The little short

RUM modified

“I’m officially betting against the Vancouver RE market,” says Simon, “as we sold our leaky Yaletown condo for $225k more than it was worth in January. The plan is now to rent for 1-2 years, as we wait, watch, and plan our next move like vultures.”

Yeah, that’s right. Simon has horseshoes up his rear end. Not only did he catch the final, insane, extreme burp of the YVR real estate gasbag, but he was already easy to hate. Just 35 years old, married, two kids, maxed TFSAs, a quarter million in RRSPs, money in his kids’ education account, a salary of $225,000 a year – and now a windfall, courtesy of the collective delusion of the greater fools he shares a city with.

“Our registered investments are invested as you recommend,” he says, “however we now have over $800k sitting on the sidelines of the housing market. So, how should I invest the money given a horizon of a year or two?”

We’ll get to Simon’s First World problem in a minute. First let’s give the dude a hand. He gets it. The window is closing on this chance to harvest some historic, epic, tax-free capital gains, and he’s managed to squeeze his $225,000 profit through it unscathed. A greater fool’s money now sits in his non-registered investment account.

Over the last couple of days this pathetic blog has been making the case for Peak House – that point at which it’s pretty much a slam-dunk that valuations cannot be sustained. The macros suck, after all. We’re embarking (finally) on the normalization of interest rates with two Fed increases slated for this year and a couple more in 2017. Canadian five-year mortgage rates will be following suit this autumn, and the Bank of Canada will pop its rate next year. This is the real deal. The party’s ending.

Meanwhile the Canadian economy is sputtering again – negative growth as the first quarter ended and dismal prospects for the second, thanks in part to the Alberta fires. Commodity prices are under pressure as the US buck rises, and household debt is swelling faster than a lovesick sponge.

And if you need more evidence the bubble days are probably coming to a conclusion, look at what our third-biggest bank’s doing. Scotia’s CEO just announced it has taken its “foot off the gas”, purposely restricting new mortgage exposure in Toronto and Vancouver because, well, the locals are idiots.

“We’re a little concerned about housing prices in the greater Vancouver area and Toronto,” Brian Porter said yesterday. “We just took our foot off the gas the last couple quarters in terms of mortgage growth for the reasons I cited, in terms of Vancouver and Toronto.” As you know, recent price gains have been hockey-sticking their way into the history books – up 25% annually in Van and 15% in the GTA. If you don’t have a million to spend, don’t bother looking.

But Porter isn’t stopping there. His bank is now calling on the feds for even-higher minimum down payments. “It is not sustainable and I don’t think it is healthy, there is a bit of an aberration here. I know OSFI (the bank regulator) is concerned about it, the CMHC is concerned about it, the Department of Finance is concerned about it… so I think there are more things the government can do.” And, just to add to the pressure, here’s the OECD, the global development agency which thinks Canadians are loan addicts who need a smack-down. (Household debt hit a new record high at the end of last year.)

“Very low borrowing rates have encouraged household credit growth and underpinned rapidly rising housing prices — particularly in Vancouver and Toronto,” says the international body, “which together are a third of the Canadian housing market. In relation to household incomes, both house prices and household debt are high. Rules should be tightened and targeted regionally.”

Of course, most people won’t heed any of this. They’ll continue to believe the real estate boards’ house-humping releases, the steady diet of Re/Max propaganda and the wall-to-wall media housing coverage while trusting Mom’s real estate advice and envying everyone who’s made a killing (or say they have). That’s why banks and politicians are worried. Is it already too late to wind it down without a bust?

Beats me. But we’re getting close.

Anyway, Simon, we hate you. But in terms of your eight hundred grand, just go ahead and invest it in a balanced and diversified portfolio and give up any idea of Van-vultching in 12-24 months. It took five years for prices in the US to fall 32%, just as it took seven years in the last Toronto correction for a 30% decline. That’s the nature of residential real estate – it shoots higher on euphoria, greed and FOMO, then slides slowly but relentlessly down a sticky slope of failed hope and despair. In the meantime, renters are winners.

You might also extend your bet against Van real estate with a fat position in preferred shares. As rates rise and houses slump, preferreds will be among those assets that benefit mightily from the rising cost of money. A juicy 5% dividend, a nice tax credit, and a capital gain to boot.

Love liquidity, Simon. It’ll be the new cool.

200 comments ↓

#1 TurnerNation on 06.01.16 at 6:33 pm

Of course it sold in three days
Buddy’s million dollar box, in 905 just north of Toronto.
People still were calling clamoring for showings.
A few hundred saw it.

…and it sold 8% over asking.

Maybe we top out in 2017 if/when both Banks AND subprime scuzzy mortgage brokers tighten their taps.
(Or, Gartho finally going for that beer with Smoking man at South Side Johnny’s could be a catalyst. )

#2 Jimmy on 06.01.16 at 6:33 pm

First!!!!!

#3 Bodenby on 06.01.16 at 6:37 pm

Ah liquidity….for many it’s never there when needed most.

#4 Love My Kia on 06.01.16 at 6:39 pm

Simon should sink his windfall into gold!

If Peter Schiff has his way, it will go to 10,000 an ounce.

Everything comes to pass if you wait long enough.

#5 Fred on 06.01.16 at 6:44 pm

“But Porter isn’t stopping there. His bank is now calling on the feds for even-higher minimum down payments”

-From the looks of it, this hasn’t worked before so how about the banks start reducing the amount people are approved for instead?

#6 Suede on 06.01.16 at 6:45 pm

“Scotia’s CEO just announced it has taken its “foot off the gas”, purposely restricting new mortgage exposure in Toronto and Vancouver because, well, the locals are idiots.”

I’m sure the CEO has a real reason why they’re spewing this in the media that he hasn’t revealed.

#7 CMHC a house of cards on 06.01.16 at 6:47 pm

CMHC have known for years that the housing market was in a bubble but continues their Ponzi scheme as they don’t know how to stop it from crashing the Canadian economy into an economic depression. Canada has no industry left just buying, selling, building , fixing , renovating RE . Every realtor who posts here knows it’s a Ponzi scheme but they make their living off scaming people by doing nothing but lying. IT’S time to remove CMHC and let the free market decide Canada’s housing bubble fate. I know Realtors, bankers and mortgage scum hate the free markets

#8 crowdedelevatorfartz on 06.01.16 at 6:48 pm

Well done Simon. Well done.
A round of applause people.
(polite Golf clap)

#9 Vancouver Troy on 06.01.16 at 6:49 pm

Chopper Dude

Thanks for your response yesterday. Congratulations on your sale. What city were you in? Older home?

#10 BOOM! on 06.01.16 at 6:50 pm

“Love liquidity, Simon, it’s the new cool!!

Well said.

#11 SeeB on 06.01.16 at 6:55 pm

Should I be loading up on preferreds exclusively from outside of Canada? Brian Porter’s call to reason doesn’t exactly instill confidence in the Canadian banks…

#12 JohnnyP on 06.01.16 at 6:56 pm

While the hope is for a declining Van market, I won’t hold my breath for getting a home at fire sale prices as there are so many ultra wealthy people around Vancouver that any discounts would be a trigger for them to collect real estate at an even greater volume.

#13 Maple Bacon Legend on 06.01.16 at 6:58 pm

First!

#14 Rainclouds on 06.01.16 at 6:59 pm

Yup am thinking Minimum 3 yrs before thinking about house hunting in Vandelusional. Meanwhile the portfolio pays the rent and increases.

Thanks for the life changing advice GT!

In other news: Much piling on here in BC, The photogenic and increasingly Hapless Real Estate Pumping Premier is in the news for the wrong reasons :

http://www.theglobeandmail.com/news/british-columbia/oversight-of-british-columbias-housing-market-is-a-sham/article30227434/

http://www.theglobeandmail.com/news/national/bc-regulator-feels-heat-to-curb-real-estate-misconduct/article30227796/

https://www.biv.com/article/2016/5/christy-clark-downplays-real-estate-ties-her-lates/

http://news.nationalpost.com/full-comment/brian-hutchinson-everything-stinks-about-christy-clarks-mysterious-salary-top-ups

#15 TurnerNation on 06.01.16 at 7:01 pm

Reporting from Duke of Devon patio…summer is here.

#16 Victoria Real Estate Update on 06.01.16 at 7:05 pm

There are numerous examples of housing markets that craahed 40% – 50% or more in approximately 5 years. For example, Miami, Phoenix, San Francisco, Los Angeles, San Diego, Las Vegas in the US.

In Canada in the early 80s, it didn’t take very long for markets in Edmonton, Calgary, Vancouver and Victoria to crash.

In the early 90s, people I know had purchased a house in a nice area of Toronto but had to sell two years later. They got half of what they paid.

In 2008-09, house prices in Vancouver fell at a rate of 14.2% per year (for 10 months) until interest rates were suddenly slashed from near-normal to emergency levels.

. . . . . Vancouver House Prices. . . . . .
. Percent Below July 2008 Price Level . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. .0%. . .*. . . . . . . . . . . . . . . . . . . .
– 1%. . . . . . . . . . . . . . . . . . . . . . . .
– 2%. . . . . . . . . . . . . . . . . . . . . . . .
– 3%. . . . . . . . . . . . . . . . . . . . . . . .
– 4%. . . . . . . . . . . . . . . . . . . . . . . .
– 5%. . . . . . . . . . . . . . . . . . . . . . . .
– 6%. . . . . . . . . . . *. . . . . . . . . . . .
– 7%. . . . . . . . . . . . . . . . . . . . . . . .
– 8%. . . . . . . . . . . . . . . . . . . . . . . .
– 9%. . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . .
-11%. . . . . . . . . . . . . . . . . . . . . . . .
-12%. . . . . . . . . . . . . . . . . . . . * . . .
—————————————————————-
. . . . . .July. . . . December. . . . May. . .
. . . . . 2008. . . . . 2008 . . . . . 2009. . .

(source: Teranet’s index)

In 2009, Vancouver’s (crashing?) housing market was rescued by emergency rates.

At that time, similar major price corrections were underway in Victoria, Edmonton and Calgary. These falling markets were also rescued by emergency rates.

There is always the danger of rapidly falling prices when a housing bubble exists. Has there been a bigger bubble than Vancouver’s?

#17 jay on 06.01.16 at 7:11 pm

Meanwhile in Ricmond B.C they’re fighting over town houses. http://www.richmond-news.com/news/queue-jumping-accusations-fly-for-million-dollar-townhouses-1.2268050

#18 No LOSERS on the Trump train on 06.01.16 at 7:12 pm

#2 Jimmy on 06.01.16 at 6:33 pm

First!!!!!

This is what I’m talkin about folks…. a total and complete LOSER every day… I will fix that and everything else… I will build a wall around Jimmy.

#19 Dave on 06.01.16 at 7:13 pm

Garth,
Don’t you think the frothy Vancouver market will goose the smaller retirement towns in BC like Kelowna, Parksville, Qualicum etc? Anyone over 50 and tired of the traffic clogged city with Vancouver property can live like kings in these places. Shouldn’t real estate in these towns still do well?

#20 The Dude on 06.01.16 at 7:17 pm

Hey Garth, when did Simon buy?

#21 Rexx Rock on 06.01.16 at 7:24 pm

Emergency interest rates for 7 years now.How long do emergency rates last for maybe 10 years?Nobody knows so it can last a few more years.It was all planned and it worked well for the government and the big banks.

#22 Kilt on 06.01.16 at 7:27 pm

I can just see Simon 18 months from now cratering to the wife and putting half a million down on a 1.8 million dollar fixer upper on the east side.
Good luck with the renting.

Kilt.

#23 Hank Posilijka on 06.01.16 at 7:34 pm

Canada 30 year bond yields are currently 1.95%. Oh, when or when are they going to rise, oh when or when oh when.

I just see all the debt junkies and their beneficiaries from governments, corporations, businesses to consumers and their masters, U.S. Federal Reserve, ECB, Bank of England, Bank of Australia, Bank of Canada, Bank of Japan, Bank of China, Bank of New Zealand, Sweden, Finland, Norway central banks etc. all keeping rates lower and negative where possible.

#24 IHCTD9 on 06.01.16 at 7:35 pm

#164 Neil Armstrong on 06.01.16 at 3:54 pm
Let’s go green and IH..whatever.

If you’re about 50+ years of age, live in Canada, are used to the riches of oil and gas, and have only a passing educational grasp of the physical and chemical sciences, you probably won’t understand how quickly the electric revolution will happen. It’s already happening. The incumbents are scrambling.

————

Nothing’s happening, it’s nuclear fusion or nothing. I know the math, and any effort worth pursuing is not happening in Canada, and is decades from fruition.

Don’t get me wrong, I welcome the day; but there are a lot of bs claims and dead end go nowhere recycled ideas on the table, I have not seen a single one make it to mass production yet. Even Tesla would be insolvent if they weren’t getting hand outs.

There are no real world practical forms of electric flight or bulk transport systems anywhere in the world. Not a single exclusive electric car manufacturer that can stand on its own two feet. There is squat. A bunch of ideas looking for investment or handouts, and all need much improved battery technology, and all need a source of clean, ultra cheap electricity to even have a prayer of getting off the ground – and both of these don’t exist.

Your enthusiasm is admirable, but we won’t be seeing any major electric revolution in our lifetimes.

#25 common sense on 06.01.16 at 7:35 pm

Speaking of liquidity, 3 people combined had a nice sell order last night in China to the tune of only 90 million. A drop of 12.5% of the market there.

Now THAT’s liquidity.

#26 G on 06.01.16 at 7:44 pm

http://torontolife.com/real-estate/houses/scotiabanks-ceo-is-selling-his-swanky-church-conversion-condo-for-4-million/

#27 mike in kelowna on 06.01.16 at 7:47 pm

Oh you mean this Scotiabank?

http://business.financialpost.com/news/fp-street/shine-fades-on-scotiabanks-gold-business-as-banks-land-in-court-over-alleged-price-manipulation

or

http://www.cbc.ca/news/scotiabank-manager-s-death-probe-reveals-multimillion-dollar-fraud-1.2125652

Yep, this bank is certainly a pillar of the community and an entity you can’t help but have great trust in and respect and warm feelings for..

The boyz have done their best to scrub this information from the internet but they missed a few places…

Time for some perp walks…

#28 salonist on 06.01.16 at 7:48 pm

How feeDuck hopes to challenge real estate commissions in Ontario and across Canada

http://business.financialpost.com/entrepreneur/fp-startups/how-feeduck-hopes-to-challenge-real-estate-commissions-in-ontario-and-across-canada?__lsa=ef23-483c

#29 Debt's Dark Embrace on 06.01.16 at 7:48 pm

Why not common stock in some of the Big Five banks instead of preferreds? 4 to 4.5 % dividend, 11 times earnings, 52% of cash flow, potential capital gains if u are in for the long haul, and insured by the Gouvernement of Canada ? Buy and forget…….what say you? Or is that too easy ?

More volatility, lower dividend and there is no government guarantee. — Garth

#30 Smartalox on 06.01.16 at 7:54 pm

Does anyone else think it’s weird that the CEO of Scotiabank is acknowledging the risk of leverage, and in the next breath calling on governments to ‘do something’ about it?

Why can’t the bank itself ‘do something’ about it? At least in terms of its own clientele? Enact stricter (lower) Loan-to-value requirements, or higher commitments? Actually scrutinize employment letters?
ACTUALLY TURN CUSTOMERS DOWN?

If he’s concerned about getting scooped by his competition, he shouldn’t be. All he’d do by making loan approvals harder to get is move some potentially troublesome mortgages off his bank’s balance sheets, and on to his competitors’.

Sun-Tzu would call that a win-win.

Van City would clean up; I hope that when the provincial credit unions implode, the provinces bail them out with a special tax on housing values. As a renter, I’d hate to have to pay for other people’s shoddy business practices.

#31 MoneyDriven on 06.01.16 at 8:09 pm

Hey Garth,
Why is the mortgage rate is still same if not lower than last November when US raise 0.25? How much US has to raise their interest rate before it reflects on our fix term mortgage rates?

Thanks,

#32 Mark on 06.01.16 at 8:10 pm

I wonder how many of these letters to Garth are real? I mean, $225k salary and $800k saved at the age of 35 is a bit off the charts statistically. Sure, there’s a few 35-year-old doctors or dentists pulling that, but most of them spent until their early 30s in school or paying back debt in some form or another.

A strong indicator of this being merely a troll is that the average housing unit hasn’t actually appreciated this year. So claiming $225k ‘appreciation’ in just a few months, well, sends the BS-meter a’blarin, that’s for sure.

#33 RocDoc on 06.01.16 at 8:14 pm

Bravo Simon! Millionaire by 35 is a great place to be.

#34 Mean Gene on 06.01.16 at 8:19 pm

In Metro Vancouver you need to have your new home arranged before selling… unlike in the past. Market is stupid crazy and even rentals reasonably priced that are not toilets can be elusive prey.

#35 TRT on 06.01.16 at 8:21 pm

Here’s how to know whether to Short:

CRA has all taxpayers income tax info. CMHC, Genworth, and Canada Guaranty has all the income documents for mortgages approved which had less than 20% down. For those who put more than 20% down, the Big Banks have the income documents.

Sources tell me that there seems to be a mismatch between the income numbers of CRA and those given to CMHC, Genworth, Canada Guaranty, and the Big Banks.

Hmmm. Wonder what percentage of mortgages have falsified incomes. They wouldn’t say.

This is our version of Liar Loans. Only thing complicating matters is Chinese Money inflows. If that ever stops, you will see a 50%+ crash.

The powers that be and financial industry are doing everything to keep the Chinese money inflows hidden from the common folk

#36 Timmy on 06.01.16 at 8:23 pm

http://www.theglobeandmail.com/news/politics/globe-politics-insider/jeffrey-simpson-why-isnt-bc-really-cracking-down-on-cause-of-rising-home-prices/article30219088/

#37 Timmy on 06.01.16 at 8:25 pm

Hey Garth,
Even Jeffrey Simpson, one of the Globe and Mail’s most respected columnists writes about Chinese money in Vancouver real estate:

For reasons of absurd political correctness, it is considered in some quarters racist to mention that Chinese money has been buying up property everywhere in B.C.’s Lower Mainland. Where do people think it’s coming from? Azerbaijan? Indonesia? Australia?

The exact share Vancouver that has received of the estimated $1-trillion exodus of Chinese cash can’t be known. But housing prices have soared 30 per cent on average in the Lower Mainland in the past 18 months, and that surge didn’t just happen.

Seems everyone but you agrees what is pushing this market.

Simpson is an Ottawa-based political journalist. Big YVR property expert. — Garth

#38 Ace Goodheart on 06.01.16 at 8:25 pm

Still don’t agree with this. Only 40% of Canadians actually have mortgages. A very small percentage used CMHC type financing and put less than 20% down when they purchased.

Hikes in interest rates do not seem to result in falling real estate values. In Toronto, the opposite actually seems to be true. When interest rates were raised, house prices rose along with them, and did not actually fall again until interest rates started to fall.

The US housing crash was not caused by interest rate increases. It was caused by deregulation. Various right-leaning politicians and civil servants began a long process of deregulating the consumer lending industry. This was done along with a corresponding deregulation of investment banks and a loosening of capital requirements.

The result was “bundling” of bad loans into tranches (collateralized debt obligations), credit default swaps and securitization. The idea behind this was to hide bad debt. It worked so well because banks were allowed to do it (deregulated investment banks could sell their own debt instruments and they could structure those instruments pretty much any way they liked).

So you had a huge inflow of cash into the lending market.

This was combined with the deregulation of consumer lending. The main deregulated items were credit checks and “teaser” mortgages. Basically, anyone could get a mortgage to buy anything, and the interest rate was only good for a year (and then re-set at a higher rate).

The US housing bubble resulted. There are documentaries about this situation. Absolutely none of it resulted from an increase in interest rates.

We have none of this happening in Canada. We just have a slow rise in interest rates.

The assumption that everyone is so over indebted that any rise in rates will put everyone under water and cause a housing price collapse is really far fetched.

To figure out what is going on in the Canadian housing market you have to really dig into it. I have figured it out. It takes a lot of research and a lot of thinking.

What I can tell you from what I have learned, is that people want to do the following:

1. Don’t sell your house.

2. If you have to sell your house, don’t keep any of the money you get from the sale, in cash.

3. Invest in things that are not tied to the value of either Canadian or US currency. This is really important.

4. Go ahead and fix your mortgage rate (if you actually have one) for 2.49% or lower if you can get it. Likely we will see an interest rate rise of about 1.5% in the next three years.

#39 E Richard on 06.01.16 at 8:27 pm

Here is why you should never trust a realtor, mind you purchaser should have done some due dilligence.

http://www.cbc.ca/news/canada/nova-scotia/harrietsfield-homeowner-wants-rdm-site-cleaned-1.3609713

#40 TRUMP University Graduate on 06.01.16 at 8:28 pm

Wrong, wrong, wrong, Garth. I paid good coin for a university degree a decade ago, which taught me a lot about the power of investment real estate, from one of the masters of the subject.

I am doubling down, and going for another seminar next week while they’re still cheap!

Then I’m gonna raise the rents of all the pathetic renters who come to your blog!!

#41 Trading Naked on 06.01.16 at 8:32 pm

Sea sponges swell when they’re lovesick? Any marine biologists in the house?

#42 Brian on 06.01.16 at 8:35 pm

Calling the top eh? I’ll believe it when I see it.

#43 vulcan without ears on 06.01.16 at 8:38 pm

35 years old, maxed trsf, rrsp, no debt, already millionaire…2 Kids.

They don’t have a life?

#44 Smoking Man on 06.01.16 at 8:38 pm

#15 TurnerNation on 06.01.16 at 7:01 pm
Reporting from Duke of Devon patio…summer is here.
……………………….

Jealous not. Earls is better.

#45 Harbour on 06.01.16 at 8:41 pm

Can you imagine the nutjob paying a 1/4 million more than he could of paid in January. Ha Ha

#46 the other white meat (pork) on 06.01.16 at 8:41 pm

What’s the low down on XTR ? I’m thinking of buying some but Morningstar has it listed as “high risk, average return “. Looks like the dividends have been decent but being a rookie there’s a lot that I’m missing. Thanks!

#47 crowdedelevatorfartz on 06.01.16 at 8:44 pm

Yo!
Devils Advocate.
Did you read any of the links provided in #14 Rainclouds comment?
Specifically the unaccountable, secretive, self regulating real estate “cartel” that currently packs millions in commisions in its back pocket all while spending millions more to perpetuate the money machine.
Revolting doesnt even begin to describe it.
Enjoy it while it lasts because it aint gonna last forever.

#48 Andrewt on 06.01.16 at 8:55 pm

#11 SeeB on 06.01.16 at 6:55 pm
Should I be loading up on preferreds exclusively from outside of Canada? Brian Porter’s call to reason doesn’t exactly instill confidence in the Canadian banks…

If I’ve been following along correctly I think the banks know stuff better and before anybody, and probably figured out a few years ago the exact point they could milk this bubble to, and here we are.

Now it’s about PR, and getting ahead of the headlines with expressions of concern so they minimize the backlash.

Anyways, the banks stand to make more profit as people renew at higher rates.

Banks have so many ways to make money.

It’s like that morning you got up and all of a sudden it was 3 bucks to use another banks ATM.

And everyone just shrugged and went about their day.

The banks will be fine.

#49 Ronaldo on 06.01.16 at 8:58 pm

#28 Debt’s Dark Embrace on 06.01.16 at 7:48 pm

Why not common stock in some of the Big Five banks instead of preferreds? 4 to 4.5 % dividend, 11 times earnings, 52% of cash flow, potential capital gains if u are in for the long haul, and insured by the Gouvernement of Canada ? Buy and forget…….what say you? Or is that too easy ?

More volatility, lower dividend and there is no government guarantee. — Garth
================================

And as an example of volatility take RBC for instance.
52 week low $64.52 Feb. 11th and 52 week high $80.97 May 30th. 25.5% gain in 3.5 months.

#50 AK on 06.01.16 at 9:02 pm

#2 Jimmy on 06.01.16 at 6:33 pm

First!!!!!
==================================

Almost!!! Maybe tomorrow…

#51 SmallTownSteve on 06.01.16 at 9:02 pm

My mortgage came up for renewal, locked it in for 2.69 5yr closed. It was 3.09. [email protected] asked if I would like to put down a lump sum as well. I replied “Why when you just gave me a loan that is a couple points over inflation?” No I will invest that and maybe in 5 years if interest rates are much more I will consider it.
We talked a bit about TFSA’s etc. She said “where did you learn all this?”
My reply? “I went to the school of Garth”.

#52 Ronaldo on 06.01.16 at 9:17 pm

#46 the other white meat (pork) on 06.01.16 at 8:41 pm

What’s the low down on XTR ? I’m thinking of buying some but Morningstar has it listed as “high risk, average return “. Looks like the dividends have been decent but being a rookie there’s a lot that I’m missing. Thanks!
====================================
https://www.blackrock.com/ca/individual/en/products/239495/ishares-diversified-monthly-income-etf?nc=true&siteEntryPassthrough=true

One of my favorites. Pays a nice dividend. Low volatility. A good steady performer.

#53 45north on 06.01.16 at 9:17 pm

“We’re a little concerned about housing prices in the greater Vancouver area and Toronto,” Brian Porter said yesterday. “We just took our foot off the gas the last couple quarters in terms of mortgage growth for the reasons I cited, in terms of Vancouver and Toronto.”

that’s when everything is on the up swing. Wait until it’s on the down swing.

But I’m afraid wait is what the politicians will do. Politicians like Justin Trudeau, Christy Clark and Katherine Wynne. I suppose Stephen Poloz isn’t a politician but he should raise interest rates.

Wait until September, it’s going to make Fort McMurray seem like a picnic. How about this “if you live in Fort McMurray for a year, every day, then all your debt is erased”. They’d have to double the lanes on Highway 63. Again.

#54 Kostas on 06.01.16 at 9:23 pm

This blog would be priceless if it had all the advises Garth gives in one place. Some kind of “Today’s advice”

#55 Smoking Man on 06.01.16 at 9:29 pm

I don’t have a morsel of a gay gene in my DNA
Never been to a pride parade and have no intention of ever going to one. Lesbians scare me, and I don’t enjoy looking at naked men.

But damn it, I have serious crush on this young gay man. Almost like the one I got for Freddy Mercury.

He’s touring US collage compasses with his
“The Dangerous Faggot Tour”

He’s Dracula to the mental left SJW movement.

https://twitter.com/Nero

#56 Smoking Man on 06.01.16 at 9:34 pm

#32 Mark on 06.01.16 at 8:10 pm
I wonder how many of these letters to Garth are real? I mean, $225k salary and $800k saved at the age of 35 is a bit off the charts statistically. Sure, there’s a few 35-year-old doctors or dentists pulling that, but most of them spent until their early 30s in school or paying back debt in some form or another.

A strong indicator of this being merely a troll is that the average housing unit hasn’t actually appreciated this year. So claiming $225k ‘appreciation’ in just a few months, well, sends the BS-meter a’blarin, that’s for sure.
…………….

Didn’t know robots came with BS meter.

#57 Joe2.0 on 06.01.16 at 9:37 pm

I believe the only way that Van and area RE is going to go down is if there’s a war or a global disaster of sorts otherwise people are going to continue to flock here.

The Sunshine Coast is up almost 30% in 5 months with bidding wars on almost all properties
The reasons being people are cashing in on their houses getting away from the big city and getting way more bang for there buck, also there’s the the foreign interest.
The same goes for Vancouver Island, where the bidding wars have started.

A big problem for locals is that Canada has a small population that’s competing with far larger economies Aka way more millionaires.
My assistant from China said that many investors he knows bid up prices as it raises the book value of the whole area.
So personally I don’t think there’s going to be a big RE dip.

#58 Give us this Blog our daily Garth on 06.01.16 at 9:41 pm

#13 Maple Bacon Legend on 06.01.16 at 6:58 pm

First!
—————–
Now THIS is pathetic! C’mon Man…. practice hitting F5 harder and faster. You can train up with a Shake Weight in your spare time. LOL!

#59 Ronaldo on 06.01.16 at 9:43 pm

#57 Joe2.0 on 06.01.16 at 9:37 pm

I believe the only way that Van and area RE is going to go down is if there’s a war or a global disaster of sorts otherwise people are going to continue to flock here.

The Sunshine Coast is up almost 30% in 5 months with bidding wars on almost all properties
The reasons being people are cashing in on their houses getting away from the big city and getting way more bang for there buck, also there’s the the foreign interest.
The same goes for Vancouver Island, where the bidding wars have started.

A big problem for locals is that Canada has a small population that’s competing with far larger economies Aka way more millionaires.
My assistant from China said that many investors he knows bid up prices as it raises the book value of the whole area.
So personally I don’t think there’s going to be a big RE dip.
==================================

You’re a realtor right?

#60 TCContrarian on 06.01.16 at 9:45 pm

“The Little Short” or…

“The Bigger Short” ?

– time will tell I guess.

Given that the debt levels are higher now in Canada than US at their peak, along with greater complacency, it could be the latter, if you ask me.

At least Garth -I hope – you’re not talking about a part of your anatomy…LOL

Aside, I was at a dinner party in E.Van last weekend, – everyone ‘knew’ that it was Asian $$$ causing the inflated RE prices. No-one had even a clue about the cost of borrowing etc.
And this was an ‘educated’ bunch!

“Look out below”, is all I can muster to say.

#61 Toothless Measures on 06.01.16 at 9:52 pm

“It took five years for prices in the US to fall 32%, just as it took seven years in the last Toronto correction for a 30% decline. That’s the nature of residential real estate – it shoots higher on euphoria, greed and FOMO, then slides slowly but relentlessly down a sticky slope of failed hope and despair. In the meantime, renters are winners.”

And there it is – something I have reminded renters waiting on the sidelines for years and it is finally acknowledged after years and spelt out for all to see….

A 13 year bull run in Vancouver will take many many many years to subside to a point where it make sense again to invest based on ‘economic fundamentals’ like price to rent ratios – if ever.

All the ‘genius’s’ cashing out are so eager to get back into the market and think it will slide in a year or two. That is about all they can justify waiting for, particularly for those that have wives and kids.

In or or two years, the siren to RE will sing to them and they will want to get in. Few if any, will have the fortitude to keep renting for the next decade as it will take that long for prices to fall to the point.

Guess what – he can join the que of ‘smart’ people waiting on the sidelines for years. And they will keep waiting for years.

And surprise – you get to keep you money in a portfolio for the next ten years when you cash out. Oh, and perhaps you can enjoy the paltry annualized 3% return in my 60/40 balanced portfolio since early 2012.

Eventually, when one does the math, you realize that sitting on the sidelines renting for years and waiting for a bottom will cost more than actually buying a depreciating asset and holding on to it.

#62 Smoking Man on 06.01.16 at 9:55 pm

For a wee buggee going for almost a Million in my hood, it’s safe to say that this is complete madness. And anyone with two brain cells would be selling.

So you all know the herd is mental, I’ve known it all along. That’s why I never bet against them.

The real estate pig has a long way to go.
All the negative chatter on MSM will do nothing to curtail it. It’s social status, and a Canadians mental obsession to hate land lords.

It would be like me finally getting to Bottoms_Up, get him a climate change denier tattoo on his fore head.

It’s not going to happen anytime soon.

#63 Smoking Man on 06.01.16 at 9:59 pm

A member of always believe the woman fan club, look at her reaction to a free speech gathering.

http://www.breitbart.com/milo/2016/06/01/milo-waves-as-ucla-protesters-block-entry-spit-at-him/

#64 Harbour on 06.01.16 at 10:05 pm

#56 Smoking Man

Ha Ha… BS Meter

So true, you never see an email to Garth from Joe Average

#65 Calamity Janeevkaya on 06.01.16 at 10:05 pm

First. There is no way BOC Poloz will raise rates. It would bankrupt the federal government and all minor governments and Quango’s who are deep in the trough. Won’t happen. What will happen to the Trudeau Paln to borrow another several hundred billion “because rates are at historic lows”.

Second. Simon and no one else in the private sector is ‘salaried’ at $225 in Vancouver, no one. Dentists, neuro surgeons maybe. But private sector ‘salary’ no way, just doesn’t exist. Only leeching city civil servants get that . And if he’s bragging about being a leech, he’s a parasite puke and should f off.

#66 Smoking Man on 06.01.16 at 10:14 pm

We need a Canadian version of http://www.breitbart.com/

I can think of no one better then the great Gartho to head it up.

Lets face it ice scream merchant at the forks. You love to hit keys on the keyboard more than anything in life. Your obsessed with the reactions your words create. Posting comments at all hours of the day.

Screw the gig as advisory shtick. Life is short do what you love and are a master at.

Give me a page, I’ll work for free, I don’t loot, got lots.

I like this too.

#67 rainclouds on 06.01.16 at 10:16 pm

#57 Joe “My assistant from China said that many investors he knows bid up prices as it raises the book value of the whole area”

Wow! impressive fact based assessment of the market.

Your idiot assistant knows people who pay more just because. Riiiight.

Yes there are bidding wars on the SShine coast I was checking props 3 weeks ago. Had a few beers with a realtor. Very few overseas investors. In fact they are typically 2nd homes bought with equity from the city prop.

Question for you Joe.

Wadda suppose happens to the sunshine coast/island/Okanagan when van tumbles.?

Yup cottages get dumped to try and hang on in the city. Did your “asistant from china ” mention that?

#68 Smoking Man on 06.01.16 at 10:21 pm

#64 Harbour on 06.01.16 at 10:05 pm
#56 Smoking Man

Ha Ha… BS Meter

So true, you never see an email to Garth from Joe Average
…..

Joe average don’t send emails, but works a shovel masterfully.

#69 Rich Young on 06.01.16 at 10:25 pm

THINKING OF BUYING IN CALGARY… STOP!
I know two families in cowtown declaring bankruptcy. One has now dropped the keys off and drove back to NS. Meanwhile, down the street people file through a renovated duplex like sheeple fools.

This winter we will see more empty homes. Once school is out many more will leave this province and head back to where they came from. If you want to stay in Calgary, sit on your hands at least until this winter. Buying now will only lead to depression as this market falls to pieces.

I pity those locking into a home purchase now. It is especially amusing to be living next to vacant bank owned property while people file through a listing a block away $430,000 for a half duplex 1965 built! I recall paying $145,000 for my last home in BC in 2003 before the Government pulled the wool over our eyes with cheaper and cheaper money. All this to create the biggest bubble we will ever see.

Only 10 mins from my hood people are paying $500K for tear downs and building mcmansions in there place. $600K for an empty lot once you clear out the old home I’m guessing. This in a dieing economy.

Still waiting to get back in the market.

#70 VanMan on 06.01.16 at 10:38 pm

While i agree that Vancouver is at insane valuations and there will no doubt be a slow erosion of real estate values, I disagree that renters will be rewarded and that owners will be forced to sell at lower multiples. A huge component of this is the rise of the sharing economy and in particular Airbnb.

I personally know dozens and dozens of people (ages 28-45) that have their units listed on Airbnb and they make multiples of the mortgage payment in a month (even in off tourist season). Vancouver is a major travel, tourist and entertainment hub and that is not going to change.

I think the meme that people will be dumping properties and vultures swooping in is way overblown.

#71 Smoking Man on 06.01.16 at 10:39 pm

My Dogs, not you guys. My poodles.

Sophie a little female psychopath, props up on the sofa waiting to see an animal, a cartoon so she can scream barks at the TV. a slow walk back to the sofa, shes bursting with pride.

Now Wyatt. This dog is a full on retard. Shits and pisses in the house. Has no clue we have a TV. Try to get a lick(Kiss) is impossible unless you give him a full hour of a tummy rub. You might get one. You look into his eyes and there is nothing there.

I’m trying to figure out what university he attended.

#72 Get on the Trump Train on 06.01.16 at 10:51 pm

#71 Smoking Man on 06.01.16 at 10:39 pm

My Dogs, not you guys. My poodles.

Sophie a little female psychopath, props up on the sofa waiting to see an animal, a cartoon so she can scream barks at the TV. a slow walk back to the sofa, shes bursting with pride.

Now Wyatt. This dog is a full on retard. Shits and pisses in the house. Has no clue we have a TV. Try to get a lick(Kiss) is impossible unless you give him a full hour of a tummy rub. You might get one. You look into his eyes and there is nothing there.

I’m trying to figure out what university he attended.

Your alma mater naturally – where else!….. Trump University

#73 Millmech on 06.01.16 at 10:52 pm

#61
You only buy if house is 2-3 times earnings,guy who sold and has 800 large should never own again,why would you as you can rent a better place with income than you could ever afford to buy.
Also if he stays invested for ten years his cash doubles to 1.6 million,good chance his place might be for sale for $400,000.
Strange how people don’t look at mortgage amortization tables when calculating total payout.If his place was bought with 5% down over 25yrs+CMHC fees rolled into it+strata fees and special assessments+property taxes I would bet its much cheaper to rent for the rest of your life.
PS
with all those costs associated with ownership which is only suppose to be 32%of yearly income you need to actually have to earn triple whatever that works out to over 25yrs.

#74 Smoking Man on 06.01.16 at 10:59 pm

#72 Get on the Trump Train on 06.01.16 at 10:51 pm
#71 Smoking Man on 06.01.16 at 10:39 pm

My Dogs, not you guys. My poodles.

Sophie a little female psychopath, props up on the sofa waiting to see an animal, a cartoon so she can scream barks at the TV. a slow walk back to the sofa, shes bursting with pride.

Now Wyatt. This dog is a full on retard. Shits and pisses in the house. Has no clue we have a TV. Try to get a lick(Kiss) is impossible unless you give him a full hour of a tummy rub. You might get one. You look into his eyes and there is nothing there.

I’m trying to figure out what university he attended.

Your alma mater naturally – where else!….. Trump University

Yes that’s why I love him so much

#75 rainclouds on 06.01.16 at 11:01 pm

#70 “i personally know dozens and dozens of people (ages 28-45) that have their units listed on Airbnb and they make multiples of the mortgage payment in a month (even in off tourist season). Vancouver is a major travel, tourist and entertainment hub and that is not going to change.”

Lets follow this through. Sales tank. Tax revenues drop. Governments at all levels need cash. Ever heard of CRA? They want their cut. Hotel lobby kinda pissed too.They pay taxes. Gregor getting an earful. New economy meets strapped City coffers. Y
New economy gets a lesson.

#76 JP on 06.01.16 at 11:11 pm

2 or 3 Us rate hikes coming this year, all the deniers and naysayers will be left with their pants around their ankles. Then Yvr market will have constipated diahria, decline will start slow but when panic sets in it will accelerate quickly in to the abyss.

#77 family beagle on 06.01.16 at 11:14 pm

#43 vulcan without ears on 06.01.16 at 8:38 pm
35 years old, maxed trsf, rrsp, no debt, already millionaire…2 Kids.

They don’t have a life?

No kidding. Must have written ‘retirement planning’ under yearbook photo. Oh well, it keeps them between the pylons and on designated trails. I knew a dude like that. Had the economical chevette in high school, became some class a tax lawyer in TO. Married for congenial benefit. Safe, secure consumer. Had salt and pepper labelled salt and pepper.

#78 JP on 06.01.16 at 11:24 pm

DELETED

#79 Ronh on 06.01.16 at 11:24 pm

#19 Dave I live in the SO. Word is lots of people from Van are shopping
here.

#80 bank CEO calling on the feds on 06.01.16 at 11:34 pm

But Porter isn’t stopping there. His bank is now calling on the feds for even-higher minimum down payments.

===

Why does a private bank need babysitting of the government when it comes to make a decision about placing a mortgage?

#81 S.Bby on 06.01.16 at 11:38 pm

#65 Calamity Jane

no one is salaried at $225 in Vanvouver, no one.

Really? Do you know what everyone in Vancouver makes? I know people who are salaried at that level and more.

#82 cheap money on 06.01.16 at 11:43 pm

I recall paying $145,000 for my last home in BC in 2003 before the Government pulled the wool over our eyes with cheaper and cheaper money. All this to create the biggest bubble we will ever see.

—-

What wool are you talking about?

Cheap money was born to save the world from total financial collapse, caused by major flaw of Capitalism, executed by the supposed top experts of finance, the banks, at the time when money was not cheap.

#83 Damifino on 06.01.16 at 11:54 pm

#76 JP

… decline will start slow but when panic sets in it will accelerate quickly in to the abyss.
—————————-

I partially agree. The decline will start slow then stay that way for an exceedingly long time. Sticky, sticky, sticky all the way down. Just as bad in the long run.

#84 Don Derc on 06.01.16 at 11:57 pm

So Scotia Bank needs the Feds to change down payment rules because….the studs at the bank can’t police themselves?

When the reset button hits, that means a dumper selling in YVR for $1.25 million is now $900K….and that’s a deal?

Did a week in Indianapolis – the boarded up homes at College and 30th is heartbreaking. I got bored after my 60th pic. Indy certainly isn’t the litmus test for the nation but you know…just saying.

Then a week in Toronto…what a beautiful, expensive zoo. You guys have some big problems out there – too fast too soon.

Now finishing up in Winterpeg before heading to the west coast. I say buy Nicaragua my fellow Cdns. It’s easier to dodge bullets their than dodging T2’s blank cheques. It’s either Nica or Chilliwack. Either way I think the Cdn dollar is at par n’est pas?

#85 Brazil ex-pat on 06.02.16 at 12:00 am

How is it….that only the 1% seem email Garth? Public sector employees mostly maybe?

#86 Newcomer on 06.02.16 at 12:02 am

@VanMan

A huge component of this is the rise of the sharing economy and in particular Airbnb.

I personally know dozens and dozens of people (ages 28-45) that have their units listed on Airbnb and they make multiples of the mortgage payment in a month (even in off tourist season).
————————————————

My grandmother took in lodgers (foreign students) to help make ends meet. It’s easier to get bookings these days but it’s still a lot of work. You have to clean up, and be nice to people, and have strangers in your house. It’s what you do to get by when your means are stretched, and it’s fine, but it’s not an indication of a healthy growing economy, it’s not a growth factor. Next thing you’ll be telling us that prices will keep going up because a lot of your friends have taken to collecting bottles by the roadside for the deposit.

#87 lukas luo on 06.02.16 at 12:08 am

Congrats, Simon! Time horizon of 1 to 2 year so you can jump back in to the r/e market…what a joke trying to time the Vancouver market. Good luck and hope you have a comfortable chair cuz you’ll have to wait a lot longer for the market to crash, if at all. Vancouver peaked? Haven’t we heard from someone about at least 5 years ago? Those who listened I feel sorry for you as you have missed the boat…even if the market were to crashed 20% to 30% from here (you can bet there would be a lot buyers rushing in to support the market given the pent up demand), you still would have been better if you bought 5 years ago. What will happen 5 years from now, I don’t know…would I try to time when the peak? Definitely not…it would be as silly as trying to time the stock market – why add unnecessary stress and frustration to your life. Buy, hold and prosper.

#88 Bottoms_Up on 06.02.16 at 12:09 am

#24 IHCTD9 on 06.01.16 at 7:35 pm
—————————–
Don’t oil companies get hand-outs?

#89 family beagle on 06.02.16 at 12:11 am

#70 VanMan on 06.01.16 at 10:38 pm
…I disagree that renters will be rewarded and that owners will be forced to sell at lower multiples. A huge component of this is the rise of the sharing economy and in particular Airbnb…

I personally know dozens and dozens of people (ages 28-45) that have their units listed on Airbnb and they make multiples of the mortgage payment in a month (even in off tourist season). Vancouver is a major travel, tourist and entertainment hub and that is not going to change…

Yes, eventually it will become a glittery gated community serviced by contractors and overseen by hired security, like a cruise ship. Unfortunately, as my budget doesn’t include such extravaganvces, I’ll have to muse from my forested squat upstream.

Oh, I got my property tax bill today… about as much as a table for four in a mediocre Denman eatery.

#90 Get on the Trump Train on 06.02.16 at 12:28 am

What’s everyone waiting for? Hop on for the ride of your life….I’ve got Putin and now Kim Jong-un….. awesome…real leaders who aren’t TOTAL LOSERS like Billary…..6 months til I get the nukes!!

#91 Rinse and repeat on 06.02.16 at 12:31 am

Coming to a neighborhood near you.
No crash in canada, EVER.

#102 jess on 06.01.16 at 8:40 am
Trump university playbook : “You don’t sell products, benefits or solutions — you sell feelings,”

http://www.cbc.ca/news/business/trump-university-playbooks-lawsuit-1.3610115

====

NEW YORK – Attorney General Eric T. Schneiderman today announced a $100 million expansion of efforts to provide no-interest loans to help New York families avoid foreclosure and stay in their homes. The expansion, funded by the Attorney General’s April settlement with Goldman Sachs over the bank’s deceptive practices leading up to the financial crisis, is expected to help more than 3,000 families across the state pay off small debts that are preventing them from securing a needed mortgage modification.”
A new analysis released today by the Attorney General’s Office also showed that the Mortgage Assistance Program (MAP), the first phase of these efforts, has already had a significant positive impact on families that live near a MAP loan recipient because foreclosed homes often drag down the property value of other nearby homes. According to the analysis, every $1 in loans preserves about $8.50 in property values for homeowners within 750 feet of the MAP loan recipient….

http://www.ag.ny.gov/press-release/ag-schneiderman-announces-100-million-expansion-foreclosure-prevention-efforts-new

“Years after the housing crash, too many New York communities are still stuck in the crisis of foreclosed, abandoned zombie homes. I applaud the Assembly for taking a strong step by passing the Abandoned Property Neighborhood Relief Act, which enjoys the support of local elected officials, law enforcement, and fair housing advocates all across New York. As of 2014, there were still 16,701 zombie properties in New York State. These abandoned homes drag down property values, burden local code enforcement, and threaten the safety of the neighboring communities. I call on the Senate to follow suit and finally get the zombie crisis behind us.”

#92 Greg on 06.02.16 at 12:47 am

#19 Dave

http://cfjctoday.com/article/528236/real-estate-market-red-hot-kamloops

#93 Vanreal on 06.02.16 at 1:22 am

Am I the only one who’s confused by this call that Yvr is at the top. I just see no listings and those that do get listed are sold in a few days. A half duplex down the street just sold in 3 days for 300,000 over a list price of 1,300,000. Is that the sign of a slowing market? I think not.

#94 TRT on 06.02.16 at 1:26 am

Foreign money inflows plus millions of immigrants coming via 10 year visitor visas is the cause of YVR prices.

More of my relatives just got approved for multiple entry 10 year visitor visas. Its like they won the lottery lol. The kicker is that they got approved AFTER the event they were sponsored for already passed. Haha.

will debate anyone anywhere as to this being the primary cause of high prices.

Oh, they will check out the area and plan to send their kids to Vancouver as foreign students…and buy a detached in the process if they can afford it.

Anyone that doesnt see the truth is a fool.

#95 paulo on 06.02.16 at 1:31 am

called this one before, i think increasing down payments will do little if anything to stop the spiral in housing costs by its self
what needs to happen is the CHMC has to change its insurance policies and put the pressure on the banks to practice due diligence underwriting of mortgages in a world where they are not fully insured/back stopped by the tax payer, opps the CHMC .
why not implement a proven risk formula for providing mortgage insurance that includes a sliding scale of maximum coverage that is lowest at the start of a insured mortgage period and increases during consecutive renewals IE. at inception the first fixed term or in cases floating terms a maximum CHMC insurable amount limited to 50% of book value of original mortgage , include a exclusion for lines of credit being insurable, allow a 65% coverage on the first term renewal and 80% on the third. assuming the mortgagee has performed and created a record non default, or is a better insurance risk
Back to the banks, ours in this country are world class,and know how to underwrite risk, but lets face it if you where making a loan,and the person borrowing provided you with a insurance policy covering your ass fully, it might just prejudice your better judgement to make the loan you might otherwise not advance. long and the short, the CHMC should significantly reduce the amounts they insure ,and return the prospect of default risk to the banks this would put the brakes on the real estate market, and no it would not kill it just start to normalize it and encourage proper due diligence on behalf of the lenders and borrowers

#96 Russ on 06.02.16 at 1:46 am

family beagle on 06.01.16 at 11:14 pm

No kidding. Must have written ‘retirement planning’ under yearbook photo. Oh well, it keeps them between the pylons and on designated trails. I knew a dude like that. Had the economical chevette in high school, became some class a tax lawyer in TO. Married for congenial benefit. Safe, secure consumer.
=======================

I know him too. The surname is McArley.

#97 Top on 06.02.16 at 2:01 am

Our cleaning lady gave us notice she’s passed her realtor exam and she is no longer available. Welcome to Vancouver ….real estate possession. PS good luck with your new career

#98 jay on 06.02.16 at 2:23 am

Heres a nice little fixer upper in Vancouver. https://www.realtor.ca/Residential/Single-Family/16628693/4722-W-2ND-AVENUE-Vancouver-British-Columbia-V6T1B9

#99 jay on 06.02.16 at 2:29 am

Heres more economic idiocy in Vancouver. http://www.scmp.com/comment/blogs/article/1962014/vancouver-house-owners-made-more-sitting-their-assets-entire

#100 DON on 06.02.16 at 3:17 am

#75 rainclouds on 06.01.16 at 11:01 pm

#70 “i personally know dozens and dozens of people (ages 28-45) that have their units listed on Airbnb and they make multiples of the mortgage payment in a month (even in off tourist season). Vancouver is a major travel, tourist and entertainment hub and that is not going to change.”

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

Thank you for taking that one on…no energy tonight.

It still amazes me that people can turn a blind eye to risk and discount the probability of occurrence in an effort to stay positive above all else. It is frightening to watch.

And for those who figure a slow melt in Van – Yah I don’t see it that way. Real estate is local, Vancouver is nuts and equal and opposite reaction. Plus the economy of Van will be in the dumps when real estate takes a hit. Every action has an equal and opposite reaction.

Lets follow this through. Sales tank. Tax revenues drop. Governments at all levels need cash. Ever heard of CRA? They want their cut. Hotel lobby kinda pissed too.They pay taxes. Gregor getting an earful. New economy meets strapped City coffers. Y
New economy gets a lesson

#101 Freedom First on 06.02.16 at 3:25 am

#71 Smoking Man

Thanks for the laughs! Hilarious and true at the same time.

As for people who think that Van or TO RE can’t flounder and drop for years. You are insane. I remember a few decades ago the herd was convinced the Japanese investors living in Japan would end up owning Canada. Have a read about the Japanese RE market events over the last few decades. Never never never ever make assumptions. It’s just stupid.

#102 DON on 06.02.16 at 3:25 am

It’s late – screwed up my last post.

**************************
#75 rainclouds on 06.01.16 at 11:01 pm

#70 “i personally know dozens and dozens of people (ages 28-45) that have their units listed on Airbnb and they make multiples of the mortgage payment in a month (even in off tourist season). Vancouver is a major travel, tourist and entertainment hub and that is not going to change.”

Lets follow this through. Sales tank. Tax revenues drop. Governments at all levels need cash. Ever heard of CRA? They want their cut. Hotel lobby kinda pissed too.They pay taxes. Gregor getting an earful. New economy meets strapped City coffers. Y
New economy gets a lesson

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

rainclouds: Thank you for taking that one on…no energy tonight.

It still amazes me that people can turn a blind eye to risk and discount the probability of occurrence in an effort to stay positive above all else. It is frightening to watch.

And for those who figure a slow melt in Van – Yah I don’t see it that way. Real estate is local, Vancouver is mania nuts and an equal and opposite reaction is about to hit. Plus the economy of Van will be in the dumps when real estate takes a hit and jobs are affected.

How many people who read this blog know of people that own more than one house, two houses, three houses, four houses??dare I go on?

I know of several people who have two houses and at least 4 who have four. No need for foreign investors when greed is rampant in our own back yard. Most are blind to any risk, as they remain in a perpetual high rolling party. blowing off the consequences that tomorrow will bring.

#103 To the naysayers... on 06.02.16 at 3:30 am

Never worried that YVR/416 RE bubble will burst until recently.

GDP: every major sector negative except for small growth in RE residential construction et al.

January GDP recently revised down. Feb and Mar negative. 2nd Quarter expected to be negative due to Ft.Mac fires. This equals Recession.

That will translate into job losses, already happening per last few Statistics Canada Labour Surveys and the jobs created are low paying Service Sector jobs (no $ million mortgages there).

RE sector over last few years funded by unprecedented debt that will become unsustainable in a negative economy and job creation. Watch bankruptcies go up.

CREAs chief economists says it has peaked (surprising from them – fall on your own sword news).

No matter how diversified YVR/416 economies are, when virtually ALL GDP sectors are negative, then the writing’s on the wall…bubble will burst due to fear of the economy and/or job losses.

Government stimulus will not kick in until late 2016, if that, and $20 billion plus will not stimulate anything in the economy writ large, except the public sector.

As for those still buying now at peak…well, they did not get the memo…happens in each bubble or maybe some money launderers/gamblers still playing the market.

Kudos to Simon, smart guy and market timer.

It will get much worse than the Economists are predicting due to the debt load…

#104 The Last Post on 06.02.16 at 4:00 am

@ comment 71, Smoking Man

“I’m trying to figure out what university he attended”

Very funny SM – I laughed out loud !

Keep’em coming.

#105 The Last Post on 06.02.16 at 4:04 am

To Smoking Man

Straight up question

So, what are your thoughts regarding the Toronto RE market ?

As you live in a nearby suburb as I understand and seem to have a pretty good instinct for financial markets, FX, etc. ,I thought you might share some insights.

#106 Joe2.0 on 06.02.16 at 5:15 am

59 Rolando
Nope I’m not a realtor.
I sold a house 3 years ago because I thought the market was going to dump.
The house has appreciated over 600k since I sold it.
Im just going on what I’ve seen and have been told.

I’ve rented hoping the market will cool but it just doesn’t seem to be happening.
I’m just getting priced out.

I’m basing my option on facts I know top selling realtors in Vancouver Victoria and the Sunshine Coast and they are telling me foriegn money is flowing in and the markets are crazy.

As well as aging demographics cashing out and relocating, paying off homes and banking a load of cash.

Where do you go if you sell you home in Vancouver but don’t want to leave the coast?
Victoria, Sunshine Coast, Squamish but it’s also getting expensive.
It’s a fact I’m not happy about it.

#107 Joe2.0 on 06.02.16 at 5:29 am

67 Rainclouds.
Not sure who your realtor is but I have to disagree mine says the opposite, but regardless.

There’s a point where people, many older are going to cash out because they are concerned the market may dip or correct and they are happy with there profit margin.

So either they downsize in the city, and in case you don’t know condos are currently in very high demand and currently often selling in bidding wars with no conditions.

Or they cash out and leave the city, buy a home not a vacation property and have loads of cash in the bank.

Given what’s happened to Vancouvers market, there are many older people who can cash out and live comfortably outside of Vancouver.
Many considering the current aging demographics.

#108 banco on 06.02.16 at 6:02 am

DELETED

#109 gladiator on 06.02.16 at 6:40 am

With all due respect, Garth, I agree to disagree: renters like myself have been the losers in the last decade. More so in Van and TO.

There are absolutely no factors that would slow down this freight train. BOC to increase rates just because in about 85% of cases it followed the Fed? Yes, that gives us an 85% probability, but what about the other 15%, especially that the economy is sputtering and will likely need more stimulus.

Even though you believe that foreign money has no influence on house prices, I think otherwise, based on what I have seen and heard from friends in the construction and reno businesses. There is a lot of money coming in and authorities have absolutely no interest in slowing it down, because they just love the inflated fees and taxes they get in many shapes and forms.

I used to believe in numbers and rational thought and in what you kept writing about the real estate market, and kept seeing that I am consistently wrong and getting wrong-er as time goes, until Smokie introduced the term Herdonomics. This was the missing link that should have been paid lots of attention to. Even John Hussman, the fund manager who I follow and who called the last two market crashes had to accept this factor and embed into his analysis of the stock market: regardless of how overpriced the market is, if there is a general appetite for speculation and risk, it will go higher, and vice versa.

All this being said, I am calling for at least one more year of double digit RE market growth in Van and TO, even with a couple of 0.25% rate increases.

#110 Ace Goodheart on 06.02.16 at 6:50 am

Re: #65 Calamity Janeevkaya on 06.01.16 at 10:05 pm

“First. There is no way BOC Poloz will raise rates. It would bankrupt the federal government and all minor governments and Quango’s who are deep in the trough. Won’t happen. What will happen to the Trudeau Paln to borrow another several hundred billion “because rates are at historic lows”.”

Yes, they will raise rates. They have to. Yes it will bankrupt both Provincial and Federal governments. This will take a long time to happen. Governments don’t move quickly. They are large, mostly blind, very bulky animals and when they change direction, it takes eons. We are looking at about ten or fifteen years of very gradual interest rate hikes, going along with gradual currency devaluation (money printing to pay back government debt, both Provincial and Federal).

This will go along with a levelling out of house prices (which have already priced in currency devaluation, as has the price of Gold). Look for smaller increases in house values, with the exception of Vancouver and Toronto, which both have about 5 good years left of double digit increase.

Those in the know will be holding assets whose value is not related to the value of currency (if you are buying REITS right now, you are going to be known as a God or a prophet in ten years time).

#111 gladiator on 06.02.16 at 7:00 am

And what’s with the Trump hate?
The guy has real business acumen, mostly self-made. Went bankrupt a couple of times, but it didn’t stop him from doing business. Likes to be in the spotlight, but who doesn’t? Wrote a quite good book on how to make deals etc. etc. He knows very well how money works and correctly pointed that exporting jobs was wrong.
I truly wanted to find something that would explain all these attacks on him in the media and couldn’t find anything bad enough to validate the attacks. I actually now like the guy…

#112 Cottingham a bargain on 06.02.16 at 7:10 am

seems your own co workers Garth seem split in the need for Ottawa to cool housing prices , at least according to a BNN survey.

This meme you preach of a housing ” correction” or ” crash” you preach is even questioned by people who do what you do for a living.

What are the pleabes like us on this blog to believe?

#113 maxx on 06.02.16 at 7:31 am

“Of course, most people won’t heed any of this. They’ll continue to believe the real estate boards’ house-humping releases, the steady diet of Re/Max propaganda and the wall-to-wall media housing coverage….”

Yes indeed.

The realtard industrial complex doesn’t give a rat’s behind where the money comes from.

Once upon a fabled time, “paying cash” actually meant something and held sway. Then, along came the fiscal cancer of financialization. Equity no longer mattered a damn, it’s what you could borrow that counts.
No great mystery that re prices have decoupled from reality. In most areas.

When you haven’t actually earned and retained equity and you therefore need to borrow, the gravity of that transaction is a mere fraction of what it is when it’s actually being pulled out of your coffers.

Excess borrowing leads to excess inflation and enormous price distortion and we’re now entering a fiscal world of hurt, both personally and officially, because personal financial dysfunction is piped through to official levels.

Borrowing to pay essential bills, such as taxes is symptomatic of fiscal ill-health and the banks are onto this. Government has taken the cheap and easy path of short-term enhanced taxing with excess re promotion.

For the past 30 years and counting, government has allowed itself to be seduced by butt-picking, central bank train wrecks masquerading as gurus.

“Steady as she goes” has always been and will continue to be a successful guiding principal of wealth accumulation as well as economic health. In the aggregate, we’re no longer there. Were Canada prudently managed, it would almost without doubt be one of the world’s richest countries, throughout its entire fabric, from it substantial assets, to industry through to a resulting vibrant, strong, healthy and resilient citizenry. Today, we’ve become a nation of worried, frightened and debt-ridden people. Even those with money and/or “good” jobs are insecure.

The task list must now accommodate an essential new item: mitigation for stupid government – Where not to live, how to minimize retail tax, how to avoid ridiculous costs, where to get free and hugely discounted stuff, where and what to cut back on, building skills in order to cut back on services……all of these actions impact economic vibrancy and tax flow to government. But it’s all about survival and preservation of wealth for those who’ve succeeded.

The fiscal elastic is about to snap back.

#114 Calamity jane on 06.02.16 at 7:37 am

Ace 110. Please explain why you think REITS will do so well in 10. I’m intrigued by the theory.

81 sbby. I call BS. Anyone deep into recruitment and on phone constantly with recruiters who hire Vanc talent south….they use Vanc super low salaries as a stick to beat pro’s across the border. Only politico’s and leeches are paid over 200

#115 Bytor the Snow Dog on 06.02.16 at 8:16 am

@Smoking Man re: Mark’s BS Meter:

Have you seen Mark’s posts? It appears his BS meter has been busted for ages!

#116 Sean on 06.02.16 at 8:20 am

One prediction… anyone selling this late in the game a) looks like a genius, but b) is actually a greedy fool. To be able to shoulder that much risk, and be oblivious to it, pretty much guarantees idiotic behavior in future investments. This is probably the type that will begin with a balanced portfolio of ETF’s, but then not be able to resist the next bubble as it comes along… I mean Van RE is more Nortel than even Nortel was, if you know what I mean.

#117 Cheese on 06.02.16 at 9:19 am

At 35, making 30k…. I am doomed beyond reckoning.

#118 Bat Flipper on 06.02.16 at 9:22 am

Between 2004 and 2006, the Fed raised interest rates 17 times, increasing them from 1% to 5.25%, before pausing. The Fed paused raising interest rates because of the concern that an accelerating downturn in the housing market could undermine the overall economy, just as the crash of the dot-com bubble in 2000 contributed to the subsequent recession. However, New York University economist Nouriel Roubini asserted that “The Fed should have tightened earlier to avoid a festering of the housing bubble early on.”

This was one of the many causes for the housing collapse.

Many borrowers just couldn’t afford to pay the bills when the rates went up.

Canada is not in a position to ‘decide’ when to change interest rates. The USA does that for us because we need to change rates to keep our dollar competitive. If our dollar gets too low, all the stuff we import will become too expensive. Whats worse? Low rates or overpriced groceries.

As America returns to a normalized rate, so will Canada. With a good majority of Canadians not being able to afford the higher mortgage payments, then they will either need to refinance, sell, or get a better paying job.

Unfortunately, better paying jobs are the least likely. In fact, holding a job will be tough through the rate reset because our recession will only get worse. Needless to say, we are in a recession and only not reporting it because of some good accounting.

With the majority of workers becoming self-employed or contract (thank you TFWs) it will just get worse.

Finding a home and winning a bidding war is tough, getting approved for a mortgage is tough, having a job is tough, what will happen when the bills go up.

#119 Snoopy on 06.02.16 at 9:29 am

Baskin management tweet yesterday:

“Random observation: some older clients are selling big houses and instead of buying expensive condos, are renting. Never saw this before.”

– David Baskin ‏@DavidBaskinBWM

#120 };-) aka Devil's Advocate on 06.02.16 at 9:33 am

#99 crowdedelevatorfartz on 06.01.16 at 8:24 am

@ Devils Advocate

“People pay me to help them make informed decisions…..”
********************************************

Reality check here pleeease. CREA has created a virtual “closed shop” environment with as little information available to the purchaser as is possible. You are a commission based salesman. Nothing more.

You have all the nifty sales “pitches” down pat.
Nothing more.

The property sells itself.

You drive people around to various properties, and for that, are paid a ridiculous commission based wage.
Nothing more.

As for Millenials “fleeing” to Kelowna…..enjoy the last gasps of this overpriced insanity and the Greaterfools that choose to still “buy in” to your industry’s endless propaganda.

I expect when this is all over, new govt regulations on your industry will change everything for the better in the consumer’s eyes and you will look back on these times as “the good old days” when you were able to fleece the uninformed rubes with virtual impunity.

There is some truth in what you say crowdedelevatorfartz. I can’t “Sell” a house to anyone who doesn’t want it. And the fact is I don’t. I help buyers make informed decisions. I check emotion at the door and bring logic to the table.

As far as the Multiple Listing SYSTEM being a closed shop; need I point out that there are many discount brokerages one can choose to work with. In fact, you don’t need to work with a real estate agent at all – you can choose no agency. But in many respects you are right it is a closed “SYSTEM”. It is not a Multiple Listing SERVICE it is a SYSTEM created, maintained and paid for by REALTORS to facilitate the work we do. In that sense yes it is a closed system it is a tool we created to help achieve our respective clients goals.

Bottom line is some agents discount their fees… and so they should. You can choose to work with one of them or you can choose to work with the likes of me. But based on what I know of you thus far… it’s not likely that I, or anyone like me, would agree to work with you. And THAT is the difference between people like me and those “Salespeople” you speak so disparagingly of. We get to choose who we work for. You we would politely disengage from and you’d never hear from us again. But don’t despair, those agents who are so desperate for business that they are compelled to discount their fees to draw business in are also so desperate that they will work for whoever comes along. Hint: Ask yourself if they interviewed you or talked about themselves trying to sell you. };-)

#121 Ret on 06.02.16 at 9:40 am

#110
“There is no way BOC Poloz will raise rates.”

Poloz doesn’t seem to know what to do. He waxes and wanes in riddles and rhymes and seems to be detached from reality.

The boys in London and New York will set Canadian interest and currency rates.

#122 Tom from Mississauga on 06.02.16 at 9:41 am

Louis Vachon, CEO of National Bank has joined the chorus saying down payments need to go up.

http://www.bloomberg.com/news/articles/2016-06-01/mortgage-down-payments-should-go-to-10-national-bank-ceo-says

#123 };-) aka Devil's Advocate on 06.02.16 at 9:42 am

#47 crowdedelevatorfartz on 06.01.16 at 8:44 pm

Care to share what it is you do that contributes to improving peoples lives while funding your own?

#124 Rational Optimist on 06.02.16 at 9:44 am

I don’t think this was posted here: http://www.theglobeandmail.com/real-estate/the-market/ontario-property-assessments-show-extent-of-toronto-price-boom/article30178929/

For those of us who live in sane markets underneath the red line that have not exploded in price, and who are diversified and can buy honouring the Rule of 90, what’s the answer to Simon’s question? Where should a down payment on a house be stowed away if it’s to be used within a couple of years?

#125 Ole Doberman on 06.02.16 at 9:55 am

hey what a relief the government is trying to cool housing in Tor and Van – after flooding our market with laundered money lol!:

http://www.bnn.ca/News/2016/6/2/Bay-Street-split-on-whether-Ottawa-should-try-to-cool-housing-in-Vancouver-and-Toronto.aspx

#126 Lee on 06.02.16 at 10:01 am

Cheese,

No you’re not. Still very young. Can learn anything new at 35 and still have time to succeed.

#127 TurnerNation on 06.02.16 at 10:07 am

Smoking man the Wek was at Earls patio last week but apart from that it’s a typical chain restaurant run by a revolving door of 20 years olds. No sense of service.
But Duke Devon patio has manager Spiros always on hand for years now. Went Kasa Moto rooftop afterward ..from 2 star to 4 star how I roll…

#128 Ole Doberman on 06.02.16 at 10:11 am

#69 Rich Young on 06.01.16 at 10:25 pm

THINKING OF BUYING IN CALGARY… STOP!
I know two families in cowtown declaring bankruptcy. One has now dropped the keys off and drove back to NS. Meanwhile, down the street people file through a renovated duplex like sheeple fools.

This winter we will see more empty homes. Once school is out many more will leave this province and head back to where they came from. If you want to stay in Calgary, sit on your hands at least until this winter. Buying now will only lead to depression as this market falls to pieces.

I pity those locking into a home purchase now. It is especially amusing to be living next to vacant bank owned property while people file through a listing a block away $430,000 for a half duplex 1965 built! I recall paying $145,000 for my last home in BC in 2003 before the Government pulled the wool over our eyes with cheaper and cheaper money. All this to create the biggest bubble we will ever see.

Only 10 mins from my hood people are paying $500K for tear downs and building mcmansions in there place. $600K for an empty lot once you clear out the old home I’m guessing. This in a dieing economy.

Still waiting to get back in the market.
———————————————————
I don’t know if those are McMansions, I see alot of big luxury duplexes that were going up – flippers building 2 separate living spaces on 1 lot, not a bad idea.
But I’m seeing more for sale signs on them, not sure how long on the market they’ve been though.

Can anyone else in Calgary attest to this?……thx

#129 rainclouds on 06.02.16 at 10:11 am

#107 Joe “Given what’s happened to Vancouvers market, there are many older people who can cash out and live comfortably outside of Vancouver.”

Agreed Joe. Point well taken, The realtor I mentioned also said, wait till the bidding stops, too crazy now. (It was my friend who is looking, I was along for the ride I’m not interested in living there), went to some open houses, nuts!

I believe speculation is also taking place in the outlying areas and it wont take too many with leverage to bail and drive housing down to realistic levels, there is little work and the amenities on the sunshine coast in particular are few and far between. but yes a certain component are cashing out, relocating, and will remain.

Regards

#130 Wild Albertan Gonads on 06.02.16 at 10:12 am

#88 Bottoms_Up on 06.02.16 at 12:09 am

#24 IHCTD9 on 06.01.16 at 7:35 pm
—————————–
Don’t oil companies get hand-outs?

Which ones are those? Specifics.

#131 Smoking Man on 06.02.16 at 10:14 am

Another retarded university left professor

George Mason University Adjunct Professor David Alpher thinks that the American right-wing is worse than Islamists and that racist Donald Trump supporters pose a bigger domestic terror threat than radicalized Muslims.
…………………………

This idiot clearly can’t see that the radical left is extremely dangerous and the cause of all hooliganism at political rallies and protests. GOP are calm cool and collected. You don’t see them jumping on cop cars.
The mind fking going on at campuses is where the true danger lies. Moron to say the leased.

http://www.rawstory.com/2016/06/in-america-domestic-extremists-are-a-much-bigger-risk-than-foreign-terrorists/

#132 Caught on 06.02.16 at 10:15 am

Do you recommend CPD or ZPR?

Thanks!

#133 Ronaldo on 06.02.16 at 10:26 am

#80 bank CEO calling on the feds on 06.01.16 at 11:34 pm

But Porter isn’t stopping there. His bank is now calling on the feds for even-higher minimum down payments.

Why does a private bank need babysitting of the government when it comes to make a decision about placing a mortgage?
===============================

They’re like an addict. They’re addicted to cheap money and profits. The gov is their mommie.

#134 Smoking Man on 06.02.16 at 10:37 am

#127 TurnerNation on 06.02.16 at 10:07 am
Smoking man the Wek was at Earls patio last week but apart from that it’s a typical chain restaurant run by a revolving door of 20 years olds. No sense of service.
But Duke Devon patio has manager Spiros always on hand for years now. Went Kasa Moto rooftop afterward ..from 2 star to 4 star how I roll…
………

Nice. I’ve been there, done that, million times over,

I’m back to hiding JD in the back yard, sneaking out to find some creativity to finish the dreaded book.

What a ridiculous idea it was to write a book. But I’m invested now. I got to finish it. Every chapter gets harder and harder, and shittier.

#135 Ole Doberman on 06.02.16 at 10:50 am

Finally someone on the same wave length as doberman:

“Foreign investment in the housing market is creating a distortion in the Canadian economy and could “hollow out” Vancouver, according to James Dutkiewicz, Chief Investment Strategist, Sentry Investments. He argues the government should channel its “inner Trump” and find a way to make the international interest in housing beneficial to Canadians.”

Someone has to step in to curb corruption, many lives have been ruined cause of RE – who would have ever imagined

http://www.bnn.ca/Video/player.aspx?vid=882626

#136 Ronaldo on 06.02.16 at 10:56 am

#106 Joe2.0 on 06.02.16 at 5:15 am

Thanks for the response. I hear the same thing from others as well and there has to be many others in your same situation. I personally thought this market was going to crash back in 2010 but it just keeps on going. This market reminds me of the stock market back in 87 but that mania only lasted a few months before crashing. Just recently spoke to an older lady who sold her home in Vancouver a short time ago for 1.2 mil and she told me that it resold for 1.9 mil. Said she was sorry now that she sold. What is happening in the lower mainland and now the Sunshine Coast boggles the mind. People selling in one inflated area and rebuying and creating inflation in other areas. If this thing ever does burst as some believe, it won’t be pretty and you may some day find that your decision was not so bad.

#137 };-) aka Devil's Advocate on 06.02.16 at 11:07 am

#106 Joe2.0 on 06.02.16 at 5:15 am

Hate to say it Joe but you were speculating. You thought you could time the markets. You can’t. Nobody can time the markets. At best you might have a 50% chance of breaking even.

So now that you’ve bet the farm and, apparently, lost… what do you do now?

The market is always SHIfTing. Typically it follows a 7 to 10 year cycle. It’s that 3 year variable that’s the bitch. But hey you will know when it turtles because everybody will be sitting on the fence waiting for it to go lower. Why buy today when the price will be lower tomorrow, right?

When you see this happen after about a year is when you want to get in. Everybody will say “No, no, no wait. it’s going to go lower”. But it won’t. It’ll just flatline until the start of the next cycle. It starts incrementally and then goes exponential. It’s the exponential that signals the nearing of the end. Sort of like we are seeing today. Exponential = nearing the end.

So reading between the lines you might notice I’m hinting another 12 months might be your opportunity to try regain your losses. You won’t make them up entirely but you can relax, accept your plight and make the best of it by learning from your experience. You can’t do anything about yesterday and the best way to make a better future for yourself is to change today.

Education is a bargain at any price and there is no education like experience.

Of course anything can happen as in this “New Economy” the old “RULES” no longer apply. “They” simply make up new ones to suit “Their” mandate. None-the-less…

Economics is the backstory of ALL history and demographics is the backstory of ALL economics.

#138 Suede on 06.02.16 at 11:22 am

#118 Bat Flipper

You’re assuming rates will be rising. Just to normalize back to where we were 1.5 years ago will take to rate increase…. potentially starting late 2017.

This is like averaging down in stocks, only to find the trend has not reversed yet.

So you keep saying.. “This is the bottom, no, this is the bottom now”

It’s a dangerous game.

Wait for it to happen.

Hopium is the most dangerous drug.

#139 Suede on 06.02.16 at 11:24 am

Wow, my grammar and speeling is like Smoking Man’s. HA

i meant to say “will take two rate increases”

#140 You built that, and it's Crrrrrap! on 06.02.16 at 11:24 am

#120 };-) aka Devil’s Advocate — “It is not a Multiple Listing SERVICE it is a SYSTEM created, maintained and paid for by REALTORS to facilitate the work we do. In that sense yes it is a closed system it is a tool we created to help achieve our respective clients goals.”

I respect many of your comments — you are more honest than the typical perma-bull realtor.

But don’t defend the MLS. Just stop. Head over to realtor.ca, click “search map,” zoom out until you can see all of North America, and marvel at the properties from BC, Manitoba and New Brunswick plotted on the Gulf Coasts of Texas and Louisiana. Stare in wonderment at the properties from all over Canada, magically relocated to nearly every one of the lower 48 US States. These are properties that clients are paying members four, five and six figures to sell — “the biggest transaction of your life!” and MLS can’t even stick the pin in the right spot. This is NOT a technology problem. Accuracy rates of 99% on small transactions with tiny margins might be acceptable, but a decent app for huge transactions with large margins could afford 10-30 seconds of an agent’s (or assistant’s) time to stick the pin in the right spot on the map.

Only an organisation with the attitude of “eh, whatever, we’re a monopoly” would allow even a week to go by without fixing that. And if CREA, with one of the industry’s biggest budgets, can’t get that right on their public facing system, I can only imagine how much spit and duct tape is holding together the MLS systems of the smaller boards.

Surf over to the Competition Tribunal to read yesterday’s submissions from TREB and CREA, and try to tell me that their attitude isn’t “the best way to achieve a level playing between all agents is to mandate that they all tie their shoelaces together, left and right, and agent to agent, so that nobody can get ahead in the race.”

It isn’t like Trulia/Zillow et al sprang up in the US and clients started going FSBO. Member agents there are still get nearly all the business.

P.S. God help us, keep zooming out and it isn’t even limited to North America. Saskatchewan properties in China, and Ontario properties in Kazakhstan. For shame.

#141 Julia on 06.02.16 at 11:25 am

Any of you that read French, this article discusses a study done showing that of all condos bought in Quebec in 2012 and 2013 and resold before December 31, 2015, 1 out of 3 was sold at a loss. 56% were sold at a gain of less than 5% but once all costs are factored in, most gains translated to a loss.

http://www.lapresse.ca/maison/immobilier/201606/02/01-4987626-un-condo-sur-trois-vendu-a-perte.php

#142 Julia on 06.02.16 at 11:33 am

#133 Ronaldo
“But Porter isn’t stopping there. His bank is now calling on the feds for even-higher minimum down payments.

Why does a private bank need babysitting of the government when it comes to make a decision about placing a mortgage?”

_________________________

It’s wanting the Government to intervene to have all the banks compete on the same level.
If 1 bank decides to require higher downpayments but not the others, where do you think their marketshare will go? So they sorta want to reduce their risk but they don’t want to lose market share to the others.

#143 WUL on 06.02.16 at 11:42 am

#130 Wild Albertan Gonads on 06.02.16 at 10:12 am
#88 Bottoms_Up on 06.02.16 at 12:09 am

#24 IHCTD9 on 06.01.16 at 7:35 pm
—————————–
Don’t oil companies get hand-outs?

Which ones are those? Specifics.
**********

This debate rages on in every comment section in Canadian media and, no, governments do not pay subsidies to oil companies.

However, one large “subsidy” arises by virtue of no one actually expecting oil companies to reclaim, remediate and properly abandon wells and well sites. Oil companies know they don’t have to do any of these things. Hence the many hundreds of orphan wells that tax payers will take care of.

See the likes of Premier Brad Wall asking the feds to cough up $500 million for orphan well cleanup in Sask (and to aid in recovery from our recession). I believe Premier Notley is looking at the same welfare.

Hence a massive “subsidy”.

#144 Damifino on 06.02.16 at 12:01 pm

#111 gladiator

“I truly wanted to find something that would explain all these attacks on him in the media and couldn’t find anything bad enough to validate the attacks.
———————————

Look harder.

#145 Dan Duran on 06.02.16 at 12:15 pm

So how significant does the correction in the 90’s look now, given the fact that prices are so much higher now? Sure, some people got burned, those with sufficient equity (90%+ of the homeowners) did not feel a thing and had their lough later. And it was not 7yrs, it was about 3 – (90-93), then prices were pretty stable for another 3 or 4. Something tells me you studied at least a bit the Eliott wave theory.. What do you see? A clear 1st wave in the 80’s (when rates started to come down from historic highs), 2nd wave in the 90’s.. and clearly we are in the 3rd (longest and most powerful). Whenever this wave ends, the 4th (correction) will be the weakest of all. Unless you can make the argument that the 2008-9 was the 4th. But that wouldn’t make much sense, since it would make the 5th wave greater than the 3rd.. So.. who is Scotia bank BTW, they don’t have much of a presence in the city anyway.

As to the guy in your story.. make sure to update his status when banks start to clip his deposits. Balanced portfolio..hmm ..That would include bonds, no? How does that advice reconcile with a deflating bubble (necessary to occur first in the bond market). Face it, if what you predict will come to fruition, there will be no place to hide.

#146 simple financial plan on 06.02.16 at 12:15 pm

Have about 500,000 in equity.

Use 200,000 in a HELOC with a discounted rate (spouse gets 2.5% off the posted rate as a bank employee)

That 200K spins off about 5.5%.

We dump the proceeds into our RRSP.

We in turn dump the juicy tax return into our TFSA, nearly maxing that out.

So…..We use NONE of our own cash flow to max out our RRSP and TFSA, all the while generating equity and discounting our principal on our mortgage each month.

Too easy IMHO?

#147 IHCTD9 on 06.02.16 at 12:37 pm

#88 Bottoms_Up on 06.02.16 at 12:09 am
#24 IHCTD9 on 06.01.16 at 7:35 pm
—————————–
Don’t oil companies get hand-outs?

————————————————————–
Doesn’t really matter if some do. Many Oil companies in fact, do stand on their own two feet without hand outs.

There is no comparing the fossil fuel industry to the electrical generation industry. Here in Ontario, folks heating an older home with electricity get 800.00 + monthly hydro bills. Imagine if their car ran on the stuff too. NG figure 80.00/month. Wynne may be taking away our ability to make a choice though…

If you care to do the math, you’ll find right now in 2016 that the running costs of an electric car in Ontario are about the same as fuelling a typical Honda Civic in the summer time, and drops to about the same as a typical 2wd half ton truck in the winter on very cold days.

Think about it. Ontario electric car owners charge their batteries at ~.25/KW all in, folks in the US do the same for ~.03/KW.

Hydro in Ontario will very likely be .50/KW all in come 2026 based on the projections. At that price, your cost of driving your electric car will be the same as driving a gasoline powered car that gets 15 MPG in the summer…

I don’t see a good future in Ontario for electric vehicles unless we have a lot more rich, dumb, folks than I thought.

#148 Ch on 06.02.16 at 12:49 pm

“The plan is now to rent for 1-2 years, as we wait, watch, and plan our next move like vultures.”

LOL, said tons of other people in 2007, ten years ago. Its a fundamental shift, the local and prov govt is spurring it on. Stop applying old world economic models to corrupt sellout cities like Vancouver.

#149 Ace Goodheart on 06.02.16 at 12:50 pm

RE: #114 Calamity jane:

“Ace 110. Please explain why you think REITS will do so well in 10. I’m intrigued by the theory.”

My reasoning: I have a theory that our low interest rates are hiding a large currency devaluation. Basically, governments lowered rates, and then borrowed to “create” new money, and flooded it into the economy. The result now is a form of “stagflation” where we have a large amount of money circulating, which is pretty much worthless.

The items which have been effected most by this delayed inflation are gold and real estate, with real estate being effected mostly in Canada’s two major urban centres, Toronto and Vancouver.

This is because: They are not making very much Gold (hard stuff to find) and they are not making any new detached houses, at all, whatsoever, in Toronto or Vancouver (yes outside of the cities, they are building, but there is nothing being constructed in the inner cities – any new house, must replace an old house – there is no land left without something already built on it).

So as I said above, we have a flood of cheap money into our economy. Our governments have borrowed heavily to flood the economy with money. Have a look around Toronto and find out what people do for a living. Private companies are out. Government work is in. Anyone with a pension and benefits, is a government employee. The highest paid people in Toronto are civil servants. The highest earners on a gross basis (ie, taking into account the entire workforce) are the police department. We are being flooded with cheap, borrowed government money.

When this ends (it will) the following will likely happen:

1. End of high paying, secure, “government jobs for life” with “sunshine list” pay and benefits.

2. Increase in taxation.

3. A number of people will be evicted from their houses due to excessive debt load. This is not likely to be more than 5-10% of the homeowners and likely will be less than that.

So you want to own an income producing asset, which is not tied at all to currency value, which has been priced to reflect currency inflation and which is not popular. Ideally, this asset should pay no income tax at all, and it should provide places for persons to live and conduct business (after they are no longer able to afford their over mortgaged residences and business buildings).

Enter REITS. They are currently priced below book value. They pay no tax. They provide rental locations for people to live and conduct their businesses. Their underlying asset pool is not subject to currency fluctuations or devaluation. People are selling them like they are on fire. You can buy them for less than book value. They pay 8-12% distributions on a monthly basis. I see them as a ridiculous, screaming buy.

#150 bdwy sktrn on 06.02.16 at 12:55 pm

bob is telling the truth.

he said on the radio he already has something like 38 towers coming online to sell in the next 5 years.
——————–
http://www.cbc.ca/news/canada/british-columbia/bob-rennie-housing-affordability-supply-1.3612524#commentwrapper

Lower Mainland real estate magnate Bob Rennie says Vancouver’s housing affordability crisis comes down to one key factor: a lack of supply.

The man who’s been called Vancouver’s “condo king” says the only way to make the city more affordable is to build more housing, which means increased densification — a proposition that generally meets with strong opposition in primarily single-family neighbourhoods.

Rennie said this resistance needs to end if Vancouver wants home ownership to be even remotely possible for anyone beyond the super-rich.

“We live in a city where we can never build another single family home again,”

#151 Ch on 06.02.16 at 12:57 pm

” It took five years for prices in the US to fall 32%, just as it took seven years in the last Toronto correction for a 30% decline.”

Awesome! Ill never own any home ever! Thanks for making my dreams come true Vancouver!

#152 Ace Goodheart on 06.02.16 at 1:09 pm

Just in addition to what I wrote above, what I am trying to say is, houses in Toronto and Vancouver are not over-priced. They are priced exactly where they should be.

It should not be possible for the average working person to afford a house, in Toronto or Vancouver. It probably will never be possible. Most people will be buying condos, with only the ultra wealthy owning houses. That is the way it is in major cities and that will not change. People who don’t like that eventually move to smaller centers where home ownership is possible, or they commute.

What you are seeing is currency devaluation. The price of a house is set at the threshold of the value of the currency. If it takes $2 million to buy a house in Vancouver, it is because that is how much $2 million is worth now – a detached house in Vancouver.

The value of the currency has changed, not the value of the houses.

When this all evens out, what will happen is about 5-10% of over-leveraged home owners will be evicted, house prices will remain at their elevated levels, and it will STILL not be possible for the average person to purchase a house in Vancouver or Toronto. It will likely never be possible again. So if you happen to be an average person and you own a house in said Toronto or Vancouver, and you want to continue living in it, don’t sell it.

#153 fishman on 06.02.16 at 1:34 pm

Rennie was on CBC this morning & he’s giving his annual talk this afternoon. I’d suggest that if your at all interested in Van R/E you listen. Not just listen but record it & relisten. He’s the consumate politician & salesman, but truths are there buried in the nice,nice talk. Leave your prior prejudices at the door. Don’t read an analysis. Remember, Rennie is NOT a developer. He’s a marketer. He tells the developers what &how big & how expensive to build for the location & then he promises a sellout. Go figure eh, all these Vancouver property developers are fabulously rich & all they did was acquire raw land & follow Bobbie”s advise. Well, they get through City Hall too, but thats a different skill set.

#154 Joe2.0 on 06.02.16 at 1:39 pm

#137 Devils Advocate.
You were speculating.

When I sold I never took into consideration how the trillions and trillions of dollars that has been made available via QE or other means would affect things.

Markets globally have been affected by the cheap money.
If things had continued without the banking intraventions I’m confident my timing would of been good.
But that’s neither here nor there.

I have is an aging wife who doesn’t want to be a renter for the rest of her life or be in a position again of our rental home being sold out from under us
And I don’t blame her it’s a big deal moving and very expensive.

So what do you do, succumb to living in a rental and be at the owners mercy or if your able buy a small place within your means outside of Vancouver at the existing low rates.

That’s was our dilemma.
And to be honest seeing my gal in her garden puttering away makes me happy.

#155 S.Bby on 06.02.16 at 1:48 pm

#152 Ace Goodheart

No, it is not “currency devaluation” (which is caused by inflation) but high house prices are caused by low interest rates which are set to rise. So what will higher interest rates do to house prices? We both know the answer to that.

#156 S.Bby on 06.02.16 at 1:53 pm

Another 25% jump in prices predicted for metro Vancouver in 2016. Didn’t the CREA just say we had “topped out”? These guys need to make up their minds.

http://www.news1130.com/2016/06/02/metro-vancouver-housing-prices-expected-climb/

#157 Ole Doberman on 06.02.16 at 1:55 pm

#148 Ch on 06.02.16 at 12:49 pm

“The plan is now to rent for 1-2 years, as we wait, watch, and plan our next move like vultures.”

LOL, said tons of other people in 2007, ten years ago. Its a fundamental shift, the local and prov govt is spurring it on. Stop applying old world economic models to corrupt sellout cities like Vancouver.
———————————————————-
Exactly. That’s why no gov agency keeps stats on foreign money – coincidence I’m sure (sarcasm)

It’s just that now it’s so out of hand and obvious that the shroud is coming down and people are tired of being bamboozled by crooked politicians that the pitch forks and torches are coming out – lets gettem!

#158 Ronaldo on 06.02.16 at 1:55 pm

#142 Julia on 06.02.16 at 11:33 am

_________________________

It’s wanting the Government to intervene to have all the banks compete on the same level.
If 1 bank decides to require higher downpayments but not the others, where do you think their marketshare will go? So they sorta want to reduce their risk but they don’t want to lose market share to the others.
———————————————————–
Market share, right. I reckon the same thing would be fair for any other business in Canada then, right? Like gas stations for example. So who controls what share each of these banks get? You can bet that when rates go up and demand for money goes down, you will see them coming back to the ‘Prime Minus’ once again. There is no love lost between these dudes. They will do whatever they can to increase their market share (whatever that is).

#159 Blacksheep on 06.02.16 at 2:08 pm

A cautionary tale for vultures in training
———————————————————-
“The plan is now to rent for 1-2 years, as we wait, watch, and plan our next move like vultures.”-Simon

“Simon has horseshoes up his rear end. Not only did he catch the final, insane, extreme burp of the YVR real estate gasbag” – Garth
————————————————–
This is for all the would be vultures, considering Simons (Garth’s?) seemingly awesome plan. I did exactly this. Sold in the summer of 2009. I was sure (like Garth) the crash was upon us, when the market actually started to correct in the fall. (see it on any RE graph)

But we all know what happened.

The system stepped in to rescue the RE market by changing the f-cking rules.
Why the hell would they not just let prices revert to a more affordable state?

Because EVERBODY is making MONEY.
Remember 70% of the Cattle own.

I rented an acreage / farm for 5.5 years. The only thing that saved my ass financially was my investment in PM’s. I re bought RE in Jan/2014 for a divorce sale, steal price. My F.V. res is up about 30% in market value.

Would I sell right now to harvest my 175K gain?
Not-a-chance, once bitten.
—————————————————-
“Meanwhile the Canadian economy is sputtering again”-Garth
—————————————————-
Anyone who believes the system is going sit on it’s hands while the only golden goose remaining in Canada (25% GDP) gets it’s neck rung, is simply not seeing the big picture.

Simon’s 1-2 years time frame will become 5 years lickety split and that 225K is going to largely evaporate into costly Yaletown rent as 6% annually, isn’t going cut it.

Don’t try to reason that the US couldn’t save their RE, that was a different sich. The bloody world was ending, or so Paulson claimed.

Besides, Christy is on a trade junket with realtors in tow, promoting the promised land.

You place your bets, you take your chances….

#160 Caught on 06.02.16 at 2:32 pm

Contrary to popular belief the next decade for the
TSX & the S&P 500 will be significantly above average. I predict >10% annualized return for 2016-2026 – with the S&P 500 outperforming.

Canadian real estate: zero net return

#161 Samantha on 06.02.16 at 2:33 pm

” It took five years for prices in the US to fall 32%, just as it took seven years in the last Toronto correction for a 30% decline.”

and

“As you know, recent price gains have been hockey-sticking their way into the history books – up 25% annually in Van and 15% in the GTA.”

So pretty much wait 5 years to get to last year’s level. It must be depressing to be a vulture in Vancouver :))

#162 Jenna Stephenson on 06.02.16 at 2:36 pm

Interest rates are really getting low. Canada’s 30 year has dropped at down to 1.90%.

I thought interest rates were supposed to be going up.

#163 bdwy sktrn on 06.02.16 at 2:49 pm

hot off the press

may +29.7% van benchmark price

——————-
2 billion outsiders waiting in line for a ticket to lotusland.

#164 Ole Doberman on 06.02.16 at 2:49 pm

#152 Ace Goodheart

“When this all evens out, what will happen is about 5-10% of over-leveraged home owners will be evicted, house prices will remain at their elevated levels, and it will STILL not be possible for the average person to purchase a house in Vancouver or Toronto. It will likely never be possible again. So if you happen to be an average person and you own a house in said Toronto or Vancouver, and you want to continue living in it, don’t sell it.”

———————————————————
Wait a minute Ace – what about the big corrections in the 80’s and 90’s, people were talking like you back then too.

Also consider interest rates are only going up, which will wipe out the entire nation. Whereas in the 80’s 90’s interest rates were going down yet prices got smashed.

#165 IHCTD9 on 06.02.16 at 2:58 pm

#152 Ace Goodheart on 06.02.16 at 1:09 pm
Just in addition to what I wrote above, what I am trying to say is, houses in Toronto and Vancouver are not over-priced. They are priced exactly where they should be.
____________________________________

Don’t think so, interest rates drive prices much more so than dropping purchasing power. PP going down drives prices up on everything not just houses, but it doesn’t cost any more (probably less due to competition) for a new Mustang GT in the GTA than it does in Picton right now.

GTA and Van just have many more nutbars willing to sell their financial souls to the RE beast. Folks out my way use the same currency as it the GTA, but house prices here are dropping slowly.

Pricing in the GTA has risen to meet maximum affordability based on current bottom end rates. Folks today can buy a house twice and expensive as mine was and pay the exact same monthly as I did – 15 years ago! The lending these days is also ultra competitive, and there are many folks out there with mortgages that never would have had one back when I bought. Lot’s of creative stuff going on along with all kinds of “help” with the down payment.

In fact, a 70K house back in the 80’s at 18% cost about the same per month as a 250K house does today at 2.5%. Take inflation into account and that 70K debt load relative to income/cost of living – probably felt like buying a 500K+ house does today.

Folks in sane markets shun houses based on listed price, but the affordability is still there at 2.5 rates. Folks in the big city are not sane, they lose their minds, go big as they can, borrow the down payment and pray for appreciation.

#166 understood by few on 06.02.16 at 3:03 pm

#106 Joe2.0 on 06.02.16 at 5:15 am

Nope I’m not a realtor.

———————

Welcome to the comment section, where if you aren’t a hardcore RE bear you are obviously a realtor. Join the list of the accused.

Funny thing is if anyone actually read my comments (looking at you VREU) it’d be obvious I’m not a realtor. I’m pretty certain realtors in Canada don’t get paid in USD.

I’m a bear on the Canadian economy. Why? Because that benefits me (and anyone that exports to the US). Just like the hardcore RE bears are desperate for the RE market to drop. Fair enough, that’s human nature. We want what will benefit us. Calling someone without the same view a realtor (who must be “pumping” RE) is childish.

As a home owner I’m less bearish on RE. I’m also not a bull. No way this can keep up indefinitely.

#167 family beagle on 06.02.16 at 3:14 pm

#151 Ch on 06.02.16 at 12:57 pm
” It took five years for prices in the US to fall 32%, just as it took seven years in the last Toronto correction for a 30% decline.”

Awesome! Ill never own any home ever! Thanks for making my dreams come true Vancouver!

Obsession. While people study their navel, i buy acreages and rec properties close to the prettiest spots in the province. Cost to build: $65/sqft. Last one I bought was on my line of credit and the minimum payment is $150/month. Vancouver is nothing more than a human infestation around the anus of the Fraser. Vancouver has more in common with Detroit than it does with Keremeos or Creston Valley. Two different worlds, one province. Where do the nicest people live… area code 250. I own a house for every season. This weekend I head back up to Bonaparte Valley for some lawn chair sailing in the center of the universe.

Grand Forks – gorgeous
Rossland – a gem
Nelson – paradise
Aspen Grove – heaven
Nicola valley – eden
Falkland – freedom
Harrison – spectacular
Valemont – supernatural
It goes on and on. We’ve got more hideaway hamlets than Texas and California combined. You don’t hear from these people because they are out living. If you have to live in Vancouver for work, you picked the wrong career.

#168 IHCTD9 on 06.02.16 at 3:16 pm

Ontario Hydro customers about to gain a brotherhood with Albertan (and Sask too?) electricity consumers:

http://www.cbc.ca/news/business/alberta-saskatchewan-renewable-energy-wind-solar-1.3612775

Albertans, we Ontarians have seen this before, sorry about your luck, but you are now one a one way street to a perpetual 3-4 rate hikes per year.

Figure on a 150-200% increase over the next 10 years or thereabouts, combined with a steady exodus of power intensive industries out of your province.

Good luck!

#169 Dan Duran on 06.02.16 at 3:59 pm

So many idiotic arguments made.. like the one about personal debts. Yet study shows that the debt is disproportionately higher in high income high net worth areas. They don’t look at assets and this is not just real estate, but other assets, including cash savings. How many have TFSA’s investments, RRSP’s, foreign property and so on.. pretty common with high net worth individuals. Sure, if everything comes down, all these are in danger BUT don’t compare to the US, that country almost brought the world economy down, they had nowhere to hide..this is not the case in Canada if you consider RE a local problem. Of course, the world economy could implode again, as I said before.. then there’s really nowhere to hide. But as it’s happening right now, many countries are in (quasi-permanent) trouble and their rich are looking to escape here. A problem many others would want to have.

#170 Bytor the Snow Dog on 06.02.16 at 4:00 pm

@152 Ace Goodheart-

What a load! Why isn’t the currency “devaluing” here in Windsor-Essex or most of the rest of the country?

Are you related to Mark?

#171 Argonaut fan on 06.02.16 at 4:10 pm

#62 Smoking Man on 06.01.16 at 9:55 pm
For a wee buggee going for almost a Million in my hood, it’s safe to say that this is complete madness. And anyone with two brain cells would be selling.

So you all know the herd is mental, I’ve known it all along. That’s why I never bet against them.

The real estate pig has a long way to go.
All the negative chatter on MSM will do nothing to curtail it. It’s social status, and a Canadians mental obsession to hate land lords.

It would be like me finally getting to Bottoms_Up, get him a climate change denier tattoo on his fore head.

It’s not going to happen anytime soon
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;

Honestly Smoking Man I thought the sign in picture was yours. If we drive by your shit bungalow in Long-branch do we see this sign?

#172 Calgary Rip Off on 06.02.16 at 4:16 pm

If Hillary wins, two things will happen:

1) No Alberta pipeline.

2) More people leaving the USA for Canada.

Anything but a Trump Presidency is an epic fail.

#173 Blacksheep on 06.02.16 at 4:18 pm

Just looking at the timeline, Lehman failed in Sept / 2008 and that was the spring / summer I sold my home, not 2009 as listed in my post # 159.

Getting old, memory starting to fail.

#174 Joe2.0 on 06.02.16 at 4:18 pm

How can anyone seriously call someone a vulture because they are taking a chance on a speculative investment.

It is ridiculous to call someone taking a risk with their money a vulture.
It sounds like jealously to me.

#175 Joe2.0 on 06.02.16 at 4:28 pm

The reason currency is devaluing is because of all the cheap money out there driving prices up.

Example
Bank rates go down=housing prices going up, due to low supply, bidding wars…
This devalues cash in the bank since so many of us are pegged to the housing market.

RE is generally the largest investment the average person ever makes.
Not to mention the ground we have lost against other currencies.

My heart sincerely goes out to the average people who just want a place to call their own.

#176 Blacksheep on 06.02.16 at 4:30 pm

Bytor # 170,

“What a load! Why isn’t the currency “devaluing” here in Windsor-Essex or most of the rest of the country?”
————————————————-
Um…no one wants to live there?

Just imagine how little your home would be worth, without said currency inflation : )

#177 Damifino on 06.02.16 at 4:39 pm

#154 Joe2.0

I have is an aging wife who doesn’t want to be a renter for the rest of her life or be in a position again of our rental home being sold out from under us…. And to be honest seeing my gal in her garden puttering away makes me happy.
——————————

Garden puttering is overrated. My wife putters away with her flower pots on the balcony and claims to quite happy out there. We live in a professionally managed rental building in downtown YVR. Some tenants have been here 27 years.

This is not strata. The owner will never boot us out nor would he ever want to, as long as the rent is paid. Rent controls keep the monthly tied to the rate of inflation. Nice building too.

So… there are other options.

#178 Metaxa on 06.02.16 at 4:40 pm

@ 167 family beagle

…We’ve got more hideaway hamlets than Texas and California combined. You don’t hear from these people because they are out living. If you have to live in Vancouver for work, you picked the wrong career.

Hear, hear!

Two summers ago I took a buddy from Colorado and his son out into Strathcona Park…son scampers around the Rockies in CO but he was blown away by our Beauforts. Ditto with mountain biking behind Cumberland. Cape Scott took their words away.

Right now everyone is complaining in the media about the Provincial reservation system for campsites…what a laugh. I have 15 hidey holes that are on lakes or ocean all less than an hour or two away , devoid of people, just waiting.

So it takes me the best part of the morning to get to a big city for whatever, take or use what I need. Then I come home to a brand new hospital, new schools, local artisans, local food, farm gate stuff beyond compare, theater, music, craft breweries, on and on and so forth.

But don’t tell anyone else, sometimes I have to wait a full stop light cycle during morning rush hour to turn onto the bridge. Its awful, you wouldn’t want to live here.

#179 I'm stupid on 06.02.16 at 4:42 pm

#161 Samantha

We’re in trouble, when average people can’t do basic math.

1million x 1.25= 1250000
1250000 x .75 = 937500

Hopefully you can read better than you can multiply!

#180 salonist on 06.02.16 at 4:51 pm

#171 Argonaut fan

he’s got you pee!ing into the wind with your pants down to your ankles

you still haven’t caught on,it aint longbranch

#181 Ace Goodheart on 06.02.16 at 4:52 pm

RE: #170 Bytor the Snow Dog

@152 Ace Goodheart-

What a load! Why isn’t the currency “devaluing” here in Windsor-Essex or most of the rest of the country?

It is. Your houses are worth less than houses in Toronto. But you still have to buy them with a mortgage.

If a dollar was really worth a dollar, then you would have to pay cash for a house. Any borrowing, you are devaluing the currency. Any government that borrows, does the same thing. I laugh when people tell me they bought houses for 500K, a million, etc, etc and then I find out they put down like $75,000 or something. That is currency devaluation. If money was being sold for what it is worth, then a house would be worth what someone could pay for it. Flood the system with cheap money, house prices go up.

That is currency devaluation.

If only consumer borrowers were in debt as a result of cheap money, then we would be in an entirely different situation. Interest rates could rise, people would go bankrupt, there would be a lot of mortgage defaults, and house prices would crash.

But consumer borrowers are not the only ones in the hole. Governments have also borrowed, heavily and they also are relying on low interest rates to flood the economy with cheap money.

If rates rise, governments print money to get out of the hole. That is the “delayed currency devaluation” I am talking about.

#182 crowdedelevatorfartz on 06.02.16 at 4:56 pm

@#123 Devils Lawyer
Care to share what it is you do that contributes to improving peoples lives while funding your own?.
******************************************

You “improve peoples lives” while recieving a sales commission, nice.
And the more you “improve” the higher the commission. Doubly nice.
And as for not representing me…..bwahahahahaha…… You’d represent the Devil himself if the commission was high enough.
Lets just say I actually improve peoples lives…….. without the commission.

#183 Bottoms_Up on 06.02.16 at 4:58 pm

Took me all of 20 seconds to find this:

http://www.cbc.ca/beta/news/politics/g20-fossil-fuel-subsidies-450b-1.3314291

“It shows that Canada’s total federal and provincial support for the petroleum industry was close to $2.7 billion US ($3.6 billion Cdn at current exchange rates) in the 2013-14 fiscal year, with federal subsidies accounting for roughly $1.6 billion US of that.

The report says at least another $2.5 billion US of taxpayers’ money also goes to petroleum companies working in other countries through Export Development Canada “and may be significantly higher.”…..

Subsidies include everything from tax breaks for exploration and purchasing equipment, to royalty breaks and direct spending on projects from government-owned banks and financial institutions.”

#184 Van Renter Loser on 06.02.16 at 4:58 pm

#167 family beagle on 06.02.16 at 3:14 pm

Hear hear! I have an acreage in Freedom and a heritage income property in Paradise. Renting in the FA (in the sphincter, ie West Side) suotsme just fine!

#185 cramar on 06.02.16 at 5:02 pm

#131 Smoking Man on 06.02.16 at 10:14 am

Another retarded university left professor

Moron to say the leased.

————-

Nothing worse than liberal universities leasing moronic professors!

Back in the old days they at least would buy them!

#186 Ace Goodheart on 06.02.16 at 5:04 pm

RE: #165 IHCTD9
RE: #164 Ole Doberman

I agree with you. But I think it’s different this time. Mainly due to runaway government debt. I mean, this silly Province (Ontario) is in the hole like $300 billion Canadian. This is an unimaginable number. Consider, 300 years to pay it all back, at a billion a year surplus.

If you apply double digit interest rates to a $300 billion debt, you see where I am coming from. At 10% interest, that is $30 billion per year. Unsustainable. The Federal debt is similar.

So if we are going back up in terms of interest rates, then we are printing money. What I think has happened, is that through a very weird process, that was probably unintended, but has happened anyway, housing prices have “priced in” a currency devaluation as a result of cheap money being available to purchase houses, and supply and demand being what they are. Way, way, way more money available, finite supply of houses, especially in major centers like Toronto and Vancouver.

That is my thesis anyway.

#187 The Peoples Party of Canada on 06.02.16 at 5:06 pm

Oh, Vancouver prices up 30% year over year.

Average price for detached up $500,000 in a year!!!

#188 Smoking Man on 06.02.16 at 5:12 pm

#139 Suede on 06.02.16 at 11:24 am
Wow, my grammar and speeling is like Smoking Man’s. HA

i meant to say “will take two rate increases”
…..

Hey the bad spelling and grammar is my trade mark.
If keep using it I will require a royalty of some kind.

#189 bdwy sktrn on 06.02.16 at 5:29 pm

#167 family beagle on 06.02.16 at 3:14 pm
#151 Ch on 06.02.16 at 12:57 pm
” It took five years for prices in the US to fall 32%, just as it took seven years in the last Toronto correction for a 30% decline.”

Awesome! Ill never own any home ever! Thanks for making my dreams come true Vancouver!

Obsession. While people study their navel, i buy acreages and rec properties close to the prettiest spots in the province.
————————–
those places are great but a bit far off. we bought acres in howe sound (summer – oceanfront) and blaine wa (winter). can get to either in under an hour from d/t. the other wknd we went to one place on sat and the other on sun.

both were less than a price of a new tesla. howe sound had probably tripled. sales and prices are picking up in whatcom in the past year. land is still under 1/10 the price once you step over the line, but i expect this will change

#190 Capt. Serious on 06.02.16 at 5:44 pm

So pretty much wait 5 years to get to last year’s level. It must be depressing to be a vulture in Vancouver :))

Um, Samantha, you know that if an asset goes up by 25% and then down by 30% that it falls a lot below the original value, right? I know math and stuff. So pesky. Welcome to the geometric average.

#191 Joe2.0 on 06.02.16 at 6:04 pm

177 Daminfino.

Awesome setup.

If you sold it there would probably be a bidding war.
Then you could come over to the coast and buy some dirt:)

We have a father In law some dogs a few cars and a boat, camper..
We require more room.

First world problems I know..

#192 Newbie on 06.02.16 at 6:39 pm

The Guardian Etobicoke today: A Richmond Hill bungalow was listed for 899,000.There were 9 bidders and the property sold for $1.43 million. The realtor compares the sale to ” winning the lottery” for his clients.

#193 family beagle on 06.02.16 at 7:17 pm

#178 Metaxa on 06.02.16 at 4:40 pm
#184 Van Renter Loser on 06.02.16 at 4:58 pm
#189 bdwy sktrn on 06.02.16 at 5:29 pm

We’re blessed, yet the moment I clicked ‘submit’ I felt I did all youse country folk a disservice. I’d like to revise my earlier comment to include there’s probably more tundra and wolves than city people expect. ;)

#194 Joe2.0 on 06.02.16 at 7:22 pm

186 Ace Goodheart.

I agree totally.

The high house prices create a systemic off shoot.

House prices high = upping the value of neighbourhoods = retail spaces rent increases = price of consumer goods increasing…

It’s like throwing a stone in a pond

#195 Ace Goodheart on 06.02.16 at 8:00 pm

RE: #183 Bottoms_Up

I love it. Then they tell us we all have to stop using natural gas to heat our houses and we have to all start driving electric cars. Left hand doesn’t know what the right is doing.

#196 Bat Flipper on 06.02.16 at 11:11 pm

#138 Suede
I get it… market can stay irrational longer than solvent…

But risking one’s entire financial future on a single asset that will wreck you financially if one of several things goes south (job loss, interest rate increases, death, disability, recession, etc.).

There is too much risk involved, but that is the norm in Canada. 5% down payment is the norm, everyone gets max amortization, there are literally hundreds of private lenders.

It doesn’t matter where the top or where the bottom is. Trying to figure that out is crazy. Of course, as Garth preaches, bet on both sides, hedge, and set and forget, but don’t forget to re balance.

The point is to keep yourself safe.

#197 Jennifer Lockhart on 06.03.16 at 12:30 am

Do you like pugs Garth?

#198 DON on 06.03.16 at 1:48 am

#178 Metaxa on 06.02.16 at 4:40 pm

Hear, hear!

Two summers ago I took a buddy from Colorado and his son out into Strathcona Park…son scampers around the Rockies in CO but he was blown away by our Beauforts. Ditto with mountain biking behind Cumberland. Cape Scott took their words away.

Right now everyone is complaining in the media about the Provincial reservation system for campsites…what a laugh. I have 15 hidey holes that are on lakes or ocean all less than an hour or two away , devoid of people, just waiting.

So it takes me the best part of the morning to get to a big city for whatever, take or use what I need. Then I come home to a brand new hospital, new schools, local artisans, local food, farm gate stuff beyond compare, theater, music, craft breweries, on and on and so forth.

But don’t tell anyone else, sometimes I have to wait a full stop light cycle during morning rush hour to turn onto the bridge. Its awful, you wouldn’t want to live here.
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Judging by your comments light/bridge….Courtenay/Comox.

Cape Scott is spectacular (even if it rains – yes July 1). Strathcona the same and I hear yah with the camping reservations. No need for it, find a remote area and pitch a tent. But then again for most people the wilderness is a scary place…but not for me as there are no humans around. lol Can’t wait to go back to Cape Scott.

Cheers,

#199 Noel on 06.03.16 at 10:19 am

Brutal employment report and weak service sector data out for the US – also downward revision for last months employment #.

This is June’s excuse for no hike. Wonder what the excuse will be in July.

Political turmoil from Trump that effects the markets maybe? Or maybe just another bad jobs report. Possibly a further deterioration in manufacturing? They’ll come up with some excuse.

#200 Jay on 06.03.16 at 12:43 pm

Seems to me like higher and higher minimum down payments are immaterial.

What we really need to do is make it so people who get a mortgage have to prove that they actually earned that down payment, and it wasn’t from the bank of mom&dad.

If people making almost no money have to come up with $70,000 cash before they can buy a million dollar property, then they won’t be quite so ready to hop into a mortgage!