Only fair

BERNIE SIGN modified

So what happens if the feds get spooked by raunchy house values and up the minimum down payment? Will that let some gas out of the bubble before it implodes? After all, this is the current solution being proposed now by two bank CEOs. Will it work?

Forget it, says Andy Charles. Seriously.

Charles heads Canada Guaranty, a mortgage insurance company. He’s an industry lifer. I hung with him when he was president of Home Loans Canada, a rapidly-growing division of CIBC, where all the ‘alt’ borrowers the regular bank didn’t want (too much risk) ended up with mortgages from the same bank, but with a different label on them. Cute.

Anyway, this is why Charles says higher downs are dumb (as he told an industry publication):

“Raising the minimum down payment to 10% would have the unintended consequence of negatively impacting housing markets in almost all other areas of the country. Home prices are soft and either flat or moderately decreasing in almost every city in Canada other than Toronto/Hamilton and Vancouver/Victoria. Housing markets and first-time homebuyers in Montreal, Halifax, Calgary, Edmonton, Winnipeg, Regina, and Saskatoon, not to mention other smaller cities, would very likely experience negative economic impacts due to increasing the minimum down payment at a national level.”

Asking first-time buyers to cough up an extra 10% would probably change nothing. Charles is right there. Remember that the new rule boosting minimums for houses costing more than $500,000, which came into effect last winter, did diddly. The real problem is with listings over $1 million, which don’t qualify for CMHC insurance (thanks to old F). Buyers there need 20% down, which is now fueling the subprime segment of the lending business – since many buyers don’t have that kind of cas

 

After all, to purchase a typical $1.8 million faux baronial stone-over-plywood skinny house in Leaside requires at least $360,000 down, plus $64,000 in land transfer tax and the usual closing costs. That’s almost $430,000 in cash. Gulp. To get it an increasing number of people borrow off the grid, paying rates that range from 8-10%, then taking a 30-year am on the big loan in order to manage cash flow. For that you need titanium orbs or blissful ignorance. Both can be fatal.

So the enemy of reasonable real estate prices is probably not the dewy couple with the hots for a starter home, but speculators. One of Bay Street’s major bank economists this week fingered speckers as being far more consequential than the elusive foreign buyers, adding weight to Van mayor Gregor Robertson’s call for a flipping tax in BC. In other words, those people who only buy houses because they go up in value and may yield a capital gain are the ones deserving of torture, rather than the kids.

The trouble is, in some markets (guess) everyone’s now a specker. In YVR, it’s an industry. So shame on BlueShore Financial (formerly North Shore Credit Union), the ones running a nauseating Bank of Mom ad, for peddling a media release seeking to build guilt within families not playing the game. Ugh.

Check out this widely-reprinted story:

The bank of mom and dad has skipped a generation, with parents now buying houses or condos for their school-aged children or grandchildren. Nervous upper-middle-class homeowners are hoping that the strategy will help younger generations gain a foothold in Vancouver.

“At the rate things are going people are afraid,” said Kristine Skinner, a financial adviser with North Vancouver-based credit union BlueShore Financial, referring to recent rapid price gains in residential real estate.

“I have people coming to me, saying, ‘Are my children or my grandchildren going to be able to afford a home when they’re an adult?’” Skinner said. “They’re actually buying revenue properties today with the intent that the values will appreciate and those properties will be transferred to their children as adults.” Skinner said it’s common for her clients to help their adult children with either a gift or a loan of between $200,000 to $500,000 to help with buying a home, often in the same neighbourhood.

It’s hard to make this stuff up. Grandparents panic-buying condos with newly-minted equity from their bloated houses, doubling down on real estate to ensure that the generations to come will be as myopic, obsessed, materialistic and speculative as they. What a great social usage of hundreds of thousands of windfall dollars.

Thus, it’s time to stop worrying about Chinese dudes. Worry about us. Things are getting out of control.

Upping the down may be the wrong direction. Instead, tax housing gains as we tax everything else. Only fair. Sorry, mom.

157 comments ↓

#1 Randy on 06.07.16 at 6:18 pm

Yellen…Saved by the bell..haha

#2 Maple Special on 06.07.16 at 6:19 pm

First!

#3 Presumptive President Trump on 06.07.16 at 6:23 pm

Re: Trump can’t win.

Said the increasingly nervous man for the seventh time this year…

#4 Fluorine on 06.07.16 at 6:25 pm

I miss F!

#5 Jimmy on 06.07.16 at 6:27 pm

First!

#6 Doug t on 06.07.16 at 6:29 pm

When they start seriously talking about taxing housing gains that’s when my for sale sign goes up

#7 Smartalox on 06.07.16 at 6:30 pm

Gregor Robertson as the voice of reason? I’ve been living on the West Coast for too long!

#8 pathcontrolmonk on 06.07.16 at 6:32 pm

Sadly, the anti-Chinese dirty money voices are becoming more shrill and will eventually turn in to anti-Chinese/immigrant rhetoric a la Trump.

Here is a fresh article in the Huffpost about how few RE companies do anything to follow regs on money laundering:

http://www.huffingtonpost.ca/ike-awgu/canadian-real-estate-foreign-buyers_b_10329000.html

#9 S.Bby on 06.07.16 at 6:32 pm

10% down is still a good idea. It was then and it is now. If it impacts some buyers in some markets, then that just means those markets are still overpriced.

#10 pathcontrolmonk on 06.07.16 at 6:36 pm

“The Chinese brought you great food and a better economy. What’s there to complain about?”

http://www.sbs.com.au/news/dateline/story/chinas-millionaire-migration

#11 Arfmooocat on 06.07.16 at 6:37 pm

It was 10% down and the 15, 20 or 25 year mortgage in my era

#12 Best Place on Meth on 06.07.16 at 6:46 pm

@pathcontrolmonk

Criminal locusts should not own ANYTHING in this country.

They should be deported.

#13 Madcat on 06.07.16 at 6:47 pm

Excellent idea… Increase property taxes on non primary residences substantially.

Go a step further and tax property owners who hold vacant properties even more… Perhaps the owners should have to pay a percentage per month of their property value when their property sits vacant…

#14 Brian Ripley on 06.07.16 at 6:48 pm

I have my six city chart up now (even Montreal is peaking and they have record inventory):
http://www.chpc.biz/6-canadian-metros.html

I overlay a plot of total national MLS annualized sales and it’s up +/- 8% over the last peak set Dec 2007 just before the last crash.

#15 Caught on 06.07.16 at 6:51 pm

Very true. Teranet shows EVERY city in the composite 11 down or flat with the exception of Vancouver, Victoria, Hamilton and of course Toronto.

I think Vancouver is the NASDAQ in 1999, Toronto is the S&P 500 & Hamilton is the TSX.

They all declined eventually. 50% was moderate.

#16 crowdedelevatorfartz on 06.07.16 at 6:52 pm

Well.
Its good to know BlueShore “Financial” has brought real estate pumping to a new low…..
Guilting grandparents into using their homes as collateral for condos……unbelievable.
The financially ignorant “speckers” get what they deserve.
Unfortunately the taxpayers ( a la CMHC) will be the ones bailing the SS Realturd boat sinking in a sea of poo.

#17 A Canadian Abroad on 06.07.16 at 6:54 pm

What home owners need to understand:

A home is a single asset class (non-diversifed). A gain or loss is not realized until the asset is sold. Are those in Toronto or Van Trading or Investing in RE? I’m guessing the vast majority of RE owner will ride the market down and not sell as they are not used to trading and know not when to “get out”.

Trade: Purchasing an asset in hopes it goes UP in value.
Investment: Purchasing an asset in hopes it goes DOWN in value so you can buy more.

#18 Lee on 06.07.16 at 6:56 pm

If they tax capital gains I will eat my dirty shorts. It will NEVER happen. Suggesting it will is irresponsible and only intended to keep stringing along a vulnerable bunch.

#19 Victoria Real Estate Update on 06.07.16 at 6:56 pm

All housing markets need a certain number of sales to first-time buyers at the lower end of the market to support move-up buyers at the higher end of the market.

Increasing the minimum down payment enough to effectively limit the number of lower-end buyers would obviously disrupt the ability of move-up buyers to sell their properties and buy more expensive homes.

That isn’t rocket science.

When rates were suddenly slashed from near-normal to emergency levels in 2009 it was obvious that action should have been taken to limit the price-boosting effect of this powerful source of housing market stimulus. For example, the minimum down payment could have been increased to 10% or 20% (that’s what it is in most parts of the US). But nothing like this was done.

Increasing the down payment enough in Canada would help cool Vancouver’s market.

There are other options as well. For example, action could be taken to stop Canada’s mortgage fraud problem. Apparently, nothing has been done about this serious issue that was a major contributor to the US housing bust.

#20 Caught on 06.07.16 at 7:00 pm

Unfortunately, a 50% decline at this point would only bring us back to 2010 prices in the GTA and more recent prices in Vancouver.

#21 Grey Dog on 06.07.16 at 7:06 pm

Garth, a while back while Harper reigned, I’m certain you said taxing housing gains was never going to happen…suddenly you are singing another tune regarding this subject, have you been designated to float the trial balloon?
As one of the other dogs said the other day, way too many factors really complicate this issue, renos, etc. I’ve lived here in my house 31 years, bought for $240k, 2 months ago my exact model of house sold a block over for 1.650…how much capital gains tax will I have to pay? I’m feeling kinda sick right now…gotta go…

I said mortgage interest would never be deductible. Cap gains tax would apply from the day of passage, not 31 years earlier. Your unearned $1.4 million windfall gain is safe. — Garth

#22 gladiator on 06.07.16 at 7:11 pm

First, it will not any gas out.
Second, it will not implode. At least for several years.

#23 Like everything else on 06.07.16 at 7:15 pm

There is a difference between owning a dog and raising a kid.

#24 Steven Rowlandson on 06.07.16 at 7:17 pm

Make the down payment 25% and enforce the one income 3 years pay rule as a start.

#25 Not bad on 06.07.16 at 7:18 pm

Do both,
10% downpayment CMHC insures up to 6 times average family income/city so it will be regional as in some parts of USA
Tax the profit in the first 5-7 years gradually 80% for a dlup in the first 2 years, 50% in next 2, 30% in next 3 years. Free after 7 years, nobody will complain, oh wait we are not Switzerland… EVERYBODY will be againts it!

The crash will be spectacular, the sale mix is changing in YVR i don’t give it more than 3-6 montgs for a 10-15% correction

#26 Not bad on 06.07.16 at 7:20 pm

I forgot to mention that the smart money are exitin YVR RE, poor rich asians dudes will be fleeced big time, but the locals will suffer the most
Unfortunatelly….

#27 Breaking Ranks on 06.07.16 at 7:21 pm

Actually, the Mayor of Vancouver has broken ranks with the provincial government on the supposed ‘non-impact of foreign capital’ and is acknowledging the negative impact of foreign capital.

“With unregulated, speculative global capital flowing into Metro Vancouver’s real estate, we are seeing housing prices completely disconnected from local incomes,” said Robertson.

http://www.cbc.ca/news/canada/british-columbia/gregor-robertson-luxury-tax-flipping-tax-1.3617636

#28 WalMark of Sadkatoon on 06.07.16 at 7:21 pm

lookin forward to taking the homes
of foolish speckers and grand/parents

just like i did in the US

candy from baby

#29 Lulu on 06.07.16 at 7:27 pm

If the government want to cool the market fast, put a spec tax on property that re-sale within 1-3 years as home owners claim as their primary residence, it will deter flippers and speckers right away, but benefit real home owners. It worked in many countries around the world. If the Liberal really want to cool it, the matter is DO THEY REALLY WANT!? haha

#30 the Jaguar on 06.07.16 at 7:34 pm

Noticing a little momentum in the exodus from the lower mainland to ‘other locales’ lately. The smart money is cashing out big time. Certain types like a particular postal code. Who can blame them? When you don’t need to be near YVR anymore for those long hauls you can escape the madness. It’s like watching a new release of the Ocean’s Eleven gang…marvelous

#31 pathcontrolmonk on 06.07.16 at 7:37 pm

@#29 Lulu

Japan did this post JP bubble burst, now if you sell within 5 years you incur capital gains tax of 50%… unfortunately it isnt discouraging PRC money from buying RE there either.

#32 Bill Gable on 06.07.16 at 7:41 pm

Granny is going to carry a mortgage, (BIG LOC) for her Grandkids, so, in, what, 25 years, they will have a ‘home’.
That’s what a North Vancouver “financial” institution is calling, “prudent”?
Mr. Turner. These people are totally, without a doubt, CLUELESS.
What’s the average IQ in North Vancouver? (Aw, heck, all of YVR).
in the low 80’s would be a good guess; for a goodly number of maroons cruising this overpriced, boring, Potemkin Village.

#33 Victoria Real Estate Update on 06.07.16 at 7:48 pm

In addition to my previous post…

Perhaps it would be a good idea to increase down payments significantly in the markets identified in Garth’s post – Vancouver, Victoria, Toronto and Hamilton (currently the areas that Garth has identified as bubble markets).

The minimum down payment could be left at 5% outside of these markets.

I would also recommend other changes to remove some of the housing market stimulus that has been in effect in Canada since the late 90s.

It was ridiculous that three more bubble-blowing policy changes were made in 2015 – two rate drops by the Band of Canada and allowing 100% of rental income to be used on mortgage applications.

100% is ridiculous when you consider that rental income is taxable and therefore significantly less than 100% of rental income could possibly be put toward monthly mortgage payments. Another example of what Canadian policy makers claim to be “conservative” mortgage lending standards.

If you’re concerned about a housing bubble then it only makes sense that you stop lowering mortgage lending standards almost every year.

#34 BOOM! on 06.07.16 at 7:53 pm

Yes, parents, grandparents, aunts, uncles should buy a house, condo, even a 4 plex for the kids & grandkids!

Make sure you buy with a big mortgage, the biggest available, for the longest amortization period, and at a variable interest rate. More chance for house appreciation that way. When did prices FALL in your hood?

The MORE property you can buy at the present highest AND, lowest prices in the yet unwritten history of your locale the better.

Further, make sure the property is deeded to all the close relatives, and never named in a will, or trust document.

What a better way to ensure you will never leave a family legacy, keep them anchored to the town, as well as your friendly lender.

A public service announcement of Better Get ‘M Now!!

#35 Estrella on 06.07.16 at 7:56 pm

Peak house is here. Someone has to do something fast because some realtors are now using sex to sell some properties. The following link was on Breakfast Television this morning in Toronto. This really has me scared.

http://www.bttoronto.ca/videos/4930098393001/

#36 Joe2.0 on 06.07.16 at 8:04 pm

There are city’s on this planet that the mortgages are passed on from one generation to another.

It’s a naive concept to think that the banks won’t try to get positioned so that 100 year mortgages are the norm when and where ever possible.

Bright side is less moving..

#37 Rainclouds on 06.07.16 at 8:18 pm

Law is already on the books, audits already happening. Not working, next……………

http://bc.ctvnews.ca/are-house-flippers-all-paying-their-taxes-cra-probing-128-home-sales-1.2771284

#38 Andrew Woburn on 06.07.16 at 8:28 pm

Garth said yesterday –
Like Brexit. A month ago this was a yawner, with analysts everywhere convinced Britons would vote on June 23rd to stay in the European Union, just like boss David Cameron instructed. But it turns out UK locals are in a mood – just like Trump and Sanders-loving US locals – and whatever the Establishment tells them to do is opposite to what they will.
=======================

Many UK voters suspect the undemocratic EU elites cannot be trusted to manage Europe, have lied to them all along and have no real interest in their desires or welfare.

Brits are not racists but they don’t want to drown in endless immigration. They have welcomed hordes of EU and third world migrants and have seen the economic growth that followed but the UK government grossly misled them about being able to control immigration under EU rules. Some projections see a 20% population increase over the next two decades. Public services are strained and the once revered National Health Service now provides a squalid saga of neglect and underfunding. House prices are relentlessly driven up by the literally millions of legal immigrants coming to a place short of buildable land. Now rubber boatloads of non-EU migrants are landing on British beaches provoking scary visions of millions of poor Africans waiting to follow.

Business elites claim that Brexit will impoverish Britain and drive the all-important banking industry to Frankfurt and Paris. They said exactly the same thing when Britain opted out of the Euro. Call me doubtful. Ambitious Europeans have flocked to London to escape anti-business bureaucrats in weak economies. Why would they go back? London now has more French speakers than most major French cities.

Probably UK voters will pull up just short of Brexit. Britain’s influential betting shops say they will even if the pollsters don’t. But Brits have seen what chaos uncontrolled immigration brought Germany so events in the next weeks might tip them over the edge. Nobody really knows the cost/benefit of leaving but the indelible British identity and taste for independence may mean more to voters than somebody’s lost profits.

I think leaving the EU now is a mistake. It will collapse before long anyway, at least in its present form. The gap between the needs of powerful Germany and the weak, indebted states of Southern Europe threatens the stability of the region. Staying aboard the EU train would give the UK an important role in structuring a healthy move back to a common market away from a failing monetary union.

Germany dominates the EU economy even if it really, really doesn’t want to be a dictator. It is the world’s third largest exporter. Exports account for more than 40% of its GDP. It still looks invincible but problems are growing. Its political consensus is fracturing over immigration. Without immigration, it will age rapidly. Vital world trade is slowing significantly. Its banks are major creditors of some pretty sickly spots like Portugal and Europe’s 4th largest economy, Italy. Italian banks are carrying nearly 20% non-performing corporate loans. With an economy already suffering deflation and strangled by political inability to manage labour productivity, Italy needs a miracle, a revolution or a doorway out of the EU.

The Europe/Euro pretty federal plan now looks like a nightmare. It was supposed to be a cordial entente led by France and Germany but even France is staggering and facing revolt on the left and the right. The eurodream needs to evolve into political/fiscal integration but it can’t without popular support and especially bags of German money which is not on offer. The German taxpayers believe in living without debt and if you must borrow, pay your bills on time. They choked at bailing out tiny spendthrift Greece when they were still feeling rich. As falling exports hit their pockets, guess how Germans will greet Italian banks waving very large begging bowls.

The uncompetitive south of Europe, France included, is shackled to the Euro. Giving up their national currencies cost them the ability to rescue their economies by devaluing against the the German export machine. If the Euro stays, non-German debt will just keep growing in a nasty deflationary environment. It is looking like the first nation to default or leave the Euro wins. The rest will then likely rush to the exits unless a new vision of Europe can quickly emerge. This is exactly when the price of trying to deceive too many voters for too long will probably bankrupt the visions of the Brussels elite. Britain doesn’t have any immediate need to leave. It could just watch and wait.

#39 Joe2.0 on 06.07.16 at 8:28 pm

#30
The Jaguar

I agree that there is smart money cashing out here and buying into more affordable areas.
I base this on my realtors x 3 feedback.

They are seeing a on slaught of empty nesters whose homes have skyrocketed in value heading to the Island Sunshine Coast or Okanagan.

I checked the inventory on the coast in Gibsons and its slim at least in my tax bracket, almost nothing for under 500k, in Sechelt and further away there are still some better prices.

I think people cashing out will also be excellerated if there’s a hic up in the Van market as sellers will want to cash out at the markets highs.

Because of the rapidly expanding aging demographics who can move away from metropolis not worrying about going to the office I think the face of certain out lying areas are going to under go enormous face lifts.

I stand by what I say, unless there’s a disaster or banking failure RE at least in Vancouver and area is going to remain strong.

And that pisses me off because I’ve been priced out of the town I was born in.

#40 Ace Goodheart on 06.07.16 at 8:32 pm

RE: “The real problem is with listings over $1 million, which don’t qualify for CMHC insurance (thanks to old F). Buyers there need 20% down, which is now fueling the subprime segment of the lending business – since many buyers don’t have that kind of cash”

– are you honestly saying that people purchasing houses for over a million dollars, are doing so with “sub prime mortgages?” Really? I find that very hard to believe. You’re saying someone who can come up with $400 – 500,000 in cash to buy a house priced over a million, needs to borrow sub prime? Because they, like, just walked under a money tree but unfortunately, not enough cash fell out? That is a stretch.

RE: “Instead, tax housing gains as we tax everything else. Only fair. Sorry, mom.” – spoken like a true politician. You can fix any problem with a tax. Global warming? Tax heating fuel. People’s houses becoming worth too much, tax them full value when they sell.

My prediction is any politician who brings in that law, will bury their party. That will be as unpopular as Harpo’s universal gag order (the one that lost him the election)

I propose a tax on reading comprehension. — Garth

#41 Ted54 on 06.07.16 at 8:39 pm

Not sure what the problem is. Capital gains is payable on resale of any property not designated as your home. Without hesitation I would assume most people buying at these price levels will already own property. So they will pay capital gains. Foreign buyers if not resident also have a a withholding tax.

#42 For those about to flop... on 06.07.16 at 8:39 pm

Before the Fort Mcmurray wildfires WULLY and I were co hosting the Count Of Caledon Karaoke…Unusual Posts or CockUp for short on Saturday nights on the blog where we discuss a lot of off topic issues including sport.

For the non sporting people on the blog I will try to tell you what is going down in Britian this summer regarding the Brexit vote.

The Brexit vote is due to be held on June 23rd whoever chose this date is a moron or a genius depending on what you want to happen.

Here’s the reason….for the average guy this date is not even on his top 5 list of important dates this summer.
Euro 2016 kicks off in a few days and last for a month.

It is the major sporting event held in Europe and this vote will be held right in the middle of it.

A tournament like this naturally bring out nationalistic feelings and so this can account for some of the upswing in the leave vote.

Wales,England and Northern Ireland are in the tournament,Scotland did not qualify and so will be cheering for whoever plays against England.

England and Wales first game get underway on June 11th and if they get off to a rough start things will get even better for the leave side.

The side story and one of the reasons soccer is tied to the Euro situation is that some of the football associations are sick of the corruption in Uefa, the governing body of Europe football and have tried to leave this set up as well.

I could go into more depth but I hope this helps a bit.

Moral of the story if they get off to a good start in the tournament the better for the stay vote.

If they feel like they are being cheated ,better for the leave side.

Come on England…

M41BC

#43 Tom jonea on 06.07.16 at 8:57 pm

How about a freakin normal rate of interest?????

#44 paul on 06.07.16 at 9:03 pm

#13 Madcat on 06.07.16 at 6:47 pm

Excellent idea… Increase property taxes on non primary residences substantially.

Go a step further and tax property owners who hold vacant properties even more… Perhaps the owners should have to pay a percentage per month of their property value when their property sits vacant…
———————————————————-
The key words ‘their property’ Tell the government to piss off.
They brought in rent control so all the big builders said screw that and started building Fn. Condo’s and selling they with cmhc backing. So now we have no or hardly any rental stock. Let the free market work appropriate down payments, a job to making enough money to carry the house/Condo problem solved!!

#45 Smoking Man on 06.07.16 at 9:03 pm

Upping the down may be the wrong direction. Instead, tax housing gains as we tax everything else. Only fair. Sorry, mom.-Garth

With lefty governments all over Canada you suggest this in open air.

Dude they look for every which way to Sunday to rob us blind.

Please don’t give the cleptocrats any more ideas.

#46 p on 06.07.16 at 9:19 pm

‘titanium orbs’…priceless

#47 Smoking Man on 06.07.16 at 9:20 pm

Air space above Arizona has been closed since April 2 when a Tall White ship took on A Nictonite cruiser.

The tall whites lost. Ha…..

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

#48 Rich Dudley on 06.07.16 at 9:24 pm

“The Market Can Remain Irrational Longer Than You Can Remain Solvent”

Should we keep this in mind regarding housing and the Stock Markets and interest rate increases?

#49 Estrella on 06.07.16 at 9:27 pm

Any spectators out there better not be looking at buying in Connecticut.

http://mobile.nytimes.com/2016/06/08/nyregion/with-connecticut-foundations-crumbling-your-home-is-now-worthless.html?smid=tw-nytimes&smtyp=cur&referer=https://t.co/FIpm97uF3N

#50 Smoking Man on 06.07.16 at 9:39 pm

Boy I’m surprised Barrington took out a Tall White battle cruiser in his personal plasma flier.

Barrington is a useless teacher. He never got the feel of flying. That’s my Job. I’m best in the evenings.

Barrington left the bright orange trail from his plasma flier.

Watch it. Above link in earlier post.

Snap shot of the dog fight below.

http://dyslexicsmokingman.blogspot.ca/2016/06/ufo-dog-fight-over-arazona.html

#51 Fed-up on 06.07.16 at 9:47 pm

“Raising the minimum down payment to 10% would have the unintended consequence of negatively impacting housing markets in almost all other areas of the country. ”
———————————————————–

You mean most other markets that have more than doubled as well in less than 10 years? Is “keep property values insane” written into our Constitution or something?

What a moron.

Raise downs to more like 20%, eliminate CHMC, raise interest rates and restrict foreign buyers and boom, problem fixed.

#52 White Crock BC on 06.07.16 at 9:50 pm

Rainclouds on 06.07.16 at 8:18 pm

Law is already on the books, audits already happening.

=============

Wow, 128 audits out of the thousands and thousand of transactions.

CRA goes after low hanging fruit. (i.e. forget to include a T5? see what happens)

Auditing flippers is too much work.

I know a guy who bought condos in Richmond years ago. Rented them out to “masseuses” for cash…. never declared that income, then sold the condos at a tidy profit. Didn’t declare that gain either.

#53 Smoking Man on 06.07.16 at 9:57 pm

The State Department claims it would take 75 years to compile the 450,000 pages of emails between Hillary Clinton and her top aides, meaning it will be able to satisfy two Freedom of Information Act lawsuits from the Republican National Committee no later than 2091.
………………

Can no one see how Hilary and Hubby are cleptocrats to the nines.

Using political clout to in rich themselves. That’s how lefties make loot.

When Trump wins, she doing some time.

#54 BobC on 06.07.16 at 9:59 pm

Listen to you guys. Raise taxes! Punish those that got lucky or gambled on real estate in the right areas!
What’s wrong with you people? Why not leave it alone to work itself out? It always does. Don’t be jealous and hateful.

#55 Ret on 06.07.16 at 10:04 pm

Do the 10% down. Let the market decide the value of a property.

Homes in the burbs went up because of cheap and easy credit just like in the cities. Lots of average sized homes priced at $450,000+ in Niagara Region, along the north shore of Lake Erie or in SW Ontario are not worth anywhere near that number.

#56 AisA on 06.07.16 at 10:05 pm

I smell subprime cooking everywhere. Must be the ability to do basic math.

#57 gut check on 06.07.16 at 10:11 pm

.. I am revived now after fainting at this:

“Upping the down may be the wrong direction. Instead, tax housing gains as we tax everything else. Only fair.”

calls for higher taxes? on this blog?
W.
T.
F.
?

But in reality, what is the investor profile for people who will be taxed who are not already?

Those people who are buying one additional residential property to use as an investment? Is that what we want? Is that what you’re advocating?

Correct me if I’m mistaken, but I thought that anyone who sold a home that they don’t live in was already obliged to pay cap gains.

The logic behind having residential real estate as the only asset class exempt from capital gains tax is anachronistic. It’s helped turn housing into a commodity and render it unaffordable. There is no reason ridiculous windfall gains should be tax-free. Addressing this would be an elegant solution to rampant speculation, bidding wars and FOMO. — Garth

#58 conan on 06.07.16 at 10:12 pm

#49 Estrella on 06.07.16 at 9:27 pm

This is going to be a nightmare. Twenty thousand homes minimum just became worthless.

Today I learned to make sure the foundation contractor uses quarry sand and not beach sand….. pay the extra…

#59 cj on 06.07.16 at 10:15 pm

Real estate in Vancouver was out of reach for us 40 years ago and we needed to move further out to buy a place in Coquitlam. I see the same age bracket of young people talking on our local TV news about how they are not able to live in the city. That’s reality, not just for your generation but for previous ones as well

Many are waiting for the government to intervene. My experience has been that whenever the government intervenes, it is not a successful solution. The real estate craziness will resort to a natural correction. No help needed.

There was a large impact on real estate in the early 1990s with Hong Kong money drifting into the lower mainland for political reasons. This got out of hand and again individuals thought there was never going to be another chance to buy their own home. The frenzy caused housing to inflate and it eventually got to reasonable levels again.

The panic in 604 is insane and I find the media and house of mom are fueling it by having gullible buysers believing it is their last chance to own a home. Deja vu all over again.

Renters need to rethink perceptions of being second class citizens to seeing themselves with a stronger backbone. It takes a lot of guts to being more
financially diversified when those around you question your reluctance to buy into your last chance to own a home. The ironic part is that they are neck deep in debt
and will be unable to enjoy financial freedom for a long
time

#60 For those about to flop... on 06.07.16 at 10:16 pm

Hey Ronnie,I don’t want to rehash what happened on the weekend but I was cleaning out my account last night and I thought of a more diplomatic way to respond to your statement about what goes on between me and BOOM.

I just start off a lot of the American based stuff I post with” Hey Boom…” just to get his attention because he seems interested and we get on well but in actual fact if I am not lazy and do a proper lead in to to post these images can be viewed from anywhere from 50/60 times up to a thousand.

I normally take them off after a few days after giving the stragglers a chance to read them if they are interested and so I know there a lot more people than Boom reading them so when you called it BS I decided to call you Woody.

Anyway were all good and I hope this helps why I start a lot of my posts with ” Hey Boom”

Cheers,Goofy.

M41BC

#61 Freedom First on 06.07.16 at 10:17 pm

Something is wrong with me. I am starting to feel a little bit of compassion for the Millennials.

Perhaps because I’ve noticed a number of them are living a simpler lifestyle, opting for Freedom over materialism. They will be alright. Very smart. The only big difference I see between them and me is that I am older, and I don’t need to work.

#62 conan on 06.07.16 at 10:19 pm

#47 Smoking Man on 06.07.16 at 9:20 pm

Do you swear that this link is not to a Nicki Minaj video?

#63 Smoking Man on 06.07.16 at 10:19 pm

Bernie got burned by the machine.

http://www.latimes.com/politics/la-na-pol-california-voters-president-20160607-snap-story.html

There is democracy in the USA.

Ha!!!!

Trump is humanities only hope.

#64 Smoking Man on 06.07.16 at 10:21 pm

Christ, the only thing T2 got right so far.

http://news.nationalpost.com/news/canada/canadian-politics/trudeau-says-f-35s-are-far-from-working-as-liberals-tories-spar-over-fighter-jet-strategies

#65 Smoking Man on 06.07.16 at 10:23 pm

Someone pass the head and shoulders.

Really NASA. Someone should school you in the art of lying.

Dogs: where do you want the most amazing UFO sighting. Just tell me.

#66 Smoking Man on 06.07.16 at 10:24 pm

Shit forgot the link in my last post. Many trips to the back yard tonight. here it is

http://metro.co.uk/2016/06/07/its-not-aliens-its-space-dandruff-nasa-guy-explains-the-real-story-behind-ufo-sightings-5929248/

#67 greyswan on 06.07.16 at 10:25 pm

It`s time for an inheritance tax on all residential
real estate in Canada.
….that would slow down foreign money flows in to Canadian real estate.
….use inheritance tax for lower income families and our working youth!
The Americans have a capital gains tax on real estate!!
Foreign money prefers Canada because they very little American income to write off mortgage interest!!

#68 Jenmick on 06.07.16 at 10:28 pm

DELETED

#69 Raptorstruth on 06.07.16 at 10:30 pm

Wait, grandparents are buying income properties so their grandchildren will be able to have property when they become adults???

Holy. Shit.

This cannot end well

#70 For those about to flop... on 06.07.16 at 10:33 pm

This is a cartoon poking fun at the Clintons…

M41BC

http://imgur.com/RqDxDaD

#71 cto on 06.07.16 at 10:40 pm

Well no rate rise today. Me thinks this little game the fed is playing is going to play out into the next decde at least. It seems that the powers that be plan to extract every last penny out of the savers….what ever it takes to get their hands on that money. This will likely end with negative interest rates some time in the not too distant future.

#72 Smoking Man on 06.07.16 at 10:51 pm

#52 White Crock BC on 06.07.16 at 9:50 pm
Rainclouds on 06.07.16 at 8:18 pm

Law is already on the books, audits already happening.

=============

Wow, 128 audits out of the thousands and thousand of transactions.

CRA goes after low hanging fruit. (i.e. forget to include a T5? see what happens)

Auditing flippers is too much work.

I know a guy who bought condos in Richmond years ago. Rented them out to “masseuses” for cash…. never declared that income, then sold the condos at a tidy profit. Didn’t declare that gain either.

…..

CRA audits me every year. To bad they don’t know how to speak in Nictononian

CRA: Here it is. Take a wild guess what this means.

Pin 999999 # Alien encryption.

8962827384282268782974071340848764598473

#73 Smoking Man on 06.07.16 at 10:55 pm

#67 greyswan on 06.07.16 at 10:25 pm
It`s time for an inheritance tax on all residential
real estate in Canada.
….that would slow down foreign money flows in to Canadian real estate.
….use inheritance tax for lower income families and our working youth!
The Americans have a capital gains tax on real estate!!
Foreign money prefers Canada because they very little American income to write off mortgage interest!!
….

Oh Man: Orientals am I allowed to say that in this PC world.

The rich ones don’t even know where Comu-Canada is.
Bet on Mom

#74 Cloudy on 06.07.16 at 10:57 pm

I’m surprised to hear that you are against an increase in down payments to qualify for CMHC. I think making homeowners have more skin in the game will encourage wise choices and help bring about some stability as people buy in an emergency interest rate environment.

I also think a gradual increase in interest rates is a good thing. And a graduated capital gains tax so people treating a house as an investment are treated as investors and people treating a house as a home don’t have to pay more tax on their living quarters.

I am also wondering if I am one of the only people that doesn’t think it’s wrong or racist to tax foreign owners of property or put some limits or regulations in place? Lots of countries do it and I don’t think it makes you a xenophobe. I wouldn’t care if it was someone from China, Columbia or Czech Republic, if you want to own assets here you should contribute to the country.

I also think there will not be any significant action taken because nobody wants to be responsible for placing the straw that breaks the camels back or killing the goose laying golden eggs. Everyone is too afraid of the beast that has been bred. It will take outside forces (I’m praying for US rates to steadily march upwards) to bring things within reason. The BOC used to warn people that shocks could upset the market and when the oil shock hit I think they should have used that as the scapegoat and left rates where they were. A blameless occurance of market forces. Newer age economics seem to want to allow risky behavior and try to fix the problems with radical tools.

I the people saying a 30% correction will only take us back a couple years bring up a good point. Here on Vancouver Island the madness is accelerating and it would take a huge drop to get anywhere close to the long term trend.

#75 Smoking Man on 06.07.16 at 10:59 pm

#70 For those about to flop… on 06.07.16 at 10:33 pm
This is a cartoon poking fun at the Clintons…

M41BC

http://imgur.com/RqDxDaD

…….

not correct, I’m seeing two single beds in two different room.

#76 Pathetic blog now on 06.07.16 at 11:11 pm

The logic behind having residential real estate as the only asset class exempt from capital gains tax is anachronistic. It’s helped turn housing into a commodity and render it unaffordable. There is no reason ridiculous windfall gains should be tax-free. Addressing this would be an elegant solution to rampant speculation, bidding wars and FOMO. — Garth

Pathetic excuse.

Let the market take care of it – like all other commodities. Pick and chose Capitalism?

What’s next from comrade Garth, central planned economy?

#77 wallflower on 06.07.16 at 11:45 pm

#23 Like everything else on 06.07.16 at 7:15 pm
There is a difference between owning a dog and raising a kid.

What is it?

#78 will on 06.07.16 at 11:45 pm

Seventy-second!!!!

“Instead, tax housing gains as we tax everything else. Only fair. Sorry, mom.”

I don’t understand Garth. Gains on principal residences is basic religion. Please explain.

#79 rainclouds on 06.07.16 at 11:49 pm

#52 “Wow, 128 audits out of the thousands and thousand of transactions”

Completely agree. We have laws in place. But no enforcement. Why would anybody think it will change.?

Kinda like Airbnb which is negatively impacting rental market,laws in place, 0 action. Perhaps Send a hired city minion to answer the ad . Hand Mr/Mrs illegal hotel room a fine and a summons.Advise their strata for the requisite fine. Publish it. Rinse repeat.

Not holding my breath a capital gains tax is coming. Politically toxic.
Not holding my breath anybody in the provincial liberal party will do squat.

We are screwed…..

#80 M on 06.07.16 at 11:51 pm

More sub-primes better the banks exposure to a crash.
The amount of dough to be done on this is …staggering.
If shorted in US dollars our brave new banks will provide fantastic gains on their march downwards.

We live in a world where both leaders AND “tza people” lost their compasses. People act and behave like herds. They only wake up slowly and one by one.

That’s why the few of us are here..and the rest of them are out there, CBC, CTV, CNN, CNBC…etc
And yes, the gold guys are right, they are just unpopular, that’s all. Not a big deal.

#81 Smoking Man on 06.07.16 at 11:57 pm

Steven King, Jk Rowling better wish I don’t develop a work ethic.

I will leave then in a dust.

#82 M on 06.07.16 at 11:59 pm

Propping up the speculative market (the one in which companies borrow on the cheap to buy their own shares – that suggest a certain sexual position of one w.r.t. oneself), a market in which the clown investors are drowning in margins ready to blow up is A VERY GOOD THING. The pop is guaranteed, just as the the upward march of the stocks. Long term volatility i.e. things that gain twice and lose half has some periodicity that can not escape to a seasoned investor.
We are living great times. Speculating on other people mistakes is a beautiful thing.

#83 Brazil ex-pat on 06.08.16 at 12:04 am

http://www.foxnews.com/politics/2016/06/01/poll-71-percent-dems-think-clinton-should-keep-running-even-if-indicted.html?intcmp=hpbt2

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

Only in “Murica” can a criminal run for president…..

#84 Casual Observer on 06.08.16 at 12:29 am

The logic behind having residential real estate as the only asset class exempt from capital gains tax is anachronistic. It’s helped turn housing into a commodity and render it unaffordable. There is no reason ridiculous windfall gains should be tax-free. Addressing this would be an elegant solution to rampant speculation, bidding wars and FOMO. — Garth

I could not agree more. I’ve been saying this for years.

http://www.greaterfool.ca/2013/11/18/ambition/#comment-271745

If the gov’t used the revenue to help fund affordable social housing it would attack the problem from both the supply side and the demand side.

#85 VanDammeCouver on 06.08.16 at 12:32 am

“It’s hard to make this stuff up. Grandparents panic-buying condos with newly-minted equity from their bloated houses, doubling down on real estate to ensure that the generations to come will be as myopic, obsessed, materialistic and speculative as they. What a great social usage of hundreds of thousands of windfall dollars.”

IMO your best and most forceful paragraph since I started reading 3 years ago. Couldn’t agree more with you… took the words right out of my head

#86 Greg on 06.08.16 at 12:40 am

We are such an entitled society, no wonder we’re collectively in debt up to our eyeballs.

Can’t afford to buy a SFH in 604? Move.

Newsflash: 604 never was affordable, comparatively speaking. We moved out 36 years ago for this very reason, the smartest thing I’ve ever done.

#87 Kenchie on 06.08.16 at 12:42 am

To slow the GVA and GTA housing markets:
1) force banks to hold 125% of capital against mortgages by non-Canadian incomes (I.e. “Satellite families” and “students”). This will make it harder for foreign money to be leveraged to buy property, and make it less enticing for banks to lend to those who can’t prove their income comes from Canadian sources.

2) treat any property transaction, as well as assignments, that have been traded within 12 calendar months as Taxable Income, and should be taxed at a minimum of 25%. This will effect speculators only, not those looking to buy for the long-haul (and reduce realtor income).

3) phase out the “Home Owners Grant” over the 5 years so there is an even playing field between “home owners” and “investors” who provide rental properties. It’s perverted to subsidize those who have benefited so much while punishing those who have the least means (renters pay the property taxes, not investors). This money can be used for transit funding that the municipalities complain they don’t have.

#88 Blueshore Bubble on 06.08.16 at 12:46 am

My cousin just got a 35 year amortization mortgage from Blue shore. I didn’t believe him when he told me. I went to their website and sure enough, their mortgage calculator allows you to go 35 years. They are not federally regulated so are not bound by the fed rules. This is Canada’s Countrywide Financial.

#89 juno on 06.08.16 at 12:58 am

Problem is how are the GP going to pay off for the mortgage and property tax once they are retired

In case one hasn’t noticed its a new era out there
There is no such thing as a secure job where you can start out of high school and work til you retire with a nice pension.

Or even a graduate of university which will guarantee you a management job.

Yep that is what the boomers grew up with. But this generation (the lost ones) can graduate from university and can’t find a job or a low rate job because the boomers are still working until mid 70’s because they are still in debt and haven’t saved for their retirement years.

Its a new world now, a global one. Where jobs are being lost to india, china, russia, and other countries where labour is cheap. Even that is being lost to robotics manufacturing firm which can produce cheaper without human intravention.

There are more mid age people committing suicide because they have lost all hope.

An yet we continue onward with more and more greed. When will this end

#90 Mark on 06.08.16 at 12:59 am

“How about a freakin normal rate of interest?????”

What’s a ‘normal’ rate of interest in an economy so beset with overcapacity that 2/3rds of its engineers are either unemployed or unemployed? Something close to zero I would submit, as there is obviously an intractable gap between demand and supply.

If we saw resources being utilized to their fullest, and inflation actually occurring, then I would agree, raise the rates. But with so much spare capacity either immediately available, or available a few years down the road with proper utilization of talent, raising rates at this point would be economic genocide committed by central bankers.

#91 Blueshore Bubble on 06.08.16 at 1:07 am

Capital gains tax on RE? Careful what you wish for. This could back fire and be more like Capital losses galore that can be carried forward (at least 7 years). If they bring in that tax now, the cost base will have to be the value of the home now (otherwise it will be a retroactive tax that won’t fly). With the crash coming, this will mean folks will be sitting on massive paper losses in a few years that they can use to offset cap gains elsewhere.

Beware of unintended consequences.

Instead, let’s raise property taxes and make them deductible against provincial income tax paid. That way, locals that pay the bulk of the system costs get a break over others. Seems fair to me.

#92 juno on 06.08.16 at 1:11 am

69 Raptorstruth on 06.07.16 at 10:30 pm

Wait, grandparents are buying income properties so their grandchildren will be able to have property when they become adults???

Holy. Shit.

This cannot end well
===============

We are becoming the next china, we will live with several generations of our family all under the same roof(all 500 sf of it)

#93 Freedom First on 06.08.16 at 1:44 am

#53 Smoking Man

I see. Couldn’t have put it better. Especially the last line! Well done!
Fan #33

007FF

#94 Laughable Analysis on 06.08.16 at 1:47 am

So Vancouver and Toronto residents ARE different than residents of other cities of Canada?

Isn’t that a racist thing to say?

Why is it different there if it isn’t foreign money?

And how are people buying houses if incomes are low in Vancouver?

Laughable analysis really.

#95 The American on 06.08.16 at 2:25 am

And then there was One (and a lying, ignorant, orange-faced ZERO). There is no topping this victory speech. Despite the fun the media has had with orange-face, Americans ultimately are currently and will continue to reject Drumpf’s xenophobic, sexist, classist divisiveness. Now, everyone repeat after me… “Madam President.” If you struggle to do so, you better start practicing.

What a truly amazing and Presidential-like victory speech as the presumptive Democratic Nominee. Hillary now has the Delegates she needs. No stopping her at all. What an historic evening, and I am thankful.

http://www.pbs.org/newshour/rundown/clinton-claims-historic-victory-in-democratic-primary/

#96 jane 24 on 06.08.16 at 4:40 am

I was in Canada last week with my British son-in-law who is an architect. He could not believe how flimsy the new housing being built in Brampton was especially for the Canadian climate. He called them glorified timber sheds. He pointed out that they would not meet UK house building code.

When I told him the prices for that type of construction he was shocked and he lives in London!!

#97 Julia on 06.08.16 at 6:37 am

I think CMHC should be available only to first time home purchasers and with minimum 10% down. If people want to upsize then they’re on their own.

Just like the home buyer’s plan with RRSPs. Didn’t Trudeau hint at making that available to all, not just 1st time home buyers?
That plan should be scrapped and downpayment should come from the buyers only, no allowance for gifts from family. If you can’t manage to save it yourself then you shouldn’t buy.

I would also make income verification from CMHC approval based on income tax returns and tighten debt servicing (TDS) calculation, to include for instance a monthly reserve for repairs and maintenance.

There. My 2 cents.

#98 Ace Goodheart on 06.08.16 at 6:44 am

RE: #96 Jane 24: “He called them glorified timber sheds. He pointed out that they would not meet UK house building code.”

This has long been my complaint about Canadian construction standards. A house here, would not meet building code for a tool shed in Western Europe. Our houses are basically wooden pine and composite board boxes covered in either fake brick or vinyl.

Also have a look at the roof of a house. This has always been my biggest complaint. The shingle industry has us all on a 15 year replacement cycle. The most important part of your house, will become permeable to water and require full replacement, around every fifteen years or so. How do any of us take this sitting down? A house roof in Europe lasts for many hundreds of years (there are thousand year old houses in France with their original roofs).

Canada is still a backwards, colonial little nub of a country, in its infancy. Some day we will build ourselves proper houses.

#99 What on 06.08.16 at 7:05 am

““I have people coming to me, saying, ‘Are my children or my grandchildren going to be able to afford a home when they’re an adult?’” Skinner said.”

“Thus, it’s time to stop worrying about Chinese dudes. Worry about us. Things are getting out of control.”
————————————————————–
This is clearly a reaction to house prices increases fuelled by foreign speculation. You’re talking about the symptom, not the cause.

#100 Mr. Frugal on 06.08.16 at 7:31 am

#95 The American on 06.08.16 at 2:25 am
And then there was One (and a lying, ignorant, orange-faced ZERO). There is no topping this victory speech. Despite the fun the media has had with orange-face, Americans ultimately are currently and will continue to reject Drumpf’s xenophobic, sexist, classist divisiveness. Now, everyone repeat after me… “Madam President.” If you struggle to do so, you better start practicing.

What a truly amazing and Presidential-like victory speech as the presumptive Democratic Nominee. Hillary now has the Delegates she needs. No stopping her at all. What an historic evening, and I am thankful.

http://www.pbs.org/newshour/rundown/clinton-claims-historic-victory-in-democratic-primary/

===============================

Corrupt Hillary has no chance of winning. None! The FBI is closing in and she will have no choice but to bow out of the race. Not that will be truly historic. But, not to worry the Clintons will do fine with all the loot they’ve made from selling national secrets. Going to love watching that treasonous witch go down in flames.

P.S. Make America Great Again.

#101 crowdedelevatorfartz on 06.08.16 at 8:13 am

@#90 Mark
“2/3rds of its engineers are either unemployed or unemployed? Something close to zero I would submit, as there is obviously an intractable gap between demand and supply. ”
******************************************

Underemployed or unemployed?
OR replaced by the internet and thousands of engineering grads sitting in cubicles in India willing to work for a quarter of your salary……not to worry…..its also happening to accountants and lawyers as well.

#102 crowdedelevatorfartz on 06.08.16 at 8:21 am

@#96 Jane24
Ahhh yes. British building codes. Postage stamp Row housing with oil heaters(to replace the coal heaters of yesteryear and clanking noisy water pipes).
Perhaps we use wood because its so plentiful in Canada as opposed to drafty old Blighty where most of the trees were hacked down 400 years ago to fend off another foreign invasion and the only thing left was rocks.
Good to know his sniffing at our “colonial building standards” is based on his years of experience with -40cel winter temps…..
He should visit a Trailer Park in Kansas during tornado season…..THAT would open his eyes a bit.

#103 Noel on 06.08.16 at 8:30 am

Garth, you usually hate on any and all tax increases – corporate and income, yet think a tax on housing gains is a good idea?

The money used for the down payment and the mortgage payment has already been taxed, and the property is being taxed yearly, and land transfer taxes are applied to each sale. Not to mention there is GST/HST applied to investment properties.

Why is taxing home price appreciation a good idea, while raising corporate taxes 2% a job killer, and slightly raising the marginal rate of income taxes a cause for flight to safer havens?

Its all just taxes that go into the general revenue fund, which you think is mismanaged. Interesting you think fiscal policy and tax hikes are a good way to manage individual behaviour and actions (but only when it affects your pet issue of housing) but not a good way to influence corporations.

Care to explain the rational behind that?

I did. You want to stop rampant, greed-fueled speculation, excessively-leveraged debt and runaway price increases? This is it. — Garth

#104 Sean on 06.08.16 at 8:44 am

Why not wind down CMHC, or at least reduce it to maybe 10% of its current self… i.e. bring it somewhat in line with its mandate. That alone would do it. If banks weren’t backstopped, they would not loan a cent in this environment. Rates are just too low, prices too high… people too blind.

#105 Sean on 06.08.16 at 9:02 am

Re: British building codes, and the nature of Canadian housing… I have to say that even as an expat living in Central America (you would think poor quality housing), it sure is hard to see Canadian housing as “quality”. It’s pretty old school here, of necessity I guess. Our patio is made of huge chunks of slate, from our neighbor’s farm… our vaulted ceiling is 4x8s structurally, covered with 1×8 planks… and when the periodic earthquake hits, it’s nice to know the whole structure is of reinforced concrete (commercial building standard in Canada, we are told). Going back to Canada for a visit, and seeing these “multi-million” dollar homes being assembled with glue and staples, it’s hard not to laugh.

(OK.. cue up the hatred… first rule of fight club, never diss Canada.. lol!)

#106 CHERRY BLOSSOM on 06.08.16 at 9:30 am

Government should not screw around with the real estate market. They are the ones who caused this bubble. Everyone is talking about increasing supply. I say eliminate the 80,000 immigrants each year. They come to Canada, have babies and double their umbers and the there is all the ones sneaking in, paying to have babies in a Canadian hospital. Then they fly back to their own country. The baby is a Canadian citizen and when it is old enough that child can sponsor the parents into Canada. Where will it end? Why should we pave paradise to build more homes? Just stop immigration. We don’t need it. They government is just trying to increase their tax base.

#107 The American on 06.08.16 at 9:41 am

At #100: Mr Frugal, as I said, start practicing saying “Madam President.” There’s nothing more to say. You can believe what you wish, but you are a fool to believe she has no chance. In fact, you are a greater fool to believe Drumpf stands a snowball’s chance in hell. You clearly have little knowledge how the American political system works. Hillary Clinton will in fact annihilate Drumpf. Mark my words because I’ve marked yours. High profile Republiclowns, including Paul Ryan and Lindsey Graham, are now speaking out against their own Drumpf due to his xenophobic behaviors, and idiot Drumpf doesn’t even realize he needs the Latino and Mexican vote, the women vote, and other various groups, but instead he continues to placate to toothless wonders, Bible beaters, gun slingers, and the clinically obese.

Funny to say she is corrupt being that the Republiclowns have tried for decades to “catch” her, but for some reason they never seem to be able to nail anything to her. This means at least one of two things, and they are 1) Hillary is just a lot smarter than any and all of the partisan investigative panels’ combined knowledge, which in turn means Republiclowns truly are the epitome of “stupid.” 2) She’s not corrupt. Typically in life the simpler of an answer remains true. However, in this case I am going with a combination of both.

#108 Centre Wing on 06.08.16 at 9:43 am

If raising the down payment to 10% would unfairly hurt those outside of YVR and Toronto/Hamilton, wouldn’t taxing the gains on it also unfairly hurt them too? C’mon.

#109 ablaze on 06.08.16 at 10:01 am

We sit around talking about flaming RE when the entire forest is ablaze. Many of us can smell the smoke. America (and us) are in for very hard times ahead. somethings going on. bad times ahead. 2008 was just a precursor

Blah, fear, blah, fear, blah. — Garth

#110 Noel on 06.08.16 at 10:25 am

I did. You want to stop rampant, greed-fueled speculation, excessively-leveraged debt and runaway price increases? This is it. — Garth
______________________

If it is in fact greed fueled speculation, it will crash all by itself – no need for gov’t intervention. And as you say, most markets in Canada have already cooled, or are in the process of cooling.

To introduce a tax targeted at two cities in Canada but will effect everyone seems like killing a fly with a machine gun. You might get the fly but there will be a ton of stray bullets that hit targets you didn’t intend to.

Someone mentioned earlier tax losses that can be carried forward if your house loses value. If your thesis of a long and widespread period of house price depreciation comes true, how much money will be removed from gov’t coiffures? Will taxes be raised on earned income to offset the losses?

#111 bguy1 on 06.08.16 at 11:12 am

@ 103 Noel

I would to hear more about how “GST/HST applie[s] to investment properties”.

#112 Peter on 06.08.16 at 11:15 am

If capital gains exemption for principle residence is eleminated then interest, repairs, taxes etc will be deductible. In USA and some countries mortgage interest is deductible against income . Could be worse .
Countries with capital gains on principle residences
still have cities with run as way house pricing. NY, San Fran, London etc. recent reports of bidding wars in Seattle

#113 Peter on 06.08.16 at 11:29 am

For the fans of government intervention to the status quo of the Canadian Free Market System.

How about a govt agency that determines the price of your home and you may only sell for that price.

Also no one is allowed to own a second home unless permitted local owner control board.

And of course a permit is also required to buy or sell and home.

That should stimulate gambling in stocks, mutual funds, ETF etc

#114 Rebs on 06.08.16 at 11:45 am

We found a way to save 20% down + closing costs (our own cash) for a home in MTL. Sure it would have been tempting to put less down, but as soon as I found out CMHC only protected banks, not us in any way, I refused to pay their premium. [BTW: it’s certainly not marketed clearly enough and probably many people who don’t read and research properly don’t understand the concept]

If banks weren’t protected by government, they would make their loans more carefully (unless they would still count on bail-out money like the US)

#115 SWL1976 on 06.08.16 at 11:46 am

#107 The American

Funny to say she is corrupt being that the Republiclowns have tried for decades to “catch” her, but for some reason they never seem to be able to nail anything to her. This means at least one of two things, and they are 1) Hillary is just a lot smarter than any and all of the partisan investigative panels’ combined knowledge, which in turn means Republiclowns truly are the epitome of “stupid.” 2) She’s not corrupt. Typically in life the simpler of an answer remains true. However, in this case I am going with a combination of both.

————————–

Well I do agree that Trump will not be President. We differ greatly as to reasons why.

1) Hilary a lot smarter???

How about bought and paid for by the globalist. So basically she can and will do as she pleases without justice.

2) She’s not corrupt???

Yeah what colour is the sky in your world??? Probably chemtrail free too

As for Lindsey Graham speaking out against Trump…

She has an invite to bilderburg 2016 so I’m sure the globalist will give her a sweet heart deal to ensure their choice; Hilary gets in.

We live in remarkable times in a mixed up world, and this Presidential race just proves that the once great, free and respected country of America is nothing compared to what it once was. America is now completely owned and operated by a select few disgusting individuals hell bent on power and control over a mostly ignorant and subservient population who would rather not know the reality of the situation. The real truth behind the unraveling of America and the freedom it once stood for.

There is no real recovery America, and until we reach a critical mass of critical thinking and perhaps a paradigm shift from our current way of doing business and governance…

Then the fox is indeed in charge of the hen house, and democracy in America is currently at best, nothing more than low brow entertainment

#116 WallOfWorry on 06.08.16 at 12:11 pm

The other side of the coin on US employment rate. Contrary to what Garth suggests, wages is also a concern. The increase in wages has been in the part-time sector, while the middle class has been gutted. Corporate earnings continue to decline, % of Americans on food stamps remains abhorrently high, and the manufacturing PMI continues to decline.

http://www.cnbc.com/2016/06/08/us-unemployed-have-quit-looking-for-jobs-at-a-frightening-level-survey.html

Just a rational view Garth…no fear mongering but I suspect that you will choose to ignore or dismiss. With these types of economic variables at play, coupled with US GDP growth at .8% there is a strong view that would suggest that the US simply can’t afford to increase interest rates – at the government level to service their $19 T debt and at the citizen level who can’t afford basic necessities.

Anything more than 1 rate increase so the Fed can save face could push the US into a recession.

OK Garth…let’s hear your dismissive, condescending denial?

#117 Wylde on 06.08.16 at 12:12 pm

The staged bidding wars? Or Should these be called blind auctions?

One would expect in this day and age that transparency and accountability are norms and system is not architected or rigged so as to allow all ethical standards be compromised, no?

Is there any point in having/allowing for conditions such as financing and home inspections anymore?
In GTA (and assuming Van), where we have a pile of buyers bidding – Wait not bidding – This is no less than blind auctions wherein – not a single property is not staged for bidding war – and you are essentially out of the race if you put in any conditions… and you dont get to see what others bid? How is this by any measure transparent or ethical? For one of the biggest finance decisions of your life? Our political system is a failure if they can’t protect/decide/improve in this!

And MLS is a big joke! All item details appear optional. They have now shielded for how many days the house has been up for sale.
Forget other stats, basic details such as square footage arent filled in. Let’s hope they never start talking morality!

Compare this to US, which I am sorry to say now appears to be much progressed society that ours where atleast transparency is not taken for granted in this aspect and its all out there for you to help decide!

Will we ever see this change?

#118 LP on 06.08.16 at 12:14 pm

re: taxing housing capital gains

Fifteen or more years ago cousins of mine who lived in Pennsylvania spoke of capital gains taxes on housing. As I remember their explanation, taxes were owed on any gain from a PRINCIPAL residence in which you had lived for less than 1 year. It was owed on ANY residence you owned that was not your principal home.

The only exception occurred when you moved immediately from one residence to another within that year if the distance between them was a stipulated amount (say from one place to another for work purposes).

I might be shaky on the finer details, and someone/anyone can correct me, but that’s the gist of it. Personally, I don’t see the difficulty applying those rules – and collecting that tax – with a system like that. It catches the flippers while leaving regular householders alone.

#119 Bytor the Snow Dog on 06.08.16 at 12:24 pm

I propose a tax on reading comprehension. — Garth

Not likely to generate a lotta revenue from this idea Garth.

#120 Don't tax me bro on 06.08.16 at 12:41 pm

Sorry Garth, I respectfully disagree with this proposal to tax capital gains on primary residences.

Even without “speculation”, monetary inflation naturally pushes house prices higher over time. The problem with taxing capital gains on primary residences (aside from the fact that we are already taxed enough) is twofold:

1) You punish those who didn’t speculate.
2) Those who sell their home now have less than enough to buy another comparable home.

There are of course other problems with this scheme as others have mentioned…

The solution to the problem (that government created) is not more government intervention, but less government intervention: Eliminate CMHC, and allow the free markets to function; Instead of privatizing bank profits, and socializing their losses (which is crony capitalism, and an abomination that the Canadian people should never allowed), simply allow the banks to properly manage their own risk. That would solve the problem over night. It’s a no-brainer.

#121 Best Place on Meth on 06.08.16 at 12:58 pm

The locust mentality:
Infiltrate, degrade, destroy, take over.

#122 CanNeverThinkOfAGoodName on 06.08.16 at 12:59 pm

DELETED

#123 Yuus bin Haad on 06.08.16 at 1:05 pm

Re taxing housing gains, how about the CRA just enforce the laws that are already in place?

#124 Vamanos Pest on 06.08.16 at 1:24 pm

#51 Fed-up

Totally agree. However, of the actions you mentioned to bring prices back to earth, only 1 is necessary: end the CMHC.

It is a program “created to house returning war veterans and lead the nation’s housing programs”, but has become a de facto moral hazard that enables irresponsible borrowing by consumers, and REWARDS irresponsible lending by banks.

Furthermore, it is an empiric failure in its in achieving its own goals (providing Canadians ” access to a wide choice of safe, quality and affordable homes…(and)provide stability in RE prices…”. This is from the CMHC’s own website) when you consider that Toronto and Vancouver comprise some 30% of the national RE market.

#125 Nectonian text on 06.08.16 at 1:50 pm

#72 Smoking Man on 06.07.16 at 10:51 pm
#52 White Crock BC on 06.07.16 at 9:50 pm
Rainclouds on 06.07.16 at 8:18 pm
Law is already on the books, audits already happening.

=============
Wow, 128 audits out of the thousands and thousand of transactions.
CRA goes after low hanging fruit. (i.e. forget to include a T5? see what happens)
Auditing flippers is too much work.
I know a guy who bought condos in Richmond years ago. Rented them out to “masseuses” for cash…. never declared that income, then sold the condos at a tidy profit. Didn’t declare that gain either.
…..
CRA audits me every year. To bad they don’t know how to speak in Nictononian
CRA: Here it is. Take a wild guess what this means.
Pin 999999 # Alien encryption.
8962827384282268782974071340848764598473
——————————————————
53 6d 6f 6b 69 6e 67 20 4d 61 6e 20 69 73 20 61 20 57 61 63 6b 6a 6f 62 21

#126 Dan on 06.08.16 at 1:56 pm

Socialism will free you. Right to work, right to have a shelter, free education. Trap to speculators.
Less stress, less work for head doctors, less crime.
Slavery abolished.

#127 JR on 06.08.16 at 2:00 pm

https://btcmanager.com/news/business/rex-decentralizing-and-distrupting-real-estate-listing-services/

Blockchain MLS
Industry ripe for disruption

#128 Stuff of the Stars on 06.08.16 at 2:12 pm

#125 Nectonian text on 06.08.16 at 1:50 pm

#72 Smoking Man on 06.07.16 at 10:51 pm
#52 White Crock BC on 06.07.16 at 9:50 pm
Rainclouds on 06.07.16 at 8:18 pm
Law is already on the books, audits already happening.

=============
Wow, 128 audits out of the thousands and thousand of transactions.
CRA goes after low hanging fruit. (i.e. forget to include a T5? see what happens)
Auditing flippers is too much work.
I know a guy who bought condos in Richmond years ago. Rented them out to “masseuses” for cash…. never declared that income, then sold the condos at a tidy profit. Didn’t declare that gain either.
…..
CRA audits me every year. To bad they don’t know how to speak in Nictononian
CRA: Here it is. Take a wild guess what this means.
Pin 999999 # Alien encryption.
8962827384282268782974071340848764598473
——————————————————
53 6d 6f 6b 69 6e 67 20 4d 61 6e 20 69 73 20 61 20 57 61 63 6b 6a 6f 62 21

He sure is!! LOL

41 6e 64 20 61 20 6d 61 73 73 69 76 65 20 62 75 6c 6c 73 68 69 74 74 65 72

#129 bguy1 on 06.08.16 at 2:14 pm

@ #52 White Crooks BC

Submit a lead to the CRA: http://www.cra-arc.gc.ca/gncy/nvstgtns/lds/menu-eng.html

#130 Victor on 06.08.16 at 2:23 pm

A bit different picture if expensive homes excluded.
TREB’s report for May, SALES BY PRICE RANGE AND HOUSE TYPE, page 2. Detached sales are:
1 $99K 14 $199K 50 $299K 200 $399K 425 $499K 676 $599K 891 $699K 867 $799K 740 $899K 442 $999K 759 $1249K 559 $1499K 342 $1749K 171 $1999K 363.
6500 sales, $986691 av. price.
The median price for these numbers is near $815000, about 18% less than the average.
If those 363 homes with price more than $2M excluded, at least $726M in total cost, but could be twice or more of that since many of them are much more expensive than $2M, the average price would drop to $926754. Price growth Y/Y would be around 11% instead of 19%.

#131 Nectonian text on 06.08.16 at 2:35 pm

#128 Stuff of the Stars on 06.08.16 at 2:12 pm
#125 Nectonian text on 06.08.16 at 1:50 pm
#72 Smoking Man on 06.07.16 at 10:51 pm
#52 White Crock BC on 06.07.16 at 9:50 pm
Rainclouds on 06.07.16 at 8:18 pm
Law is already on the books, audits already happening.
=============
Wow, 128 audits out of the thousands and thousand of transactions.
CRA goes after low hanging fruit. (i.e. forget to include a T5? see what happens)
Auditing flippers is too much work.
I know a guy who bought condos in Richmond years ago. Rented them out to “masseuses” for cash…. never declared that income, then sold the condos at a tidy profit. Didn’t declare that gain either.
…..
CRA audits me every year. To bad they don’t know how to speak in Nictononian
CRA: Here it is. Take a wild guess what this means.
Pin 999999 # Alien encryption.
8962827384282268782974071340848764598473
——————————————————
53 6d 6f 6b 69 6e 67 20 4d 61 6e 20 69 73 20 61 20 57 61 63 6b 6a 6f 62 21

He sure is!! LOL
41 6e 64 20 61 20 6d 61 73 73 69 76 65 20 62 75 6c 6c 73 68 69 74 74 65 72
———————————————————-
41 20 62 75 6c 6c 73 68 69 74 74 65 72 20 79 65 73 2c 20 61 20 77 68 61 63 6b 20 6a 6f 62 20 79 65 73 2c 20 62 75 74 20 61 20 72 61 63 69 73 74 20 54 72 75 6d 70 20 69 64 69 6f 74 20 73 75 70 70 6f 72 74 65 72 2e 20 54 72 75 6d 70 20 61 6e 64 20 68 69 6d 20 73 68 6f 75 6c 64 20 67 65 74 20 61 20 72 6f 6f 6d 20 74 6f 20 64 6f 20 74 68 65 69 72 20 74 68 69 6e 67 2e 20
Lol

#132 WUL on 06.08.16 at 2:37 pm

Understandably the Ft. Mac Real Estate Board has not posted market data for April or May. A city of ~ 80,000 to which about 40,000 have returned. A fascinating socio-economic study.

#133 paul on 06.08.16 at 2:38 pm

#129 bguy1 on 06.08.16 at 2:14 pm

@ #52 White Crooks BC

Submit a lead to the CRA: http://www.cra-arc.gc.ca/gncy/nvstgtns/lds/menu-eng.html
————————————————————-
Hey bguy1 I want to submit a lead what is your name and address !!
As the Rat runs for cover!!
As the rat runs for cover!!

#134 Blacksheep on 06.08.16 at 2:46 pm

“You want to stop rampant, greed-fueled speculation, excessively-leveraged debt and runaway price increases?” — Garth
——————————————–
No…actually I don’t want to stop it, as I’ve aligned my financial bets (2.5 yrs ago) with the systems, because clearly the system doesn’t want it stopped, or it would have years ago.

Lots of pissed off suggestions / solutions, from the Dogs today, but it’s all a waste of time. The readership here frequently falls into the peer / group think trap, (like I did) overlooking the fact that they are a minority when it comes to the systems concerns or the publics perspective on canadian RE.

“Instead, tax housing gains as we tax everything else. Only fair.”- Garth
———————————————–
Stop expecting ‘fairness’ from the system. It’s an entity that’s taken 100’s of years to design, is all about preservation of self and the maintenance of the status quo.

Besides, heavily taxing 70% of the Cattle, is not productive in the maintenance of an obedient, complacent society, so it will simply not happen.

They want those cap gains in the marketplace, sloshing around fuelling the economy when many other sectors are either dead or slowly dying….

#135 WalMark of Sadkatoon on 06.08.16 at 2:58 pm

not to worry…..its also happening to accountants and lawyers as well

happening only to the sucky ones

which is fine by me

need to weed them out somehow

#136 Noel on 06.08.16 at 3:19 pm

#111 bguy1 on 06.08.16 at 11:12 am
@ 103 Noel

I would to hear more about how “GST/HST applie[s] to investment properties”.

________________________

Varies by province, but basically buying a property that isn’t a principal residence is subject to GST.

This is in BC:

http://www.thetownhouseguy.ca/confused-about-how-gst-works-on-your-real-estate-purchase

But I know it applies in Ontario too. One way around it is to live in, or leave empty and claim you’re living in it for a few months and then rent it out. I believe that is illegal though, so don’t do that.

#137 Zed in Geneva on 06.08.16 at 3:46 pm

Why tax real estate plus value? How will this help milleniums buy a cheaper condo/house?

This would only help the boomers who have owned for the last 30 years and benefited from the price increase and tax the younger generation in the future to help pay the social cost of those said boomers.

The canadian government is not broke.

The CRA should do its jobs to make sure that house flippers pay the capital gain tax required, that the mortgage helper’s rent is added to the owner’s revenue as it should be and monitor all other loopholes in the system.

When everybody pays in the system, everybody pays less.

#138 Aggregator on 06.08.16 at 4:00 pm

Instead, tax housing gains as we tax everything else.

Good luck convincing politicians to sign off on that proposal when 3/4 of their constituents are homeowners.
Plus the construction and developer lobby groups would have that bill killed.

There isn't any practical solution other then to inflate the economy (currency devaluation) with more government housing schemes along with infrastructure spending. So be ready for more government in your life and higher prices on everything.

Ontario's climate change plan keeps natural gas, but offers home and car incentives

Ontario setting new rules to end era of suburban sprawl across GTA

Remember Ontario is now the most indebted sub-sovereign state in the world. The last thing the government will do at this point is fiddle with the housing market.

#139 Sunshine on 06.08.16 at 4:24 pm

Hi G,
Could you write about this CIBC report for us dummies. http://www.calgaryherald.com/business/bequest+boom+canadian+parents+will+pass+billion+kids+over+next/11967923/story.html
These numbers make no sense to me – $750 BILLON? How is that remotely possible – even if every senior had a $1M home and $1M in bank (which many do not) to pass on that does not add up hundreds of billions of dollars.
Thanks,

#140 bguy1 on 06.08.16 at 4:24 pm

@ #136 Noel

I think that the GST/HST tax status of a supply depends on its use. If the property meets one of the exempting provisions of the Excise Tax Act, such as used residential (rental or owner-lived in), the sale of the property is exempt from GST/HST.

#141 Really? on 06.08.16 at 4:25 pm

#101, crowded

Really? Let’s see someone in India appear in a court room in Toronto as lawyer for a client tomorrow morning. Lawyers don’t fill out tax returns or crunch formulas, which can unfortunately easily be done from India. Computers may well wipe out the accounting, engineering and financial advisor industries. I think the place to be today is writing Code. A small outfit in Cupertino typically pays first year employees (with or without a degree) about $150,000 US to start, plus stock options.

#142 Russ on 06.08.16 at 4:25 pm

wallflower on 06.07.16 at 11:45 pm
#23 Like everything else on 06.07.16 at 7:15 pm
There is a difference between owning a dog and raising a kid.

What is it?
==========================

you raise a dog and own a kid

#143 Dan Duran on 06.08.16 at 4:38 pm

Since my previous post was censored, I’ll try again and try to be nice: Please, please, please: make that cap gains taxable and interest and other costs (renos, realtor fees etc..) deductible. It’s only fair that interest and expenses be deductible if you consider the primary residence an investment. Then watch property values soar while old houses get upgraded. This is what they do in the US and ‘hot’ markets are just getting hotter (SF, San Diego, Portland, New York etc…)

#144 Johnny Rotten on 06.08.16 at 5:32 pm

“To get it an increasing number of people borrow off the grid, paying rates that range from 8-10%, then taking a 30-year am on the big loan in order to manage cash flow”.
_______________________________________________

This is just not true Garth. It makes no sense,,, the debt service costs would be too high for most to afford. And you have no proof of this… its just speculation on your part.

Really? — Garth

#145 Wicked as it seems on 06.08.16 at 5:41 pm

#38 Andrew Woburn on 06.07.16 at 8:28 pm
You should publish that comment!…..so right on the mark it took my breath away!

#146 Make RE great again! on 06.08.16 at 5:55 pm

Stop calling RE a commodity, it’s ridiculous.

It ain’t a commodity if there is no way to short it. That’s why there is no mechanism to deflate the RE bubble. It used to be the interest rates that performed that function years ago but this mechanism has been killed by Central Banks to bail out the corrupted oligarchs that bought the governments.

I wish you stopped harping and embarrass yourself on raising the interest rates, not gonna happen. It’s a mathematical impossibility now that would blow up the governments around the world and possibly start WW3 as well.

So.. there needs to be an alternative mechanism to balance the RE prices instead. Maybe ban mortgages altogether by a decree or let the market work by listing RE indexes on a commodity exchange. Either one would work

#147 Capt. Obvious on 06.08.16 at 6:01 pm

Remember Ontario is now the most indebted sub-sovereign state in the world. The last thing the government will do at this point is fiddle with the housing market.

Wynne will still be standing in the abandoned ruins of Ontario long after the last company has turned out the lights shouting “See, THIS is climate change leadership people! Our emissions have declined 99%!”

Meanwhile China and the developing world will go on doing what they want, because they have billions and billions to serve.

#148 nonplused on 06.08.16 at 6:07 pm

Taxing housing gains like other capital gains would of course mean write-offs if real estate goes the other direction, which would be more the worry right now in Toronto and Vancouver I would think.

#149 nonplused on 06.08.16 at 6:08 pm

Also if gains on your residence become taxable then I assume interest on your mortgage becomes deductible just like in the US.

#150 family beagle on 06.08.16 at 6:15 pm

#117 Wylde on 06.08.16 at 12:12 pm
Will we ever see this change?

When there’s no price support for the inventory available. Productivity is slow. Credit is loose. Limit foreign investment, tax speculators, tighten lending, and develop vacant lots like Stanley Park. Voila, change.

Personally, I don’t mind the density, or the delusion, predicted by my social studies teacher 25 years ago. People want space, water, security. It’s a bubble, no doubt, when I consider the value of some shacks, but the govt is actively selling nationally and internationally to keep prices high. Why? Needs the revenue for entitlements. Go Christy go. But with RE so pricey, and transportation so costly, other things have to give. Now’s the time to shop for what others forego to participate in the residential dogpile. My consortium is accumulating the next wave.

Garth, good topic. Also, I understand Ottawa is hosting a visual representation of Federal economic policy today across from Rideau Centre.

#151 salmon rear end arm on 06.08.16 at 6:26 pm

The universal dynamic of capitalism is to strive for growth. The opposite of growth is not non-growth but rather…sharing.

#152 crowdedelevatorfartz on 06.08.16 at 6:43 pm

@#141 Really?
Apparently there’s a tad more to “appearing in a courtroom in Toronto tommorrow morning”.
ie research, case study, precedent review, interviewing witnesses, etc.etc.etc. all of which are billable hours. Law Firms in the US and Canada are now using much cheaper(and just as qualified) Indian legal experts to do the “background work” for the “rock stars” that “appear in Court tomorrow morning”.
But you just keep payin those exorbitant legal fees…..
unlike other clients who’ve had enough……

https://www.google.ca/url?url=https://www.thestar.com/business/personal_finance/2013/05/13/some_toronto_law_firms_and_inhouse_lawyers_send_work_to_india.html&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwjXjae7wJnNAhUS4WMKHfiiCysQFggtMAE&usg=AFQjCNHCpr3v7NfaSyd2MEsfF_v1SBk9eg

THAT was easy.

#153 Cici on 06.08.16 at 6:47 pm

#54 BobC

What a nerve you have…why should we, the average hardworking and responsible tax payer, be backing low-life gamblers who have been borrowing their downpayment money from CMHC and overly lax banks…putting us all at risk and driving up our housing costs?

I’m not usually impolite, but seriously: GFY

#154 Really? on 06.08.16 at 7:31 pm

#152,

You are correct. All of those menial tasks are farmed out by lawyers to algorithms today. Except interviewing witnesses. No lawyer worth his weight in salt lets a third party interview witnesses for him. See how well that went for the Crown in the Gomeshi trials? If some guy named “Carl” from India is left to discern the nuances of our culture In a witness, not to mention read a witness over the phone, the lawyer should disbarred. Carl however can fill in anyone’s tax returns and perform regression analysis from anywhere in the World.

#155 Dan Duran on 06.08.16 at 7:35 pm

And now, for the final nail in the cap gain’s tax coffin: market value property tax assessment. So you see, we already pay tax based on increased market value. It’s not based on services received from the city. For exactly the same dwelling, you pay 2 or 3 times more($3-5k/yr) the amount of property tax in Leaside than you do in Scarborough. Case closed.

#156 45north on 06.08.16 at 9:46 pm

it’s common for her clients to help their adult children with either a gift or a loan of between $200,000 to $500,000 to help with buying a home, often in the same neighborhood.

this is worse than the stock market crash of 1929.

the clients don’t actually have $200,00 to $500,000 in the bank! Means that not only are the children’s houses at risk, so are the clients!

okay since the end of the Second World War people have bought houses and prospered. Generally. If this situation fundamentally reverses then we are going to be living in a different country.

Jaguar: Noticing a little momentum in the exodus from the lower mainland to ‘other locales’ lately.

I’ve heard the senior professionals are cashing out. Leaving a void.

Bill Gable: Granny is going to carry a mortgage, (BIG LOC)

These people are totally, without a doubt, CLUELESS.

yep

The American: Trump is a disaster.

Aggregator: Remember Ontario is now the most indebted sub-sovereign state in the world. The last thing the government will do at this point is fiddle with the housing market.

I’m afraid you’re right. I have said the government should raise interest rates but that would impact Ontario. I can just imagine Wynne saying: it’s really our fault for going into debt but the Government of Ontario has to meet its bond obligations so provincial taxes are going up 50%.

#157 Trevor W. on 06.08.16 at 11:50 pm

Hi Garth,

I have been referring to your website for over seven years and have really appreciated your refreshing (and hopeful) point of view. I say hopeful because a serious correction is the only hope. I am professionally employed, make an above average income and will never own my own home. Ever. Not unless something drastic changes. It’s sad because I am the single father of two children and renting is never a home. Everyone in my family owns homes, I grew up in the same home for twenty years so know the difference between “home” ownership and renting. Especially since I can only rent a basement suite on my $75, 000 a year job. I live in Surrey. Good lord what a disaster for humanity when an above average wage earner cannot afford his own home in the “community” in which he raises his family-on his own.