In a moment, a small but poignant example of the troubles we face. First, the latest reason why said pooching will occur.
The only banker in the world who actually matters, feisty little Janet Yellen, on Friday confirmed we’ve come to the end of cheap money. Two more rate increases from the Fed this year, the next one…soon. “It’s appropriate — and I’ve said this in the past — for the Fed to gradually and cautiously increase our overnight interest rate over time,” she said at Harvard. “Probably in the coming months such a move would be appropriate.”
That means the Fed boss is in agreement with her colleagues who have been busy tell reporters (and markets) to expect multiple hikes this year, next year, and beyond. The next one will occur on June 15th or July 27th. And here are the odds, following her words today:
So, it’ll happen, as this blog told you would be the case. No, moist Millennials, rates are not going to stay where they are for decades. And neither will house prices. What you do about it therefore seems quite clear: (a) lock in the five-year mortgage at 2.49% (or better) if you need to keep the house and expect to renew at double that rate (or better), (b) sell at this peak level and look like an omniscient friggin’ genius in two years, or (c) take a cold shower with your dog if you even think about buying right now.
This brings me to Sandy. She emailed yesterday. The exchange was short. Here it is.
Hi Garth. So my question is; what if you don’t have a lot of money to save, after rent payments. Would it not be better to be making those rent payments turn into mortgage payments? That way at least you are investing in SOMETHING, rather than nothing. By the way, we live in Toronto, where obviously both rent and mortgages are crazy. Thanks Garth.
Garth: How do you buy a house without money?
Well we have about 40,000 saved at this point. And we cannot afford a house so it would be a condo or townhouse.
Garth: What is your income? Your current rent? Family makeup? Savings rate? Ages? Jobs?
My husband and I are 34, and we have an almost two year old. Our combined incomes are 145,000. I am a social worker and he is a program manager at a not for profit. Our child is in daycare for another two years at about 1000 a month. After everything each month we put away about 300-400 in savings. Right now we pay 1800.00 a month in rent. I’m afraid to keep waiting to buy – it’s been years now and everything just keeps going up. I definitely feel we’ve missed the boat as our friends places have appreciated like crazy during this time.
Sigh. It’s hopeless. Two people, mid-thirties, minimal savings, professional jobs, university educated, with a kid – and clueless. They suffer from FOMO, sautéed with envy at leveraged friends who have what they do not. On an income of $145,000 they save a piteous three hundred bucks a month despite living costs of just $1,800. If they found a cheap 416 townhouse for only $650,000 and put 5% down, their savings would vanish and their monthly (mortgage, insurance & property tax) soar to $3,500. In other words, screwed. Impossible. With a child to look after, irresponsible. And yet Sandy moans like she’s a victim – missing out on an entitlement. “I’m afraid to keep waiting to buy…”
This is what real estate is doing to this place. It’s toxic. And every day that passes now, we’re a sleep closer to the resolution. Check back occasionally, and I’ll give you a date.
Well, let’s not end the week emotionally hooped. There are some people reading this blog who actually seem normal. Randy (in Calgary) has decided to join FIRECracker’s screw-the-house Millennial Revolution (last weekend’s event here) while Suzy in Van has some intelligence from the most expensive neighbourhood on the planet.
If you own a house, try not to worry this weekend. Seriously. You can always grow cauliflower.
Hi Garth, love the blog and read it almost daily. I rent a comfortable 2 bed/2 bath 1,400 sq ft. condo with numerous amenities, located in downtown Calgary. When I signed my lease for $1,500 per month, I also had the option of purchasing the same unit for $275,000. Had I purchased, the condo fees would have been approximately $950 per month and property taxes roughly $150 per month. My calculations put the price to rent ratio of this condo at 57, before considering any additional costs of ownership beyond condo fees and property taxes. I have a roommate paying $750 per month on a month to month sub-lease for the extra bedroom, rent out the parking space for $275, and my girlfriend chips in $400 per month (plus she’s a great cook). Yes, I pay $75 per month in rent living in a large, relatively upscale condo just a 10 minute walk from work. My annual income is modest ( just a little under six figures), but I max out my TFSA and RRSP every year, which has resulted in an overall tax rate of under 20% of my income over the first decade of my career. Roughly 60% of my income has gone into investments (mostly ETFs), while I live very comfortably on the other 20%, as a happy renter. The video you posted earlier this week about the millennial revolution sounded a lot like my story, as I’m approaching having full financial freedom. You are an inspiration and a bit of a contrarian in a sea of conformists, thank-you for your insightful blog!
Hey Garth – I live in Vancouver’s west side close to point grey and I’ve been noticing that properties aren’t selling quite as fast as they were a couple of months ago. I saw a commenter on one of your posts also mention this and I think they are right. For example one house was listed for over two months and just got taken off the market and also this house for example (see below) has been for sale for almost 3 months and just yesterday the agent changed (not doing her job?). I’ve noticed the same thing on my way home from work a lot for sale for over 2 months. Also a funny story – a friends neighbour sold their house for 500k over asking – everyone was shocked. The agent let it slip that while there were multiple offers all were low except for one. Same thing with a family friends house that just sold over asking. One offer below asking and one offer above but all people see it sold over asking. So all it takes is one idiot. Could this mean we have reached the top? Love, Suz.
196 comments ↓
There is no top in land values
Any slide will be short lived in vanwowser.
Love Real Estate. Every home owner thinks he/she is a financial genius.
FIRST!!
3 Jimmy
Nice work man
Mr. Calgary..Congratulations on your choices and commitment…All the best.
Janet raising in June? Believe it when I see it.
Hey Garth, I been saving and waiting for a long time now and not in a rush either. Let us know when it’s time to jump in and BUY, BUY, BUY…..
The price to rent ratio doesnt mean much when there is zero rental inventory.
Apparently so many have now moved to Chilliwack (1.5hr drive without traffic) that the city is now considered a “Hot” rental market.
Was wondering if things were cooling in Vancouver . Duplex Nextdoor listed for 1.3 did not sell for two or three weeks is sold now.
The record setting 50’er here listed at 2.2 is now 2.2 minus the ext stucco asbestos job currently underway . Big white tent.
Prob 2,5 once it’s asbestos free.
Mother Yellen…… Your magic finger is GOLD!!!!
Renters…… the light is there, I can see it, Can’t you all see it? YES!!!!!!!
Listened to the great one Janet Yellen this afternoon. Sounds like rate hikes are just around the corner – finally!. My guess is July, but if the May jobs report is strong could be June. Picked up a few more ZPR – slow and steady.
She also provided some sound advice for students who are making career choices, which really applies to anyone young and old.
Basic messages: Pursue something you are passionate about; enjoy your work day in day out; work with people who you enjoy spending time with and affiliate yourself with an organization that is aligned with your values – an organization you are proud to work for.
The wife overheard someone yesterday speaking about finishing her spec home in Vancouver. When asked when she was going to sell, she said that her realtor claimed there were very few buyers at this time and she should list in September. and so the cull begins!
We are at a top, even YVR needs a wind break.
Houses over $2M are moving more slowly.
Mind you a 2M house was just 1.6M three months ago.
$950 A MONTH IN CONDO FEES?!
I’ve been living under a rock. That number is shocking to me.
A “condo marketer” disagrees with Garth:
http://www.cbc.ca/news/canada/british-columbia/big-drop-predicted-for-vancouver-real-estate-prices-1.1142304
Bdysktn
Seriously, you think the value of land is actually infinite? Because what, they aren’t making any more?
You could not pay me enough money to live in Vancouver and never could have. Now it is a rat’s maze of traffic hell.
One can buy a very nice place elsewhere and make a great living. The difference in housing cost would pay for a really nice 3 month vacation every year forever. In a place much nicer than Vancouver.
You need to get out of Vancouver and see what other great places there are to be when it is puking rain for weeks on end in the winter.
Yeah! Way to go #3 Jimmy!!! You get a gold star.. now go outside and play on a busy street.
At least I live where the P/R ratio makes it sane to buy.
#1 Bdysktn on 05.27.16 at 6:25 pm
There is no top in land values
Any slide will be short lived in vanwowser.
there was in 82… and it took several years to recover. then from 1990 until 2000, it slid like a toboogan… you call that short lived?
You need a history lesson…
@#8 bdysktrn
“Prob 2,5 once it’s asbestos free….”
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Nah. It’s deflating.
Even “Glow-Ball” 6pm “News” that owes its current existance to the incessant Remax ads is starting to post nightly stories about the unafordability of it all.
When you’ve lost the “no questions asked perennial pimpers” aka Global TV.
Its all but over.
Lets see what the summer selling season brings in the GVRD.
I be thinkin’ the Bank of Canuckda may and try and slide a rate increase during the slow summer months when everyone’s holidaying….
Either way.
Not good for real estate ( Vancouver will never drop) “pumpers” like vous.
I choose to invest in something that people actually need and can’t do without. The business I own runs in same principle. RE fits the bill perfectly for above
Although ETF,s paper assets and a balanced portfolio can do well for someone im sure , people can do just fine without them . I wouldn’t characterize them as a necessity.
Just an observation
I got a call from a contractor last night about going to work on a house in Kerrisdale
I said I’ll do it ,even if just to make Billy Bob happy by not posting too much.
I had worked on a house for them about 1.5 years ago which was in the same area.They are young speculators and I trust you can guess their ethnicity.
The thing that shocked me was they hadn’t sold the original one and were doubling down on another new build like they just can’t lose.
A block of land in that area can go for somewhere around 3/4 million so these guys are really rolling the dice.
The bubble could continue on its merry way and these guys will live like kings or these guys will be the poster children of greed an insanity…
M41BC
Good thing Randy is renting. $950.00 a month condo fees…. who would want to own this long term? And you can’t even grow your own Cauliflower (unless there is an amenity room for that)
Seventeenth!!!
#5
“Janet raising in June? Believe it when I see it.”
Agreed.
June or July. It’s coming. — Garth
Day after day, week after week month and year.
Putting up with Stupid people.
How the hell do you do it!!!
11 Mr. White on 05.27.16 at 7:03 pm
You need to get out of Vancouver and see what other great places there are to be when it is puking rain for weeks on end in the winter.
———————-
i went thru most of europe, some africa, a year in asia, and lived in a dozen places between brandon and bridgewater before i set foot in the 604 (outside yvr)
– had the travel bug bad . van squished it .
where else do you suggest i try, because in a few years i plan to be gone south somewhere all winter, every winter – south spain, india, south pac, carribean, argentina, panama are just a few coming up. (thank you 604 house lottery!)
for the spring/fall already got the big acerage near yvr (usa)to build the mansion (huge garage, don’t give a shit about the house)
summer on howe sound has got me forever.
i would rather die than live in ottawa, no offence to my redblack friends.
will bail on the city house at 60-70% higher than here – i got 10 yrs to wait.
$300 – 400 a month savings on $145K a year????
I put away $500 a month on 45K a year.
Learn to deal with your money.
Sandy & family should stick to renting, for sure. If they can’t squeeze more than $300 per month savings out of a combined $145,000 income, they are living way too rich a lifestyle to buy a house right now. Seriously, at worst they are netting $90,000 – $95,000 between them. Take $21,600 off for rent, $12,000 for the child care, $12,000 for food, $16,000 for running 2 cars & $12,000 for clothing/other & that leaves a balance of $16,000 they could be socking away (from $90,000 – it would be more if their net is $95,000). $300 per month is a mere $3,600 so what ARE they doing with that left over cash?
#18 spaceman on 05.27.16 at 7:13 pm
. then from 1990 until 2000, it slid like a toboogan… you call that short lived?
—————–
i bought a house in 95. the 5 year tobbogan ride feels really really short looking from 2016.
O.k regarding the original house that has been on the market for over a year and a half.
Here it is…
M41BC
http://www.rew.ca/properties/R2073314/6520-laburnum-street-vancouver
#13 Squish on 05.27.16 at 7:00 pm
$950 A MONTH IN CONDO FEES?!
I’ve been living under a rock. That number is shocking to me
—–
No shit, that’s nuts. More than my old mortgage payment was except the condo fee never ends and always goes up.
#10 Great Gazoo
Did she say anything about screwing savers for a quite a few years, enhancing the top 1%, keeping your word, how Lucy from Charlie brown is her role model, how Ben and Alan are her role models, etc, etc?
Nice when she says we are intending to raise rates in case we have to lower them again soon. Gives me great confidence in this bubble economy?
Let’s take bets when she lowers them again after raising them, that is IF she is still around or wisely passes the baton to the next greater fool.
Just curious.
As you know well Garth, real estate isn’t very elastic…. Interest rates can start raising today and housing prices will not change in 18-14 month. Heck even 36 months or 48 months. Calgary has been hammered for 24 months and prices are down a meesly 2-3%. Canadians are house proud… and mortgages are full recourse. They will sell their possessions before they default on a mortgage or agree to sell below what they paid.
Woohoo rates goin’ up!! Sorry doubters. I say it’ll be June but regardless it’ll happen soon.
Latest Credit and Housing Data:
Genworth Canada insurance-in-force hit $412.4 billion in Q1, up 12.8% yy. Chart So much for that debt limit.
Chartered Banks' Credit Growth (as of Q1 2016, Quarterly Y/Y)
HELOCs: +0.63%, +$1.6B yy
Insured Mortgages: +0.64%, +$3.5B
Uninsured Mortgages: +13.7%, +$66B
Source: OSFI
Household Debt by Major Provinces (as of Q4 2015; Quarterly Y/Y; Includes Mortgages, HELOCs, Credit Cards and Personal Loans)
BC +3.8%, +$8.8B
ON +7.2%, +$45.3B
AB +3.3%, +$6.7B
QC +2.5%, +$5B
Source: Bank of Canada
Housing Dollar Volume by Major Provinces (as of Q1 2016, Quarterly Y/Y)
BC +70.1%, +$8.9B
ON +25%, +$4.8B
AB -12.6%, -$0.6B
QC +10.7%, +$0.5B
Canada +31.8%, +$13.7B
Source: CREA
———
This data doesn't include credit growth from small lenders, which is now fastest growing lending source. Now go blame the Chinese for driving up prices.
In 1820, 94% of the world’s population lived in extreme poverty.
In 2015, less than 10% did.
Bill Gates thinks we can bring it down to near-zero by 2030.
https://pbs.twimg.com/media/CjVmOkrXAAAm9np.jpg:large
http://www.businessinsider.com/bill-gates-on-ending-poverty-by-2030-2016-1
So what happened? [insert trigger warning]
Maybe the Industrial Revolution, capitalism, coal, oil, steel, railways and pipelines. All those things we once considered to be progress and now can’t mention in polite company.
i find this real estate story so crazy, i cant believe there are that many new families being formed to be interested in housing at all. all my niece and nephew’s they are interested in travelling, going to school, going out. when did people start loving oak flooring and granite counter tops. non of them own a hammer, or watch tv let alone the home and garden shows. i find this a low interest rate, ponzi scheme, wrapped up in parental influence, cmhc financing, like who would lend anyone 90 percent of a purchase price at 2.5% for 25 years. unless its subsidized and secured by the government. all this for a junky constructed home. kids are stuppid beyond belief so i guess take advantage of them, debt slave, is acceptable in todays society
My bankers says if interest rise so will house prices?
First, to the “homeless young couple in Toronto” too bad.
You earn OK, but you don’t save diddly-squat. Second, your priorities are incorrect in my book.
Let us assume we are now at the top. Prices don’t magically fall all at once, but will likely melt a bit for several years.
Assuming the call is correct, you won’t have diddly-squat in 5 years either. So, how do you correct that? Easy actually, but I am not giving free advice to the clueless. That’s Mark’s job, or SM, or pick one…
At least you have not been stupid to buy a condo, yet.
Good luck, it is do-able, but you got some work to do, and when you ARE ready might just think twice about the smarts of the whole idea.
NEXT UP… slow economic numbers. ZIRP is choking growth here. I just hope Janet (the data driven) can find the driven data to support the rate increase next month, that was due 2 years ago… I have my doubts… We have zombie companies, and borrowers that need to be flushed out. ‘Colon Blow’ for the economic pipes so to speak…
I can such a snit.
M64WI
DELETED
This comment is intriguing, Garth:
Check back occasionally, and I’ll give you a date.
I think Garth knows something. An upcoming announcement by the Feds that will throw cold water on people who are speculating on real estate. Am I right, Garth?.
As for Sandy. Hardly a surprise. She’s a social worker. Social workers and teachers are the worst when it comes to finances. No sense of reality at all.
The condo fees aren’t 950 a month on a 275k place, even if it’s a leaker. Good on the guy for being a tightwad and socking away the cash but his numbers are a little suspect.
And Yellen again with the threat of an increase? If I went to that source for news I’d never want for moonshine. I’ll believe it when I see it. And no, I don’t have a mortgage or debt so I really don’t care what happens.
Congratulations to all of my friends who persevered on their places here in YVR and hit the jackpot. Even a 75 percent drop would have them in the black.
$9.50 strata fees? They must have had some some major repairs or else their building up the kitty for same.
File it under:
Don’t it always seem to go that you don’t know what you’ve got till it’s gone? –
“Chinese Interest in Australian Homes Is Starting to Drop”
http://www.bloomberg.com/news/articles/2016-05-27/chinese-interest-in-australian-homes-is-starting-to-drop-chart
Those of us who were around Vancouver the last time the HAM slid off the plate after Expo 86 remember house prices that dropped 30% and didn’t recover until at least 2005. But as T2 says it’s 2016 now, everything’s different.
Never seen someone brag as much as you do over the smallest confirmations!
Kills ya, doesn’t it? — Garth
#26
Right on,I’ve upped my contributions to$2000/mth on 75k,just keep adding another$100 mth per year you won’t even notice it,helps avoid lifestyle creep.
#168 Rays “RayofLight” on 05.27.16 at 4:10 pm
Do you ever ask yourself why you hate Narcissist.
It’s learned feeling by your programmers, ak teachers. Think of a work place where all the workers are Narcissist, nothing would get done.
What is wrong with loving yourself, and telling the world how great you are?
__________________________________
I don’t hate narcissists, just assholes like you. You truly are delusional now?
====================
Don’t worry – its easy to make up stories on the internet about how rich you are – gotta go I just won the 6/49 and lotto max…
Why Garth is killing it. The beard helps too.
“Affluent Americans trust older white men most for financial advice”
http://www.investmentnews.com/article/20160526/FREE/160529943/affluent-americans-trust-older-white-men-most-for-financial-advice?utm_source=Morning-20160527&utm_medium=email&utm_campaign=investmentnews&utm_visit=344272
@#21 for those about to flop
“The bubble could continue on its merry way and these guys will live like kings or these guys will be the poster children of greed an insanity…”
*******************************************
Please keep us updated.
“My annual income is modest (just a little under six figures)”
So this guy earns more as an individual than the median Canadian FAMILY ($76,000), and he thinks his income is modest?
It’s a good thing he’s doing so well for himself; that way he’ll be able to pay somebody to dress him. Because it’s honestly a miracle that somebody so out of touch with reality manages to clothe themselves.
#1 Bdysktn on 05.27.16 at 6:25 pm” There is no top in land values. Any slide will be short lived in vanwowser.”
Given your market certainty how many more properties have YOU purchased in the past while?
I thought so…..
Combined income of 145k and only saving 3 to 4 hundred per month; I am in agreement with # 27 Linda; something does not add up here. My guess is that their combined income reported is actually half of what they are saying.
Don’t fall into the trap and follow Garth’s advice. Continue to save and if all hell breaks loose like so many predict in the upcoming years then you will be in a sweet spot to purchased your dream home.
@ #4 Bdysktn on 05.27.16 at 6:32 pm
3 Jimmy
Nice work man
********************
HA HA HA HA HAAAAAAAAA!
loved it. thanks for the laugh
#5 common sense on 05.27.16 at 6:35 pm Mr.
Janet raising in June? Believe it when I see it.
====================================
June 15, 2016. It’s happening….
#2 Randy … meet… #25 bdwysktrn
(Agreed, Randy)
I’m not sure if the word ‘entitlement’ when referring someone’s desire for a home is an ideal word to use interchangeably with ‘wishing’ for one.
Everyone wants financial security and some people wrongly think that their security lies in the purchase of an overvalued home.
I guess my wishes for higher investment returns makes me feel entitled as well.
Don’t disagree with the rent decision based on $75/month. That’s the way to live in cowstown.
But where did he get the $275k and 57 from?
2bed/2bath 1400sq ft condo in cowtown downtown is more along the lines of $375k minimum.
in April a guy bought the house that we rent in Pt. Grey for $3.8 million. He phoned a few days ago to ask what the size of the lot was!!!!!You can’t make this stuff up. It’s insane here in the “Couve”
As this is a Boomer music blog…and TO Craptors are…
Once you know who ‘he’ is…so clear:
(Miller time and his milky, sotto,delivery.)
“Billy Mack is a detective down in Texas
You know he knows just exactly what the facts is
He ain’t gonna let those two escape justice
He makes his livin’ off of the people’s taxes”
A holiday weekend! Almost forgot about it, has been a busy week here. trip to the old family hometown for an impromptu reunion (gee, they look old) with old high school friends. Most of these are several years older than me, most not well situated for retirement. (what the heck were they doing?) How could you have graduated in 1961-62-63 and not me pretty dam well off today? OK. let’s get to 69-75 you were in a different mix of crap.
I do have some sympathy for the millennial generation, but not a whole lot. Yes, re-think that pricey degree, you’re not THAT dam special. Re-think buying in the hot markets, there is a large world out there it beckons. Never re-think investing, if you’re under 40 take more risk, you don’t need the balanced yet, just control your emotions when it craps. 2015 was a dud year, this one thus far is not distinguished itself here in the states. It is still early, we just don’t have a bright congress and it is an election year, they’re usually lackluster.
Still know I can’t pull the lever for Trump -or- Hillary so it’s Bernie or, maybe the Green party.
At least they discuss issues of importance. Of course things can change quickly, that’s today’s view…
#40 crowdedelevatorfartz on 05.27.16 at 8:50 pm
@#21 for those about to flop
“The bubble could continue on its merry way and these guys will live like kings or these guys will be the poster children of greed an insanity…”
*******************************************
Please keep us updated.
///////////////////////////////////
No problem, Crowdie…
M41BC
#168 Rays “RayofLight” on 05.27.16 at 4:10 pm
#161 Smoking Man on 05.27.16 at 2:20 pm
#152 Rays “RayofLight” on 05.27.16 at 12:39 pm
#124 Smoking Man on 05.27.16 at 9:41 am
#119 Rays “RayofLight” on 05.27.16 at 8:56 am
________________________________________
Sounds like another narcissistic asshole (SM) on this blog! He is so predictable too!
………………
Nothing wrong with being narcissistic.
The Phd who’s calling out Trump has spent two many years in school getting mind fkd.
Long time ago I was into the group thing till one day I blew all my loot, all of a sudden, the group vanished. No one around to help.
Naked and all alone I made a come back, a huge come back. I don’t even consider my bet from yesterday 35K up to 400k overnight a big deal just to give you some scale.
You buggers relay have a problem with people who are self reliant.
It’s called communism. Now go have a marsh mellow roast with other like minded morons.
_______________________________________
We don’t have any issues with self reliance. BTW I’m 100% Conservative and despise communism. Being an Narcissistic Asshole appears to come easy to both you and your boy Trump. “If you cant defend your position then you will just try to bully someone or call them names” Spot on SM, just what I would expect from the likes of you. Tell us more about yourself, blah, blah, blah, blah, me, me, me, me, look what I did, look what I did, I’m the best, I’m the best. Try defending your pathetic low life shtick with some real rebuttal, not the lame stuff you try to feed us. BTW Given an infinite length of time, a chimpanzee punching at random on a typewriter would almost surely type out all of Shakespeare’s plays. So get typing chimp!
………………
Do you ever ask yourself why you hate Narcissist.
It’s learned feeling by your programmers, ak teachers. Think of a work place where all the workers are Narcissist, nothing would get done.
What is wrong with loving yourself, and telling the world how great you are?
__________________________________
I don’t hate narcissists, just assholes like you. You truly are delusional now?
………………..
Guess your not going to buy my book in the fall huh?
Now this is encouraging, to evoked so much rage is a true testament to my writing prowess.
Go to twitter @SmokingMan what do I list as an occupation. delusion is the hallmark for a great writer.
As far as you know I could be a twisted man hating, serial killing brush cut lesbian, with a tattoo of the hammer and sickle on my right boob, working as an english professor at a university near you mind fking kids for the benefit of the sisters hood.
Giving Straight white men a bad rap by posting the shit I do,
But thanks for feeding my narcissism, it tastes so good!!!!
@9 Lulu:
The light at the end of the tunnel is from the incoming train. Plan accordingly.
@ Bdwyskytrn
Well.
I must apologize.
Just when I thought Global “News” had finally grow testicles…..ReMax yanked their chain.
Tonights mesmerizing Real estate story on prime time 6pm Vancouver “News”
Millenials that can “afford” to buy.
A 25 year old worked two jobs ( even Saturdays! gasp!), brown bagged his lunches and (horrors) didnt go out partying with his friends…..
All that to afford the downpayment on a 40 year old , 900 sq ft. , 2 bedroom former apartment. he said the “sacrifice” was worth it and when the breathless reporter spoke to his realtor she said, ” I dont like the word “sacrifice” ….I prefer to think of it as “prioritize”.
And the self delusional ponzi scheme continues………..
@#60 Flop
i prefer to think of myself as “fartzie” but I’ll answer to just about anything as Brazil Expat already knows.
Before the big fed meeting mid June comes the big USA and China economic meeting. China is already in helicopter dropping cash mode. Perhaps some of Janet’s messaging is just preamble blather to set the fear factor bar high enough, manning that the Yuan will rise along with the USA buck. Time will tell but last summer we were hearing the same rumblings when China moved the Yusn lower and Yellen didn’t raise rates. So Jury’s out.
Some pretty shrewd investors out there buying. Personally I would be embarrassed to say I owned a Westside property. Pretty much only speculators, builders and fools left holding now. This thing has to end soon.
My bankers says if interest rise so will house prices?
whut?
oh and condo fees are typically 65-75 cents/sq ft. figure it out
Aggregator: Household Debt by Major Provinces (as of Q4 2015; Quarterly Y/Y; Includes Mortgages, HELOCs, Credit Cards and Personal Loans)
ON +7.2%, +$45.3B
Ontario household debt grew $45.3 billion or 7.2%. So total Ontario household debt is $629.17 billion?
I’m surprised. Alarmed really.
here’s an article by Global News:
http://globalnews.ca/news/2572132/canadian-household-debt-to-income-ratio-rises-to-another-record/
The growth helped drive the ratio of household debt to disposable income to a new peak of 165.4 per cent in the fourth quarter, up from 164.5 per cent in the third quarter.
@#20 Cottingham-
You invested in thirsty underwear and old age homes?
PS- Garth for a second I thought you wrote this one about me.
Could these problems effect real estate prices in Vancouver and other cities ?
http://harveyoberfeld.ca/blog/granville-street-turning-into-another-downtown-eastside/#comments
Joking Man # 61
As far as you know I could be a twisted man hating, serial killing brush cut lesbian, with a tattoo of the hammer and sickle on my right boob, working as an english professor at a university near you mind fking kids for the benefit of the sisters hood.
Giving Straight white men a bad rap by posting the shit I do,
But thanks for feeding my narcissism, it tastes so good!!!!
//////////////////////////////////////
It was plausible, until you got to the English professor part…
M41BC
Know this dogs.
Money is printed out of thin air, every country does it.
Humans are violent animals. Need to be kept in check.
Humans need to be busy changing my oil, shining my shoes or they will just kill each other out of boredom.
It is what it is.
#65 John
Excellent comment..with the Yuan already devalued and IF the USA raises rates it only makes Chinese exports more desireable…
So what will happen to all markets again when this happens?
Once again it may seem I dislike Janet but really she is truly dammed if she does or doesn’t? What happens to ALL the pension funds, self directed RRSP’s etc if (when?) the markets go south? What do boomers have to fall back on? They sure as heck do not have time on their side. Growth is projected to be low, wages stagnant, levels debt high.
What a fine mess The FED, demographics, etc have got us all into.
Looking forward to the clawbacks on CPP, OAS AND SSI, net worth taxes, etc….
#72 For those about to flop… on 05.27.16 at 10:18 pm
Joking Man # 61
As far as you know I could be a twisted man hating, serial killing brush cut lesbian, with a tattoo of the hammer and sickle on my right boob, working as an english professor at a university near you mind fking kids for the benefit of the sisters hood.
Giving Straight white men a bad rap by posting the shit I do,
But thanks for feeding my narcissism, it tastes so good!!!!
//////////////////////////////////////
It was plausible, until you got to the English professor part…
M41BC
…………..
I’m good.
Obama will not green light Yellen to raise rates, that will be left to the next president to order. Obama has a shaky legacy and he obviously doesn’t want ‘anything to happen’ during his last few months of ‘legacy building’. He wants a runway for his post presidential speaking/book tour and fundraising for the Obama Foundation.
Here’s his real ‘legacy’
“Unfortunately, with “justice” did not come peace. The policies that followed — appeasing Vladimir Putin, the Iranian mullahs, the butchers of Tiananmen Square and lately the Castros — have advanced neither justice nor peace. On the contrary. The consequent withdrawal of American power, that agent of injustice or at least arrogant overreach, has yielded nothing but geopolitical chaos and immense human suffering. (See Syria.)
Talking about Canadian debt levels to the typical Cuban friends while there on vacation, they CANNOT BELIEVE anyone, especially so called educated Canadians can be so stupid…they ask:
What they charge and pay more later instead of saving and paying cash for something?
They don’t make due and live with their families until they can afford a house?
Who is so silly to lend these people money if they can’t pay it back?
People there would rather have no money there and not have money to go out for drinks or to have dinner with friends?
Their child like innocence is something to behold. They may be poor but are more wise out of necessity that likely 75% of our population.
Are you an elite? Easiest question, would you have answered as ex-Enron CEO Jeffrey Skilling did when interviewed in his younger days by McKinsey consulting and asked “How smart are you?”.
To wit his answer was “I’m f***ing smart Sir”.
(Back then swearing actually meant something – inferred hard won cynicism – unlike today’s copycat potty mouth millenials. )
Side note, Enron produced at least two bodies (dead men tell no tales)).
another article on debt:
Alexander takes what shouldn’t seem a novel approach: assessing the debt of people who, you know, actually have debt.
Citing Alexander’s research, the Bank of Canada accepted his data that “highly indebted households,” where mortgage debt to disposable income exceeds 500 per cent, doubled to 10.8 per cent from 5.5 per cent. That’s half a million households.
https://www.thestar.com/business/2016/02/27/a-household-debt-warning-to-pay-attention-to-wells.html
500% ! So if interest rates rise these households will not be able to make their payments! The increase in interest rates is going to rip the fabric of Canadian society.
“My annual income is modest ( just a little under six figures)”
Let’s all send bags of rice to this poor guy who can’t afford to eat.
All you rocket scientist think you got this shit figured out.
I commend you bravery for posting an opinion in this day and age of lunatics.
Single words brand you these days.
Denier. Homophobic. sexist. misogynist.
Yet there is more to humanity than a few words that are designed to kill debate and advance a pick pocket.
The Science is settled bitches.
Nictonites are for free speak….
Gut Check
Where did I lose ya.
I’m an artist too, more of a drunk since my near death experience.
Are we finally here, Garth? What a long, strange trip it’s been, with apologies to Jerry Garcia …
China debt-fueled stimulus may lead to recession – People’s Daily
http://reut.rs/1OjwfBk
Part 2 of FIRECracker’s promised financial expose is now posted.
http://www.millennial-revolution.com/invest/how-we-got-here-part-2-panic/
And no, I’m not “Wanderer”.
#80 BG on 05.27.16 at 10:44 pm
“My annual income is modest ( just a little under six figures)”
Let’s all send bags of rice to this poor guy who can’t afford to eat.
===================================
Envy is such an ugly thing.
A five-figure gross income is nothing spectacular, especially after taxes. It’s alarming that more than a couple posters actually take time out to mock the guy for describing it as “modest”. Which is most certainly is. Less than modest, if you live in Vancouver/Toronto.
Tall poppy syndrome. Someone makes more than me, so I have to chirp at him about it. SM is pretty accurate about the prevailing mentality being bred into most folks.
Keep your expectations low Canadians, you’ll have a better chance of achieving them I suppose.
“The price to rent ratio doesnt mean much when there is zero rental inventory. “
There’s boatloads of rental inventory. What are the stats, 8% of YVR condo units are empty? And rising by the day as new units are completed, while the youth of Vancouver leave?
As far as Janet’s concerned, she’s been singing the same song for years. She’s basically the boy who cried wolf. She has little to no credibility. She’s not going to raise and crash the stock market in an election year, making Trump’s claim of an impending stock market collapse a self-fulfilling prophecy.
500% ! So if interest rates rise these households will not be able to make their payments! The increase in interest rates is going to rip the fabric of Canadian society.
To the benefit of those who lent the money, of course. Cash savers, and investors have been basically laughed at for much of the past 13 years (ie: ~2000 until the 2013 peak of Canadian RE), while owners of RE have enjoyed outsized returns. The relatively smaller group of non-RE, non-FIRE investors will hence have their proverbial time in the sun going forward.
#85 ww1 on 05.27.16 at 11:25 pm
Just as I thought (didn’t read the whole article though). I couldn’t figure out why their investments were able to have such sweet gains. Mine, and other millennials and posters on here, have had dismal returns over the last year. I haven’t gained anything by being invested over the last year tbh. It is no one’s fault, just bad timing. They got lucky. Yeah yeah they save and live frugally…but so do I and lots of others.
They bought into the financial market in 2008. Markets were bailed out in 2008. 2008 WILL NOT happen again. This is because during the next financial crisis, which will be an extension of the last one, central banks do not have any other weapons available. We’ve already had tons of QE, completely ineffective ZIRP/NIRP, we already spent trillions in bail out money, and we are in huge debt as a result of that bail out money.
Everyone knows it too. The market is so jumpy because people are losing faith in the ability of the “experts”, since they always seem so clueless. Every meeting it’s stimulus and more stimulus.How much stimulus do we need? Why is growth so low even with this supposed stimulus?
Their message is fine, but I think they might get people’s hopes up a little high.
MF
#45 Millmech. I could do more, but I’m putting money aside right now for my escape out of the GVRD. Could do $700 a month right now if I want doing that
Great, sounds like interest rates will hike up soon, still waiting on the side line to buy a decent home in our price range… and kudos for the savers..your portfolio will start to look healthier…..
Firecracker is calling herself Canada’s youngest retiree. Could this be true?! Or, is she just now doing something she loves?
#29 For those about to flop… on 05.27.16 at 7:35 pm
O.k regarding the original house that has been on the market for over a year and a half.
+++++
holeeeeeeeeeeeeeeee property taxes are SO cheap in Vancouver…maybe that’s why prices are so high. C4 Toronto house at $2M pays more than $12,000. Your listing is $6M at $10,000.
“(b) sell at this peak level and look like an omniscient friggin’ genius in two years.”
What does one look like who’s been providing this advice for the past nine years? The friggin’ part is part.
Do the jobs or incomes of your ‘bankers’ depend on selling mortgages by any chance?
Hi Garth. Randy calculated his rent-home price ratio of 57 by taking into account cost. But before cost, the ratio is 15. As a rule of thumb, should it be 15 including cost to be a good deal?Thanks.
“On an income of $145,000 they save a piteous three hundred bucks a month despite living costs of just $1,800. If they found a cheap 416 townhouse for only $650,000 and put 5% down, their savings would vanish and their monthly (mortgage, insurance & property tax) soar to $3,500.”
Yes, but that $650k townhome would be an upgrade because there is no way they could rent it for $1800 a month. Not in Toronto. More like $2800 a month. The economics of renting here really aren’t that great. Crazy prices are supported by crazy rents, unfortunately.
#92 wallflower on 05.28.16 at 1:38 am
#29 For those about to flop… on 05.27.16 at 7:35 pm
O.k regarding the original house that has been on the market for over a year and a half.
+++++
holeeeeeeeeeeeeeeee property taxes are SO cheap in Vancouver…maybe that’s why prices are so high. C4 Toronto house at $2M pays more than $12,000. Your listing is $6M at $10,000.
//////////////////////////////////////
Hey wallflower,I will do you a deal.
You keep the 2k and I’ll take the 4m…
M41BC
#85 ww1,
just let me know when she answers the question:
http://www.greaterfool.ca/2016/05/20/chutzpah-2/#comment-449925
#71 Vancouver Problems on 05.27.16 at 10:16 pm
Thank you for that link. I really enjoyed reading the article and the comments. I was filled with fond memories of the years I spent in Vancouver as a uni student in the early 80s.
You have to ask yourself one important question:
If the Fed traditionally raises rates to slow an overheating (?) economy, then why raise rates at this juncture?
Signals from the U.S. Yield Curve: World Can’t Handle Fed Rate Hikes
http://blogs.wsj.com/moneybeat/2016/05/24/signals-from-the-u-s-yield-curve-world-cant-handle-fed-rate-hikes/
Losing Ground In Flyover America, Part 1
http://davidstockmanscontracorner.com/losing-ground-in-flyover-america/
So what are they driving at?…
“You can always grow cauliflower.”
This is what keeps ’em coming back – for years. Brilliant reach back several posts Garth. It’s one excellent verbal tapestry you weave.
A slow rise in interest rates will not harm the real economy at all. It will simply gently force operational reality and hence robust health back into trade dynamics at all levels. More demographics will be pulled back into spending as a result, confidence will rise in retail and services and the indebted will adapt, as will business of all stripes.
Truly stupid, entitled wannabees, including a swath of banks of Mom and Dad will get spanked. Hard – as it should be. Excess borrowing never works. Ever.
Government won’t save anyone’s butts.
There is no time left to “buy”.
Garth, the Trudeau Liberals just spent 9 billion to spite the PBO and the past government accountancy. That money is all borrowed and can’t be payed back. How are the Trudeau Liberals going to green light the BOC to raise rates if they can’t pay ongoing expenses now? IMHO there is no way the Trudeau Liberals will raise rates while in office. That gives House Hornies and HAM at least four more years in the trough. Canada will go bankrupt and taxes will reach 100% , but why should Trudeau Liberals care? They’ll all be rich and out on fat pensions.
http://business.financialpost.com/fp-comment/joe-oliver-the-liberals-spent-9b-in-a-single-month-just-so-they-could-say-there-was-a-deficit
The federal government does not set monetary policy. — Garth
#95 Kalergie on 05.28.16 at 4:06 am
———————————
I wouldn’t include property tax but the condo fees are like paying a mortgage that never goes away (maintenance can be deferred or many things you can do DIY, that crazy condo fee ain’t nothing you can do about it).
So $950/mo pays about a $175,000 mortgage, so the actual “cost” of the townhouse would be 175k + 275k = $450.
This gives a PR ratio of 25. Still makes sense to rent.
Poloz better raise too….TO and YVR are basically unlivable
economictsunami on 05.28.16 at 7:31 am
Because they know that the low “emergency” rates are driving asset bubbles and distorting everything. Every market is broken and the economies are on a form of life support. I signed into cnbc one day and the headline was “Jobs report a big miss. Market rallies”. Look at the housing market in all the western countries as an example. Tons of misallocated capital in an area that provides zip to an economy. This zirp policy is clearly a failure and everyone knows it. We also need to have some where to drops rates when the next inevitable financial crisis hits. Nothing was really solved last time. Lastly, we need to keep the illusion of some recovery going.
MF
from the Stockmann link at #100 –
Are there any dark condos in Vancouver’s skyline at night?
#88 MF on 05.28.16 at 12:30 am
Just as I thought (didn’t read the whole article though). I couldn’t figure out why their investments were able to have such sweet gains. Mine, and other millennials and posters on here, have had dismal returns over the last year. I haven’t gained anything by being invested over the last year tbh. It is no one’s fault, just bad timing. They got lucky. Yeah yeah they save and live frugally…but so do I and lots of others.
They bought into the financial market in 2008. Markets were bailed out in 2008. 2008 WILL NOT happen again. This is because during the next financial crisis, which will be an extension of the last one, central banks do not have any other weapons available. We’ve already had tons of QE, completely ineffective ZIRP/NIRP, we already spent trillions in bail out money, and we are in huge debt as a result of that bail out money.
————————-
You’re on here always complaining about how fellow millenials are nothing but lazy whiners. You should avoid looking in the mirror, you’d hate seeing the man you’ve become.
You just looked for an excuse and then handwaived things away.
So yeah they invested in 2008. They were what, 23 years old at the time? How much could they actually have put into the market when they’re 23?
They’re basically the same age as you are.
Stop making excuses.
Dude I usedto work with quit a trade to become full time RE…
Oh, Canada…
#89
Your doing well by living below your means and investing the difference for growth.My view of investing is the Timmys coffee;double double,every 10yrs my cash doubles so 2000 now will be 4000 in ten and 8000 in twenty.Subconciously when I get my pay stub I automatically think double double,frigging love it!
Hilary event.
Hosted by teachers union. Watch them all sit during the usa national anthom.
http://www.prisonplanet.com/video-clinton-rally-goers-sit-down-during-national-anthem.html
That’s what’s teaching your kids my American friends.
Perhaps a field trip to Arlington Cemetery might help next time.
Librals is all I’m saying.
So total Ontario household debt is $629.17 billion?
Total household debt for Ontario was $673 billion in Q4 2015. Charts below.
Provincial Household Debt
BC ON AB QC
Provincial Household Debt Per Capita
BC ON AB QC
Provincial Household Debt-To-GDP
BC ON AB QC
Other data…
Chartered Bank Loans To Non-Financial Corporations and Unincorporated Businesses (By Sector)
Builders & Developers Real Estate Energy Automobiles
Canada Average Home Price in Barrels of Oil Chart
I don't know who or how, but eventually the piper must be paid. Whether this is enforced by a loss of social and health services, reduced pensions, direct and indirect taxes, austerity or the most likely scenario, currency devaluation (lower standard of living) — either way you're all paying for it one way or another.
The anti Vancouver……
http://www.forbes.com/sites/eamonnfingleton/2014/02/02/in-worlds-best-run-economy-home-prices-just-keep-falling-because-thats-what-home-prices-are-supposed-to-do/#14a6210abb2d
No one in Vancouver that buys real estate knows who Janet Yellen is.
Until Global news and 24hrs paper tell them that rates are rising and house prices are lower, the hockey stick will trace on for a little longer.
When those one off super offers over asking clear. It will look like a minor correction. But reality is those offers are ‘I don’t care, just do it’ offers creating the hockey stick.
Otherwise it would be a standard 10% rise in YVR RE
Great post Garth.
#32 i will: “On an income of $145,000 they save a piteous three hundred bucks a month despite living costs of just $1,800. If they found a cheap 416 townhouse for only $650,000 and put 5% down, their savings would vanish and their monthly (mortgage, insurance & property tax) soar to $3,500.”
Yes, but that $650k townhome would be an upgrade because there is no way they could rent it for $1800 a month. Not in Toronto. More like $2800 a month. The economics of renting here really aren’t that great. Crazy prices are supported by crazy rents, unfortunately.
On another note, my gay friends say Garth is at their YMCA every lunch hour giving out free Cleveland Steamers.
Any “crash” in Toronto values will be modest and will involve mostly condos. Single family detached houses south of highway 401 will continue to be made from “unobtanium”. There are just too many people here. There are a lot of jobs. Everyone is doing well. I am not sure about the rest of Canada, but Toronto is def. hands down the happening place to be if you want to make money.
Got a friend who happens to be a mortgage dude in Ottawa. His son bought a town home 5 years ago for $250,000. Put over $30,000 in renos. Over the 5 years got married and started a family. Time to climb the property ladder.
Son listed for $309,000. Had 5 offers on the first day. Accepted the highest at $307k.
So, purchased for $250K. Add another $1500 to close. Plus $30K in renos and $13,750 in property tax for 5 years. That’s a grand total of $292,250 for the 5 years.
Sells for $307k. Nets $289k and change after fees. Throw in another $1500 in legals to close and the son of a mortgage man is out $7,096 for 5 years. And that doesn’t include the interest paid on the mortgage.
So what does this insightful guy do? Buys a 9-yr old home backing onto a swamp for $547,000. A 9-yr old home that has seen hard living and he estimates will need $70K+ in renovations to make it “his” home.
Surprising, he didn’t look hard or he would have discovered that the builder is offering a brand new upgraded model of the same home for $509,900 with $25,000 in design credit. http://mattamyhomes.com/ottawa/communities/stittsville-traditions-ii/plans/wynwood-with-loft/quick-delivery-homes/wynwood-w-loft-elevation-b.aspx
Seriously, you can’t make this stuff up.
…pooperty taxes are SO cheap in Vancouver…maybe that’s why prices are so high. C4 Toronto house at $2M pays more than $12,000. Your listing is $6M at $10,000.
======================
(SIC) intended
So, I guess servicing Strip Bars and Motorcycle Clubs isn’t all that expensive. I just got my Nanaimo property tax notice. It’s $1300 (with homeowner discount) on a 235,000 assessment, 1 acre land and old house within the city limits.
To be fair, water/sewer/garbage is charged separately throughout out the year, costs about $500.
Should I defer the taxes ’cause I’m eligible, over 55 or pay annually as is normal? It doesn’t seem worth it to defer since it’s really just similar to a millennial’s annual spend at Charbucks or a Boomer weekend retreat at one of the island spa resorts.
The other consideration is, I’ve told the wife if the Chinese make it to this area of the Island we will sell at 1/2 million and go traveling. Rumours are becoming more common here these days, lotsa sold signs too.
It’s like houses are vampires, and banks are the nurse telling you roll up your sleeve so the fangs can latch on
Being hooked on debt has long-term consequences
Impact on those approaching retirement
http://www.bttoronto.ca/2016/05/27/being-hooked-on-debt-has-long-term-consequences/
By this time 99% of the free world believe Yellen is bluffing and are likely correct on this. Oh yes, they may raise rates .25 this summer and then wait another 8 months and go another .25… wow we’ll be at 3% in 5 years.
‘I’m afraid to keep waiting to buy – it’s been years now and everything just keeps going up. I definitely feel we’ve missed the boat as our friends places have appreciated like crazy during this time.’
All I read was fear and greed in both sentences. Bad combo. (and I have nothing wrong with greed in the sense of wanting more, but in this context where emotion overrules practicality…..)
77 since when did that basket case of a country have any credibility in any sort of financial discourse?
A humorous little ditty about millennialist https://www.youtube.com/embed/hLpE1Pa8vvI
Millennials, not millennialist. Auto correct
#88 MF
I thought the TSX had a pretty bad year last year.
The S&P was basically ‘flat’ here, too. Some (index) Bond sectors eeked out 2.5 – 3.5% and REITS (index) delivered mid single digits.
With dividends you were hitting close to ~6% overall. What’s not to like there?
@#122 Scott
When they have Venezuela as their neighbor?
http://www.google.ca/url?url=http://www.ft.com/cms/s/0/0c2b0db8-21a4-11e6-9d4d-c11776a5124d.html&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwjM4rPVvv3MAhVO0WMKHS5HBSMQqQIIFzAB&usg=AFQjCNGtgu5fbAgidn8QhtMbJRCwxpf_GQ
Venezeula…….so bad it makes Communist Cuba look good.
Do they drive a KiaÉ
#107 A box in the Sky on 05.28.16 at 10:28 am
I’ll ignore your little personal attack.
I invested at a garbage time. If you were not panicking and invested in 2008,you made money because the markets were bailed out…not because you are a financial genius. Did you miss that point?
How have the financial markets treated the average investor over the past year? After reading their blog, millennials may have high expectations of market returns that may not become reality. When the next crash happens (with a much slower recovery) watch the moaning. Like you said..i know because that’s how i felt over the past year.
MF
#83 Slow Canada on 05.27.16 at 11:04 pm
Are we finally here, Garth? What a long, strange trip it’s been, with apologies to Jerry Garcia …
————————————————————————————-
I strongly suggest that you do not hold your breath.
What the hell is with all the hillbillys at Seneca this week end.
What am I missing? Trail convention.
Randy in Calgary: “my girlfriend chips in $400 per month (plus she’s a great cook). Yes, I pay $75 per month”
So sociopath Randy rips off his girlfriend, who does all the cooking and still pays 4x what he does for rent. She probably makes less than he does too. What a freaking runt.
Really Garth, this is your new “normal”? You can keep it.
500% ! So if interest rates rise these households will not be able to make their payments! The increase in interest rates is going to rip the fabric of Canadian society.
To the benefit of those who lent the money, of course. Cash savers, and investors have been basically laughed at for much of the past 13 years (ie: ~2000 until the 2013 peak of Canadian RE), while owners of RE have enjoyed outsized returns. The relatively smaller group of non-RE, non-FIRE investors will hence have their proverbial time in the sun going forward.
———————————
Yes, yes, enjoy the slow melt where in maybe another decade you can enjoy reasonable prices.
A 13 year bull run in Vancouver will see an even longer melt as prices are always sticky on the way down.
The domino price effect has also tainted any areas near Vancouver and Toronto, so can count on an equally slow melt in any of the previously ‘affordable’ areas.
Hey, how is everyone’s balanced portfolios been doing for the last year :) Negative and flat returns while Vancouver and Toronto gains have been 30% – an increase that will not be matched by any balanced portfolios for 10 ‘good’ years.
By the way, Yellen is crying wolf again for the umpteenth year….
#115 Ace Goodheart: “Any “crash” in Toronto values will be modest and will involve mostly condos.”
Then all the ‘move-up’ buyers moving from condos to houses will disappear. The housing market isn’t comprised of discrete parts, it’s all connected. Think things through next time.
#120 cto: “wow we’ll be at 3% in 5 years”
Exactly. They’ve been crying “wolf” for years, and eventually the wolf will come, but it’ll turn out to be a friendly beagle.
123,
Garth would have you believe the world will come to an end if rates go up 3-5 percent over five years.
Hardly. The over-indebted might think so, however. — Garth
DELETED
#128 MF on 05.28.16 at 4:31 pm
What the hell you doing here young lad.
First good summer night, why are you not out chasing skirts.
Hormone levels are high for both genders. Posting on days like this should be reserved for old hasbins like me and the other old farts who’s screw drivers are malfunctioning.
Hammered and it’s not even 8pm
Just read through that “Millennial Revolution” website with the folks who retired at age 31 and decided to “travel the world”. I actually laughed a bit, because I “opted out” of the system at age 25 and, with my undergrad degree, travelled the world teaching English, until I got so culture shocked and messed up from constantly changing countries every six months to a year, that I came back to the T-dot to decompress, do a grad degree and hook up with Mrs. Goodheart.
I very much remember that life and I remember it fondly.
These folks are right in many ways. For me, no one would ever hire me, despite many interviews and resumes and the like. So I started my own business, and it took off quite nicely.
Now, yes I am a millionaire, own three houses (one of which I rent out as a triplex), have plenty of cushy, dividend paying stocks, am a venture capitalist, and the second half of my life (I am 43) looks like it will be even better than the first half (which is hard to do, considering I was in Uni for seven years, during which I partied quite hard, studied as little as possible and managed to live in three countries).
Really, what you are doing, if you want to do it right, is the grounding principle of “look out for number one”. That is really it.
Question everything.
Remember that everyone is acting on self interest. Everyone who is telling you to do stuff, is doing that for their own benefit. You will meet very few people who care about you and tell you to do things for your own good.
Above all, be a contrarian. Disagree with everyone. Invest in stuff everyone else is selling. Buy houses in “bad” neighbourhoods (the secret to about 1/2 of my current wealth is buying residential buildings in “bad” Toronto neighbourhoods, that have subsequently “gentrified”).
Diversify, diversity, diversity. Never hold more than 10% of your net worth in any one item. Spread it around.
I have about 30 good years left. Anyone who thinks “iife begins at 65” is an idiot. Life ends at 65, for about 1/2 of the population of this planet. The other 50%, half die before that, and 1/2 live a little longer. If you think things get better as you get older, visit a retirement home. Talk to a 95 year old about how their day usually goes (it is sooooo hard to pee in the morning, takes about half of the day, then all the meds, then if the nurse lets me, I get to go outside).
Live NOW folks, you will be dead soon (John Keats?).
For me, the first 43 years of my life have been a riot. The rest look equally as good (but now I am rich).
Just remember, number one. That is all that matters.
#120 cto on 05.28.16 at 2:10 pm
“By this time 99% of the free world believe Yellen is bluffing and are likely correct on this. Oh yes, they may raise rates .25 this summer and then wait another 8 months and go another .25… wow we’ll be at 3% in 5 years.”
If they did raise it to 3% by 2020, mortgage rates would likely be about 5.00% in Canada, perhaps a little lower, assuming the spread over the Fed Funds rate remains the same.
At 5.00%, people with $1,000,000 mortgages would be paying $47,300 in interest alone, and about $70,000 in total per year, over 5 years. By the end of the first 5 year term, it would have an OSB of $885,800. If they renewed at 5.50%, the next 5 year term would have $65,000 per year in mortgage payments, $46,300 in interest only per year, and only $19,000 in principal repayment per year. After 10 years, they’d still have $790,800 in mortgage remaining.
It’s doable for some people, but not a heck of a lot. Meaning fewer people in 2020, than in 2015/16, will be taking out $1,000,000 mortgages. As a result, house prices won’t be able to remain so high.
To those who will be nearing retirement in 5 years, good luck getting the same “equity” out then as you can today.
Aggregator welcome back. One of your posts is worth more than all DA or “mark” posts/insane rants.
Joking Man, sober up and read this…
M41BC
https://imgur.com/bCGTbo6
#111 Aggregator on 05.28.16 at 11:31 am
So total Ontario household debt is $629.17 billion?
I don’t know who or how, but eventually the piper must be paid. Whether this is enforced by a loss of social and health services, reduced pensions, direct and indirect taxes, austerity or the most likely scenario, currency devaluation (lower standard of living) — either way you’re all paying for it one way or another.
++++++++++++++++++++++++++++++++++++
Relative to all the “FREE MONEY” the govt’s of Canada get from resource revenue – how about slashing the size of the most inefficient fat wasteful govt system in the entire G-20?
That would save billions. But I digress this is Canada and that is not how things are done. Layers and layers and layers of govt and paper pushing. Welcome to Canada.
Tr#130 Smoking Man on 05.28.16 at 5:58 pm
What the hell is with all the hillbillys at Seneca this week end.
What am I missing? Trail convention.
…
A step up from the usual crowd I bet. Maybe trump is dropping by? Drink up!
Most of you dont know shit about other aliens on earth
This dude was a rebal from planet fagathron. He got the news he was going to die. He gave no shit. Enjoyed it to the end without fear of judgment.
True ingredient for orgasmic happyness.
Who gives a shit what others think.
Love him.
https://youtu.be/R-soyspdwqU
Hey Boom,someone posted a info graphic of the allied troops from d-day to honour Memorial Day so I thought you might want a look.
Respect…
M41BC
https://imgur.com/bCGTbo6
Boom, I messed up here it is…
M41BC
http://imgur.com/lWsqXvu
Hey Boom,someone posted a info graphic of the allied troops from d-day to honour Memorial Day so I thought you might want a look.
Respect…
M41BC
http://imgur.com/lWsqXvu
P.S Garth feel free to disregard the other two posts.
Why do you care. A good woman is all ya need men
“What Do I Care”
When I’m all through if I haven’t been what they think I should be
If the total isn’t high enough when they figure me
When I grow old if there’s no gray from worry in my hair
What do I care? What do I care?
What do I care just as long as you were mine a little while?
When the road was long and weary you gave me a few good mile
What do I care if I miss a goal because I make a slip?
I’ll still be satisfied because I tasted your sweet lips
What do I care if I never have much money?
And sometimes my table looks a little bare
Anything that I may miss is made up for each time we kiss
You love me and I love you, so what do I care?
What do I care just as long as you were mine a little while?
When the road was long and weary you gave me a few good mile
What do I care if I miss a goal because I make a slip?
I’ll still be satisfied because I tasted your sweet lips
What do I care if I never have much money?
And sometimes my table looks a little bare
Anything that I may miss is made up for each time we kiss
You love me and I love you, so what do I care?
Aggregator: I don’t know who or how, but eventually the piper must be paid.
so the debt has steadily increased since 1982 whether you look at the aggregate on a national or provincial level or you look at the debt per capita. Maybe the trend is reversing right now. Which implies an enormous shift in society. And in particular, in politics.
Does anybody see a problem with a guy charging his girlfriend $400 for rent, while he pays $75 and she does the cooking? Poor woman – don’t marry him. Sounds like an arrogant ass.
I’m in car . Drive you bastard . Take me to the house and I won’t kill you.
My wife.
https://youtu.be/5A-4VGfx5lU
Hardly. The over-indebted might think so, however. — Garth
indeed
if not dead already
Our combined incomes are 145,000. I am a social worker and he is a program manager at a not for profit. Our child is in daycare for another two years at about 1000 a month. After everything each month we put away about 300-400 in savings.
i don’t understand this
Aggregator welcome back. One of your posts is worth more than all DA or “mark” posts/insane rants.
____________________________
Aggregator === Mark === Greg
Nice day in T.O today from what I seen.
Most rainy day of the year in Vancouver
This is a picture of me in the Couv today…
M41BC
http://imgur.com/TOxWXff
Christy is flogging real estate in China again . http://bc.ctvnews.ca/clark-criticized-for-bringing-realtors-on-asia-trade-mission-1.2921709
Uh Uh
-3 condos in my building up for sale as of today.
-$1000 per sq ft
-Price to rent ratio 29
If my San Fran landlord lists (and I would) might have to go to Burnaby……..oh well
What’s next. http://globalnews.ca/news/2727923/beyond-ridiculous-raffle-held-for-langley-development-lineup-spots/?sf27205688=1
dude, please nuke one
busy world in my head…………….
Sorry:-)
It’s pretty obvious that Randy is charging full market rate for the parking space and extra room, while giving his girlfriend a bit of a deal. $400 to live in a large, centrally located condo is a steal by any measure. Nobody would bat an eye if Randy owned the condo and had this arrangement, why judge the fellow for being intelligent and renting? Also, he complimented her cooking, he didn’t suggest she cooks any more than he does. They are a young, modern couple so let’s lay off with the sexist stereotypes and assumptions. Most women would be pleased to have such a financially savvy bf.
The federal government does not set monetary policy. — Garth
—————————————————————-
Thats why the feds put in place compliant chairmen.
Of fire them when they become non-compliant.
Same as setting monetary policy to me?!
For those about to flop… on 05.28.16 at 10:00 pm
Nice day in T.O today from what I seen.
Most rainy day of the year in Vancouver
This is a picture of me in the Couv today…
===============================
It rains all the time here. Everyone knows that.
Please move away.
#150 AR on 05.28.16 at 8:26 pm
he thinks he is beating “system”, guess he never heard of common law partner…
Common-law partner
This applies to a person who is not your spouse, with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. He or she:
has been living with you in a conjugal relationship, and this current relationship has lasted at least 12 continuous months;
Note
In this definition, 12 continuous months includes any period you were separated for less than 90 days because of a breakdown in the relationship.
https://youtu.be/dmbQM1W_WDA
#29 For those about to flop
My god, that’s my parents’ house!
Seriously — when Dad died in 1212 Mom sold it, as she’s in a nursing home. Of course they tore down the old house and put up this – didn’t realize it hadn’t sold yet!
They won’t have any financing problems, though — the money to buy the house came from China, as they actually told us that it would be a while before they could close, as they’d have to get the money out of China. They paid cash, as close as I can remember.
Nice couple. I’m surprised the house isn’t sold yet, though.
#160, if I shared a place with the boyfriend and he charged me more rent than what he paid, I would ditch his mercenary butt so fast. That’s a very big sign that your future-hubby looks after his interests first, and yours last. You and he aren’t a ‘we’.
Randy’s girlfriend and Randy’s roommate need to start looking for a 2 bed condo to rent between them.
123 Ex Van – thanks for the link.
Here is some good discussion
https://www.youtube.com/watch?v=sPpNkUjFAxo
“The federal government does not set monetary policy. — Garth”
Really, that’s pretty naive when evidence supports otherwise.
http://business.financialpost.com/fp-comment/why-does-poloz-back-stimulus
Learn the difference between fiscal and monetary policy. — Garth
Where the hell is my room
“131”. Thank you. That’s what I thought.
@Betamax and AR-
If this situation were the other way around it would be ok, right? Just a man “providing” for his woman.
Now on to better things. I’ve been tossing around commuting my pension and getting the hell outta dodge but I don’t think the lump sum is large enough to sustain my lifestyle for long enough. I don’t know if I can get a high enough rate of return.
Then I had a EUREKA moment. An epiphany, if you will. I could sell ,everything, move to Vancouver, and become a Real Estate Agent! Guaranteed cash flow via commissions. After all, real estate always goes up, right? Right?
This is, finally, yet suddenly, feeling very much like we are at that ominous peak, like we have all just realized something is off.
http://www.msn.com/en-ca/money/topstories/soaring-prices-have-trapped-canadians-in-their-homes-td-bank/ar-BBtAOms?li=AAggFp5
http://www.fool.ca/2016/04/22/why-every-investor-needs-to-worry-about-canadas-housing-bubble/
For the first time I can recall in Toronto, neighbours at backyard gatherings are whispering, then talking out loud, about how the housing market has become too crazy.
It’s not just blogs or pundits or forward-thinkers anymore.
It’s here now. I am calling it. As have so many others.
Summer 2016. This is the peak. It’s all downhill from here.
And probably quite fast.
The biggest domino of all, public sentiment about real estate is wobbling.
It will soon tip over.
#162 Russ on 05.28.16 at 11:33 pm
For those about to flop… on 05.28.16 at 10:00 pm
Nice day in T.O today from what I seen.
Most rainy day of the year in Vancouver
This is a picture of me in the Couv today…
===============================
It rains all the time here. Everyone knows that.
Please move away.
///////////////////////////////////
Hey Russ,Thankyou for your kind words!
Two things though…
a) I didn’t complain,just pointed out facts.
b) Did you even bother to look at the photo?
I stay here for the friendly people, obviously…
M41BC
#164 jrochest on 05.29.16 at 12:34 am
#29 For those about to flop
My god, that’s my parents’ house!
Seriously — when Dad died in 1212 Mom sold it, as she’s in a nursing home. Of course they tore down the old house and put up this – didn’t realize it hadn’t sold yet!
They won’t have any financing problems, though — the money to buy the house came from China, as they actually told us that it would be a while before they could close, as they’d have to get the money out of China. They paid cash, as close as I can remember.
Nice couple. I’m surprised the house isn’t sold yet, though.
///////////////////////////////////////
Hey jrochest, that’s pretty crazy.
Besides the price,maybe it’s proximity to a busy street has something to do with it not selling yet.
Also not sure how high the original asking price was.
I’m not sure if any of the speculators/ developers I work for are going to get offended that I talk about their houses,but worse case I guess I could lose my job.
I am not too concerned ,as Garth has assured me that he has an extra ice cream scooper for me in Caledon with my name on it and Russ wants me to move away because I repeated a fact from the weather network.
Man I love this place…
M41BC
Meanwhile back at the ranch:
Housing affordability in BC will certainly become an election issue next year. and what to the Libs do?
Christy is taking a bunch of realtors on a trade mission to China, on the taxpayers’s dime.
And Rich Coleman has his “Let them eat cake” moment when he says : some people just have to wake up and whine.
#147 Flopper…
Thanks. Dad was in WWII he had enlisted in the Navy in 1931 severed 3 years. Then got called up again for his “essential skills” in WWII.
Decoration Day, or Memorial Day, borrowed originally from the south who honored their civil war dead, is now a national holiday. Well deserved, but it has morphed into something a bit less genuine today (in my opinion).
If we mourn our War dead, why the hell must we engage in so many numerous bullshit fights the world over to make MORE war dead?
Has their been a “legitimate” reason for war anywhere since the close of WWII?
I certainly have my doubts on that…
We are now a dangerous nation, not one I am very proud of today -nuff said.
By rhe way, it’s rumored that Coleman is big into RE in BC.
so the debt has steadily increased since 1982 whether you look at the aggregate on a national or provincial level or you look at the debt per capita. Maybe the trend is reversing right now.
I don't see the trend reversing anytime soon since most of the debt is driven by favorable government policies and green initiatives towards housing affordability and development, respectively. Canada's debt would have never reached current levels if it wasn't for CMHC and Genworth mortgage insurance and government guarantees.
Another tailwind is that Canadian bonds are still considered a safe haven for global institutions, especially now with more global bonds yielding negative rates. If you're an institution like Japan's Government Pension Investment Fund, Canadian fixed income (of which most is insured or guaranteed by CMHC and Ottawa) looks great compared to negative yielding JGBs.
It's not that Canada's economy is doing great that allows us to borrow at ultra low rates. It's the fact that other economies are much worse off, making us one of the cleanest dirty shirts in the laundry basket. Just look at the size of Canada's bond market compared to the world (Chart). We're tiny and have very little influence in this environment. If global institutions want to offer Canadians enough debt (mortgages) to hang themselves with then there isn't much Ottawa or the Bank of Canada will do about it. After all, it's more revenue and lower borrowing costs in their view. That said, there is always tail risk that can cause economic shocks.
What I worry about most is currency devaluation and see the loonie structurally decoupling from oil to the downside. Ya your home might be worth $2 million northern pesos, and cauliflower $15 a head.
I think the best idea for couples who don’t want or have children is sell their house and invest so you get a return and can live in a beautiful country like Mexico for 7 months then return and work for 5 months.Find a small furnished place on craiglist, month to month lease and Bob’s your uncle.You both work and then pay less taxes to our wasteful government.Many couples do this now because of the total rat race and pressure of keeping up with the Jones’s.Life is short and time is priceless and to slave away to give away a big part of your income to a corrupt government is not appealing to me.
#175 BOOM! on 05.29.16 at 10:38 am
#147 Flopper…
Thanks. Dad was in WWII he had enlisted in the Navy in 1931 severed 3 years. Then got called up again for his “essential skills” in WWII.
Decoration Day, or Memorial Day, borrowed originally from the south who honored their civil war dead, is now a national holiday. Well deserved, but it has morphed into something a bit less genuine today (in my opinion).
If we mourn our War dead, why the hell must we engage in so many numerous bullshit fights the world over to make MORE war dead?
Has their been a “legitimate” reason for war anywhere since the close of WWII?
I certainly have my doubts on that…
We are now a dangerous nation, not one I am very proud of today -nuff said.
//////////////////////////////////////////
Morning Boom,you are not alone on your thoughts.
Most people prefer no war ,or war as a last resort,not when the wind changes direction.
On a lighter note ,this is why I am glad to see two American teams play each other for the World Series,then there is no one to fight when they lose…
M41BC
#175 BOOM!
Thanks. Dad was in WWII he had enlisted in the Navy in 1931 severed 3 years. Then got called up again for his “essential skills” in WWII.
Decoration Day, or Memorial Day, borrowed originally from the south who honored their civil war dead, is now a national holiday. Well deserved, but it has morphed into something a bit less genuine today (in my opinion).
If we mourn our War dead, why the hell must we engage in so many numerous bullshit fights the world over to make MORE war dead?
Has their been a “legitimate” reason for war anywhere since the close of WWII?
I certainly have my doubts on that…
We are now a dangerous nation, not one I am very proud of today -nuff said.
—————-
And well said
#150 AR on 05.28.16 at 8:26 pm
Does anybody see a problem with a guy charging his girlfriend $400 for rent, while he pays $75 and she does the cooking? Poor woman – don’t marry him. Sounds like an arrogant ass.
——————-
I agree it’s pathetic.
Garth,why did you just send me an encrypted email?
Is this the type of cyber security I have to go through to get a job scooping ice cream?
O.k ‘I will change my answer to your question ” Who is your favourite financial adviser?”.
You run a tight ship…
M41BC
@#181 a box in the Sky
“Does anybody see a problem with a guy charging his girlfriend $400 for rent, while he pays $75 and she does the cooking?”
*******************************************
What ever happen to “equal rights’? Is she supposed to live there for free? Because she’s his girlfriend? In this expensive day and age? $400 a month is chicken feed for a roof over your head.
Perhaps he’s trying to teach her how to manage her money? Instead of watching her spend it on frivilous items? Perhaps he’s a cheap bastard and she hasnt figured that out yet………
Perhaps he’s doing it on the advice of his lawyer?
If she lives there rent free she becomes a”dependant” and after a year or so ……can leave and possibly sue him for “living allowance/ alimony?”
She’s only paying $400 a month for rent ( a huge bargain in this day and age) and Im sure that she’s cooking because she enjoys it.
But you folks just keep seeing how she’s being “oppressed” by her cruel cruel boyfriend.
I have an idea.
Why doesnt he kick her out and let her pay $1000 -$1500 month for her own place and a coupla hundred more for heat/ lights/ internet …..where he can come by for dinner and maybe a “booty call”.
She’d be way better off dont you think?
#161
The federal government does not set monetary policy. — Garth
—————————————————————-
Thats why the feds put in place compliant chairmen.
Of fire them when they become non-compliant.
Same as setting monetary policy to me?!
#167 “The federal government does not set monetary policy. — Garth”
Really, that’s pretty naive when evidence supports otherwise.
The Kruger-Dunning effect: “…those with limited knowledge in a domain suffer a dual burden. Not only do they reach mistaken conclusions and make regrettable errors, but their incompetence robs them of the ability to realize it.”
#106 Herb on 05.28.16 at 10:12 am
from the Stockmann link at #100 –
… China’s tens of millions of real estate speculators do not want the units occupied in order to keep them shinny [sic] new; they are being purchased in lieu of stock certificates or, for the matter, lottery tickets, on the theory that real estate prices will rise forever.
Are there any dark condos in Vancouver’s skyline at night?
+++++++++++++++++++++++++++++++
Okay lets try again.
Yes Herb. …..there are many empty condos and houses owned by foreigners in Moldcouver.
This girl has no problem with the high cost of education…
M41BC
https://imgur.com/CXTfuOv
How about they split it evenly? No special favors just an equal partnership.
Your comment about ‘teaching her’ is telling. Is that like ‘mansplaining’?
#183 crowdedelevatorfartz on 05.29.16 at 1:03 pm
Perhaps he’s trying to teach her how to manage her money? Instead of watching her spend it on frivilous items? Perhaps he’s a cheap bastard and she hasnt figured that out yet………
Perhaps he’s doing it on the advice of his lawyer?
////////
They share same bedromm, it is irelevant she paays rent or not.
Question is is that dude reporting rental income?
and on side note, i wonder does she uses flax seeds when she cooks…
@ #183 crowdedelevatorfartz on 05.29.16 at 1:03 pm
———————————————————–
Now now… Don’t get upset over the White Knights trying to save this poor girl for Paying $400 a month.
All Females are special snowflakes that deserve to be treated like Princesses.
I think he should just let her live there for free and buy her a Pony as well. He can obviously afford it.
Maybe she also does the Laundry… ZOMG!! Call the Misogynist Police!!!
Somewhat true right now, but as you said there is another factor.
Foreign institutions are not going to want their money in CAD with the downside currency risk. US bonds pay similar and are valued in USD not the CAD peso. If yield was the only factor institutions would be buying Brazilian 10 year bonds valued in Real which pay 13%. CAD dominated bonds will have to pay a much higher premium going forward as things unravel to offset the collapsing currency just like the Real. Canada will have to use it’s own version of QE to buy the bonds nobody else will touch.
There is no question in Vancouver 99% of coverage about housing is now negative. Meaning rising prices are now considered a bad thing in the media. Last year at this time all the media stories were positive about housing. Now even people who own housing are freaking out. The people that own are trapped. There is so much inventory in speculation renting is becoming difficult. I say the jig is up. It is going to be a major election issue here in BC next year. It is no longer just about the first time buyer.
@187 Arrrrrgh
“Your comment about ‘teaching her’ is telling. Is that like ‘mansplaining’?
******************************************
Ah yes the PC Police hath risen their ugly head.
So now ‘Teaching” isnt politically correct any more?
Wow!
Sooooo? What do we call the 10’s of thousands of “teachers” in schools across Canada?
“Brain Formulators”? “Life Experience Guides”? Overpaid Under worked BonBon Eaters”, salesmen( errr sorry) sales persons)?
Unbelievable.
You’re right. She’d be better off on her own, learning it all the expensive hard way ……
#185 Brazil ex-pat,
thanks for the confirmation.
#190 BS Foreign institutions are not going to want their money in CAD
That depends. If you're GPIF and expect JPY to devalue another 40-60% over the next 3-5 years, CAD bonds look safer. They wouldn't buy all USD bonds because they can't. Too much exposure. They have to diversify.
#181 A box in the sky on 05.29.16 at 12:37 pm
I agree it’s pathetic.
———-
‘Cause the women get to live for free right?
Give your head a shake douche.
The comments section of this blog could be made into an episode of Jerry Springer.