Hara-kiri

GARBAGE modified

“Can’t tell you enough how reminiscent these stats are to the 2007 pre-crash USA,” says Mike. “History is repeating itself, this time in Canada. I suspect auto sales will the next major indicator, durable goods, etc.”

The news Mike refers to comes from his industry where Canadian motorhome registrations collapsed 44.1% year/year in April, and have now tumbled 35.4% so far in 2016. “It certainly doesn’t look good for the Recreational Product business in Canada,” he says.

This may be one reason why. Household debt’s shooting for the top of the chart (below), when expressed as a percentage of disposable income. If real estate values were not rising and interest rates in the ditch (both of which will change), this is a snapshot of a nation committing financial hara-kiri.

HOUSEHOLD DEBT

And here’ another reason Mike ain’t selling a lot of 30-footers. Disposable income is being sucked off by huge mortgage payments, as many people finance $1 million homes with loans exceeding 450% of their incomes, and with two-thirds now taking 30 or 35-year amortizations.

450 PER CENT

Increasingly the heat’s on the T2 gang to stop the insanity of 30% year/year price increases in Van and 15% in the GTA, before these markets hit a wall, doing to the nation what oil did to Alberta. As reported here last week, Finance Minister Bill Morneau is now considering a package of measures from his department which would restrict mortgage accessibility, raise posted rates and force bankers to eat more risk.

A Bank of America Merrill Lynch report says the Bank of Canada will not be playing the bad guy in bringing house-horny northern beavers back to their senses. Instead, this is purely Ottawa’s gig. And, says TD Economics: “The Bank of Canada highlighted a concern over the rising share of households carrying debt loads of more than 450% of income in both Toronto and Vancouver and increasingly relying on 30-year amortizations to make their debt payments more affordable. Households are now taking on more and tying themselves to it for even longer.”

What can the central bank do? Basically, (a) look seriously pissed and (b) raise rates. The first has already happened. The second won’t take place until after the US hikes two to four more times – which will be at least a year from now. But, from a political standpoint, that’s way too long to wait. Besides, if YVR and GTA prices continue to hockey-stick higher for another year, rising mortgage rates then could bring one mother of a correction.

Morneau and his boss know it would be far better to start deflating now. And I hear they will. So, buyers should wait. Owners (those who have lucked into a once-in-a-generation windfall) should sell. And never look back.

I corresponded yesterday with the Van guy I referenced days ago who sits on a $2.6 million beater house and worries about selling and pocketing the loot. “But I might have to rent a house in Langley,” he lamented, “and then have to drive all that way to work. I couldn’t take the stress.” The answer, I said, is simple. That amount of money, invested for a 6% return in a nice balanced portfolio, would throw off enough income each year to (a) lease a new S-class Mercedes, (b) hire an assistant/driver at $40,000 a year, and leave $4,500 a month for rent. Plus he’d still have his two million extra bucks. So, how bad can Langley be?

Mercedes

Finally, let’s bring in Dan for an update, and some perspective:

“I wrote you a while back about how we bought our place in 2007 for $325,000 and we’d be lucky to sell for $300,000 (you posted my email on April 3, 2016). We’ll I’m proud to say that we listed for $299,900 and sold our place for $295,000. We are so happy to not be home owners anymore, even though we lost a ton of money if you add it all up. We will be renting forever and reaping the benefits of our new found savings and investing—suck it you house horny house purchasers. Thanks for your awesome blog. You rock!”

By the way, a Vancouver realtor (who does most of her work in Richmond) called me yesterday for some money advice. She just sold her four of her five properties, and plans on bailing out entirely. “This cannot last,” she said. “In fact, I see it already slowing fast.”

Soon to be faster.

193 comments ↓

#1 Leslie Barber on 06.13.16 at 6:08 pm

First!

#2 Derek R on 06.13.16 at 6:08 pm

You now how this isn’t going to end well? Well, we’re almost at the end.

#3 Market Crash on 06.13.16 at 6:10 pm

Thought today will be about stock market.
on: to buy or to sell?
or how long to wait to buy?

XAW and VXC or similar are down for couple of days..

or ppl should gamble with Linkedin stock..

#4 TRUMP on 06.13.16 at 6:11 pm

OPPORTUNITY knocks again…..

Good time to get a great deal on a Motorhome.

#5 Doug t on 06.13.16 at 6:12 pm

Gonna hear this a lot – WTF OMG I’M SCREWED

#6 LH on 06.13.16 at 6:14 pm

Trend is my friend.
I’m holding my M5T and M5R SFHs.
Let’s revisit in another five years.

#7 pathcontrolmonk on 06.13.16 at 6:14 pm

Technically speaking it is HARA-KIRI, or stomach-slitting. HARI-KARI could be translated as Needle-Hunting though.

#8 Love My Kia on 06.13.16 at 6:16 pm

Take the money and RUN! Quit your job while you’re at it!

#9 Watching on 06.13.16 at 6:17 pm

The Vancouver house prices are out of reach of everyone I know. Makes me feel like a peasant and we both have degrees..

#10 MSM-Free Zone on 06.13.16 at 6:21 pm

“….A Bank of America Merrill Lynch report says the Bank of Canada will not be playing the bad guy in bringing house-horny northern beavers back to their senses. Instead, this is purely Ottawa’s gig…….”
_________________________

Kind of like a mother shifting the blame from one arsonist child to another for burning the homestead to the ground.

#11 ender on 06.13.16 at 6:23 pm

OK…Now I’m ‘officially’ scared…

#12 Victoria Real Estate Update on 06.13.16 at 6:27 pm

Canada’s bubble will begin to deflate without any intervention. It’s easy to argue that the peak is already a thing of the past in most Canadian markets.

US policy makers didn’t intervene and prick their bubble, neither did the Japanese, Greek, Irish , etc.

Where it comes to housing bubbles, house prices begin to fall because the average family can no longer afford the average home.

Houae prices in Canada’s remaining bubble markets will begin to fall for the same reason. No intervention will be necessary.

The bigger the bubble, the lower the price bottom.

Vancouver mortgage holders might like that prices have continued to rise and haven’t turned around yet. Their emotions will be just as strong but in a negative way when prices are falling.

Any further price gains in Toronto and Vancouver will result in an even deeper (and steeper?) price decline.

It’s definitely time to get out of those markets.

#13 Economically Trapped in Manitoba on 06.13.16 at 6:32 pm

1st time poster, long time lurker. In the 2008 GFC, Canada’s strategy was to spend it’s way out of the GFC, for the most part side-stepping the meltdown that occurred in the U.S. My very limited financial knowledge made me think that was ludicrous and we would eventually have to pay for that tactic. Here we are 8 years later, the U.S. is moving forward and we may very well be in for an even worse ride than if we had suffered along with everyone else in 2008. Is the southern Ontario and lower mainland real estate bubble not to a certain degree, a result of Canada’s method of dealing with the GFC? If cheap money was not available would we be moving forward with the U.S. today? Would housing prices be more reasonable in the hot market areas?

#14 ROTFL on 06.13.16 at 6:32 pm

Langley’s always competitive for the car theft capital of Canada. Better tell the chauffeur to keep it running.

#15 Nick on 06.13.16 at 6:46 pm

I think motor home sales are down because everyone is buying homes…I think sales will surge when people start losing their homes.

#16 Mark M. on 06.13.16 at 6:53 pm

“The second won’t take place until after the US hikes two to four more times – which will be at least a year from now.”

Almost Garth. While this is the most realistic you’ve ever sounded with regards to US interest rates, you’re still clinging to the narrative that the next few moves are up. They aren’t, the US economy is rapidly decelerating, and the Fed will be cutting rates before the year is up.

#17 not so fast on 06.13.16 at 6:54 pm

YVR is screwed either way, the feds will try to cool it of, Christy Clark will add an incentive for first timers or a tax break for old timers, BoC will lower rates again, will get more foreign investors and stupid NIMBY rezoning…
i gave up, should have bought in 2009, instead we made some babies, i guess i won this one compared to the single pair with no offspring’s and a lot of mold in the stick walls

#18 45north on 06.13.16 at 6:59 pm

Increasingly the heat’s on the T2 gang to stop the insanity of 30% year/year price increases in Van and 15% in the GTA, before these markets hit a wall, doing to the nation what oil did to Alberta. As reported here last week, Finance Minister Bill Morneau is now considering a package of measures from his department which would restrict mortgage accessibility, raise posted rates and force bankers to eat more risk.

better late than never. It’s gona hurt and many will say the Liberals are to blame. That’s why they need resolve and courage.

#19 Time is #1 on 06.13.16 at 6:59 pm

As the Vancouverites start to sell and look for something more reasonably priced, they will look at the premium neighbourhoods outside of Van like White Rock, Ocean Park etc causing those prices to at least be stable or continue to rise. This rally still has legs in many neighborhoods as real estate is local.

#20 YVR update on 06.13.16 at 7:04 pm

30% Vancouver mortgages over 450%??

Average Vancouver income is around $80K for family. So 30% of mortgages over $360,000?? The horror.

When we gonna talk about what’s really driving the Vancouver market?

#21 Cory on 06.13.16 at 7:04 pm

Good grief. It’s about time. I’ve been saying here how embarrassing this is for a long time. Even the country’s big bank CEOs are begging to stop the madness…and they make a living on nims which mostly come from mortgage lending!!. Everyone on the planet knows Canadian house prices and debt levels are severely over done except for Canadians who all think they’re geniuses for all doing the same thing yet no political backbone to stop it only for power reasons not for the good of the country.

It’s an illusion. Always has been. Let’s get back to reality and fast.

#22 ronh on 06.13.16 at 7:04 pm

Most of my neighbors have RVs. Which they use two weekends a year. Monkey see, monkey do. That money
could be invested.

#23 When will they raise rates? on 06.13.16 at 7:04 pm

By the way, a Vancouver realtor (who does most of her work in Richmond) called me yesterday for some money advice. She just sold her four of her five properties, and plans on bailing out entirely. “This cannot last,” she said. “In fact, I see it already slowing fast.”

Soon to be faster.

And it begins…

https://www.youtube.com/watch?v=30QzJKCUekQ

#24 TurnerNation on 06.13.16 at 7:05 pm

No one under 50 would buy a motorhome. Or, an HD.
Boomer stats.

And this housing market ain’t going no where with only 2% mortgage rates.

#25 Let's Get House Horny on 06.13.16 at 7:05 pm

“The answer, I said, is simple. That amount of money, invested for a 6% return in a nice balanced portfolio…”

Garth….if pension funds around the world are struggling to meet long term projections due to all the financial repression, lowered interest rates, greater risk, etc, then are you SURE you can guarantee a 6% ROI by keeping money in the markets, which BTW, are looking shakier as each day passes ?

Even banks these days are looking at storing physical cash in order to avoid negative rates alongside their physical inventories of gold.

Anyway – good luck getting those returns into the future when so much doubt and potential trouble hangs over the global economy.

Have the ructions in the markets from 2006 onwards already being totally forgotten – never to be repeated ?

The amount of debt has now more than doubled since then and nothing has been fixed. Leaving the bulk of your investments exposed to equities at this point in time is no guarantee of financial safety, perhaps quite the opposite…

#26 family beagle on 06.13.16 at 7:09 pm

By not buying in the Lower Mainland,
– we bought a retirement ranch and paid it off in three years
– put 100 years of property tax in an interest bearing acct.
– have no debt
– maxed tfsas earning 6%
– paid both kids college
– sent one kid to Europe last year for six months
– enjoy sailing, motorcycling, music, travel, hang out with friends
– work part time
– started a business paying in US funds
– sponsor multiple kids in Africa
– assist the SPCA on call
– rent a farm with chickens and ponies in 604

Life is good.

#27 Joelarue on 06.13.16 at 7:10 pm

Garth-san
It’s Hara Kiri

#28 };-) aka Devil's Advocate on 06.13.16 at 7:10 pm

Personally I’m looking forward to a correction. For a lot of reasons, that would escape your readers, this is not such a good time to be in real estate.

#29 Smartalox on 06.13.16 at 7:11 pm

So how will it end? In the movie ‘The Big Short’, the bet identified that the US real estate crash would happen in Q2-2007, as everybody’s mortgage rate re-set. What was so special about that date, that it was obvious things would re-set en masse?

Was it the introduction of term loans, so that people who bought at low (1% to 2%) interest rates post 2001 stock market crash had the loans they got in 2002 re-set at 6% after the initial 5-year introductory term expired? That fits the Q2-2007 time line, somewhat.

Just trying to get a clear line on what happened the last time, so that I know what canaries to look for in Canada’s current situation.

#30 Webby Ludlow on 06.13.16 at 7:11 pm

Read this article on the Hedge. Garth, you have used sources like this in the past in your articles. Can the balanced portfolio actually work longer term now going forward? Of course it used to work in the past but with demographics and massive debt across the world can it still work forward indefinitely?

http://www.zerohedge.com/news/2016-06-13/why-socgen-thinks-long-term-investors-outlook-dire

#31 nonplused on 06.13.16 at 7:12 pm

It’s good if RV sales are falling because they haven’t built any new campgrounds in many, many years and you simply can’t park if you don’t have a reservation anymore.

When the governments (provincial and federal) originally built all their campgrounds in the 60’s and 70’s they turned out to be great economic stimulus, not only tourism but it established the RV industry and provided a base to build 10 or more RV’s per camp spot. But most of the manufacturing has moved to the US now so the boost to the Canadian economy is much less.

#4 Trump,

It probably won’t be that great of a time because the dealer invoice has gone up 25% with the crash of the Canadian dollar so they can’t sell it for less even if they want to. 2008 was better because the Canadian dollar was strong so foreign made stuff like RV’s and motorcycles got relatively cheap for Canadians. I bought a brand new Yamaha and a 5th wheel right about then and got stellar deals on both because of the exchange rate. (For example the motorcycle was listed at $17,500 + GST, etc. and I got it for $9,950 “out the door”). But I don’t see that happening this time because the dealers can’t get them in for cheap in Canadian dollars this time.

However if you are in the market for used toys I imagine there are lots of deals to be had. When people loose their jobs and can’t find new ones the first things to go are the cabins, RV’s, and other toys like boats and motorcycles.

They are tough to sell though even in good times. I looked at selling my boat some years back when times were still good and it just wasn’t worth it. Trouble is the used market is mostly cash because nobody will finance a used boat in a private deal and how can you compete with $190 a month financing on a brand new one. So I have a recently rebuilt 135 hp Black Max outboard engine that would cost $14,000+ to replace (albeit with better, newer technology) that I couldn’t sell for $4,000 including the hull, which is in really good shape and still fairly modern looking. So I just keep it for the few times a year we use it because it’s no longer worth selling. I can’t compete with the financing on new ones.

It’s funny how times have changed. The used market used to be a great place for people on a budget but now people with no money have to borrow and buy new because they can’t afford to pay cash for something used.

#32 Caught on 06.13.16 at 7:15 pm

This will be the worst real estate correction Canada has experienced in a century.

#33 WallOfWorry on 06.13.16 at 7:16 pm

Housing may be one asset bubble….but there are others:

http://www.cnbc.com/2016/06/13/12-trillion-of-qe-and-the-lowest-rates-in-5000-years-for-this.html

#34 RudyGQ on 06.13.16 at 7:18 pm

Garth,
Albeit, Recreational Vehicle purchase trends is an indicator of economic trends, it by no means is a heavily weighted indicator. In fact studies will show the majority of RVers are 50+ years. The correlation between this consumer base and the troubling over-leveraged home owner demographic is not strong. The majority of homeowners 50+ have reaped the benefits of favorable economic conditions when it comes to housing and enjoyed or are enjoying superior income and benefits that their children may never see in their lifetime. They are not as exposed to over-leveraging and thus there is disposal cash for RVing. Yes, this does kinda sound like a Millennial rant, but there is ample evidence to support this position.
I suggest using broader indicators like travel and entertainment (eating out) as giving better insight on the economic temperature of the nation. Slowing RV sales—‘rich’ people problems. Slowing sales to southern destination getaways—(1st world) middle class problems.

#35 will on 06.13.16 at 7:20 pm

Haha #7 pathcontrolmonk

You beat me to it! Having spent time in Japan and learning Nihongo I cringe every time I hear stuff like hari-kari or carryokie or kimona.

#36 Winterpeg on 06.13.16 at 7:21 pm

“Canadian motorhome registrations collapsed 44.1% year/year in April, and have now tumbled 35.4% so far in 2016. “
Recreational vehicles might perhaps become the affordable option for housing.( Buy used, of course from kijiji at a huge discount) Just need a plot of land to stick them on. Try the prairies.

#37 WallOfWorry on 06.13.16 at 7:24 pm

If we do not see a real estate correction of 40+ %, recognizing that this blog has been calling for such for 7 years now….then it has been a massive waste of time.

Like your coming here? — Garth

#38 nonplused on 06.13.16 at 7:24 pm

Garth,

I still think the biggest driver that will eventually fix the housing market will be increased supply. Sure low interest rates drive prices higher, that’s what they are supposed to do, but those higher prices are suppose to stimulate production to meet the new demand. This has happened, but various policies and such (land cartels, slow building permits, land use by-laws, etc.) conspire to keep supply down.

Here in Alberta there is a lot of land and a lot of laid off oil workers. If they wanted enough housing to meet demand at affordable prices everything is in place to do it except the permitting.

#39 D on 06.13.16 at 7:24 pm

Retirement savings mistakes courtesy of John Oliver.

https://www.youtube.com/watch?v=gvZSpET11ZY

#40 Agreement? Help Pls! on 06.13.16 at 7:28 pm

Help, I can’t, for the life of me, remember the name of the agreement Mr. Turner said we should never ever ever sign with a realtor…Gah! Google has been of no assistance….

Could some kind soul please remind me, appreciated!

Cheers, SF

“BRA.” Easy to remember. — Garth

#41 crowdedelevatorfartz on 06.13.16 at 7:34 pm

ladies and gentlemen

Hell has frozen over

#28 Devils Advocate
“this is not such a good time to be in real estate…..”

#42 Lulu on 06.13.16 at 7:34 pm

Renters……please stand behind the door, train is approaching super fast, please don’t enter until it fully stop. If you miss this one, next schedule is a minute away!

#43 common sense on 06.13.16 at 7:35 pm

What’s that saying about buying a boat or even a RV?

“The best 2 days of ownership is the day you buy and the day you sell..”

Looking forward to selling the house, buy a nice, inexpensive RV when the market tanks, parking it on a friend’s nice piece of land, spending 6 months here and the cold months south…

Flopper! I’m sounding like Freedom First. Help me!

#44 crowdedelevatorfartz on 06.13.16 at 7:40 pm

@#35Will

“Having spent time in Japan and learning Nihongo I cringe every time I hear stuff like hari-kari or carryokie or kimona…..”

Ahhh yesssssss
The snobbery of the bilingual Nipponese afficionados. My Karate instructors reached various levels after their trips to Japan.
Yawn.
All I have to say to anyone that “cringes ” at my abominable Japanese is “Pearl Harbor”, “Hiroshima” and “bring me more wasabi”

#45 Joe2.0 on 06.13.16 at 7:44 pm

I think certain markets will suffer.
Vancouver and area not so much.

To much big money wants to settle here, from all over the planet.

Check out how many Chinese and Indian millionaires are being made daily.

Where do you go to live these days that’s relatively safe and clean and not over populated?
And doesn’t have these crazy religious threats that are escalating daily.

You should see the amount of U.S. plates on the Sunshine Coast “checking it out”

#46 Mike in the Okanagan on 06.13.16 at 7:45 pm

S class Merc with a limo driver…you made me laugh for real today.

Personally I’m glad this thing is going to blow on T2’s watch.

#47 "T2 gang" on 06.13.16 at 7:45 pm

Going Trump, Garth?

Why are you surprised then?

#48 Ottawa on 06.13.16 at 7:47 pm

Any idea what Brexit will bring to the market?

#49 b riding dirty on 06.13.16 at 7:50 pm

Last week you slammed the one city of Angels by saying it is not even worth stopping to fill your gas in… now it’s a great city? Garth you maybe starting early signs of dementia or have started smoking pot! Fort Langley hosts a ton of stores like yours. Recommend stop by sometime.

I have. One good resto. Casino sucks. — Garth

#50 AK on 06.13.16 at 7:51 pm

Canada’s Debt

#51 Vancouverite on 06.13.16 at 7:52 pm

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

According to the mayor the problem is foreign buyers. The idea that the real estate industry will collect data and then share that data with the government is laughable. Real estate insiders have a vested interest in keeping the public in the dark when it comes to foreign investors.

https://petitions.parl.gc.ca/en/Petition/Details?Petition=e-281

Foreign buyers = 5-7%. Local buyers = 93-95%. Local sellers = 100%. Yeah, blame someone else. — Garth

#52 BOOM! on 06.13.16 at 7:55 pm

A typical Monday with friends slurping up Beer, and Brandy at the Cabin. Market took a bit of a header, another typical Monday happening.

Sold of 413,000_+ stock that vastly appreciated, thanks to the Jan-Feb thaw when I bought them. While a GIC pays what maybe 3% if you’re lucky, I made 14% betting on the beat down REITS and stuff. OK, so the new roof and patio door is paid for, and I still have more left than I had at the start of 2016.

You can drown in your Real Estate, while the Boomer delights in his cash in hand. It’s my BET and I’ll cry when I want to… to paraphrase the late great, Lesley Gore.

So, Boomerland still Rocks,if only to them old 45’s, but I get to pick ’em!

So Canuckistan is starting to wobble under the DEBT burden? Don’t say you have not been warned, you young know it alls. Just remember, we over 60 graduated, and made life well before the internet. WAHH!

This has been an equal opportunity annoyer post.

I’m in Smoking Man Realm tonight (hic).

M64WI

#53 For those about to flop... on 06.13.16 at 7:56 pm

#126 gut check on 06.13.16 at 11:09 am
“when picked on proud and fiesty!”

I will take that.
:)

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

Hey Gut check,glad your happy with Northern Ireland.

The Prime minister is David Cameron but their first minister is Arlene Foster and unless I am mistaken she is famous for the following quote…
” Yeah , we need a lot of things Bill but more rock trucks is not one of them” or words to that effect…

M41BC

#54 Linda on 06.13.16 at 7:58 pm

#34 matches my thinking. Maybe it is just an impression, but I had thought the vast majority of RV owners were part of the older demographic (age 50+). Younger cohorts seem to prefer SUV’s or big ass trucks with the power to race up the hill, not chug slowly along taking in the wonders of the landscape.

Also, I’ve often wondered just how many of those vast acres of RV’s one sees on lots when driving by are actually owned. If they are all of them for sale then my goodness, the RV lot owner has one huge amount of cash tied up in keeping that lot full of product. Add in that RV living isn’t for everyone & I can see why the sales may not be all that robust.

#55 Watchin In YVR on 06.13.16 at 7:59 pm

Looks like things are already beginning to slow in YVR. This house bought by a developer in 2014 and rebuilt except for 3 walls has now been on the market for 2 months. Prime location 1/2 block west of Granville Street.
http://www.remax.ca/bc/vancouver-real-estate/na-1566-w-65th-avenue-na-wp_id141570238-lst/
What it looked like in 2014
https://www.propertyinsight.ca/1566-65th-avenue-west-vancouver-bc-nvaqym4buokk

#56 Victoria Real Estate Update on 06.13.16 at 7:59 pm

It’s clear from Garth’s second chart that Victoria is almost as bubbly as Toronto and Vancouver.

When Garth talks about Canada’s two bubbliest markets he might as well include Victoria as a close third.

Just as I thought, when it comes to new mortgages, Victorians are stretching themselves as thin as they are in Vancouver and Toronto.

The US experience is one example to look at that shows how those markets that have a significant increase of first-time buyers rushing in at the peak often end up experiencing the biggest price busts.

In the US, west coast cities were at or near the top of the list of biggest price losers. Prices in LA, San Francisco and San Diego fell approximately 50% or more. All of these markets had a rush of new buyers at the end motivated partly by FOMO. That they bought for the first time with such high levels of debt compared to income contributed to the deep price declines experienced in these markets.

Think Victoria and Vancouver.

#57 my 2 cents on 06.13.16 at 8:00 pm

A correction is not a sure thing.
A sure thing is very high inflation caused by the current credit expansion

That affects us all

#58 Amused on 06.13.16 at 8:02 pm

Friends who live just north of TO were concerned about bubbly pricing, so they decided to put there home on 25 acres up for sale. Bidding wars for the property ensued. The house sold for $300K over asking and $800K over their bottom line in five days, plus they get to stay there, rent free, for more than a year after closing. Sweet. These are two happy campers sitting on top of a nicely padded retirement portfolio.

#59 WUL on 06.13.16 at 8:03 pm

Garth:

Again I profess my gratitude for your efforts.

I find it interesting that the municipal government here in Fort Mac felt it had the power to fix prices (rent and some services) at those amounts being charged on April 30 (3 days pre evacuation) pursuant to either the municipally declared state of emergency or the provincially declared state of emergency which soon followed. Neither have been lifted. I have not explored the legitimacy of that action. There is also a snitch line.

However it appears to me that asked rents (Kijiji) have jumped at least 20% (no rent controls in Alberta) and horror stories about much bigger increases abound.

I suppose one could contend that a room which was not rented on April 30 did not have a price on that date and a landlord is free to seek whatever the market will bear.

Re-entry was allowed starting 11 days ago and we still await the return of ~26,000 out of ~80,000 people according to published figures. Some have thrown in the towel. Some are pregnant and some have young children. Hospital not fully up and running and real concerns about the contaminants, toxins and carcinogens from the combustion of the plastic, glue, vinyl etc that we build houses out of.

Local council is considering whether or not people should be allowed to re-build in the flattened neighbourhoods. There are many available serviced lots but with insured homeowners entitled to indemnity for the value of the structure and its contents, who pays for the value of the new lot.

I suppose the government does. And, there could well be increased demand for those replacement lots with an increased price.

A potential mess.

#60 TurnerNation on 06.13.16 at 8:11 pm

How to control 7 billion sheeple and their minds: using a few well placed collie dogs and men on horseback.
(We now know those as “terrorists”.)
You know those people with no demands, no requests. Who, no longer seem to ‘hate our freedoms’ or even mind little girls going to school?!?

Just 101 new laws passed against us each year. Problem, reaction, solution. All we hear are outcries. No thought. In an election year too. Brilliant. Mastery of social media. Why FB even added more ‘reactions’ for us to like. It’s all we are capable of.
(And a fake UofT lockdown event today too, to dovetail it)

Recall our parents/grandparents fought for our rights like Geneva Convention. RIP that. It was taken away from us. The State can and will do anything to us.

#61 Brian Ripley on 06.13.16 at 8:12 pm

re: “financial hari-kari”

I just updated my household debt chart with overlays of GDP, Net Trade and FDI-FDO

https://www.weebly.com/editor/main.php

Negative net trade continues near the recent crash low as GDP flattens. Last year’s FDI FDO (Federal Direct Investment) numbers illustrate that capital flow is increasingly outbound. Our companies would rather invest off shore than on, by a much wider margin Y/Y.

We are a country of net consumers fueled by cheap and easy credit.

Overheard at a local credit union this week is that credit tightening has begun and I suspect we will see it in the real estate data in the next month or so… my guess is in the strata market first and then the detached market as those players get the news from their mortgage brokers that much bigger down payments are required.

On the Bank of Canada site is the Senior Loan Officer Survey (SLOS) and Outlook Survey (BOS) for lending conditions and availability of credit. The chart data are increasingly positive ie: credit is tightening http://credit.bankofcanada.ca/financialindicators

It means fewer people will qualify for that mortgage or even get close to it. I don’t think our parents are going to bail us out on this one.

#62 Andrew Woburn on 06.13.16 at 8:33 pm

#36 Winterpeg on 06.13.16 at 7:21 pm
Recreational vehicles might perhaps become the affordable option for housing.( Buy used, of course from kijiji at a huge discount) Just need a plot of land to stick them on. Try the prairies.
===================

I agree in principle but have you ever tried to sleep in an RV at 20 below?

#63 down and out on 06.13.16 at 8:36 pm

Young people are completely discourage in Vancouver ,relative says most resigned to looking elsewhere , Clark ‘s government has done nothing for the youth to find affordable housing. Why will all this not end well just reread” When the bubble bursts ‘ about the great depression how smart people pleaded with the fed to raise rates but like today ‘s Yellen lots of talk and warnings but no action .No wonder the adage says those that do not learn from history are doom to repeat it.

#64 acdel on 06.13.16 at 8:41 pm

Never mind the mortgage payments for those stupid or greedy enough to pay today’s charges; what’s killing Canadian’s is the inept municipal and provincial leaders with there not so clever tax increases, as well as good old oil and gas (yep I am an Albertan) that attempt to justify today’s gas prices at $48 oil. Never mind the shyster banks who are going to raise there fees once again; cable in my part of the country in going up again; second time in the past year. For those who live in Owetario and Bring Cash BC; I never understood why you put up with your current leaders; at least we in Alberta do something about and kick the losers out; although unfortunately they are only getting replaced with bigger idiots; seriously I think the political days are coming to an end; this macerating wealth reduction to pay for there lifestyles or idiotic ideas are killing us.
Seriously how much more can we put up with??????????

#65 For those about to flop... on 06.13.16 at 8:43 pm

Euro 2016 update.

Smoking Man’s Ireland and Boom’s Sweden played to a draw. 1-1.

In a cruel twist of fate Mark’s Belgium had his bum kicked as usual by WalMark Of Sadkatoon’s Italy …2-0.

Also to keep things on topic I would like the 24 contestants to find out something interesting or quirky about their country and post it on the blog.

I will go first…here are some facts about my country England…

M41BC

Harry Ramsden’s holds the Guinness World Record for the largest fish and chip shop in the world, seating 250 people, serving nearly a million customers a year. It is Britain’s longest established restaurant chain. Its first shop opened 1928 at Guiseley, West Yorkshire.

Britain has the highest per capita consumption of cider, as well as the largest cider-producing companies in the world. Over half of England’s cider is produced in Herefordshire. The world’s largest producer of cider is H. P. Bulmer, based in Hereford. Cider making was introduced by Viscount Scudamore in 1639, who brought the recipe from France. In 1674 he built the county’s largest house with cider money at Holme Lacy, near Hereford.

The Equitable Life Assurance Society, founded 1762, is world’s oldest mutual insurer. It pioneered age based premiums based on mortality rate, the basis of modern life assurance upon which all life assurance schemes were subsequently based.

#66 Toronto Dweller on 06.13.16 at 8:49 pm

#13 Economically Trapped in Manitoba
“1st time poster, long time lurker. In the 2008 GFC, Canada’s strategy was to spend it’s way out of the GFC, for the most part side-stepping the meltdown that occurred in the U.S. My very limited financial knowledge made me think that was ludicrous and we would eventually have to pay for that tactic. Here we are 8 years later, the U.S. is moving forward and we may very well be in for an even worse ride than if we had suffered along with everyone else in 2008. Is the southern Ontario and lower mainland real estate bubble not to a certain degree, a result of Canada’s method of dealing with the GFC? If cheap money was not available would we be moving forward with the U.S. today? Would housing prices be more reasonable in the hot market areas?”

—————————————————————–

Both countries had QE (Quantitative Easing) with interest rates going down over the last 8 years.
And no we “didn’t spend our way out of the recession” as touted by Economic Action Plan under Harper, we just doubled our investments into energy sector and made housing flipping our religion.

#67 Cottingham a bargain on 06.13.16 at 8:52 pm

#6 LH – ” trend is your friend .. Holding his properties at M5T …”

Yup , feel the same way as you but holding my properties in Richmond hill, the real RH only , south of Major Mack Yonge corridor.

#68 acdel on 06.13.16 at 8:53 pm

Ok, I stand corrected on my thoughts on the current Alberta government, for now!

Good job Notley.

http://www.calgaryherald.com/news/local-news/agriculture+financial+services+corporation+board+directors/11983584/story.html

#69 Notagreaterfool on 06.13.16 at 8:53 pm

Re:” Finance Minister Bill Morneau is now considering a package of measures from his department which would restrict mortgage accessibility, raise posted rates and force bankers to eat more risk”

Garth, what does your team os spies see?

#70 For those about to flop... on 06.13.16 at 8:55 pm

#43 common sense on 06.13.16 at 7:35 pm
What’s that saying about buying a boat or even a RV?

“The best 2 days of ownership is the day you buy and the day you sell..”

Looking forward to selling the house, buy a nice, inexpensive RV when the market tanks, parking it on a friend’s nice piece of land, spending 6 months here and the cold months south…

Flopper! I’m sounding like Freedom First. Help me!

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

Hey Common, I think you have it wrong….Freedom First is softening and is starting to sound like you.

Regarding R.Vs I drive a 19 ft Campervan every day to work to get my money’s worth.

Just in case I don’t make it to retirement I took a few summers off and drove it all over North America.

Maybe one day i will get something bigger but for now I park it out front of my apartment and it does the job.

No regrets…

M41BC

#71 jay on 06.13.16 at 8:55 pm

Garth are you looking to make a little extra cash?

http://flipstersoftware.com/longf/

#72 TRON on 06.13.16 at 9:09 pm

My nephew bought a tiny condo in downtown Vancouver that will be completed this summer.

He paid $235k for it and my brother (has a $4.6M home on the westside he paid $680k for 12 years ago) says the condo could sell for $500k. My nephew is 26, RRSP’d the down payment and makes $100k a year.

I bet my brother $100 bucks the place will be worth less in a year from now and that his son should sell the condo and rent. He obviously disagreed and said the place will be worth more and proceeded to tell me a story about how some St Georges students (from Asia) toured 10 homes the other day then bought all 10.

Bubbles never burst lol.

#73 common sense on 06.13.16 at 9:10 pm

#59 WUL

So sorry to hear of all the problems in Fort Mc….

We are thinking of you all and hope for all the best sooner than later…

#74 Prairieboy43 on 06.13.16 at 9:13 pm

Garth you amaze me. Everyday you give facts regarding Canada’s Investment and RE climate. Some utilize this info, many not so much. Everyday you need to don your boxing attire. You must like it. Get back into politics.
PB43

#75 conan on 06.13.16 at 9:14 pm

I know that many international agreements are going to be signed that deal with corruption and the illegal flow of money. Canada is going to be part of that. So if there is any illegal money coming in from China, two things will happen; it will help take the pressure off the second bubble of the double bubble that is Vancouver RE. The other, no more Chinese ambassadors with angry hands.

I would rather deal with JW’s at my front door then CAWAH.

#76 46 and 2 on 06.13.16 at 9:21 pm

http://www.theglobeandmail.com/report-on-business/rob-commentary/housing-costs-are-rising-but-its-not-a-supply-issue/article30380106/?cmpid=rss1&ref=yfp

As I mentioned long ago….Vancouver is not a local real estate market, it is a world real estate market, Canadian fundamentals mean nothing. Don’t know about Toronto.

#77 Ronaldo on 06.13.16 at 9:22 pm

”So, buyers should wait. Owners (those who have lucked into a once-in-a-generation windfall) should sell. And never look back.”

I would say more like once-in-a-lifetime windfall. These house prices are decades ahead of their time. Going to be quite an unwinding.

#78 common sense on 06.13.16 at 9:24 pm

Flopper:

Unique German facts:

Prostitution is legal and the government pays for sex for the disabled.

“Une stoppin from floppin” is German for bra.

Drinking is legal in public spaces.

Germany will reinstate Nuclear plants if the Brits exit.

Giving someone the bird is illegal.

There you have it. Go Germany!

#79 Freedom First on 06.13.16 at 9:27 pm

Hey, ever notice how the rich man keeps getting richer, while the poor man has debt?

#80 Yuus bin Haad on 06.13.16 at 9:28 pm

Gerald is not going to be happy about being pulled off the polar bear file.

#81 Long Branch Apprentice on 06.13.16 at 9:32 pm

First the Orlando shootings, now today’s fake gunman.

All the while, Elites are eating caviar and planning how to further pull the strings in Dresden.

As for Canadian RE, perhaps it’s our lack of math skills that are at least partially to blame. I know homeowners who don’t know what an amortization table, who thought it was unfair that they had to pay so much interest in the early stages of the mortgage, and my cousin told me he had $230k in equity when he put less than $10k down on his shitty Kitchener townhouse.

What we’ve got here is a failure to communicate. At least in numbers. Here’s my theory:

In our current disaster of an education system, students are encouraged by grades. Get a good grade, it starts a positive feedback cycle. Problem is, most students today get good grades in Drama class, Gender Identity and Poetry. Many get poor grades in math, for one reason or another and therefore get scared of another big red mark at the top of their quiz.
This leads to students dropping maths as they advance through the system, and most choose university majors that hardly have a math component, opting instead for essays that can be entirely subjective.
The result is a population that very much shies away from any type of calculation, such as involved in a mortgage amortization table.
I honestly know people who don’t know what compound interest is, yet have a half million mortgage.

Now, I could say we need better male, I mean math teachers in the system, but I doubt many with a firm grasp on the True Universal Language want to work for our pathetic education system, even if it means summers off and stress days.

I strongly doubt our quantum computing loving PM could explain say, orders of magnitude or prime numbers or the Fibonacci series.

Hell, I bet he can’t read a tape measure.

Understand mathematics, and you’ll understand the Universe.

#82 Ronaldo on 06.13.16 at 9:37 pm

#22 ronh on 06.13.16 at 7:04 pm

”Most of my neighbors have RVs. Which they use two weekends a year. Monkey see, monkey do. That money
could be invested.”

Ditto. One of the worst purchases that one can make. If you want to throw money down the toilet. That is a sure way to do it. Never could see the sense in it.

#83 ANON on 06.13.16 at 9:40 pm

Pain

#84 For those about to flop... on 06.13.16 at 9:42 pm

#78 common sense on 06.13.16 at 9:24 pm
Flopper:

Unique German facts:

Prostitution is legal and the government pays for sex for the disabled.

“Une stoppin from floppin” is German for bra.

Drinking is legal in public spaces.

Germany will reinstate Nuclear plants if the Brits exit.

Giving someone the bird is illegal.

There you have it.Go Germany!

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

Good Man! I was going to go the humorous route as well but I didn’t want to annoy the boss too much.

He is letting me post soccer scores on a financial blog after all.

Still haven’t worked out why Mark is not complaining that I gave him Belgium because he is full of “chocolate”…

M41BC

#85 acdel on 06.13.16 at 9:46 pm

Long Branch Apprentice

Good post!

Garth, always good informational posts,thanks.

#86 Smoking Man on 06.13.16 at 9:46 pm

#81 Long Branch Apprentice on 06.13.16 at 9:32 pm
First the Orlando shootings, now today’s fake gunman.

All the while, Elites are eating caviar and planning how to further pull the strings in Dresden.

As for Canadian RE, perhaps it’s our lack of math skills that are at least partially to blame. I know homeowners who don’t know what an amortization table, who thought it was unfair that they had to pay so much interest in the early stages of the mortgage, and my cousin told me he had $230k in equity when he put less than $10k down on his shitty Kitchener townhouse.

What we’ve got here is a failure to communicate. At least in numbers. Here’s my theory:

In our current disaster of an education system, students are encouraged by grades. Get a good grade, it starts a positive feedback cycle. Problem is, most students today get good grades in Drama class, Gender Identity and Poetry. Many get poor grades in math, for one reason or another and therefore get scared of another big red mark at the top of their quiz.
This leads to students dropping maths as they advance through the system, and most choose university majors that hardly have a math component, opting instead for essays that can be entirely subjective.
The result is a population that very much shies away from any type of calculation, such as involved in a mortgage amortization table.
I honestly know people who don’t know what compound interest is, yet have a half million mortgage.

Now, I could say we need better male, I mean math teachers in the system, but I doubt many with a firm grasp on the True Universal Language want to work for our pathetic education system, even if it means summers off and stress days.

I strongly doubt our quantum computing loving PM could explain say, orders of magnitude or prime numbers or the Fibonacci series.

Hell, I bet he can’t read a tape measure.

Understand mathematics, and you’ll understand the Universe.
…..

You’re a good student…Brilliant post.

#87 Smoking Man on 06.13.16 at 10:10 pm

#79 Freedom First on 06.13.16 at 9:27 pm
Hey, ever notice how the rich man keeps getting richer, while the poor man has debt?

….

A rich man looks in the mirror, naked, egnors his short commings and focuses on the good parts. A poor man sees only a victim, he could have the biggest attribute in the world but he remembers his programming from the safe hands teacher.

Be a good widget and I’ll give you an A

#88 roxy on 06.13.16 at 10:18 pm

An interesting study on this country…I read reddit subs for Toronto, Calgary and Vancouver.

In Toronto, all they talk about is transit and missing cappybaras.

In Calgary, they talk a lot about unemployment insurance.

Vancouver’s sub is ALLLLLLLL HOUSING.

#89 WUL on 06.13.16 at 10:19 pm

#73 common sense on 06.13.16 at 9:10 pm

#81 Long Branch Apprentice on 06.13.16 at 9:32 pm

Garth:

If I may, a couple of responses and thanks for your tolerance.

First to common sense.

No need to lament my personal situation at all and I take your good wishes to extend to the collective. Thousands of people here in the Taiga have suffered terribly. I dealt with a fellow today that lost two houses. As for me, I am in an amazing space. I maintain, and have since May 5, that I am the luckiest of ~80,000 evacuees, by far. And that is without having attended church once in my life.

It allows me to remain in good humour and observe and learn from an unbelievable experience and experiment.

So with that, I can turn my energies to assisting people here and put my shoulder to the wheel.

Also, while months ago I decided to grow my hair until the Flames win the Stanley Cup, I have added another measure. I will grow it until Ft. Mac is rebuilt. Rapunzel of the Bailey.

Now turning to Long Branch Apprentice.

You make some points worthy of discussion. I read as many perspectives as I can. In fact, I stoop so low as to read the National Post and Financial Post (and for crying out loud, the Calgary Sun) while trying to control my gag reflex. With Godfrey turning to the federal government for welfare to support his newspapers, I decided I will host Canada’s biggest party when his “empire” collapses.

On that front, I watched “Requiem For The American Dream” featuring Noam Chomsky on Netflix. Yes, the immediate reaction of some will be “That damn lefty, intellectual member of the ivory tower elite.” and perhaps I liked it because it fits my existing perceptions, but it provokes some thought, at least to me. I think it explains why we are sheep.

Now turning to my lifelong favourite national soccer team, Iceland. From whackopedia:

“Five major geothermal power plants exist in Iceland, which produce approximately 26.2% (2010)[2] of the nation’s electricity. In addition, geothermal heating meets the heating and hot water requirements of approximately 87% of all buildings in Iceland. Apart from geothermal energy, 73.8% of the nation’s electricity is generated by hydro power,[3] and 0.1% from fossil fuels.”

If only Alberta had volcanoes.

#90 common sense on 06.13.16 at 10:22 pm

#79 Freedom

What’s debt?

#91 S.Bby on 06.13.16 at 10:26 pm

#45 Joe2.0
You should see the amount of U.S. plates on the Sunshine Coast “checking it out”
————————————————
or maybe they are just on vacation? We see what we want to see…

#92 S.Bby on 06.13.16 at 10:27 pm

Was in Whistler last weekend for a few days. Did not see one US license plate.

#93 Dan Duran on 06.13.16 at 10:30 pm

I had a good lough at your effort to get ” buyers to wait and sellers to sell”. Fact is, whatever Morneau does, he cannot get sellers to sell. He may inconvenience a few buyers, who will definitely look pissed for a while, then would have no choice but to shell some more cash and buy. Look, in the better neighborhoods of Toronto NOBODY sells, unless they want to buy something else. Most weak hands have been flushed out already. Everybody who has not sold has better job prospects, enough equity, loves their neighborhood and understand there is 0, zip, nada supply of new single detached homes coming to the market in these neighborhoods for the next 1, 10, 100, or 1000 years.

#94 Smoking Man on 06.13.16 at 10:31 pm

My last post needs further examination.

Be a good widget and I’ll give you an A…..

The teachers goal, there to stupid to stupid to even know the work for the machine.

It’s about fitting into the community. A pat on the head for being a good boy.

That is the whole goal of modern mind fking. Be a loser amonst other losers.

Anyone who touches this head that don’t have a set of double ds is going down….
I played Jr hockey and I was the goon.

#95 acdel on 06.13.16 at 10:38 pm

#87 Smoking Man
A rich man looks in the mirror, naked, egnors his short commings and focuses on the good parts. A poor man sees only a victim, he could have the biggest attribute in the world but he remembers his programming from the safe hands teacher.

Be a good widget and I’ll give you an A

—————————————–

A poor man does not see a victim, ok some do (you win), some know how to get around the system; other’s take it unto themselves to take that chance but when the system is fighting you all the way, as in my hometown where property taxes, bike lanes, electricity fees, parking fees etc have forced closer of many small business’s that have been around for 10 plus years, laying off many dedicated employees.

You will counter with your opinion; but my point is why it cannot be a level playing field for all? Especially those who have gone all out, employed many over the duration of there business’s only to get defeated by idiotic decisions of an elected few.

If you say who you say you are and making it big in today’s world then kudo’s to you; just understand the one’s who tried, no fault of their own who were decimated by bad policy. We need government out of our lives; let us all prosper!

#96 Spectacle on 06.13.16 at 10:42 pm

Re:
#72 TRON on 06.13.16 at 9:09 pm

“………He obviously disagreed and said the place will be worth more and proceeded to tell me a story about how some St Georges students (from Asia) toured 10 homes the other day then bought all 10.”

************************
Um, And that sounds like money laundering to me.

Old guy visits our building, his “job” is to make it look like the absentee owners are actually living there. He does this , but I’m not sure what the name of the job is in his language. He sends important letters and courier packages to them over seas. Neat gig! Pays well.

Ps: you know your in trouble when your house has wheels, …….. and your truck doesn’t!

#97 For those about to flop... on 06.13.16 at 10:43 pm

Now turning to my lifelong favourite national soccer team, Iceland. From whackopedia:

“Five major geothermal power plants exist in Iceland, which produce approximately 26.2% (2010)[2] of the nation’s electricity. In addition, geothermal heating meets the heating and hot water requirements of approximately 87% of all buildings in Iceland. Apart from geothermal energy, 73.8% of the nation’s electricity is generated by hydro power,[3] and 0.1% from fossil fuels.”

If only Alberta had volcanoes.

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

Thanks WULLY ,and keep up the good work in Fort Mac.

Im proud of ya…

M41BC

#98 Give us this Blog our daily Garth on 06.13.16 at 10:47 pm

#36 Winterpeg on 06.13.16 at 7:21 pm

“Canadian motorhome registrations collapsed 44.1% year/year in April, and have now tumbled 35.4% so far in 2016. “
Recreational vehicles might perhaps become the affordable option for housing.( Buy used, of course from kijiji at a huge discount) Just need a plot of land to stick them on. Try the prairies.
———————————–
The only problem with this or these new “Micro Home” options is worrying it will get stolen when you are “not home”. Houses connected to the earth are impossible to steal.

#99 Smoking Man on 06.13.16 at 10:47 pm

Smoking man fans

I’m at the south west corner of 38th street and James street in Shlong Branch . Well that may be a lie but that property puts this song into my head.

https://youtu.be/a2zgmKtH_7M

#100 Smoking Man on 06.13.16 at 11:03 pm

95 acdel on 06.13.16 at 10:38 pm
#87 Smoking Man
A rich man looks in the mirror, naked, egnors his short commings and focuses on the good parts. A poor man sees only a victim, he could have the biggest attribute in the world but he remembers his programming from the safe hands teacher.

Be a good widget and I’ll give you an A

—————————————–

A poor man does not see a victim, ok some do (you win), some know how to get around the system; other’s take it unto themselves to take that chance but when the system is fighting you all the way, as in my hometown where property taxes, bike lanes, electricity fees, parking fees etc have forced closer of many small business’s that have been around for 10 plus years, laying off many dedicated employees.

You will counter with your opinion; but my point is why it cannot be a level playing field for all? Especially those who have gone all out, employed many over the duration of there business’s only to get defeated by idiotic decisions of an elected few.

If you say who you say you are and making it big in today’s world then kudo’s to you; just understand the one’s who tried, no fault of their own who were decimated by bad policy. We need government out of our lives; let us all prosper!
….
It’s all about sending out I love me to the universe ..

The mind fkd have been trained to tell the universe on their hands and knees. Please teacher give me an A, god damn it I will do anything for it.

I give you the herd

Dr Smoking Man
PhD Herdonomics

#101 ANON on 06.13.16 at 11:05 pm

#90 common sense on 06.13.16 at 10:22 pm

What’s debt?

Basically a promise (of more), which must be impossible to keep.

#102 acdel on 06.13.16 at 11:26 pm

#100 Smoking Man
It’s all about sending out I love me to the universe ..

The mind fkd have been trained to tell the universe on their hands and knees. Please teacher give me an A, god damn it I will do anything for it.

I give you the herd

Dr Smoking Man
PhD Herdonomics

—————————————-

I get it; what we need is enough people to say “enough is enough”starting with oneself. Have a good-night!

#103 Smoking Man on 06.13.16 at 11:29 pm

Thought about taken a 2-4 to 38th street and James street. Make a new friend.

Their newfess. The flag flyes high. What could go wrong. Newfees, the best thing I’ve observed about Canada and humans. I’m on a mission from Nictonite

But I got rid of friends 5 years ago. It’s too much work for a man that has no work ethic.

Neffees will save us all.

Beauties.

#104 Ole Doberman on 06.13.16 at 11:29 pm

Any constructions guys out there or contractors?

What does it cost to build an average house in Calgary?

Just got into a big fight with a bud who says homes will never go below $400K cause it costs so much to build them.

Thats good point I’ve never heard addressed – anyone have input on this?

#105 Ronaldo on 06.13.16 at 11:40 pm

#98 Give us this Blog our daily Garth on 06.13.16 at 10:47 pm

” Houses connected to the earth are impossible to steal.”

———————————————————-

Except for this one.

http://www.aol.ca/article/2015/02/26/house-in-oregon-missing-stolen-off-its-foundation/21147140/

#106 rainclouds on 06.13.16 at 11:42 pm

#45 Joe 2.” certain markets will suffer.
Vancouver and area not so much.To much big money wants to settle here, from all over the planet”

That would be the “it’s different here” argument.BPOE!

No. it isn’t …….

#107 Pierre on 06.13.16 at 11:42 pm

Smartalox:

“Just trying to get a clear line on what happened the last time, so that I know what canaries to look for in Canada’s current situation.”

Why on earth would you think you’ll find any clarity here? Folks on this blog have been calling tops and canaries since 2006.

#108 Ronaldo on 06.13.16 at 11:48 pm

#104 Ole Doberman on 06.13.16 at 11:29 pm

Any constructions guys out there or contractors?

What does it cost to build an average house in Calgary?

Just got into a big fight with a bud who says homes will never go below $400K cause it costs so much to build them.

Thats good point I’ve never heard addressed – anyone have input on this?
————————————————————
This may give you some idea but I’ve heard from a builder in Red Deer that it would be about $180 s.f. so a basic 1150 s.f. would cost about $207,000. The cost of the property is what generally goes down in value in a downturn. I recall back in the 80’s downturn that you could buy a house for the cost of rebuilding. Lot basically was free.

http://www.alberta.ca/estimated-residential-construction-cost.cfm

#109 bdwysktrn - go Hungary! on 06.13.16 at 11:57 pm

35 will on 06.13.16 at 7:20 pm
Haha #7 pathcontrolmonk

You beat me to it! Having spent time in Japan and learning Nihongo I cringe every time I hear stuff like hari-kari or carryokie or kimona.
—————————
a few years back i got my cringes from hearing peter mansbridge talk about the key-yoe-toe accord on the tv news. you’d think there was at least one Nihon-jin on staff to correct him.
btw it’s 2 syllables “kyo-to”. same as “to-kyo”, not toe-kee-oh

#110 Ronaldo on 06.14.16 at 12:02 am

The mind fkd have been trained to tell the universe on their hands and knees. Please teacher give me an A, god damn it I will do anything for it.

I give you the herd

Dr Smoking Man
PhD Herdonomics
———————————————————–
To Smoking Man. Thought you might find this interesting reading. Am sure you have read the book “The Peter Principle”. It could very well apply to our education system today.

http://www.forbes.com/sites/robasghar/2014/08/14/incompetence-rains-er-reigns-what-the-peter-principle-means-today/#64c0b047631b

#111 BS on 06.14.16 at 12:07 am

#104 Ole Doberman on 06.13.16 at 11:29 pm
Any constructions guys out there or contractors?

What does it cost to build an average house in Calgary?

Just got into a big fight with a bud who says homes will never go below $400K cause it costs so much to build them.

Thats good point I’ve never heard addressed – anyone have input on this?

The houses already built or in the process of being built have to get sold. They can only be sold for what someone will pay. If it cost $400K to build that is irrelevant. It can sell for half that if that is all someone is able or willing to pay. It can take years to sell inventory already built or in progress.

If house prices are below the current cost to build then land prices will drop, labour costs will drop, cities will lower development costs and material costs will drop. When things are in a boom everyone increases what they charge. In a bust prices go down.

In the 2009 mini housing bust in Vancouver below is an example of how prices fell by cutting costs. They gave buyers who put down deposits 22% rebates in order to keep the project going and sell the remaining units. Everyone takes a hair cut, except the buyers.

Amacon reopens the site sales office March 21 at 1035 Seymour and plans to hold a sales blitz on April 4 to sell the remaining condos. According to Amacon, construction costs reductions of up to 30%, especially for concrete, steel rebar and labour have allowed the price reductions.

http://www.westcoastresidence.com/Blog.php/99

#112 Pierre on 06.14.16 at 12:12 am

BOOM: “OK, so the new roof and patio door is paid for, and I still have more left than I had at the start of 2016.”

Dude – living the dream. Keep us updated on the patio door – I’ll miss the regular updates.

#113 bdwysktrn - go Hungary! on 06.14.16 at 12:12 am

#36 Winterpeg on 06.13.16 at 7:21 pm
“Canadian motorhome registrations collapsed 44.1% year/year in April, and have now tumbled 35.4% so far in 2016. “
Recreational vehicles might perhaps become the affordable option for housing.( Buy used, of course from kijiji at a huge discount) Just need a plot of land to stick them on. Try the prairies.

———————————
got 2 fifth wheels – one 27′ like new 6k. one 32′ (3 slides) needed a new floor – free

plopped them on gorgeous 10 ac lot 1.5 mi from the ocean/beach , not on the prairies but 45min from dt van. (80k for the lot – WA state)

now have 2-3km of awesome personal dirtbike/quad track – fun stuff.

will build a 10 car shop and a nice new house

land+RVs+motorcycles+quads+new house and shop = about 1/2 a van 2br condo.

the trips down pay for themselves (.80/l gas) and save about 2x the property taxes in scotch/cheese/smokes.

#114 bdwysktrn - go Hungary! on 06.14.16 at 12:17 am

and… 10yr yield making new ytd lows, new 12mo lows, 24 mo lows, 36 month lows soon 48 month lows.

rates are DEAD IN THE WATER.

#115 Mark on 06.14.16 at 12:56 am

“Um, And that sounds like money laundering to me.”

Sounds like lying to me.

Just got into a big fight with a bud who says homes will never go below $400K cause it costs so much to build them.

I’ll make a few points on the topic. First, as the bubble continues to deflate, construction costs will fall as the existing housing vendors are forced to deliver supply at lower price points. Prices on labour, materials, etc., will be squeezed. If you’ve ever shopped in Canadian housing supply retail stores, and shopped in their US counterparts, you’ll know that there’s a huge amount of room for lower costs.

Secondly, nobody will rationally pay for a used house what they would pay for a new house. Sort of like cars, they lose value the moment you drive them off the lot. So while new houses may very well cost $400k to construction, the average house, adjusted for investment, is likely 20-30 years old against a service life of 60 years. So basically, half depleted. This means that an average house can easily go down to $200k in a city where a new build costs $400k.

“Was in Whistler last weekend for a few days. Did not see one US license plate.”

Not surprised. The affluent US citizens fly to YVR, and rent a car or otherwise get chauffeured up there. The not-so-affluent don’t have the money to visit Whistler. And Whistler isn’t exactly much of a tourist destination in the summer.

“Foreign buyers = 5-7%. Local buyers = 93-95%. Local sellers = 100%. Yeah, blame someone else. — Garth”

The Foreign buyers and local buyer stats are well sourced and verified but what about the local sellers = 100%? I do believe that there is some evidence of foreign selling in Vancouver as “Chinese” participants in the market (smartly) cash out, taking the speculators’ money and running.

#116 NoName on 06.14.16 at 1:04 am

#65 For those about to flop…

Topic
https://www.linkedin.com/pulse/dont-fooled-statistics-real-estate-prices-croatia-tom-thiele
(diferent country, diferent continent, same msg)

14% of Croatia’s GDP comes from tourism industry.

Off topic
The famous inventor Nikola Tesla was born in Croatia in the small village of Smiljan in the Lika Region.

Emperor Diocletian, who was the only Roman Emperor to ever retire, chose to do so in Split. Et tu, Brute? rings a bell?

The richest collection of remains of Neanderthal people in the world found on a single site was discovered in the small central Croatian town of Krapina. (that probably explains why i beehave way i do…)

The first torpedo was created by Ivan Lukic in Rijeka.

King’s Landing is in Croatia. Dubrovnik served as a double for the capital of Seven Kingdoms of Game of Thrones. Other filming locations include Split, Šibenik, Ston and Imotski.

The first mechanical pencil was patented by Slavoljub Penkala in Zagreb in early 1900s. He also invented a hot water bottle, a type of bluing detergent, a rail-car brake and an anode battery.

The necktie was invented by the Croats in the 17th century. In Croatia it is known as kravata.

Zadar is home to the most beautiful sunset in the world – at least according to Alfred Hitchcock. He said that “Zadar has the most beautiful sunset in the world, more beautiful than the one in Key West, Florida.”
https://flic.kr/p/ecaqH2

After Ireland, Croatia has the highest emigration rate in the world.

Vinkovci in eastern Croatia is the oldest city in Europe. People have been living there continuously for the past 8,000 years.
https://flic.kr/p/fA3rEr

It was a Croatian named Rudjer Boskovic who suggested placing five concentric iron bands on the dome of St. Peter’s when a crack had been discovered. His suggestion was adopted and saved Michelangelo’s work from being ruined.

Andrija Mohorovičić is best known for the eponymous Mohorovičić discontinuity and is considered as one of the founders of modern seismology.

Croatian writer Marko Marulić is credited with the first known use of the word psychology (in the title deeds Psichiologia de ratione animae Humanae), meaning the science of the soul.

Dalmatian breed of dog is from the region of Dalmatia in Croatia.
https://flic.kr/p/jp7nGY

The Croatian Sheepdog has lived in the fields of Slavonia for more than 600 years.
https://flic.kr/p/nFQxMB

Croatian citizens can start voting at the age of 16 provided they are employed. If not, they have to wait till they are 18.

Edison’s carbon filament light bulb sucked but that is not advertized, incandescent bulb as we know it was invented by Hungarian Sándor Just and Croatian Franjo Hanaman were granted a Hungarian patent (No. 34541) for a tungsten filament lamp that lasted longer and gave brighter light than the carbon filament..

#117 WUL on 06.14.16 at 1:20 am

I pine for the beaches of the Algarve and the iron tower Mr. Eiffel built in Lisboa which I last visited in 1982 (Topless Swedish ladies poolside too!). Eiffel tried to prove that towers could be built out of steel in Lisboa at the same time he built that hideous phallic erection in Paris.

I have to go with my beloved Iceland tomorrow against Portugal.

I will call in sick to work tomorrow to watch the game on the idiot box (cough, cough).

And, if those hooligans from England and Russia start a ruckus, us Icelanders will unload 16 tons of serious “Alberta Hockey Rules” on them and start throwing the dukes like a former Ontario Junior “B” hardrock blueliner.

Game on.

#118 Looney Baloney on 06.14.16 at 4:03 am

Foreign buyers = 5-7%. Local buyers = 93-95%. Local sellers = 100%. Yeah, blame someone else. — Garth

Probably. But it is the foreign buyers that set the tone for market prices with their endlessly deep pockets. When one foreign buyer shows up and offers 3,888,000 for a shack that should be worth less than a 10th of that, it distorts market price discovery and inevitably raises the prices of all current and future listings in the neighbourhood, forcing the locals, many of whom are non-speculators simply looking for a home, to take the hit. The rising tide lifts all boats.

The locals pay not only with insane debt levels through their mortgages, but by exorbant property taxes off which the local government profits handsomely, and is therefore incentivised to look the other way, failing to protect the citizenry they are elected to protect.

If and when the HAM dries up and market sentiment changes, the fallout from this gong show will be spectacular, a supernova possibly resulting in a black hole that might just take the Canadian economy with it. We live in interesting times indeed.

#119 JWD on 06.14.16 at 4:51 am

The sooner the better Garth. The local politicians need to be brushed aside. Word on the street is that many of them in YVR have multiple investment properties. It’s time to take some federal action to get everyone off the koolaid. A correction is long overdue.

#120 BillyBob on 06.14.16 at 5:01 am

Their newfess. The flag flyes high. What could go wrong. Newfees, the best thing I’ve observed about Canada and humans.

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

I THINK you mean Newfies…if so I agree completely. Except, I think Newfoundlanders may be the ONLY good thing about Canada.

Especially the females. Scots/Irish descendants, closest creatures I ever found to real-life Wildlings during my roams of the planet…

http://awoiaf.westeros.org/index.php/Free_folk

#121 Chance TB Rich on 06.14.16 at 5:30 am

““Canadian motorhome registrations collapsed 44.1% year/year in April, and have now tumbled 35.4% so far in 2016. “
Recreational vehicles might perhaps become the affordable option for housing.( Buy used, of course from kijiji at a huge discount) Just need a plot of land to stick them on. Try the prairies.”

Why the prairies? Why not Mexico?

A couple of years ago I went to work on one of those horrible macro plays and picked another winning stock……that Garth told me not to….too risky he says. Yeah maybe…for someone who couldn’t recognize opportunity if it bit them in the asss. I bought Ritchie Brothers stock sub $20 and now it’s $40’s. There will be plenty of cheap toys at auction before this is all over. Meanwhile I’m holding the RBA for obvious reasons.

#122 Mike in Toronto on 06.14.16 at 5:36 am

#104 Ole Doberman

I always thought this argument was weak.

It costs $400k to build a house because labour costs are high. Labour costs are high because we’re in a boom market. Take away the boom and suddenly it costs half as much.

Take away the $50k kitchen and $30k bathroom finishes, and the costs drop more.

Just try to get a contractor to do anything on your property. My back-of-the-napkin estimate: Cost of doing it yourself + the cost of taking time off work + the cost of taking time off work to go to school to learn how to do it properly. + the cost of the courses and a second round of materials because you screwed it up the first time + cost of all the tools + ~20%.

I was quoted $2k to replace a front door. Seriously. Isn’t foam core steel supposed to be *cheap*? These things come pre-manufactured with frames. I did it myself in a day for under $300 in tools and materials, and I don’t get paid $1700/day.

Even when you pay them that much, there’s no guarantee they’ll show up, you’ll probably lose a few days of work waiting around for them, they’ll do a crappy job and urinate in your dishes.

Most ridiculous part about the $2k quote was that the contractor bragged about his huge waterfront home.

#123 james on 06.14.16 at 7:53 am

Don’t commit hara-kiri, Smoking Idiot, we feel for you.

Poor guy, such a confusing week. The poor, stunted bigot can’t decide who he hates more – “femanazi” gays and “sjw’s” or Muslims.

It’s hard to fit any new ideas into such a small mind…..

#124 crowdedelevatorfartz on 06.14.16 at 8:08 am

@#92 S Burnaby
“Was in Whistler last weekend for a few days. Did not see one US license plate….”
+++++++++++++++++++++++++++++++++++

Perhaps due to the lack of snow? And its mid June?
Or the endless rain…….. like today?

#125 gut check on 06.14.16 at 8:31 am

@ #53 For those about to flop… on 06.13.16 at 7:56 pm

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

I’ll have to look into Arlene Foster – hadn’t heard of her before but I like that quote!

I’d also like to take this opportunity to correct my spelling of FEISTY, too. i before e except after c except in the eight exceptions.

cheers!

#126 Baloney on 06.14.16 at 8:38 am

Foreign buyers = 5-7%. Local buyers = 93-95%. Local sellers = 100%. Yeah, blame someone else. — Garth

There is no data yet you quote this !?!?

Lots of data has been presented on this site. — Garth

#127 Smoking Man on 06.14.16 at 8:42 am

Currency War On !!!!

The yield on the 10-year benchmark German bund fell into negative.

Yeah, Rates are going up……..Ba hahahahha

http://www.cnbc.com/2016/06/14/brexit-news-uncertainty-around-eu-vote-causing-volatility-in-markets.html

#128 20th Century Limited on 06.14.16 at 8:49 am

Garth –

Suppose the T2 gang follows through and deflates, to some degree, the overwrought YYZ and YVR markets. I’m assuming they just deflate these markets without destroying them – I don’t have a lot of confidence that they – or anybody – can get it ‘just right’. But supposing they do – prices level off, sellers start lining up &c. Isn’t it possible that first-time homebuyers will just buy on the dip? And send this whole thing back up again?

My view is that, until there is a sustained rise in interest rates, certainly more than just a half-point or so, that the temptation to borrow stupid amounts of money will remain. As you noted recently, Millennials view mortgage debt as ‘good debt’, so if it cost 3% rather than 2.5% like, what’s the big deal. You also said that Ms earn an everage of 75K annually – where you got that number I’d like to know!

#129 Bob on 06.14.16 at 8:52 am

BNN is having a segment later today about the meltdown in preferred shares. Should be interesting

Preferreds are up more than 13% since January. What meltdown? — Garth

#130 RP on 06.14.16 at 9:17 am

Check this out from the WSJ, time to buy in Canada
http://www.mansionglobal.com/articles/30056-in-canada-international-investors-find-luxury-for-less?link=TD_MG_headline_2

#131 };-) aka Devil's Advocate on 06.14.16 at 10:00 am

GOLD? Since departing that standard the value of gold has become much more subjective. Certainly still considered a “safe refuge” gold isn’t nearly so much so as it has been historically. Why? Because it isn’t so controllable as…

FIAT CURRENCY; Money as we know it today is a convenient medium of exchange. Money as we know it today is manipulable. Central banks can tighten or loosen the supply of fiat currency pretty much at their whim and fancy. Of course the printing such money represents debt. Debt is negative, in the red, borrowing against one’s future. As negative as debt might be historically thought of today “debt” is the economic lifeblood of our economy.

STOCKS and BONDS; Give the fruits of your labour to someone else to manage. How’s that working out for you today? Might as well go to…

VEGAS; Speculation, seems everywhere you turn there is a new “get rich quick” scheme. Speculations… gambling… that’s not…

INVESTING; is not a “get rich quick” scheme. Investing is work, using the fruits of your labour to fertilize future opportunities. For example; putting 25% down on the purchase of a revenue property stakes your claim to a part of the returns. They who fund the remaining 75% will be entitled to and expect a portion of those returns. Banks today are willing to do that for a relative pittance of what they once were. Of course that will change but for today banks can be an awesome business partner… or your worst enemy,,,

LAND; Everybody needs a safe shelter… EVERYBODY. That safe shelter requires a plot of land to place it upon. Land, they’re not making any more of it. The more strategically located the more valuable that land is. It is not the improvements upon the land (granite, stainless and hardwood) that appreciate in value it is the land under those improvements that appreciate.

In the past mere 100 of man’s long 200,000 year existence on this earth the body count has increased from 1 billion to over 7 billion. Is it any wonder prices have gone up and the relative supply of commodities diminished. Simple Supply and Demand.

Sure you can say but we can build up thus increasing the supply of housing. Yes, but that is aside my point as what that actually does is increase the value of the land below. And THAT is my point. With increasing populations in the face of limited supply what happens? Prices go up.

So why do you think we actually departed the Gold Standard anyway? Think about it…

Now, do you want to be a Landlord or a tenant?

Spoken like a true realtor. BTW, the preponderance of Canada is empty. — Garth

#132 Grantmi on 06.14.16 at 10:19 am

And looks like more sovereign bonds could be replaced with gold as a safe haven. JEFF CLARK from the monthly gold-investment newsletter from Doug Casey’s Casey Research is predicting!

With all these negative bond rates around the world getting worst and worst each day! Hmmmm. I wonder!

https://youtu.be/oDp-yBLybpA

#133 };-) aka Devil's Advocate on 06.14.16 at 10:20 am

#126 Baloney on 06.14.16 at 8:38 am

Foreign buyers = 5-7%. Local buyers = 93-95%. Local sellers = 100%. Yeah, blame someone else. — Garth

There is no data yet you quote this !?!?

Lots of data has been presented on this site. — Garth

So what’s driving YVR markets? Domestic? Hmmmm… ya right.

Been there, seen it, working it, living it. Talk to anyone in Vancouver and they will tell you what IT is.

THEY (The Premier the Mayor and others) are afraid to curtail IT because IT is fuelling the economy let alone IT is a political hot potato as THAT which is fuelling it is a dominant force (voice) on the political front.

Demographics… economics is the backstory of all history and demographics is the backstory of all economics.

#134 Tiger on 06.14.16 at 10:31 am

GARTH CAN U DO A BLOG POST ON THIS ?

https://www.youtube.com/watch?v=z78XE3p45E4

http://www.huffingtonpost.ca/2016/06/07/realtors-risque-approach-_n_10340370.html

#135 Cranky Investor on 06.14.16 at 10:35 am

Brexit will cause a big drop in the markets….but that will be a great buy opp imho. Hang on to your dingle berries…it’s going to be a wild summer. At the end of the day UK being part of the EU means nothing. Canada has no correlation to the UK markets…..Brexit is all socialist hype.

#136 For those about to flop... on 06.14.16 at 10:47 am

#125 gut check on 06.14.16 at 8:31 am
@ #53 For those about to flop… on 06.13.16 at 7:56 pm

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

I’ll have to look into Arlene Foster – hadn’t heard of her before but I like that quote!

I’d also like to take this opportunity to correct my spelling of FEISTY, too. i before e except after c except in the eight exceptions.

cheers!

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

Hey Gut Check , I was actually trying to quote your famous post when you were trying to point Bill Morneau in the right direction on how to stimulate the economy.

I guess I failed…

M41BC

#137 For those about to flop... on 06.14.16 at 10:59 am

#117 WUL on 06.14.16 at 1:20 am
I pine for the beaches of the Algarve and the iron tower Mr. Eiffel built in Lisboa which I last visited in 1982 (Topless Swedish ladies poolside too!). Eiffel tried to prove that towers could be built out of steel in Lisboa at the same time he built that hideous phallic erection in Paris.

I have to go with my beloved Iceland tomorrow against Portugal.

I will call in sick to work tomorrow to watch the game on the idiot box (cough, cough).

And, if those hooligans from England and Russia start a ruckus, us Icelanders will unload 16 tons of serious “Alberta Hockey Rules” on them and start throwing the dukes like a former Ontario Junior “B” hardrock blueliner.

Game on.

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

Yep ,today on the schedule we have Andrew Woburn and his steady Austria vs Bdwy Skrtn and his real estate hungry Hungary.

Then lifelong Icelandic fan WULLY fulfills his dream of seeing his team in a major tournament against Brazil Expats fancied Portugal.

Not to sure what is going to happen to the grease in Christiano Ronaldo’ s hair when it meets a wall of ice…

M41BC

#138 Teacher teacher on 06.14.16 at 11:01 am

#94 Smoking Man on 06.13.16 at 10:31 pm
My last post needs further examination.
Be a good widget and I’ll give you an A…..
The teachers goal, there to stupid to stupid to even know the work for the machine.
It’s about fitting into the community. A pat on the head for being a good boy.
That is the whole goal of modern mind fking. Be a loser amonst other losers.
Anyone who touches this head that don’t have a set of double ds is going down….
I played Jr hockey and I was the goon.
******************************************
Dear Smoking Goon,
I have to totally agree with you, you are a goon.
As an educator and an investor I will give you an A for effort only. Your continual histrionics to bash the current education system is rather blasé. While the educational system is not perfect by any stretch of the imagination it is what it is. As opposed to admonishing and lambasting it continually attempt to be beneficial and help to improve it. What astonishes all of us is that you have not self-imploded into a ball of revulsion while mired in an extremely profuse drunken rage during one of your moment’s sorties. If by any chance you were ever in one of my calculus classes I would have identified you immediately and attempted to save you. What I taught dear Smoking Goon was not subjective at all. Don’t try to show me 1+1 = 3 or any other antics. Math is a science that is unadulterated and unpretentious. Therefor in my teachings you both understood it and could navigate through complex problems or you failed to grasp it and it was perhaps beyond your comprehension. There was no agenda, no “mind fking” no setting you up work for the “machine” no “fitting into the community” my function was to be able to pass along information that would be useful in the field of study that the student pursued. Therefor Smoking Goon, you can thank the system for giving you safe infrastructure, electricity on the grid, medical devices that save your life, aircraft that ferry you to your Casinos, or perhaps the device that is in your hands now allowing you to rant at liberty. I was also a hockey player on the Varsity Blues and played in (Canadian Interuniversity Sport) in University. Perhaps not at your level being such a Jr Hockey star (BS) but let’s just say I can still skate and I have all of my teeth but you sir do not. One last thing, if you are such a wealthy and brilliant venture capitalist then go out and invest in a better smart phone so you may communicate properly with we earthlings! That diatribe above was atrocious even for an alien.

#139 For those about to flop... on 06.14.16 at 11:18 am

NoName at 116.

Thanks for doing your homework,you are a beauty.

Regarding sunsets I have been to Zadar and liked the place,like I did all of Croatia ,but the best sunset you are ever likely to see is on the Greek island of Santorini.

Amazing red hues over a caldera is pretty hard to top…

M41BC

#140 james on 06.14.16 at 11:18 am

A candidate for the highest elected office in the land doesn’t get to choose what goes in a newspaper,”

What a piece of work Trump is. He doesn’t think his own shit stinks and can stand anyone who doesn’t agree with his warped version of reality or truth. Wow, simply wow. If elected you could kiss freedom of speech goodbye America!

http://blogs.wsj.com/washwire/2016/06/13/donald-trump-revokes-washington-post-press-credentials/

#141 james on 06.14.16 at 11:22 am

Now I can say I really see the similarities between Trump and Kim Jung-Un. They both don’t like something they try to brush it aside.

http://economictimes.indiatimes.com/news/international/world-news/north-korea-shuts-down-pyongyang-model-village/articleshow/52742163.cms

#142 Shawn on 06.14.16 at 12:00 pm

Debt is Not Evil

Devils Advocate, just above, said:

“debt” is the economic lifeblood of our economy.

***************************************
Absolutely, true, credit (debt) is the grease of the economy and actually always has been.

New research agrees that debt existed since the first cave man said, “hey my hunt went bad today, while yours was good. Give me one of those rabbits you caught today and I will repay you with two when mu hunt goes good.”

Massive interest rates…

Or maybe there was no interest, one rabbit for one rabbit in a small cohesive village. But such debt and credit has existed as long as humans have existed.

A Barter economy without debt has in fact never been found as far as I understand from reading recent books on the topic.

All Hail debt and credit as the great grease of the economy. Of course debt can be abused. But to suggest all debt is bad would be simply wrong.

#143 real ladies don't sign/wear bras on 06.14.16 at 12:01 pm

Thanks Mr. Turner, I shall not forget my BRA again ;-)

#104 Ole Doberman on 06.13.16 at 11:29 pm

I would love to hear feedback on this too, both for new builds and renos; price per square foot; anyone? anyone?
I can’t get general info from any Calgary project managers, what gives?
( perhaps I should ‘forget’ to don my bra when chatting with these gentlemen)

I did find this Govt of AB chart that may be of help.

Please let us know what you find out Ole Doberman, cheers!

http://www.alberta.ca/estimated-residential-construction-cost.cfm

SF

#144 Ole Doberman on 06.14.16 at 12:16 pm

“If and when the HAM dries up and market sentiment changes, the fallout from this gong show will be spectacular, a supernova possibly resulting in a black hole that might just take the Canadian economy with it. We live in interesting times indeed.”

I wish this were true, but have a bad feeling HAM is unlimited and multiplying. And our government is happy to make back door deals.

You are obsessed. — Garth

#145 Ole Doberman on 06.14.16 at 12:18 pm

Foreign buyers = 5-7%. Local buyers = 93-95%. Local sellers = 100%. Yeah, blame someone else. — Garth
———————————————————–

The foreign buyer % could very easily be off, doesn’t take into account foreign money coming to local friends/family using the money to invest, or should I say “layer”, into the RE market – just the sad truth.

#146 family beagle on 06.14.16 at 12:19 pm

#131 };-) aka Devil’s Advocate on 06.14.16 at 10:00 am

I’m surrounded by 3600 acres of crown land with an unbroken ribbon of asphalt from YVR Main Terminal to my driveway. Two hours away, I get better weather than Vancouver. Nearest clinic: 10 minutes. Nearest town: 8 minutes. It’s all about choice. Paid 22 cents per sq ft for the land, and yes, I have wifi.

British Columbia, 4.3 people per sq km with fulltime search and rescue.

#147 Balmuto on 06.14.16 at 12:39 pm

Teranet HPI numbers out for May – up 1.8% MOM, up 9.0% YOY. Every single city in their 11-city index posted gains last month. No correction in sight.

#148 gut check on 06.14.16 at 12:56 pm

@ #136 For those about to flop… on 06.14.16 at 10:47 am
#125 gut check on 06.14.16 at 8:31 am
@ #53 For those about to flop… on 06.13.16 at 7:56 pm

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

I’ll have to look into Arlene Foster – hadn’t heard of her before but I like that quote!

I’d also like to take this opportunity to correct my spelling of FEISTY, too. i before e except after c except in the eight exceptions.

cheers!

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

Hey Gut Check , I was actually trying to quote your famous post when you were trying to point Bill Morneau in the right direction on how to stimulate the economy.

I guess I failed…

M41BC

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

oh.
ha ha!

Well, there’s your first mistake: you pay more attention to me than I do. ;)

#149 S.Bby on 06.14.16 at 12:59 pm

#124 crowdedelevatorfartz
Perhaps due to the lack of snow? And its mid June?
Or the endless rain…….. like today?

—————————————————
We had great weather while in Whistler. Sunny and hot.
And no Americans…
BTW: Whistler is as popular in the summer as it is in winter.

#150 Bob on 06.14.16 at 1:02 pm

http://www.bnn.ca/Video/player.aspx?vid=890889

Down 19% in 2015, up 13% this year. Do the math

#151 gut check on 06.14.16 at 1:03 pm

Math might be a subject which is “unadulterated and unpretentious” but I don’t think anyone could apply the same descriptors to Teacher Teacher.

and besides, Math is only as ‘unadulterated’ as the number system.

ever thought about Infinity? don’t try too hard, better men than we have gone insane doing so.

but nevermind me, Teacher Teacher. I’m just a university and college educated prize winner, artist, investor, philosopher and hell of a fun chick.

what could I possibly know that a calculus teacher doesn’t?

#152 conan on 06.14.16 at 1:14 pm

Serious beat down happening in post 138. How will Smoking Man respond? Who gives a poo about German bond rates….. the World awaits. The air has chilled and there is no need for air conditioning.

#153 maxx on 06.14.16 at 1:15 pm

Oh Canada!

http://www.imf.org/external/pubs/ft/scr/2016/cr16146.pdf

“….uncertainty about oil prices, challenges in
sustaining the global recovery, and elevated domestic vulnerabilities suggest risks to the outlook are tilted to the downside.”

“Tilted?” That’s some tilt! Makes it all sound like an easily reversible trend. With no more than a wave of ennui.
Apt descriptors have been bleached silly like a worn out pair of stone-washed jeans.

Read on, dawgies! There’s more! Unless of course, like me, you prefer mostly to simply keep your eyes open and your wits sharp.

#154 Ronaldo on 06.14.16 at 1:21 pm

#131 };-) aka Devil’s Advocate on 06.14.16 at 10:00 am

”LAND; Everybody needs a safe shelter… EVERYBODY. That safe shelter requires a plot of land to place it upon. Land, they’re not making any more of it.”

————————————————————
Here is something from The Vancouver Sun some time ago:

“While density has its challenges in terms of congestion, parking and noise, it is worth noting that the region is a virtual nature preserve by international standards. As of 2011, Metro Vancouver’s population per square kilometre totalled 802.

By contrast, Paris’ population per square km is nearly 3550 people, while the per-square km density in New Delhi is 11,300 people, and Manilla, 43,000.

Nothing like comparative data to put our challenges into proper perspective. [email protected]

We have a ways to go yet.

And who says they aren’t making land anymore? Check this out.

https://www.youtube.com/watch?v=0BXGh0EYJtE

You see DA, we have no shortage of land, we just have to relocate some of it is all, or we build upwards where this is no shortage of space.

#155 Barb on 06.14.16 at 1:22 pm

The RE/debt situation brings to mind Paul Simon’s brilliant lyrics: “The nearer your destination, the more you’re slip slidin’ away.”

#156 Keith in Calgary on 06.14.16 at 1:24 pm

“Land………….they’re not making any more of it”

LOL……..better check with the Chinese about the islands that they’re building in the South China Sea.

Having said that, last weekend I drove from Penticton to Calgary thru hundreds of kilometers on UNINHABITED RAW LAND…….ROFTLMAO !!

#157 A Canadian Abroad on 06.14.16 at 1:40 pm

#3 Market Crash “Thought today will be about stock market. on: to buy or to sell? or how long to wait to buy?”

Depends if you are an investor or a trader. If you are an investor, then you WANT the market to go down so you can buy at a SALE price for future appreciation. If you are a trader, you WANT the market to go up so you can sell at a profit.

I just purchased more Ticker: ATB203 today myself.

#158 Paul on 06.14.16 at 1:46 pm

Well at least we had indexed pensions.
Not so much.

https://www.sprottmoney.com/blog/the-pension-bubble-how-the-defaults-will-occur-peter-diekmeyer.html?utm_source=Sprott+Money+Newsletter&utm_campaign=cfebbb96e2-Sprott_Money_Journal_June_13_2016&utm_medium=email&utm_term=0_0a3cfde35b-cfebbb96e2-293682605&mc_cid=cfebbb96e2&mc_eid=ee83eababc

#159 A Canadian Abroad on 06.14.16 at 1:49 pm

#131 };-) aka Devil’s Advocate on 06.14.16 at 10:00 am “Now, do you want to be a Landlord or a tenant?”

After owning 3 homes in 2 counties, I say with conviction. I would rather be a Tenant!

– I can write if off the rent.
– I can move anytime, anywhere, any place I want.
– I can use what I would pay in full for a home and put it in the markets (+6% yr and I’m creating jobs)
– I don’t need to pay property taxes, Realtor fees to sell, maintenance, upkeep, improvements, pull weeds/mow, spend 3+ hours and $50+/wk in Home Depot, I easily move, I’m not dependent on a sale or the RE market to get my money out and best of all NO STRESS = lots of more years to live!

Yup, I would rather be a Tenant by a LONG shot. But I’d buy a home when that asset makes financial sense to own.

P.S. I’m pretty good with money, I’m a financial trader.

#160 WallOfWorry on 06.14.16 at 2:26 pm

I know that Bloomberg is no Ross Kay but I wonder what this suggests about the likelihood of two rate hikes this year? I also wonder what it means in terms of the how much further the real estate bubble could expand?

http://www.bloomberg.com/news/articles/2016-06-14/u-s-recession-odds-climb-to-55-as-yield-curve-flattens-chart

#161 BOOM! on 06.14.16 at 2:28 pm

While contemplating “things” this morning, I ran across an interesting thought.

In the 1920’s prior to the market topping out on easy credit, and low 10% margin requirements that ended in the big crash of 1929 and subsequent Great Depression…
(yes, there were many other factors here as well, trade, protectionism, lack of social safety nets etc) the ONE thing that does stand out… humans have a tendency to over-do on good things.

While market fundamentals were ignored, and everyone was focused on the ever rising prices, how could they not have seen the peril?

Today, we have a 50% margin requirement not the 10% one of yore, yet for real estate….. we let people buy with much less as a down payment? What happened to the usual and customary 20% for no borrowers insurance?

perhaps it is time to shut the door on self-destructive practices, and insist on a 20% down payment as a minimum across the board. The RE industry will bitch, the banking industry will bitch, even less prepared borrowers will bitch, but… to restore the health of all perhaps to risk the bitching, is a risk worth taking.

Now, do we have lawmakers will brass dads to pass the disabling legislation, or would we prefer to revisit 1929 in RE?

#162 BOOM! on 06.14.16 at 2:30 pm

“Brass dads” SHOULD Be “Brass NADS” thanks auto-correct.

Boom-

#163 Bill on 06.14.16 at 2:46 pm

A few worthy notes.
Money out of China and Russia looking for a home?
3 Trillion. There more fire power for RE then most think.
Stock markets? as I said 6 months ago will be a tough go and Europe looks real bad. The growth of the past is over…Its good for Gold.

We have WAY bigger problems out front for humanity.
WELL WORTH watch your future depends on it. If you have kids and want a future listen….A sane voice in an INSANE world.
https://www.youtube.com/watch?v=EbYMoUa9_BU

#164 Brazil ex-pat on 06.14.16 at 2:47 pm

#138 Teacher teacher on 06.14.16 at 11:01 am
#94 Smoking Man on 06.13.16 at 10:31 pm
My last post needs further examination.
Be a good widget and I’ll give you an A…..
The teachers goal, there to stupid to stupid to even know the work for the machine.
It’s about fitting into the community. A pat on the head for being a good boy.
That is the whole goal of modern mind fking. Be a loser amonst other losers.
Anyone who touches this head that don’t have a set of double ds is going down….
I played Jr hockey and I was the goon.
******************************************
Dear Smoking Goon,
I have to totally agree with you, you are a goon.
As an educator and an investor I will give you an A for effort only. Your continual histrionics to bash the current education system is rather blasé. While the educational system is not perfect by any stretch of the imagination it is what it is.

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

That lazy “ridiculous” cop out saying “It is what it is” IS the reason the education system is so poor in CanaDUHH right now.

When is the last time teachers went on strike to improve the education system? Never. You only go on strike for money, benefits and pensions. On the tax payer dime. Perks the average taxpayer never sees……

Teachers…..go on STRIKE to improve the system. Then you will get respect again.

#165 LL on 06.14.16 at 2:50 pm

…..and force bankers to eat more risk…..

Good luck!

#166 Mr. Frugal on 06.14.16 at 2:53 pm

#141 james on 06.14.16 at 11:22 am
Now I can say I really see the similarities between Trump and Kim Jung-Un. They both don’t like something they try to brush it aside.

http://economictimes.indiatimes.com/news/international/world-news/north-korea-shuts-down-pyongyang-model-village/articleshow/52742163.cms

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

Personally, I think Trump has the correct approach. I’m going to take your comments (which I don’t like because they are stupid) and brush them aside.

#167 For those about to flop... on 06.14.16 at 2:55 pm

Hey WULLY this is the list of Iceland players

I think the one that ends in ….son is going to be your best player.

Try to contain your tears during the national anthem…

M41BC

Date of birth (age) Caps Goals Club
1 GK Hannes Þór Halldórsson 28 April 1984 (age 32) 33 0 Norway Bodø/Glimt
12 GK Ögmundur Kristinsson 19 June 1989 (age 26) 11 0 Sweden Hammarby IF
13 GK Ingvar Jónsson 18 October 1989 (age 26) 5 0 Norway Sandefjord
2 DF Birkir Már Sævarsson 11 November 1984 (age 31) 57 1 Sweden Hammarby IF
3 DF Haukur Heiðar Hauksson 1 September 1991 (age 24) 7 0 Sweden AIK
4 DF Hjörtur Hermannsson 8 February 1995 (age 21) 3 0 Sweden IFK Göteborg
5 DF Sverrir Ingi Ingason 5 August 1993 (age 22) 6 2 Belgium Lokeren
6 DF Ragnar Sigurðsson 19 June 1986 (age 29) 56 1 Russia Krasnodar
14 DF Kári Árnason 13 October 1982 (age 33) 47 2 Sweden Malmö FF
19 DF Hörður Björgvin Magnússon 11 February 1993 (age 23) 5 0 Italy Cesena
23 DF Ari Freyr Skúlason 14 May 1987 (age 29) 38 0 Denmark OB
7 MF Jóhann Berg Guðmundsson 27 October 1990 (age 25) 47 5 England Charlton Athletic
8 MF Birkir Bjarnason 27 May 1988 (age 28) 47 6 Switzerland Basel
10 MF Gylfi Þór Sigurðsson 8 September 1989 (age 26) 39 13 Wales Swansea City
16 MF Rúnar Már Sigurjónsson 18 June 1990 (age 25) 11 1 Sweden GIF Sundsvall
17 MF Aron Gunnarsson 22 April 1989 (age 27) 59 2 Wales Cardiff City
18 MF Theódór Elmar Bjarnason 4 March 1987 (age 29) 27 0 Denmark AGF
20 MF Emil Hallfreðsson 29 June 1984 (age 31) 54 1 Italy Udinese
21 MF Arnór Ingvi Traustason 30 April 1993 (age 23) 7 3 Sweden IFK Norrköping
9 FW Kolbeinn Sigþórsson 14 March 1990 (age 26) 39 20 France Nantes
11 FW Alfreð Finnbogason 1 February 1989 (age 27) 34 8 Germany Augsburg
15 FW Jón Daði Böðvarsson 25 May 1992 (age 24) 21 1 Germany Kaiserslautern
22 FW Eiður Guðjohnsen 15 September 1978 (age 37)

#168 Toothless Measures on 06.14.16 at 3:00 pm

Two key points – this is a hot potato that no government wants to ‘own’ and RE is the economic generator at 25% GDP that no one wants to curb.

If you are hoping for some significant government intervention with a meaningful impact, then you really are desperate and waiting for that hail mary pass.

Should we recount the host of oh so productive government measures that only served to increase prices rather than cool the market including: the elimination of the 0 down/40 year mortgage; elimination of the 35 and 30 year mortgages; changed HELOC rules; new 5year qualification rules; changed bank capitalization requirements; and new down payment rules.

Each new cooling measure brought in by the government since 2010 has ‘amazingly’ resulted in increased prices.

If a new measure is brought in, expect the same pattern – tough talk, new measure brought in after a few months of warning, a massive spike in prices to ‘get in’ before the new measures take effect, and new all time highs reached. Or maybe this time it is different :)

Foreign capital will remain untouched and will continue to simply support and push prices higher. And all those communities sitting an laughing at the extreme prices in TO and Vancouver, thinking that they are immune, are just starting to witness the impact of domino prices.

Refugees from the big cities are invading the smaller ones and driving up prices to what locals view as ‘ridiculous.’ As more and more people cash out, or are driven out, their sense of a ‘fair price’ is different then locals as they have been conditioned with throwing an extra 100k or 200k on the table from their big city experiences.

So for those that could not understand those complaining about TO and YVR and said “you should just move, why stay” – you too may be asked that same question when you start complaining about prices increases in your smaller communities.

Oh, and all those renters can expect your rents to go up significantly. Its has been acknowledged here, and demonstrated elsewhere, rental demand increases in prices correct. So you get to enjoy increased rents as prices have been going up, and increased rents as prices go down and increased competition during both phases.

Your price to rent ratios will be swinging back in favour of buying as prices go down and rents go up. You will likely end up paying close to the value of the home for several years renting as you wait for any slow and sticky price melt. A 13 year bull run in Vancouver does not disappear in 1 year folks – try 7 or 10 before it becomes ‘affordable again’. Can you wait that long?

#169 Volatility on 06.14.16 at 3:04 pm

Its official, bond markets have signalled that a recession IS coming the USA.

German 10 year yields went negative today.

Brexit coming.

In hindsight, looks like Vancouver RE was the big winner! But what is causing these astronomical prices??

I’m joining the RE party. Buy Buy Buy!

#170 Mark on 06.14.16 at 3:13 pm

“The foreign buyer % could very easily be off, doesn’t take into account foreign money coming to local friends/family using the money to invest, or should I say “layer”, into the RE market – just the sad truth.”

If “foreign money” were a factor in the Vancouver RE market, leverage would be steady or falling. This is not the case. So we can safely discard the whole idea of “foreign money” driving the Vancouver RE market.

Basically what we’re left with is the sales mix (significantly shifted on account of the low-end activity dropping out, and delivery of new supply to market). And local speculators passing properties amongst themselves (sometimes called “assignment flipping”) to exaggerate transactional volume and to prop up quoted prices to hoodwink banks into extending more credit. “Chinese” may actually be sellers. The CBSA certainly thinks so, as their activity at YVR is largely focused on outbound currency movements to China, not inbound.

They who fund the remaining 75% will be entitled to and expect a portion of those returns. Banks today are willing to do that for a relative pittance of what they once were. Of course that will change but for today banks can be an awesome business partner… or your worst enemy

Very true. And increasingly the banks are tightening the noose by demanding higher spreads against their funding costs for the credit. Hence, the stagnating/falling RE market seen in Canada over the past few years. After all, banks have an option — they can either invest in RE, or they can invest in loans that are backed by RE. They generally choose the latter (although banks can and do own RE) on account of higher returns over the long term being seen in RE-backed debt, than in RE itself.

In other words, the time preference for money, over the long term, always works in favour of the lenders, and the borrowers pay a premium to borrow money in the present that they do not otherwise own.

#171 westcdn on 06.14.16 at 3:21 pm

Time for my 2 cents worth – random thoughts.

I had a boss who said to me “I dread seeing you because you are the only one that brings me bad news”. Well, someone had to tell him so he didn’t get blindsided – didn’t my career any good although I usually fixed the problem. I don’t see many good things down the road. I will not give up despite fear of the future.

Preferred shares, there is quite a variety of them and none are easy to understand. I began buying reset preferred several months ago because they were so heavily discounted. Even at the lower reset, I am getting 12% to 20% on some of the new resets. Generally though, I am conservative and quite happy with less. I may live in Calgary but I am not a cowboy. Most of the preferred money has gone into solid companies with little debt and large retained earnings or large common share interest relative to preferred share interest. I particularly like companies that do not pay dividends to the common shareholder but have to pay me so banks are out mainly because their preferred yields are crap. I may give up capital appreciation but I think these suckers will pay me a high yield as far as I can see. I do have to monitor the health of the companies but this is not day trading as there is lots of time to figure out what is coming down the pipe.

I often wonder why the superstars of yesterday’s financials become so average or worse after about 10 years – think Hedge and Mutual Funds. My theory is the more you understand markets – the less you are able to understand the irrationality of the herd and get trampled under their stampede. I don’t set market prices – the herd does. I think the managers of these funds become legends in their own mind and forget they are average humans too. Technical analysis on individual shares may be able to save you but at the end of the day, most are better in ETF’s where the market averages events unless you want to gamble. I prefer to gamble that my wits are sharp and I can keep my ego under control.

I look at this debate about a housing bubble. My solution – make the sale of a primary residence taxable of the net proceeds received at least say 10%. Sellers might get an exemption of 5% if they had declared rental income/loss. Now, once done – how do we get those foreigners to sell and lower prices?

I would recommend slacker taxes. You know, on the ones on those who do not work in Canada yet have nice properties. Well, just to be miserable, I would make property taxes dependent on the income taxes declared by the owners so that no public servant shall ever go into the cold. I still amazed by bureaucrats who believe we have a “revenue problem” rather than bureaucratic inefficiency – a personal basis. I do hope that when those public service pension benefits begin to bite that I am not around – sad but true.

#172 Mark on 06.14.16 at 3:23 pm

“What happened to the usual and customary 20% for no borrowers insurance?”

Its still there. In fact, the banks have such a dim view of credit-worthiness even for people who put more than 20% down that they end up purchasing CMHC subprime mortgage insurance for loans that are as much as 50% down.

So while it looks like “easy credit” from the point of view of an outsider, if you actually look at the numbers, the banks know that they’ve written a whole pile of trash loans at valuations that are likely unsustainable. Canadian bankers are smart in that respect.

The big elephant in the room is that as the loans increasingly start to become impaired and/or default, will the CMHC step up to pay on their obligations in full? At the moment, the answer is yes. But CMHC has such a paltry capital cushion that the answer may not always be “yes”. Just the rumour of this happening, the CMHC either saying “no”, or the government refusing to bail them out, could easily precipitate a systemic crisis in the Canadian banking system, and by extension, the Canadian economy.

Now where you do see uninsured subprime lending is in the provincially regulated institutions. Namely certain credit unions. This is quite scary because these institutions are not backed by meaningful federal deposit insurance, yet some of them are so large, at least in their local economies, to basically be systemically important. As I’ve written before, I think there will be lots of quid pro quos, backroom political dealings, forced takeovers by the big-5, etc., when the proverbial dung hits the fan in the not-so-distant future.

#173 Ronaldo on 06.14.16 at 3:27 pm

”Not to sure what is going to happen to the grease in Christiano Ronaldo’ s hair when it meets a wall of ice…

M41BC”
——————————————————

I will use this:

https://en.wikipedia.org/wiki/Sperm_oil

#174 For those about to flop... on 06.14.16 at 3:50 pm

Boss, I can’t help but notice you aren’t updating the comments during “game time”

Could it be that you are turning into a hardcore football fan and you fancy your team France to win the whole thing…

M41BC

#175 Smoking Man on 06.14.16 at 3:56 pm

#152 conan on 06.14.16 at 1:14 pm
Serious beat down happening in post 138. How will Smoking Man respond? Who gives a poo about German bond rates….. the World awaits. The air has chilled and there is no need for air conditioning.
…………………..

I didn’t even read it. You would think a teacher would know how to break up sentences. It’s to busy and ugly to read.

And he forgot to address me as Dr Smoking Man.

#176 Aggregator on 06.14.16 at 3:57 pm

#161 BOOM! – Today, we have a 50% margin requirement not the 10% one of yore

That's nonsense. There's more leverage offered today across financial assets then at any point of history.

#177 For those about to flop... on 06.14.16 at 4:06 pm

Hey Noname ,check out this huge rock that landed in this house in your land of Croatia…

M41BC

https://m.imgur.com/gallery/8zc8X

#178 BRAKING NEWS! on 06.14.16 at 4:16 pm

The term QE will be used by the FED tomorrow.

Put the brakes on the rates and inflate our way out.

Asset bubbles to the moon.

#179 Ole Doberman on 06.14.16 at 4:18 pm

Looks like Canadians can’t even afford condos anymore:

http://beta.bnn.ca/looking-to-condos-suburbs-for-an-affordable-home-think-again-report-suggests-1.507569

Well I guess RV’s and trail parks are next – thank you our beloved politicians!

#180 bdwy sktrn on 06.14.16 at 4:36 pm

HUUUUUUUNGARY ALL THE WAY – woohoo!

take that austria! 2:0

Rubik’s Cube
The famous logic-toy was invented by a Hungarian engineer, Ernő Rubik. Mr. Rubik originally named the toy as Magic Cube. Hint: the colour of a side is determined by the colour of the centre-cube of that side

#181 Lee on 06.14.16 at 4:50 pm

#179,

Condos in Toronto that are at least 1,000 sft and have 2 parking spaces (needed to live a normal life) and in a decent area start at $700,000. With double LTT it’s $721,000. With CMHC you’re pushing $750,000. Try to find something cheaper that’s not in Weston.

#182 conan on 06.14.16 at 4:50 pm

RE: #161 BOOM! on 06.14.16 at 2:28 pm

Not a bad idea at all…. what do we do about the shadow lenders though, those that will lend the down payment? Speaking of them…. what is the source of their lending funds? I do not want to own any of it nor have any of my clients own it.
Garth do you know?

#183 Nemesis on 06.14.16 at 4:57 pm

#FinancialSeppuku,Or… #LessonsInPoliticalEconomy… #ACautionaryTaleOf… #StatusIncomeDisequilibrium…

[Atlantic] – The Secret Shame of Middle-Class Americans: Nearly half of Americans would have trouble finding $400 to pay for an emergency. I’m one of them.

…”I don’t ask for or expect any sympathy. I am responsible for my quagmire—no one else. I didn’t get gulled into overextending myself by unscrupulous credit merchants. Basically, I screwed up, royally. I lived beyond my means, primarily because my means kept dwindling. I didn’t take the actions I should have taken, like selling my house and downsizing, though selling might not have covered what I owed on my mortgage. And let me be clear that I am not crying over my plight. I have it a lot better than many, probably most, Americans—which is my point. Maybe we all screwed up. Maybe the 47 percent of American adults who would have trouble with a $400 emergency should have done things differently and more rationally. Maybe we all lived more grandly than we should have. But I doubt that brushstroke should be applied so broadly. Many middle-class wage earners are victims of the economy, and, perhaps, of that great, glowing, irresistible American promise that has been drummed into our heads since birth: Just work hard and you can have it all.”…

http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/#article-comments

#184 Ronaldo on 06.14.16 at 5:07 pm

http://www.jessbaxter.com/r2080230-153-w-19th-avenue

Here’s a good example of what’s happening in the Mt. Pleasant area of bubbly Vancouver. The house at 153 West 19th Avenue was listed for sale in July of 2012 for 1.039 million. It was listed again on Sep. 23, 2013 for 1.788 million and sold Dec. 14, 2014 for 1.630 million.
It was assessed at 1.537 million in July 2014.
It was assessed at 1.854 million in July 2015.

It is back on the market for 2.880 million. A cool 1 million over the assessed value. Open house is on Saturday and I am willing to bet that it will go for over 3 million. Totally nutso.

#185 conan on 06.14.16 at 5:07 pm

RE: #177 For those about to flop… on 06.14.16 at 4:06 pm

That rock is blowing my mind. The physics alone should have plowed that boulder right through the wall. For it to be perched like that………..shit……wow.
Who built that house? The Count of Celje?

#186 For those about to flop... on 06.14.16 at 5:17 pm

#180 bdwy sktrn on 06.14.16 at 4:36 pm
HUUUUUUUNGARY ALL THE WAY – woohoo!

take that austria! 2:0

Rubik’s Cube
The famous logic-toy was invented by a Hungarian engineer, Ernő Rubik. Mr. Rubik originally named the toy as Magic Cube. Hint: the colour of a side is determined by the colour of the centre-cube of that side

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

Yes congrats on your teams big win and commiserations to Andrew Woburns team Austria.

Also good work on your cultural fact for your assigned country Hungary.

I’m sure Crowdedelevator would have taken some joy out of watching Portugal drop points to a team the were supposed to beat in WULLYs Iceland.

That is the end of the first round we now go back to the start…each team will play at least 3 games.

As I said the tournament goes for a month and during this time we will have Brexit,Janet Yellen trying to find away to stop sitting on her hands and the Metrosexual Messiah trying to use Joking Mans shower faucet to pour just the right amount of cold water on the housing market.

Still waiting to see if Joking Man and his team Ireland has worked out if he is a genius or a Guinness…

M41BC

#187 Mark on 06.14.16 at 5:41 pm

“Oh, and all those renters can expect your rents to go up significantly. Its has been acknowledged here, and demonstrated elsewhere, rental demand increases in prices correct.”

Doubtful. Falling prices truncate incomes. Less income chasing the same pool of housing (including rentals) means stagnant, if not falling rents. Rental supply will explode with falling prices as people attempt to reduce their consumption of RE and rent out their surplus. Rents will only start rising once prices have been suppressed beneath depreciated replacement cost for an extended period.

“A 13 year bull run in Vancouver does not disappear in 1 year folks – try 7 or 10 before it becomes ‘affordable again’. Can you wait that long?”

Well even if someone waits, say, 5 years, that’s likely to give them a dramatically better deal than what’s seen today (3 years of stagnation). Chances are, their assets and savings, not invested in the housing market, will have grown.

The example I like to give is that of Toronto in the 1990s. Someone who, in 1990-1991, took their housing down-payment (25%), and invested it in the TSE TIPS ETF, at the time, had enough in their investment account to buy a house by the end of the decade, outright, in cash. Their counterpart who went and bought the house in 1990 spent a decade making payments with little to nothing to show for it.

With the contemporary bubble so much larger, and its deflation likely to be far more vigorous, owners of inversely correlated assets may very well be able to do far better than just picking up a house a decade from now for their mere downpayment funds invested today.

#188 For those about to flop... on 06.14.16 at 5:44 pm

#173 Ronaldo on 06.14.16 at 3:27 pm
”Not to sure what is going to happen to the grease in Christiano Ronaldo’ s hair when it meets a wall of ice…

M41BC”
——————————————————

I will use this:

https://en.wikipedia.org/wiki/Sperm_oil

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

Hey Ronnie, we still have one piece of business that we need to wrap up and put a bow on.

After getting sidetracked with the whole BB thing I never got around to offering my condolences for your friend that passed away that made you upset a couple of weeks back.
Sorry for your loss.

Also, I have the memory of an elephant and I remember when I first joined the blog yourself ,HD and a person named Nattie helped me out a lot and answer my questions when I was plotting the downfall of my TFSA.

We are a family here and families don’t always get on.

I’m proud to call you a blog buddy..

M41BC

#189 Bill on 06.14.16 at 5:48 pm

#156 Keith in Calgary on 06.14.16 at 1:24 pm

Location Location Location
Alot of BC is useless

#190 Bill on 06.14.16 at 6:30 pm

Ohoh

https://youtu.be/9YeAVr4Q0TU

#191 Ronaldo on 06.14.16 at 7:08 pm

#188 For those about to flop… on 06.14.16 at 5:44 pm

It’s all good flop, it’s all good. Thanks for the kind words. Life is precious. Take care.

#192 White Crock BC on 06.14.16 at 8:57 pm

BTW, the preponderance of Canada is empty. — Garth

And, uninhabitable. Too far from the US border.

#193 Realist on 06.15.16 at 12:55 pm

Prices will not go down. There is too much demand for Canada’s free heathcare system and social system. And there are 7 billion people in the world.