if they had cancer & you didn’t? So why do you care if they own in ‘Kits’? There ARE other, just as nice places to live. Don’t drink the Kool Aid!
#58 Smoking Man on 05.24.16 at 9:41 pm
Lefty mind fkd students disrupt milo university tour.
——————————————————
The whole world seems worried about Trump, while the far bigger danger is the radical, regressive left.
@#13 Capt. Serious
I went into my GREEN bank today and the teller told me I was “pre-approved” for a $20k unsecured LOC. I just laughed and told him that I didn’t need it.
I then asked him who applied for it? He said “No one did, they (whoever that is) look through profiles and approve people for LOCs based on what they see.” I told him no again and as I was leaving he said “well when you need the money it won’t be there, because we give you an umbrella on a sunny day.”
How do you know someone has $80K in watches?
Don’t worry they’ll %#*ing tell you
@ #67 The Dude
The vacancy rate that gets published and quoted is the rate of vacancies in rental purpose built multi-family buildings. It doesn’t include condos, SFHs or suites that people rent out. There is very little purpose build housing in Vancouver and, because it is cheap, it goes fast. If you are looking for a private rental (which what almost all Vancouver rentals are) and you are willing to pay 50% of the carrying costs (for example, 5000/month for a house that sells for 2M, or 2500/month for something that sells for 1M) you will be spoilt for choice. In a normal rental market, the renter pays 110%+ of carrying costs. Nobody even tries asking for those kinds of rents in Vancouver. Why? Because there is way too much supply at lower prices and not enough demand to absorb it.
So sorry to hear of Gord Downie cancer but maybe he could interject some fore thought on VYR and TO RE.
His brain is far more advanced, despite a terrible affliction…
https://www.youtube.com/watch?v=aGRNEJiD3PY
http://www.businessinsider.com/hedge-funds-betting-against-australian-housing-2016-5
Canada next?
Hayzeus smoking man, could your lungs or liver please give out.
What a waste of skin you are. Shut up and do something good for humanity.
Irony Defined?
Irony is complaining that people are clueless while copying a real estate chart that shows prices over a 40 year period on an arithmetic scale when the math requires a logarithmic chart to properly show the trend.
Any level of exponential growth such as even 2% per year eventually “hockey sticks” on an arithmetic chart. Good for inciting the mob though.
#72 charts on 05.24.16 at 10:39 pm
1.8 mil chart will be nothing compared to 2020.
3.4 mil is my prediction by 2020.
5.2 mil by 2025 and so on and so on……..
——————————————–
LOL! We have our Greatest fool! Ding ding ding ding ding!
#72 charts on 05.24.16 at 10:39 pm
”1.8 mil chart will be nothing compared to 2020.
3.4 mil is my prediction by 2020.
5.2 mil by 2025 and so on and so on……..”
———————————————————
And the average wage will be $500,000 per year right? That was funny.
The longer this goes on, the more insane the chart, the greater the house lust that Judith references, the more I’m coming to believe that the landing will be hard.Garth
////////////////////////////////////
Well boss,you know better than me but I wrote a post maybe a month ago saying virtually the same thing.
The stuff I see at work is breathtaking and made me switch from namby pamby,”I don’t want to see anyone get hurt,I hope Vancouver has a soft landing” ….to this thing is gonna crash hard.
This thing is gonna go down like a fat kid on a see-saw…
M41BC
Dang!
These comments are all over the place!
What I love about this blog!
@ 55 Vern Staples
How did you celebrate your 11th wedding anniversary?
If you email your MP’s office they would be happy to send you the rules and terms and conditions that all spouses/family members must follow when accompanying their spouse on government business trips.
Lastly I detected some Metamucil laden typing in your post…you need to lighten up a bit or that vein throbbing in the middle of your forehead will pop and you won’t be able to clear your browser history and then everyone will know….
Its not a hobby anymore, its an obsession, eh?
If the Vancouver market is insane, then call it. Go on record and say “The market WILL crash and not correct”.
But, we all know what the true driver of this market is. Lets continue to deceive.
DELETED
Hi Garth
Two article (which you’ve probably already seen)
http://www.macleans.ca/economy/economicanalysis/the-anatomy-of-a-housing-bubble/
Heard the classic house horny, gotta have story today.
A coworker can only afford out in the valley.
The house he has found is an ex crack house.
And there’s a bidding war.
Finally bought a place on the Sunshine Coast.
I lost 3 bidding wars but got the forth.
I bid/paid 130k over asking on a 440k listed house.
The agent said that since the Chinese have realized that the coast is mainland that they have shown up in swarms and are buying multiple properties up.
Many sight unseen.
Hence the markets up 30% in 5 months.
Soon anything in the vicinity of Vancouver will be very expensive.
“fickle as a trophy wife”
Hey, don’t knock it if you haven’t tried it.
More money spent on watches than stocks?
Time to get a reality check.
Question to the blog dogs and to Garth:
I might be missing something. Often when the benefits of a balanced portfolio are explained the argument is that markets can go up or down, but the long-term trend has so far always been up. We usually hear about how in any 10-year period the market is going up.
When I look at the chart of the Vancouver SFH prices, it seems that at any given 10-year period prices have climbed significantly. Any drop was short lived. Even for people who bought at the top in 1980, and who had a relatively long correction, by 1990 prices we were back higher than when they bought.
So, if we generally hear on this blog, quite often, that it is NOT different this time, why would the next correction be different than any that we see in the chart?
I understand that buying a SFH as a speculative investment has its down sides (high cost of maintenance, interest costs with rate uncertainty, etc), but on the speculation side, if we try to see where the asset value will be in 10-15 years, learning from history would suggest the value is going up. This chart is showing a trend not all that different from a stock market – ups and downs, but generally up long-term.
So – why is it different this time? Why is the next correction going to be more painful and reduce asset values greater and for longer than the previous ones?
LOWER INTEREST RATES MAKE HOUSES MORE UNAFFORDABLE !!!
Lowering interest rates drives house prices higher.
Accordingly;
1) Down payment amounts increase.
2) Mortgage principal amounts increase.
3) Land transfer taxes payable increase.
4) RE sales commission amounts increase.
5) RE taxes ( based on the higher assessments) increase.
Mortgages amortize over long periods generally ( 25 plus years) during which interest rates will undoubtedly rise from their current all time lows.
So, (and certainly over the long run), lower interest rates actually make it less affordable.
The FOMO buyers tend to not weigh these facts in their manic pursuit.
Who said doctors are smart?
If they were, they would be looking to move practice to a more affordable city.
Canadians Love Justin!!!!
http://www.msn.com/en-ca/news/canada/canada-pm-trudeaus-popularity-soars/ar-BBtrWNa?li=AAggNb9
Last week’s little drama means nothing. SHAME on the NDP for trying to block the Tory whip like high school thugs, SHAME on the Conservatives for comparing Justin to criminals (Though the Tories certainly know about criminals!)
Every elbow from now on will be worth another 2 points up in the polls!
Go ahead Justin, elbow Freedom First and your support here will go up by 50%!
People care about LEADERSHIP, not jealous conservative backlash.
Way to go, Justin!
Sunny ways, friends :) :) :)
#101 Naive question on 05.25.16 at 6:20 am
——————————–
Yes you have accurately described your question.
One cannot compare a basket of hundreds of diverse financial instruments and their long performance over a dozen decades with a single asset (house) whose value is subject to a variety of factors.
@Naive question
Companies create wealth, houses don’t.
That’s why in the long run houses values roughly follow inflation. Companies values actually grow.
Corrections match past excesses, the last US correction was a doozy because excesses haed been epic. They are obviously epic in Vancouver and GTA.
Predicting the when and how of the next correction is equivalent to trying to time the market, an impossible task really, success is pretty much random. Do you want to make financial decisions based on randomness?
@#55 Vern
Please. Spare me. Those “leadership” meetings are usually prearranged months in advance. Or Trudeau has the flu and didnt want to vomit on the Japanese PM like George W Bush did a few years back.
Wasting taxpayers money isnt an exclusively Liberal hobby…..
Herr Harper was so much more frugal.
I guess you forgot the time he was in India for a Commonwealth conference and had “his” armoured limo flown there on ANOTHER govt airplane because the armored limos the Indian govt provided all the different leaders (Australia, England, etc.) just werent good enough….
What did THAT little exercise in taxpayer dollar defecation cost?
We could cash in on the house lottery here in Unionville, but with retirement next year, we would lose on the infrastructure amenities our tax dollars built over the last 30 years. Book on retirement states live in a locale with lots of trails and destinations at the end of the trails…around me, grey dog and I walk trails to library, coffee shops, grocery gift shops, restaurants. Bus at end of street takes me directly to hospital, no transfers. Do I give this up to be car dependant in Windsor for additional 1M$ in bank? We have done our retirement numbers and will be comfortable without selling and this Grey Dog likes to have convenience at fingertips.
#93 Metaxa,
don’t mind Staples. Picking on the new PM is neither a hobby nor an obsession for him, but a trolling job he has to grind away at on behalf of the Conservative Party of Canada.
Good thing he didn’t know that Bev Oda’s orange juice was only $16!
Selling an over priced asset like a house is fairly easy to time – US interest rate inversion. Every recession in the last 100 years came 3-6 months after an inversion. This is the predominant factor and the rest is just noise.
#17 Entrepreneur on 05.24.16 at 7:14 pm
….”What bothers me is when Premier Christy Clark and Major Gregory Robertson both say that they do not want Trump’s name on his building. What, are they kidding! His name, his building, his business venture, what part of entrepreneurship do they not understand and they are our leaders. Does anyone else feel this way?”
If so, yes, absolutely, it does bother me. A lot. As they are allowing “market forces” in re free reign, why the he!! would they object to DT’s name on his building. He ought to tell them to take a flying leap……….oh, wait, perhaps he will, in more ways than one……..
The steaming stench of arrogance.
I don’t know why people believe housing should follow inflation in Toronto. We really should not look for patterns in housing back more than 30 years (over a hundred years I am sure everything smooths out). Since 1990 there have been two major housing corrections, and they were relatively short-lived. The correction of the 1990s turned back up by 1996. The correction of 2003 was too short-lived to mention. Just like people learn not to dump stock every time we have another stock correction, so too people learn from prior housing bubbles not to dump at the first sign of trouble. Talk to people with houses in TO. They expect some type of down turn shortly. But they are also planning to hold during the down turn, because they now know it will come back soon. Maybe this is not true for people buying starter homes in Burlington, or Bradford. In Toronto though, the few hundred thousand families lucky enough to own a SFH aren’t going anywhere in a downturn. Half of them are in any event “wealthy” by any standard. This won’t end well: for the idiots and vultures who think wealth building is about trying to
capitalize on other people’s misery. In five years there will be some deals to be had. But it won’t be in Forest Hills, Rosedale, Hoggs Hollow, Leaside, Lawrence Park, Bloordale, Yonge and Eg, and so on. If you want a deal, try the north-western corner of the City which is basically Brampton.
#101 Naive question on 05.25.16 at 6:20 am
Question to the blog dogs and to Garth:
I might be missing something. Often when the benefits of a balanced portfolio are explained the argument is that markets can go up or down, but the long-term trend has so far always been up. We usually hear about how in any 10-year period the market is going up.
When I look at the chart of the Vancouver SFH prices, it seems that at any given 10-year period prices have climbed significantly.
__________________________________________
The YVR Market is thoroughly and completely detached from any affordability metrics you can name. SFD’s cost like 20X family income. This has given rise to theories like HAM driving the whole market as folks do understand that the prices are way too high for the region.
HAM was a factor in kicking off the insanity, and continues to drive the high end of the market, but the current belief that houses always go up has provoked major risk taking in order to “buy in” to these “investments” by just about everyone.
1. Move uppers with cash from sale of old house
2. Specuvestors leveraging existing RE to the max to buy more
3. Bank of Mom and Dad financing new owners
4. Extremely loose lending practices
5. Dirt cheap lending rates
Everyone wants in.
IE. The perfect storm for housing insanity.
All the above is laced with fear and greed:
1. FOMO on massive RE profit
2. FOMO on home ownership altogether
3. Prevailing culture of disdain for non-owners
Many folks made craploads of money over the last 20 years on YVR RE. But look at that hockey stick in the graph. Ask yourself a few questions.
It takes a special fervor to see value in a soggy, mildew encased basket case of a house for 1 mil+. The good Doc in this blog makes enough money to be a little more objective about value – ie there is none in a deal like this.
Somewhere along the line, folks are going to start thinking that housing can’t go up anymore, and that will be the end of the line.
Where will prices land? Who knows, but I sure wouldn’t bet that HAM can single handedly support the entire RE market well above what the traditional metrics of affordability say they should be for the incomes in the area.
Specuvesting in YVR RE is a matter of faith at this point, fundamentals went out the window years ago.
Choose your doctrine, and be judged by it.
This RE market is almost getting boring, get on with the correction already.
When this RE market craps out, I wonder what politicians will do to fix RE so this doesn’t happen again. They gotta lay the blame on someone, even thought hey knew it was coming, it would be unpopular to disrupt the RE market now though, might not be able to hit the monthly quota for selfies then.
Will it be through making all RE data freely available, will it be ensuring 10% down so people have more skin in the game, making all offers to purchase publicly available to view, regulations for the stats the RE industry releases monthly…definitely won’t be the politicians fault, the blame will be laid on the RE industry somehow.
#85 Macroman
The Downie family actually sold their house in Riverdale this past February for ~2.25mm. Now we know why.
BJ
I told him no again and as I was leaving he said “well when you need the money it won’t be there, because we give you an umbrella on a sunny day.”
Well, the last part is definitely true. You’re not going to get a new emergency line of credit in an emergency. You need to have it before the emergency occurs.
here’s the link for those curious, it’s beautiful.
http://indie88.com/take-a-look-inside-gord-downies-spectacular-riverdale-home/
#55 Vern Staples on 05.24.16 at 9:20 pm
Ask yourself, if this had been Harper or any one associated with him wouldn’t the CBC and other crazies be setting their hair on fire? Was Bev Oda’s $20 orange juice expensive compared to what this wacko has just done to the public purse?
________________________________________
Libs define the extremities of a double standard.
T2 could purchase a solid gold AK47 off the black market using public money, execute 100 cute cuddly kitties in Parliament, force feed the offal to the opposition, and the entire Lib Caucus would rise in a thunderous volley of applause.
Imagine Harper elbow dropping a member of the NDP, then leaving his kids with taxpayer funded nannies and flying off to an exotic vacation on the tax payers dime when he is supposed to be working LOL! Every Lib blockhead in Canada would be slitting their wrists, and committing acts of self immolation.
All Trudeau had to do was: “Hey, guys – **work balance**”, and the CBC gets busy writing supportive articles about what a great husband T2 is LMAO!
#106 pBrasseur
“Do you want to make financial decisions based on randomness?”
Well, yeah… in a slightly more ‘enlightened’ way.
When one invests, doesn’t one TRY to have done the ‘due diligence’ before plunking down their money?
Most people don’t buy into anything ‘at the top’ do they?
Sometimes, even your best insights, due etc. leads you into a dud investment, at least for a while.
Whether investing, buying dirt, or a box in the sky you will never be assured it was the ‘right time’ to buy, or a ‘fair price’ you paid until after the purchase.
You takes your chances, and you pay up! When you sell, if you sell, the final accounting is performed.
#78 meslippery on 05.24.16 at 11:15 pm
Then again Windsor prices about to lift off.
———————————–
Been looking @ Windsor/ Sarina as a good place to rent
a nice hi rise after selling or leaving my paid off home.
You know when i get old.
It has the best weather in ontario.
Enjoy cross boarder shopping while enjoying our some
what free stuff, best of both worlds. short hop to Florida cheap gas, milk,beer,tires ect…”
Good lord…you need to help the masses….people moving to Windsor…..just because it’s cheaper, and they can make cross-border trips to Detroit no less!
I heard housing prices in Baghad are also low and cross border trips to Kuwait are possible..just ask saddam…..oh yeah and the region has 1-2 less sandstorms per year than the rest of that area….go for gold y’all
#86 rainclouds on 05.25.16 at 12:24 am
http://www.businessinsider.com/hedge-funds-betting-against-australian-housing-2016-5
Canada next?”
has been asked on here many times….what is the best way to bet against Canuck real estate……maybe Garth can set up a contrarian hedge fund?
I tend to think blaming foreigners for our housing inflation is bull, a convenient scapegoat if you will. Yet, I am sure a few others out there will send this link your way Garth…
http://www.cbc.ca/news/business/money-laundering-housing-1.3598894
I know absolutely nothing about how foreign money enters Canada from abroad, or what restrictions are in place. That could be an interesting blog topic…
#112 lee on 05.25.16 at 9:17 am
Are you new to Canada? A fellow millennial? Aging boomer with a short memory?
My parents bought a GTA house in 1992. Sellers basically begged them to buy after initially rejecting their offer. The sellers needed to get out but there was NO ONE in sight who was interested. This was in the inner 905 back when EVERYONE wanted to live in the suburbs. Real estate burned so many people that it was seen as a bad investment.
To you, 1990-1996 seems like 2 minutes, but for people caught in it, it was a financial disaster. Some people recuperated in the mid 2000’s. How does 1990-2006 sound?
That time we had a more diversified economy, room for rates to fall in an emergency, immigration from India/China, and lower levels of household debt.
How do you think it will play out the next time?
MF
Could some of the increase in house prices over the past 15 years be accounted for by an increase in disposable income and a propensity to direct that increase towards housing?
Disposable income can rise faster than total income if a person’s basic living expenses (food, heat, clothing, etc.) stay the same. For example, someone with an after tax income of $50k and basic expenses of $20k would have $30k of disposable income. If they received a raise of 5%, their after tax income would rise to $52,500, but their disposable income would rise to $32,500; an increase of 8.3%.
If people choose to direct their increase in disposable income towards housing, that could cause house prices to rise faster than total incomes.
sm
narcissistic,hardly
he’s not even holistic
he’s just using his shtick,to help those that have been obedience trained.to rekindle a spark within you.
which I suppose makes him an all around nice guy
I’m guessing Judith doesn’t own any YVR real estate and is jealous of her clients, its a nasty trait.
Why do people who don’t own real estate often feel so superior to people that were lucky or smart enough to get in at the right time? Sour grapes me thinks.
As per Garth’s Trump post,
He will be the next president. He’s tapping into an anger and a fear the American people are feeling. They are realizing they have been lied to for 8 years and the “recovery” is seen as a sham more and more every day.
The fear comes from what is happening in Europe the failure, and the west as a whole. “Progressive” policies are destroying the west. The “refugees”, the uncontrolled debt, the useless ZIRP, the useless climate change initiatives, everything to do with the worthless UN, the globalization etc. The Americans view Trump as their savior (seriously).
MF
blog dogs
https://www.theguardian.com/tv-and-radio/2016/may/25/secret-life-of-the-human-pups-the-men-who-live-as-dogs
#112 lee
My GF’s family was wiped out in 1990. Bought more house than they could afford. Now her parents are living in subsidized housing and considering bankruptcy after 26 years of struggling with the outcome. Nice little place, but far cry from their Mississauga mansion with pool, etc, etc.
Shaped her whole childhood and her life. Also meant that her parents couldn’t help her at all financially.
Some of us learned not to live beyond our means, it was a hard lesson, and one which has been thoroughly punished in this market.
They were millionaires, had a fortune from overseas business ventures. The downturn destroyed them. Opportuntiies disappeared overnight and “risk” suddenly meant something.
So go buy some more houses, get a HELOC for the new Porsche. it only goes up! Money in the bank!
Vicissitudes.
As I await recall to Fort McFlambe, I follow the rental market as I may have to move to new accommodation in the next couple of months.
Expectedly, vacancies are dropping and rents are increasing noticeably already. Mitigating the changes somewhat is a raft of families that will decide not to return.
Meanwhile back in lala land, the hedgefund sharks circled while reading the following…..
“BMO profit slips, dividend up
“Bank of Montreal boosted its dividend today as it posted a dip in second-quarter profit.
The dividend goes up 2 cents to 86 cents.
Profit at the Canadian bank slipped 3 per cent to $973-million or $1.45 a share, BMO said.”
You know you are in a bubble when people are telling a couple who makes $800K per year to move to a ‘more affordable city’ when the one they live in has an average family income of 10% of theirs. One of those quotes that should get repeated in the history books.
You are confusing jealousy with pity.
#125 salonist on 05.25.16 at 10:24 am
sm
narcissistic,hardly
he’s not even holistic
he’s just using his shtick,to help those that have been obedience trained.to rekindle a spark within you.
which I suppose makes him an all around nice guy
////////////////////////////////////
This lady got Joking Man’s mixed messages…
M41BC
https://imgur.com/iB2cwWc
Boom,I see the good people of New Mexico rolled out the welcome mat to Donny Rump.
Like all mats, it had a couple of rocks in it…
M41BC
P.S….welcome back WULLY,I wrote you a few times but you were too busy making lemonade.
Hope you had a good break.
#16 For those about to flop… on 05.24.16 at 7:07 pm
Hey Joseph,are you new to the blog?
I will go easy on you then.
What are you having for dinner tonight?
I’m having a big bowl of Satire…
M41BC
No, Con-stipaters just don’t understand ANY humor.
I just love it when JT drops something on them and gets bombed in the “liberal” press. LOL.
Sour Grapes?
#133 BS on 05.25.16 at 11:33 am commented:
Noel on 05.25.16 at 10:34 am
I’m guessing Judith doesn’t own any YVR real estate and is jealous of her clients, its a nasty trait.
Why do people who don’t own real estate often feel so superior to people that were lucky or smart enough to get in at the right time? Sour grapes me thinks.
You are confusing jealousy with pity.
*****************************************
Well, people can legitimately pity current recent buyers.
But when it comes to attitudes towards the price gains made by long term Vancouver and Toronto house owners and even those that bought just a few years ago, there is a ton of sour grapes and jealousy out there. Admit it.
Line of Credit for Job Loss?
#116 Capt. Serious on 05.25.16 at 9:33 am said:
You’re not going to get a new emergency line of credit in an emergency. You need to have it before the emergency occurs.
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Agreed but rre there any rules requiring notification to the bank if you lose your job? I suspect there may be some rules hidden in the terms and conditions.
Is there any chance that running up a huge line of credit, obtained when income was strong, but used after job loss, would be considered fraud?
Just because people get away with running up debts after job loss does not mean it is completely legal to do so.
#55 Vern Staples on 05.24.16 at 9:20 pm
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How soon we forget:
https://www.nhl.com/news/prime-minister-stephen-harper-attends-game-4-of-stanley-cup-final/c-565214
http://ottawacitizen.com/news/national/harper-paid-economy-rates-for-personal-flights-on-challenger-jets
https://www.thestar.com/news/canada/2015/08/13/wright-gets-tough-grilling-from-duffys-lawyer.html
Vappers n Gamers for Trump
http://www.nytimes.com/2016/05/26/us/feeling-let-down-and-left-behind-with-little-hope-for-better.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=photo-spot-region®ion=top-news&WT.nav=top-news&_r=0
#133 BS
You are confusing jealousy with pity.
______________
A net worth of $2m, mainly through massive gains though their real estate holdings – and you think the accountant pities them? That makes no sense.
I bet that same accountant would have advised them to cash out five years ago.
Houses and Wealth
#106 pBrasseur on 05.25.16 at 7:49 am said:
Companies create wealth, houses don’t.
That’s why in the long run houses values roughly follow inflation. Companies values actually grow.
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I agree partially. I don’t know if house values follow inflation even in the long term. Land values in Cities surely seem to rise far faster than inflation. The house itself would likely depreciate if not fully kept up to date.
Houses are a form a wealth.
Anyone who spends time creating anything of value, creates wealth. Each worker creates some wealth in terms of goods and services each day and is on average paid a portion of the wealth created.
True, companies tend to create wealth. They also tend to live very long lives and often do not depreciate.
$ 1 million invested in a house will probably not do nearly as well, in the long term, as $1 million in companies. The rise in the land value will not be fast enough and the house itself tends to depreciate due to obsolescence.
Bombs away………
https://en.wikipedia.org/wiki/Clinton_Cash
The Dr’s. Have it correct. These Physicians see wasted lives everyday. Time is the most important thing. That is why you buy $80,000.00 watch. I want one!
My landlord many years ago told me,”There are two sides to a coin”. I Never forgot those words. He also said if you “want to make $$, go where the $$ is”. “What would you rather sell 10,000 one dollar items. Or 1 ten thousand dollar item”.
I listened!
Socialists, Liberals would have despised this man.
PB43
Clinton Cash to Movie…..
http://www.webcide.com/#!clinton-cash–the-movie-/c9x4
(explosions heard everywhere)
This is going to be a cakewalk for Trump.
#136 Roial1 on 05.25.16 at 12:17 pm
#16 For those about to flop… on 05.24.16 at 7:07 pm
Hey Joseph,are you new to the blog?
I will go easy on you then.
What are you having for dinner tonight?
I’m having a big bowl of Satire…
M41BC
No, Con-stipaters just don’t understand ANY humor.
I just love it when JT drops something on them and gets bombed in the “liberal” press. LOL.
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I don’t think you are going after Joseph in particular ,but I will stick up for him anyway because he had the guts to write back”You fooled me!”when he could have switched of his computer.Trump running as an independent has been floated a few times.Martha Stewart, not so much.
I hope you are having a good day Joseph…
M41BC
#PictorialWednesdayMischief…
#GristForAmateurPsephologists…
[Politico] – Why Bernie’s Bros Might Go for Trump:
Anti-establishment liberals abandoned their party in 1968, and again in 1980. Why not 2016?
…”History shows us that when disenchantment with establishment politics and institutions is high, as it is today, voters don’t always vote along ideological lines.”…
http://www.politico.com/magazine/story/2016/05/why-bernies-bros-might-go-for-trump-213915
#AmericanDreams?…
[NYT] – Feeling Let Down and Left Behind, With Little Hope for Better
..”Ms. Chapman, 47, said she had two master’s degrees and was currently holding six part-time jobs — a mix of clerical, academic and online work, none of which provided health insurance.
“This is not the life I saw for myself,’’ she said….
http://nyti.ms/1XUligW
#YouCan’tMakeThisStuffUp…
[Guardian] – The men who live as dogs: ‘We’re just the same as any person on the high street’
…”While the pup community is a broad church, human pups tend to be male, gay, have an interest in dressing in leather, wear dog-like hoods, enjoy tactile interactions like stomach rubbing or ear tickling, play with toys, eat out of bowls and are often in a relationship with their human “handlers”.”…
https://www.theguardian.com/tv-and-radio/2016/may/25/secret-life-of-the-human-pups-the-men-who-live-as-dogs
FLOP:
Hey Mister! Saw your messages. Thx. Spent 5 days in the Okanagan at BIL’s cabin on the lake. Overcast, mild and rainy. What a beautiful part of BC. I know that if I was sitting on a pile of loot in YVR real estate what I would be inclined to do. Cash out and move there. As long as you are outside of Sicamous, Vernon, Kelowna, Penticton etc. it is a lovely environs. Truth be told though, I have not spent any winter months there and am told that the valleys get socked in with leaden grey clouds all winter. Hence the locals feel compelled to head up Silver Star above the clouds to see the sunshine.
When I was there I had to remind myself of the words of Harry Vardon on how much golf to play.
“Don’t play too much golf. Two rounds per day are plenty.”
“That downgrade means the neutral rate of interest will be lower for sure — for a very long time,” – Poloz
Let’s face it, variable rates are going NOWHERE for years.
Game over for us savers.
#144 Prairieboy43 on 05.25.16 at 1:16 pm
The Dr’s. Have it correct. These Physicians see wasted lives everyday. Time is the most important thing. That is why you buy $80,000.00 watch. I want one!
My landlord many years ago told me,”There are two sides to a coin”. I Never forgot those words. He also said if you “want to make $$, go where the $$ is”. “What would you rather sell 10,000 one dollar items. Or 1 ten thousand dollar item”.
I listened!
Socialists, Liberals would have despised this man.
PB43
///////////////////////////////
Hey PB,yeah the Drs have 80k in watches yet they can’t tell what time it is…
M41BC
#68 betamax on 05.24.16 at 10:25 pm
“a husband-wife doctor team….$80,000 in watches”
Nothing more needs to be said.
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Yeah! That is why you never go to a doctor to learn how to stay healthy.
I always buy Timex, but they have increased over the years. Use to be $25 for a good one, now $65. Must be the new cauliflower. But they do last at least 7 years. Less than $10/year.
$80,000 at 6% would yield $4,800/year. Enough to buy a new Timex, when mine dies.
#122 Brett in Calgary on 05.25.16 at 10:19 am
I tend to think blaming foreigners for our housing inflation is bull, a convenient scapegoat if you will. Yet, I am sure a few others out there will send this link your way Garth…
http://www.cbc.ca/news/business/money-laundering-housing-1.3598894
I know absolutely nothing about how foreign money enters Canada from abroad, or what restrictions are in place. That could be an interesting blog topic…
———————————————————
“Canada tried to stem the tide of Chinese entering Vancouver as thousands of
temporary foreign workers were faced with having to leave Canada because
of changes to the federal jobs program in April 2015.
Many wealthy immigrant would-be Canadians immediately took advantage of
a loophole in Quebec that allowed them easy access to Vancouver. Quebec
always maintained a separate structure in defense of their French background.
Ottawa announced back in 2013 that it was ending Canada’s Investor
Immigrant Program. However, many were still arriving in Vancouver after
applying to a similar program in Quebec that has maintained its own
immigration program under the Canada-Quebec Accord. The immigrants
quickly discovered that they could receive their visas from Quebec, but they do
not stay in Quebec and quickly migrate to Vancouver. The data illustrates that
90% of those arrivals actually end up living elsewhere outside of Quebec quickly
moving to Vancouver. The wealthy immigrants, mostly from China, hand over
$800,000 in the form of a no-interest loan to the Quebec government to gain
their visa……………”
https://www.armstrongeconomics.com/product/canadian-real-estate-report/
I know Garth has political contacts and knows the truth of this
#149 Snoopy on 05.25.16 at 2:32 pm
“That downgrade means the neutral rate of interest will be lower for sure — for a very long time,” – Poloz
Let’s face it, variable rates are going NOWHERE for years.
Game over for us savers.
—
And the RE gorge fest will continue.. people are nuts. Oh well.
RE: RRIF’s – you can also convert your RRSP into an annuity.
RE: “Doomed” – Smart doctor. Would get rid of those cash holdings if I were him.
What’s wrong with a Condo? Decided you want to cut grass, fix broken roof shingles and worry about your house when you’re on vacation? Not enough stress? Own real estate, guaranteed to make you worried about something, all of the time.
#120 Ducks of Windsor on 05.25.16 at 10:02 am
#78 meslippery on 05.24.16 at 11:15 pm
Then again Windsor prices about to lift off.
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Been looking @ Windsor/ Sarina as a good place to rent
a nice hi rise after selling or leaving my paid off home.
You know when i get old.
It has the best weather in ontario.
Enjoy cross boarder shopping while enjoying our some
what free stuff, best of both worlds. short hop to Florida cheap gas, milk,beer,tires ect…”
Good lord…you need to help the masses….people moving to Windsor…..just because it’s cheaper, and they can make cross-border trips to Detroit no less!
I heard housing prices in Baghad are also low and cross border trips to Kuwait are possible..just ask saddam…..oh yeah and the region has 1-2 less sandstorms per year than the rest of that area….go for gold y’all
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You mentioned weather. Today Windsor is 30c and where I live 31 as I type this. Too hot to be working in the sun. Not quite as hot as Bagdad though.
The name of the game in retirement savings is diversification. What I am doing is owning:
1. A rental building (next to the future site of a brand new 19 kilometer “crosstown” underground/above ground LRT in Toronto)
2. TFSA’s: Good things to own. You can keep them forever and the income doesn’t count as taxable. I have filled them with REITs, oil stocks, telecommunications stocks, a couple of railroads, some pipelines, and some banks).
3. RRSP – with a wide diversity of stuff in it. Try to be as diversified as possible. When you are buying stuff to put into an RRSP, you are buying stuff to hold for 25 years. Rule I use is, ask myself, if markets closed for ten years and I couldn’t sell this item, would I still be buying it? If the answer is no, then don’t buy it.
The idea is don’t ever put all your eggs in one basket. Old farming slogans hold true into modern life.
$322M contract key part of Shared Services modernization
http://ottawacitizen.com/news/politics/government-allocates-322m-for-shared-services-data-centre-expansion
Kevin O’Leary said that government is not efficient. This is an example.
James Bagnall basically accepts the premise that big centralized computer centres are better. I disagree. my model for tight cost effective computer centres is the one I developed and ran at Agriculture Canada. I knew the data and the processes, I knew what was important and what was not. Centralized groups have no idea.
Each department should run its own computers. You can still share best practices among departments and in some cases it does make sense to amalgamate some services.
It’s funny that the original justification for Shared Services was the amalgamation of e-mail. E-mail is not that difficult , it’s not that expensive, it’s getting cheaper all the time.
So what will actually make people sell? Same issue in Toronto where listings are way down and prices keep going up. My folks are the perfect example, early 70s with a big 4bed house with a driveway and yard they need to maintain. Sure they wouldn’t mind selling and cashing in but they aren’t into renting so to downsize it would actually still cost them more money vs just hiring some maintenance workers and minor expenses. Big savings, pensions, etc. They live in a prime location where I grew up and there are lots of great schools for young families, but even if they want to downsize it makes no sense.
Everyone is just stuck with their very valuable homes. House rich, cash poor. Met a lady who complains about a house she both 5 years ago and is falling apart, has no cash to pay the bills but she says its worth it because the value went up 150k.
http://www.trebhome.com/MARKET_NEWS/housing_charts/index.htm
Prices are in overdrive these last few months.
Question:
If one is saving for the long haul, which one to contribute to first, if one can’t do both: TFSA or RESP?
A bit on the real estate bubble and the greater fool theory according to Bob Thomson
http://www.macleans.ca/economy/economicanalysis/the-anatomy-of-a-housing-bubble/
@ 118 IHCTD9 who writes:
All Trudeau had to do was: “Hey, guys – **work balance**”, and the CBC gets busy writing supportive articles about what a great husband T2 is LMAO!
I thought the Cons were the party of family values yet you seem eager to deny the Trudeau’s the ability to be a family. He’s working the G7 on the actual day so took advantage of a free day in between the Japan trade mission and the start of the G7.
But you know all that, don’t you?
Situational application of core principles is a slippery slope, once you start down its hard to get back up…see Stephen Harper, Mike Duffy, et al. Heck, pick a con MP or Senator really.
BTW, have you looked at the poll results? T2 way up, Muclair way down..the majority of Canadian citizens beyond those who get their into from The Blaze see this tempest for what it really is…fomented by parties who will NOT be forming any government any time soon.
@ 160 Mixed Bag.
RESP is the education plan for your kids. If you can contribute enough into that to gain the full government bonus I’d do that.
Remember that RRSP is a tax deferral and TFSA is a non taxable vehicle.
So, on the off chance you meant RRSP, and if you don’t have enough to do both then you really don’t need to defer so go all TFSA.
I managed to slide into retirement with my RRSP’s all used up and only my TFSA’s to worry about in addition to other accounts…you know balanced and diversified.
But I’m doubly odd around here…I actually pay someone for financial advice and planning and I really don’t mind paying my taxes. Canada is a wonderful country, full of hope and promise and I’m pleased to do my part so I can get new hips when the time comes.
RE Metaxa BTW, have you looked at the poll results? T2 way up
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Yes, we live in an age of polished images and T2 appeals to image hungry voters. interesting what happened in japan–his image fell flat; they did not buy it. if only Canucks could see their politicians this way, but as we import all other aspects of culture from the states, looks like we have imported the image.
Re: T2 Taking a Day Off
I support it fully. One less day with an idiot representing Canada in Japan the better. Did anyone see his speach? What an embarrassment.
#151 Cramer
”$80,000 at 6% would yield $4,800/year. Enough to buy a new Timex, when mine dies.”
Ego’s are difficult things to control especially for those with loads of loot and envious of their peers.
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