Enough

ANIMALS modified

Hot on the heels of being flamed on the CBC and Tweeted to within an inch of my virile life, Global TV in BC got in touch to ask for a Skyping, “on your latest blog entry about real estate in Vancouver.” You might recall this was a day or so ago when I said, simply, “get out.”

Now the Huffington Post wants to run the same posting, word-for-word. Maybe I’ll be blessed with one of those little fuzzy pictures that makes an author look like they work for HuffPost, which nobody really does. They’re all robots. With condos.

Things are actually getting scarier by the day. Media interest in the story of a potential housing flame-out (especially in Vancouver) is one of the distinct signposts on the path to perdition. Of course, by the time most people learn something from the MSM, it ain’t news any more. It’s already happened. Which is why I said earlier this week that – if you need the money, do not wish to lose an unearned windfall gain or are swimming in housing debt – you should get out. It’s time.

Look at the situation since then. On Tuesday, as my cisgendered, misogynist butt was being flamed and I was handing out patronizing warnings to horny moisters, some shocking data was released. In July of 2005 a total of 11% of the detached houses in Vancouver were assessed at over a million bucks. This July that proportion has bloated to 91%. Yikes. In the past 12 months prices have increased 38% on the west side and 26% on the east (where the poor people live). Now Royal LePage has thrown more gas on the fire, saying the average price for a two-storey deteched house in YVR has (according to its realtors) swollen to $2.36 million, up 30.7% in a year.

Two point three million, by the way, is 34 times more than the average income in Vancouver. Let’s compare that to the GTA, where 300% more people live, incomes are higher, there’s an actual economy, The average detached two-story house here costs $975,937 – a 42% reduction from Delusia, yet still the second-hottest property market in the country with the same low mortgage rates and restricted supply of available listings.

Speaking of LePage, the company just can’t help itself. Despite a weakened economy, job losses, oil prices, big bank alarm at house prices, YVR market cracks and galloping debt levels, the house-pumpers say real estate will values will surge 12% this year, nationally. Yep, more gas on the fire. Brexit plus “economic and social disruptions… rocking the world… introducing new risks” will keep interest rates low, the company forecasts, which means “not even a mild correction” in the GTA or the Lower Mainland in 2016.

The message, of course, is designed for Royal LePage agents who need a constant supply of dewy-eyed virginal buyers to keep this party going. It’s also aimed at the moisters themselves, intended to add some further FOMO to the stress they’re already feeling from peers and misguided relatives urging them to “stop throwing their money away on rent” and instead pickle themselves in debt while crawling under far larger home ownership costs.

Now to his credit, LePage boss Phil Soper is saying some of the things that a responsible CEO should utter: “You have severe affordability issues in Vancouver. It has become a serious public-policy issue, so it’s not healthy. We’ve got a market in Vancouver that is appreciating too quickly. Prices are moving upward at an irrational rate.”

Irrational and unsustainable, which diddling from the province and the city of Van will do nothing to alleviate. Cracking down on realtors and taxing people extra who don’t use their properties is beyond lame. And ineffective. All it takes to wipe away the small benefit is one media release from LePage or Re/Max, telling the kids they can make 12%, no worries, in a year, and the heat’s back on. More fear. More Bank of Mom. More tears ahead.

There’s nothing to add to the points made here this week. No, I’m not Skyping with the anchorettes at Global. The CBC can get along without me. No more fights with kidults who so mysteriously wish to coat their youth with debt and obligation. We’re in cult mode now. Debate is impossible. After all, 91% of people with houses in Van think they’re millionaires. Given what’s coming, I hope they kept their Costco cards.

172 comments ↓

#1 C on 07.13.16 at 5:49 pm

“More recently, the CRA has been actively monitoring and auditing real estate transactions in British Columbia,” she said.
“For the year ending March 31, 2016, the CRA completed 2,203 files [in BC and Ontario] related to real estate,” she said.
In addition to the 50 redeployed income auditors, the leaked briefing says CRA is assigning 20 GST auditors and 15 other staff to the real estate project in BC.”

http://www.scmp.com/news/world/united-states-canada/article/1989586/leak-reveals-secret-tax-crackdown-foreign-money-real

#2 Nemesis on 07.13.16 at 5:55 pm

“Cracking down on realtors and taxing people extra who don’t use their properties is beyond lame. And ineffective.” – HonGT

#Surprise!,Or… #LameIsSoYesterday&… #IsThatYourWalletOrAreYouJustHappyToSeeMe?…

[SCMP] – Leak reveals secret tax crackdown on foreign-money real estate deals in Vancouver: Classified briefing for CRA auditors outlines strategy to tackle suspected tax cheats who do not report global income or who ‘flip’ homes – but reveals that last year, there was only one successful audit of global income for all of BC

…”A secret strategy briefing for Canada Revenue Agency auditors has revealed plans to crack down on real estate tax cheats in Vancouver, with 50 auditors being assigned to investigate purchases funded by unreported foreign income.

Presentation notes for the seminar, delivered to auditors on June 2 and leaked to the South China Morning Post, show that only one successful audit of worldwide income was conducted in British Columbia in the past year, in spite of Vancouver’s reputation as a hotspot for immigrant “astronaut families” whose breadwinners often work in mainland China and Hong Kong.

The plans, which come amid a furore over the role of Chinese money in Vancouver’s runaway housing market, were provided by a Canada Revenue Agency employee who attended the June 2 briefing. The briefing is identified as a “protected B” classified document on the cover.”…

http://www.scmp.com/news/world/united-states-canada/article/1989586/leak-reveals-secret-tax-crackdown-foreign-money-real?utm_source=&utm_medium=&utm_campaign=SCMPSocialNewsfeed

#3 Doug t on 07.13.16 at 6:03 pm

Get the neck braces out cause there’s gonna be some cases of whiplash

#4 common sense on 07.13.16 at 6:04 pm

91%

Ninety one percent.

Either way, that number is just. plain. scary.

WOW.

#5 KarL on 07.13.16 at 6:14 pm

The way you write makes me believe it is going to happen tomorrow..but it never does……

#6 Brian Ripley on 07.13.16 at 6:14 pm

I just updated my employment rate chart:
http://www.chpc.biz/earnings-employment.html#Rate

Calgary and Alberta employment rates are continuing their arc to the downside (down 5.7% and 3.6% Y/Y)… they peaked in 2008 !

Meanwhile the relationship to the FIRE sector has Vancouver and Toronto employment rates still showing momentum to the upside (up 4.7% and 0.5% Y/Y)

Vancouver’s unemployment rate is only 5.3% (Toronto’s is 6.8% and Calgary’s is 8.8%)

Make hay while the sun shines.

#7 pathcontrolmonk on 07.13.16 at 6:15 pm

Quote from CRA source, “The vast majority of these [undeclared global income] cases, involving high real estate values, involve mainland Chinese…”

What source? CRA does not make comments of that nature. — Garth

#8 Life among the Stars on 07.13.16 at 6:15 pm

Hey crowdedelevatorfartz

Is this you organizing this!!

http://news.nationalpost.com/news/world/a-real-gas-activists-plan-to-eat-beans-and-hold-fart-in-for-clintons-speech-at-democratic-convention

#9 Paully from Montreal on 07.13.16 at 6:16 pm

Hi Garth,

I, once again, would like to thank you for your continual blog and advice. My girlfriend and I are moving to a rental the first of August (she’s selling her condo). We are financially strong and learning more each day about investing.
Thank you so much for everything!
If ever you land at the Dorval airport and need a place to stay or would like to grab a beer, or need a lift anywhere just email me!
Thank you!!!

#10 Joe on 07.13.16 at 6:18 pm

Garth your opinion on this study?
http://www.sfu.ca/content/dam/sfu/mpp/pdfs/Vancouver%27s%20Housing%20Affordability%20Crisis%20Report%202016%20Final%20Version.pdf

#11 Chopper Dude on 07.13.16 at 6:27 pm

When I sold my house in the Fraser valley two months ago, the people were lining up for the open house and I got 100k over ask. The neighbour across the street saw this and figured ya…maybe time to sell.

Listed and…. crickets….

Then ONE greater fool came along and offered full price and neighbour grabbed it.

Oh ya… the brakes are slamming on this puppy….

#12 TRUMP on 07.13.16 at 6:30 pm

I would like to make you very R-I-C-H from a housing bubble bust coming your way.

It is going to be painful for many, but for a few of us it will feel like utopia.

Will you all join me?

#13 crowdedelevatorfartz on 07.13.16 at 6:32 pm

@#8 Life amoung the Stars

Nope . Not me but I like the way you think……It could possibly be THIS group of people..Some of the most prolific “bean eaters” and coffee swillers ……on the planet….

http://www.google.ca/url?url=http://flavorsofbrazil.blogspot.com/2011/08/what-do-brazilians-eat-most.html&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwji6bvjvvHNAhVU8GMKHR7rBAkQFggnMAM&usg=AFQjCNG3sBdrmyB6EGbwd6e4lfYqZgiZAw

The real reason Brazil Expat left Canada….a flatulent stigma free society……

#14 pete on 07.13.16 at 6:33 pm

Another repercussion of the fires in Fort McMurray is that their housing bubble collapse didn’t get to happen. Houses were destroyed instead of being listed into a dead market. Had the people witnessed the inevitable collapse, which would have occurred fairly soon, the panic selling contagion might well have swept across the country. It would then have been obvious that prices won’t continue to rise forever regardless of other factors.

#15 Corban on 07.13.16 at 6:34 pm

Costco is only worth it for the hot dogs.

#16 crossbordershopper on 07.13.16 at 6:34 pm

i think many of us wish we lived in vancouver, all we had to do was sell our million dollar home and go to cuba, my friend lives on 1500 a month like a kind, not a worry in the world, he doesnt have a million, he has nothing, why a person would not simply pack it in and go with a suitcase full of cash, and collect a small pension from the goverment because stuff costs nothing there.
im going in august, and opening it up to anyone who wants to come with me, $20000 usd condo’s , sun year round, and as long as you mind your own business, you will never know its a semi comi country

#17 Van Isle Renter on 07.13.16 at 6:37 pm

I think it is hilarious that Van millenials think that because they have a million dollars in debt they’re now millionaires. They also probably think that LNG plants will be built in Kitimat, Hillary is innocent and CO2 is the sole driver of climate change.

Putzes.

#18 For those about to flop... on 07.13.16 at 6:37 pm

Hey Common,this is one of the 91%.

I posted this the other day, l know Ace Goodheart checked it out and we had the similar views on things.

People will say the value is land ,but why not just bulldoze it and add the cost of that to the list price?

One of the reasons is there are idiots out there that want to save every house and will pay developer prices to live in these hellholes.

“Gotta get my foot in the door”,they say.

No buddy,I’m gonna rip the door off its hinges and bang you over the head with it…

http://www.rew.ca/properties/R2089613/5009-somerville-street-vancouver

#19 Brazil ex-pat on 07.13.16 at 6:38 pm

Nothing will change until prices get back under a million dollars.

#20 MF on 07.13.16 at 6:42 pm

#258 rjrt81 on 07.13.16 at 2:32 pm

Lol I’m 33, not some “dinosaur”. What did my comment have to do with telling women what to do with their lives?

Have you spoken to any 33 year old women in your life? How old are you? Do me a favour. Go talk to any 30 year old woman outside and you will hear that having kids is becoming a high priority for most. A lot of them saw the boomer women get older and wait until it was too late. The push is for younger families now.

The reality is Many of these women have spent the last ten years studying and “building careers”, and now when they have to find a suitable mate it is more difficult. It’s also more difficult having kids as women get older. That’s 1 million years of evolution that will never change.

The other part of my post addressed the fact that a lot of women do not know what it means to be feminine anymore. Feminine women are what the vast majority of men are
Looking for. Again, go argue with millions of years of evolution if you disagree.

MF

#21 Ronaldo on 07.13.16 at 6:42 pm

Garth, listened to your CBC interview. Good job. Keep the heat on.

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

#22 MF on 07.13.16 at 6:47 pm

#268 NoName on 07.13.16 at 3:32 pm

When i have a daughter she will be loved unconditionally. Her mom, probably my loving gf, will provide a model for how to be a woman. That’s called parenting.

MF

#23 Randy on 07.13.16 at 6:47 pm

Bill Tufts @BillTufts
Canada has 40,000 Revenue Canada tax collectors but only 20,000 in Armed Forces.

…..cause we are Peacekeepers ?

#24 Long Branch Apprentice on 07.13.16 at 6:47 pm

Math is hard.

It’s far easier to listen to those around you who parrot the usual lines about how they’re not making any more land, you don’t want to pay someone else’s mortgage, you’ll never build equity renting, blah blah blah.

Come to think of it, thinking is hard too.

#25 Ronaldo on 07.13.16 at 6:48 pm

#3 Doug t on 07.13.16 at 6:03 pm

” Get the neck braces out cause there’s gonna be some cases of whiplash”

You got that right Doug. When that roller coaster starts heading down it’s going to be one heck of a ride. We’ve seen it a few times in the past. Only thing different this time is it’s much much worse.

#26 Briana on 07.13.16 at 6:48 pm

Apparently folks in Ontario see the housing market getting a lot stronger

https://www.thestar.com/business/2016/07/13/ontarians-see-real-estate-market-getting-stronger.html

I’m with Garth…..Get out!

This is a blip before a significant and long lasting dip…classic bubble unfolding here… Blip before the dip… And Vancouver is quickly starting to see downturn cracks that will quickly affectToronto market…..FOMO (fear of missing out) and herd mentality is quickly turning into POMO… ” pleasure of missing out.”

Who wants to be saddled with huge debt for 25 to 30 years when we are definitely in for a bursting bubble.

Better to invest, buy some popcorn, and wait for the show to begin. Take some trips and have a good quality of life than worry about living paycheque to paycheque or being in mega debt for prime years of life!!!

People have lost it buying real estate at these prices.

#27 Frank on 07.13.16 at 6:49 pm

Brian, you collect so much data and spend so much effort but your presentation sucks. Your charts are so busy they look like the product of a schizophrenic hobo. If you send me stuff, I’ll help you make something that others actually want to read.

#28 Say What? on 07.13.16 at 6:54 pm

People talk derisively about the insane realtor predictions of massive yearly RE price appreciation. Yet, they’ve been right the last few years. Maybe they do know what they’re talking about!

#29 paulo on 07.13.16 at 6:56 pm

well Garth put your hard hat on and your ear plugs in, the old saying you can lead a horse to water but you can not make it drink applies here. i also read the royal le Page press release, quite frankly had to wounder what the author is smoking. a interesting story on how savy real estate agents are playing up the ponzi game recently:
i live in a town house complex about 75k north of the big smoke near a lake, have rented for quite a few years now, but keep a eye on whats going on, this is a quiet working class complex basic decent digs the units are about 40 years old and are 900 to 1075 sq ft 3or4 brs
the units typically rent in the 1200-1300 range for 3 br 1400 to 1500 for 4 br prices are very stable i sold my unit 7 years ago to my landlord for 148K the most recent sale was 156K after adjustments the vendor -paying off the rental furnace and central ac unit.otherwise the the unit also had recent updates to kitchen and baths and was clean and well maintained a good clean resale with recent high eff furnace and air the complex has a internet site for residents
enter the property pimp: a curious question on the project site asking what average rents are- some fool claiming they are paying 1600/mo ++ ? than a listing for a stranded 3 bed room unit no significant updates with the listing being “Held Off” the mls and indicating multiple offers expected with a selling price between 199-249? what a pitch and piece of cleaver marketing apparently this agent hopes to snag some greater fool and get it sold for 40 to 80k above average fair market value or 28 to 37% over last sale within 60 days and long established trend, i will keep a eye on this and post the results, it will be interesting to see what bank buys this dubious deal if done, the moral of the story Caviate Emptor : buyer beware
sound familiar? remember the water taxi to condo story a few days ago.
what a crazy market, well im taking the wife out to a nice dinner, most of our friends are house poor and
and pickled in debt over it, have to budget a trip to micky d’s not for me signed the greater fool

#30 understood by few on 07.13.16 at 6:58 pm

#10 Joe on 07.13.16 at 6:18 pm
Garth your opinion on this study?

(link posted here many times already)
——————————–

Really want Garth’s opinion? Learn to use a search engine. Here’s a hint, look up “The Quandary”.

#31 S.Bby on 07.13.16 at 6:59 pm

Folks see and hear what they want to see and hear. If they are told differently, they go into defensive mode.

#32 ronh on 07.13.16 at 7:04 pm

The forecast calls for pain….Robert Cray

#33 Barb Mitchell on 07.13.16 at 7:07 pm

Sheesh, the CBC (did you mean to say they can get along WITHOUT you?).
Then Global, and HuffPost.
Yawn.

I read you every day, and enjoyed the last few posts…

#34 For those about to flop... on 07.13.16 at 7:14 pm

#20 Randy on 07.13.16 at 6:47 pm
Bill Tufts @BillTufts
Canada has 40,000 Revenue Canada tax collectors but only 20,000 in Armed Forces.

…..cause we are Peacekeepers ?

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

Armed Forces….Peacekeepers

Revenue Canada…Piecekeepers…

M42BC

#35 not 1st on 07.13.16 at 7:16 pm

All of Garth’s patience is saved for his blog dogs. Sorry Susan.

#36 F.dover on 07.13.16 at 7:16 pm

The blogger at Ponzi World.com, says that they never ring a bell at the top.

Got a bell Garth?

#37 common sense on 07.13.16 at 7:20 pm

#18 Flopinski

That house is about 1.04 Million over priced compared to that house where I live AND that is considering the Torontoianites who are now heading down to the Niagara Peninsula in droves bringing prices Up about 20% over last year.

Where would you rather be for the price? Just got out of the Niagara River after enjoying a nice cool dip in 21C water on this 31C evening…

Debt free, mortgage free….priceless.

#38 pathcontrolmonk on 07.13.16 at 7:24 pm

What source? CRA does not make comments of that nature. — Garth

The author’s source in the SCMP article wasn’t named, but he did provide a copy of the briefing. Read the article and shoot him an email [email protected] , I am sure he would be glad to hear from you!

#39 conan on 07.13.16 at 7:31 pm

You picked a good time to get flamed out. The Tenor stole your spot light and the grief.

It takes a certain amount of skill to be that lucky. Teflon skills. Maybe you should go into politics.

#40 burnabysouthgardener on 07.13.16 at 7:32 pm

All right blog dogs, facing the rent vs buy question. I have found a unit for sale in the same area we are looking at renting, that is similar in location, and size. Would it make more sense to buy given these numbers ? Note, rents in this area of BC are going up by 20 % p/a. I know this as I have a pdf of the previous rental listing. If we are looking at an annual rent of $29,400, Unit for sale is listed at $ 938,000. Taxes are $ 3,348 p/a, condo fees are $ 3912 p/a. Assuming we paid cash, would it make more sense to rent or to buy?

#41 Smoking Man on 07.13.16 at 7:36 pm

FOMO is the leading cause of debt in Canada.

#42 Wack on 07.13.16 at 7:39 pm

BC gov is receiving an incredible windfall in “property purchase tax” they are not going to try to slow this train down! Every other industry in BC is flat!

#43 Dispatches from Under the Bridge on 07.13.16 at 7:42 pm

“What source? CRA does not make comments of that nature. — Garth”

The internet, where else?

By the way what was that exchange in Goodfellas? Come on I was just bustin’ his balls I never disrespected him.

A little bit. You did a little bit. Dinero’s character replies.

#44 Brazil ex-pat on 07.13.16 at 7:44 pm

DELETED

#45 LovethisBlog on 07.13.16 at 7:45 pm

http://globalnews.ca/news/2821697/mosaic-lays-off-350-employees-colonsay-sask-potash-mine/?sf30855275=1

Trouble all around. Brace yourself

#46 Frank on 07.13.16 at 7:46 pm

Look at apartment rentals in Vancouver. Buying prices much higher. Maybe 10% with a conventional mortgage.

Prices will never fall below rental prices unless people can’t qualify for mortgages. so without an interest rate shock (we now all agree that’s a long ways off) or job crash (what’s going to kill jobs in Vancouver? Mining is recovering, tech and film are based off a strong us economy, not Canadian one). So while it’s clear to see what oil is doing to Calgary, there’s nothing on the horizon to crash Vancouver.

When I can find myself a rental I’ll know there’s a chance things can change but right now, supply trails demand.

#47 not 1st on 07.13.16 at 7:46 pm

Garth, after the CBC drubbing, I thought for sure you would take a day off of RE and write about the 2 trillion returned to the equity market after the Brexit (non) event.

Good reminder: I said Brexit would pass for investors and 1%ers (it did) and be misery for Britons (it will). — Garth

#48 prunedollars on 07.13.16 at 7:46 pm

#40 Burnabysouthgardener

$2450/mo rent vs $938K purchase? Cash deal? I hope you aren’t serious and are trolling to get me worked up because it worked.

Save the cash, 5% return in the market would yield you twice the rent, effectively living for free.

Assuming a mortgage on it, you’d need $70K down, and $4250/month. OR you can live there for $2K/month less, AND keep your $70K.

What the hell do I care do what you want.

#49 Damifino on 07.13.16 at 7:49 pm

I just had occasion to take long walk on Broadway in YVR today. Construction is beyond booming. It’s absolutely everywhere with no letup in sight.

I saw the mayor of Victoria on Global TV last night lamenting that their current building boom was being curtailed by a shortage of construction workers.

Is this all really being fueled by ultra cheap money and massive debt? I suppose so. But money is still cheap and apparently will be for a long time yet. Plus, nobody seems to have the slightest apprehension about debt.

Party on.

#50 Michael King on 07.13.16 at 7:54 pm

Here in Vancouver the “For Sale” signs are popping up like weeds.

#51 Nero on 07.13.16 at 7:56 pm

DELETED

#52 Living in crazy land on 07.13.16 at 7:56 pm

Talked to my new neighbour who bought in our complex.
Leased land (pre-paid with city and has about 65 years left on lease). They were not the highest bidder, but were well over the asking of $700k. They allowed the owners to live rent free for about 6 months before leaving and are now doing reno’s and expect to move in in Sept. It will be interesting to see what happens here in the next few months. Hardly any listings in our neighbourhood as it’s one of the most “affordable” in Vancouver. No where else to go if you sell unless you’re leaving the city.

#53 Andrew Woburn on 07.13.16 at 8:00 pm

In New York, a Falling Market for Trophy Homes in the Sky

“New York City’s ultraluxury real estate frenzy — with its sky-piercing condominium towers and $100 million price tags — has finally come to an end.

Even with every conceivable amenity, the eight- and nine-digit prices attached to trophy homes with helicopter views and high-end finishes never bore much relation to actual value. Rather, a class of superrich investors primarily drove the market, choosing high-priced real estate as their asset of choice, because it was less volatile than other investments and they could use shell companies to hide their identities.

But today a four-year construction boom aimed at buyers willing to spend $10 million or more has flooded the top of the market just as global market turmoil has caused wealthy investors to pull back and the federal government has moved to scrutinize some all-cash transactions.”

http://www.nytimes.com/2016/07/12/realestate/luxury/slow-times-on-billionaires-row-as-the-8-digit-boom-fizzles.html?mtrref=undefined&gwh=8DC83F689503402D3FE7892F58EA240C&gwt=pay&_r=0

#54 bigtowne on 07.13.16 at 8:04 pm

RioCan Reit has a big sign on Appleby Road north of the QEW where the old Target store is still vacant over a year after they closed. Kitty corner to the Target in the same strip mall was a William’s Coffee Pub which has been vacant for many months. This same stretch of Appleby has many new condos and retirement condos newly built and occupied.

The Target fail was the fire alarm on the Canadian economy; the loonie and the last innings of the housing bubble played out on a parallel financial asset not related directly but a head’s up on the roadmap for anyone to notice.

#55 My Life is a Pile of Shit on 07.13.16 at 8:05 pm

Garth, stop telling people to sell their house! It’s like telling people to sell their car because car prices will crash, but they still need their car for work and shopping. You can tell people to sell their investment/income properties, but it makes no sense to sell their home and become renters. Rental properties are generally not as immaculate as owned properties, and renters get no respect from anyone or at any point in the rental process! Besides, if even 5% follow that advice, there won’t be enough vacancies and rents will go through the roof!

#56 Self Directed on 07.13.16 at 8:06 pm

Looks like YVR-RE is going to explode again, after Soper announced higher expected increases in 2016. Gas on the fire. thanks.

I now predict that Fear won’t begin to set in until after one more drunken Christmas this year. 2017. We should then see a glut of listings that will drive prices down.

You can preach “Get Out”, but they won’t because interest rates are going to keep this mania going strong. “Another 12%… it really is different this time.”

#57 NoName on 07.13.16 at 8:11 pm

#22 MF on 07.13.16 at 6:47 pm

Tell me more about parenting when you actually have kids.

#58 Bob Conolly on 07.13.16 at 8:25 pm

Great work there Garth….

Keep on keeping on !

If only we had someone of your caliber here in house horny Australia.

Alas we are over run with spruikers, rent-seekers and people with not much more than cold porridge for brains.

As goes Vancouver and Toronto so does Sydney and Melbourne Australia !

#59 For those about to flop... on 07.13.16 at 8:29 pm

As I stated last night Nintendo releasing Pokemon Go is the black swan event that is gonna end this housing bubble.

The younger crowd are going to be too busy to go to open houses and bother finding a realtor.

The bottom rung is about to fall off the ladder.

15 million downloads in a couple of days.

Finally,it’s over…

#60 As usual on 07.13.16 at 8:30 pm

Bank of Canada expressed its concerns but kept the interest rate same.

#61 young & foolish on 07.13.16 at 8:34 pm

Lots of proud renters on here (including me) … but hey, obviously somebody has to own !

Among my youngish contemporaries the sentiment about financial assets is that they are extremely volatile and perhaps even rigged. So, they’d rather buy RE.
Have you been watching the markets lately? Record highs despite low earnings and low growth outlook. WTF? No, this has nothing to do with easy money?

Right now it has a lot to do with 287,000 new US jobs created in June. — Garth

#62 Linda on 07.13.16 at 8:37 pm

I have to say, I do not get the Vancouver housing market. Yes, the weather is warmer there than most of Canada, but unless you buy in very specific locations winters are grey (if warm in comparison). Plus there is that little Cascadia issue that could decide to release at any time. Instant destruction of all assets.

Add in the housing people are willing to pay mega-bucks for. Some of the examples shown on this very blog (& not only in Vancouver) are why building codes were invented in the first place – to prevent people occupying buildings deemed unfit for human habitation & to ensure a minimum standard of public health & safety. Maybe there is something in the water……

#63 Nelley on 07.13.16 at 8:48 pm

#61Linda-not much to get-If you were very rich and for whatever reason decided to move to China you would probably locate in the Gweilo city-you would be surrounded by other Canadians and you would feel very comfortable-that is human nature.

#64 turn of the tide on 07.13.16 at 8:48 pm

People just CAN’T HANDLE the TRUTH!! They don’t want to hear the inevitable bad news that lie ahead and they will shoot the messenger with no warning.

Also, let me point out that Garth is not the only prominent person pointing out the obvious bubble.

below is just one of several articles, videos all over the place all with one thing in common: VAN, TO = UNSUSTAINABLE

“it’s an outright bubble… everyone knows that”
Listen At 4:30 minutes :
http://www.bloomberg.com/news/videos/2016-06-29/rosenberg-vancouver-housing-market-in-outright-bubble

So… Garth, forget about the ones that don’t want to listen but there’s many of us that DO listen and we appreciate this pathetic blog!

#65 crowdedelevatorfartz on 07.13.16 at 8:56 pm

@#44 Brazil expat
“DELETED”
********************************************

Hmmm….
Overdosed on a bit too much Beano and went on a verbal diarrhetic diatribe did we?

Tut tut as they say in Egypt.

#66 Lee on 07.13.16 at 8:59 pm

Toronto Star today says Ontarians believe real estate market getting stronger. That’s all you need to keep the ball rolling.

#67 Pounding sand in peachland on 07.13.16 at 9:00 pm

Don’t Pokemon and drive

#68 crowdedelevatorfartz on 07.13.16 at 9:00 pm

@#49 Damfino
“Plus, nobody seems to have the slightest apprehension about debt. …..”
********************************************
A peculiar affliction of this day and age……possibly because most people have the retention span of fruit flies when it comes to dealing with debt and interest rate rise……coming to a debtor near you.

#69 Bram on 07.13.16 at 9:00 pm

Taking LePage with a pinch of salt (or two), I can understand.

Yet, National Bank and Teranet are saying the same:
+2.6% month over month for june in YVR. (+23.4% year over year)

http://www.housepriceindex.ca/default.aspx

That’s a source, which is a lot more reliable than LePage.
I wouldn’t discard them.

#70 213 fool on 07.13.16 at 9:02 pm

I’ve been reading this fun blog for about two years. And I finally opened a Roth IRA account (expat in SOCAL so no TFSA here). $5500 of my lazy money was sent to the front lines at Vanguard to do their thang and multiply. I ordered a few ETFs, 60/40 ish, no maple right now. I’m really glad that I found this blog.

TY

#71 X on 07.13.16 at 9:04 pm

So if a mutual fund manager publicly said he estimated his fund would grow 12% in a year, he would be open to law suits…and perhaps suspended/fined by his governing body.

But if a RE board says the same thing they have no responsibility and/or liability. Not sure if it is within his powers, but perhaps Mr Morneau could achieve more by simply cracking down on exactly this type of comments from the RE boards.

By taking the fuel out of the fire, it will burn a little less intensely.

We don’t want to throw water on it, just bring it back form an out of control fire.

Also for the higher priced homes, as the borrowers already have to qualify at 25 yr amortization standards, whether they chose to opt for a longer period is up to them. To restrict the period to 25 years, shouldn’t break anyone financially, as they have to qualify at that already, but it may help to stop some of the over exuberance.

#72 TurnerNation on 07.13.16 at 9:06 pm

Banks still are laying off. I know of a couple, bot slanty semi in TO’s east end. Popped out a child .
Now, the Mom is sole breadwinner!

You’ve come a long way baby!?

#73 Realistic returns on 07.13.16 at 9:09 pm

Hey Garth

If I put 200k in solid dividend paying stocks and reits do you think I can get 8% annual return? I want to offset rent costs on a $2200 bungalow in 416. Thanks!

#74 Kelowna on 07.13.16 at 9:14 pm

If you bought in YVR or YYZ early, you should make money but only if you have the discipline to sell now!
However, if you are buying into either of these markets now, the only question is how much of your hard earned equity you will lose!!!
Can’t figure out why this is so difficult to understand???

#75 New West on 07.13.16 at 9:19 pm

In the post war neighbourhoods in Vancouver most houses are one storey bungalows. That’s a big chunk of the city. Two storey houses in these neighbourhoods are usually new builds

You see it all over the lower mainland – all “older” houses are now tear-downs unless the lots are very small or zoning laws protect them. If the lot size is big, all bets are off. I’m seeing 10 – 15 year old houses being torn down now to make way for these enormous new houses that are built from lot line to lot line to the absolute maximum square footage. If the lot costs a million+, then of course the new build will be 2 million+ for the developer to make a profit.

What I’d like to see from the real estate guys is a breakout of how many sales in say, a month are for lot value, and how many are of these new builds. That would be an interesting statistic. It would also be interesting to see how many moisters are buying new build 4000+ houses to raise their families in. Moisters buying old places? I bet 90% of them are planning on either flipping the lot, or scraping the old one off and building something new to flip.

Everyone is a developer here now.

#76 WUL on 07.13.16 at 9:26 pm

At first glance this comment might appear off topic, but I suggest that upon closer analysis it does tend to support the notion that Calgary real estate is a bargain.

Cowgirl Ingenuity in Cowtown.

Some millenials are so much smarter than some Boomers. My wife and I first visited the Stampede before Mike Pearson was PM and we are still stunted in our imagination.

My daughter is celebrating her 21st with 4 gal pals tonight. Turns out at the five and dime store you can buy a set of plastic tubes with stoppers in a box that looks like a feminine hygiene product and will fit in your purse. Fill them with vodka and tequila and when you arrive at the Stampede Grounds you buy the biggest lemonade available and save about $100 on drinks all night long.

Hey you young college gals in the daisy dukes, fill your boots.

#77 JSS on 07.13.16 at 9:29 pm

Garth, any comments about Pokemon Go?

#78 Self Directed on 07.13.16 at 9:32 pm

#61 young & foolish on 07.13.16 at 8:34 pm

Lots of proud renters on here (including me) … but hey, obviously somebody has to own !

Among my youngish contemporaries the sentiment about financial assets is that they are extremely volatile and perhaps even rigged. So, they’d rather buy RE.
Have you been watching the markets lately? Record highs despite low earnings and low growth outlook. WTF? No, this has nothing to do with easy money?

Right now it has a lot to do with 287,000 new US jobs created in June. — Garth
——————————————–

I would agree that markets seem like they are at a tipping point. If we should not buy housing because it’s about to decline, then what about the capital markets? Aren’t they poised for a correction? If so, why would I build a portfolio from scratch in what could be a Bear market on the way?

#79 Fiendish Thingy on 07.13.16 at 9:39 pm

Garth-

Please, please, please say yes to Huffington- the wider exposure your message will get will be invaluable, maybe save a few house horny souls, and if we’re lucky, speed up the shift in the market’s psychology and hasten this long overdue correction. Plus, it will drive more traffic to this not-so-pathetic blog, helping to enlighten millions, or at least dozens more.

If you post the huff post link, we all promise to post in the comments section what a handsome, virile, animal lover you are…

#80 earlybird on 07.13.16 at 10:02 pm

House poor is the new rich…renting is the Alberta Advantage now.

Raise interest rates and let the problem sort itself out.

#81 BernieBee on 07.13.16 at 10:05 pm

#10 Joe – A very interesting read.

A couple of interesting facts I didn’t know:

1: Bob Rennie (yes, the condo king) is the chair of fund raising for the BC liberals! Anyone expecting this provincial government to do anything significant to slow the bubble?

2: 2014 stats show Vancouver had the 2nd lowest median income of a dozen Canadian areas. Montreal was a hair lower. But with housing costs roughly 1/3(!) of Vancouver’s, plenty of modestly priced rentals, and a better bar scene, there’s really no comparison. AND in 2011, bachelor degree holders in Vancouver had the lowest average wage of the 12 major cities/areas in Canada.

It really is a crisis of sorts in Vancouver.

Look, here in Ottawa we’ve already received many Syrian refugees. We may be able to accept some BC’ers as well, if you ask nice.

#82 Smoking Man on 07.13.16 at 10:11 pm

Ha. To funny. The Toronto Stars leading Man hating wench has just be charged with Assault.

Twitters going nuts. Truth is socialist are violent animals.

Poor Rosie D

#83 Brazil ex-pat on 07.13.16 at 10:16 pm

#61 young & foolish on 07.13.16 at 8:34 pm
Lots of proud renters on here (including me) … but hey, obviously somebody has to own !

Among my youngish contemporaries the sentiment about financial assets is that they are extremely volatile and perhaps even rigged. So, they’d rather buy RE.
Have you been watching the markets lately? Record highs despite low earnings and low growth outlook. WTF? No, this has nothing to do with easy money?

Right now it has a lot to do with 287,000 new US jobs created in June. — Garth

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

Any “stats/links” as to what those jobs are and what kind of McSalary they pay?

#84 Smoking Man on 07.13.16 at 10:16 pm

72 TurnerNation on 07.13.16 at 9:06 pm
Banks still are laying off. I know of a couple, bot slanty semi in TO’s east end. Popped out a child .
Now, the Mom is sole breadwinner!

You’ve come a long way baby!?
….

Female suicide rates are sky rocketing. No so easy being a man is it.

#85 Kothar on 07.13.16 at 10:18 pm

Who cares about Vancouver let them have their ridiculous house prices doesn’t affect the rest of the country. Vancouver is so far removed anyway…to fly there from Ontario costs more than flying to Europe!

#86 young & foolish on 07.13.16 at 10:19 pm

…. why would I build a portfolio from scratch in what could be a Bear market on the way?

Well, because you can`t really time the markets. But the global economic growth rate seems weak, government debts are very high, and interest rates will probably stay low for a long time.

#87 BOOM! on 07.13.16 at 10:27 pm

Nothing to say tonight. Markets quiet, but still doing quite well. Things balanced, and producing, no RE issues here in the hot wet driftless region.

So far quite the nice investment return year. Sold off my HSY holding when it went nuts on a takeover bid. I’ll keep that as ‘dry powder’ for awhile. Looking for another ‘panic sell’ should the EU banking mess hit the fan.

Until then, it will be summer, enjoy the waters, the mountains, or just your friends & family!

Alert us when something materially changes….zzzz.

M64WI

#88 Scully on 07.13.16 at 10:31 pm

Phil Sopher. Ever met him? He reminds me of that lawyer Saul Goodman. If you don’t believe me just google him. He really is the perfect figurehead for today’s RE market. “S’all good, man!” What a joke. Don’t think he will have much effect though. He’s not as smart as Smoking Man. :)

#89 46 and 2 on 07.13.16 at 10:48 pm

You guys remind me of my cousin….he is hoping the economy will crash so he can buy a house and tell us all he told us so.

Simple question….how is the real estate market going to crash in both Van and TO when people continue to move there in droves not just from within Canada but from around the world.

I would agree with you if both of those cities are facing exodus like Alberta but clearly this is not the case.

Demand needs supply, if the poor Canadian cannot afford to buy in these markets then that’s too damn bad because someone else will.

Supply and demand boys….get your head around it.

#90 Smoking Man on 07.13.16 at 10:52 pm

No one got my perfect metaphor about dad swting a bee hive. It was a true story. But there was a story in a story.

I’ve attacked the wacky left liberal female sjw. Yet not one will ingage in debate.

Even with emberasaing grammmer and spelling. I should be an easy target.

They sence the smell of massive testosterone and are frightend.

Go see gost busters. The biggest Hollywood flop this year.

But pc being what it is. Accadmy awards is what I’m thinking.

Only females I respect are self made entrupuners, artists, and chics that would rather raise there kids than be a pawn in the disintegration of the middle class.

#91 rainclouds on 07.13.16 at 10:55 pm

WUL”Some millenials are so much smarter than some Boomers”

Emphasis on SOME boomers.i prefer the booze belly. 32oz….

http://hideyourbooze.com/

#92 Damifino on 07.13.16 at 10:56 pm

#77 JSS

“Garth, any comments about Pokemon Go?”
————————–

I doubt Garth would waste keystrokes on that but I’ll give it a go: It’s a vacuous diversionary pastime for the mindless masses designed to keep them defocused from serious issues. It’s working.

#93 Smoking Man on 07.13.16 at 11:02 pm

The Rouge tennor emailed me.

A Smoking Man Fan.

Ha. This pathetic blog has reach… I’m getting scared.

#94 AisA on 07.13.16 at 11:10 pm

I’ve been imagining a 60% slash coast to coast, obviously skipping over outposts where a home can be had for less the the lumber it’s nailed together with is worth, for over two years now.

BOY OH BOY HAVE I BEEN CONSERVATIVE.

#95 White Crock BC on 07.13.16 at 11:23 pm

Brazil ex-pat on 07.13.16 at 10:16 pm

Any “stats/links” as to what those jobs are and what kind of McSalary they pay?

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

Exactly. When Canada (rarely) announces job creation, each position is dissected and ultimately declared to be a crappy job….part time, min wage, no benefits…

In the US however, 287,000 jobs are created and it’s just assumed that they are top drawer jobs, big bucks, full time and with benefits.

Why is that?

#96 Marge Simpson on 07.13.16 at 11:39 pm

#90 Smoking Man on 07.13.16 at 10:52 pm

No one got my perfect metaphor about dad swting a bee hive. It was a true story. But there was a story in a story.

I’ve attacked the wacky left liberal female sjw. Yet not one will ingage in debate.

Even with emberasaing grammmer and spelling. I should be an easy target.

They sence the smell of massive testosterone and are frightend.

Go see gost busters. The biggest Hollywood flop this year.

But pc being what it is. Accadmy awards is what I’m thinking.

Only females I respect are self made entrupuners, artists, and chics that would rather raise there kids than be a pawn in the disintegration of the middle class.

You smack my beehive sonny boy.. and you’ll be singing a few octaves higher there gramps

#97 Irent on 07.13.16 at 11:50 pm

There is hardly any listing on realtor.ca site. Looks like all readers of your posts sir are renters. How will the owners “get out”? May be something for HGTV will draw their attention

#98 Victor V on 07.13.16 at 11:57 pm

http://ipsos-na.com/news-polls/pressrelease.aspx?id=7314

Views on Real Estate Market Surge as Economic Confidence Rebounds

Half (50%) Say Neighbourhood Real Estate Market is Stronger than Last Year; 48% Say it will Strengthen in the Next Year

#99 Remedial Math on 07.14.16 at 1:05 am

At some point, your home will mean more than an ATM to you in terms of investment.
As a card-carrying member of the “chosen” generation (last-year boomer crossing over to Gen-X) I bot my 1st house in North Van for $500K on my 40th bday. I had a wife, 2 very young kids, a dog, 2 cats and about $420K in debt.
Five years later I sold the mossy firetrap for $330K more (minus fees) than I bot it for and moved the whole sheebang to SW Calgary, where I pumped $600K cash money into a much larger edifice on a leafier street in a neighbourhood Mahatma Ghandi would kill to get into. Tot lot at either end of the street. Everybody knows (or at least know of) everybody and gets along like family.
Been here eight years, watched my kids and the other kids on the street grow.
Just the dirt pile on which the POS of a house I sold in North Van sits is now worth $1.5m (before demo and rebuilding costs). The large, comfy home I bot eight years ago in Calgary might still get me $600+k if I try to sell this season, and that’s after tarting the place up a bit with mechanical upgrades like triple-glazed windows, a new roof, and some other odds and sods.
But the quality of life we’ve had since moving here, and all the great times we’ve rung this place up for so far, outweigh any of the stress and spec ongoing in the real-estate-for-money markets.
For anyone totally fed up with trying to make it on coastal or 416 prices, you can get downright comfy here for less than half. For young-uns, brand-new 2-bedroom condos are being advertised at $188k. That wouldn’t buy you a spot at the bike rack in Van, where your bike is more than likely to get nicked.
A vibrant place with great infrastructure (transit, parks galore, excellent schools, etc.) and, as I’ve found out, a great place to put down roots and grow a family.
I’ve reconciled losing out on the coastal housing lotto by simply looking at how great our lives have been in our not-skyrocketing-in-value house.
It’s not coastal. I get that. Winter can be a pain.
But, as I’ve discovered, you just can’t buy what we’ve experienced for not living in, and worrying about, a money-centric real-estate market. We’ve benefited greatly despite not making more than a nickel in monetary terms.

#100 knock knock on 07.14.16 at 1:45 am

All I know is the the winds have changed direction here in Vancouver. More listings and fewer over over ask sales. More reductions and cancelation as people have missed the boat. Human nature folks don’t sell when prices rise and bail as they start falling. Some of the sales in the past 6 months….man are the buyer’s gonna regret it. Wow stupidly

#101 NoName on 07.14.16 at 1:48 am

Of topic, pokeman thingy, interesting.

http://www.inc.com/walter-chen/pok-mon-go-is-driving-insane-amounts-of-sales-at-small-local-businesses-here-s-h.html

#102 Blog Dog Joe on 07.14.16 at 2:23 am

Did anyone else have to look up what cisgendered meant?

This is not meant to be a facetious question. I honestly didn’t know, and am curious if I am unusual for not knowing.

#103 Zane Boy on 07.14.16 at 2:55 am

Toronto has always been so envious that Vancouver is a more desirable place to live for foreign nationals and others intending to stay for the free everything Canada offers to anyone stupid enough to eventually pay taxes here.

“Two point three million, by the way, is 34 times more than the average income in Vancouver. Let’s compare that to the GTA, where 300% more people live, incomes are higher, there’s an actual economy, The average detached two-story house here costs $975,937 – a 42% reduction from Delusia, yet still the second-hottest property market in the country with the same low mortgage rates and restricted supply of available listings.”

Toronto is and always will be a bunghole of loserdom, it’s a statistical fact.

#104 Mark on 07.14.16 at 3:21 am

“Also for the higher priced homes, as the borrowers already have to qualify at 25 yr amortization standards, whether they chose to opt for a longer period is up to them. To restrict the period to 25 years, shouldn’t break anyone financially, as they have to qualify at that already, but it may help to stop some of the over exuberance.”

One small note about those 25-year amortizations — they’re being written to people who, realistically, don’t have 25 years of employment income even left in their lifetime. Such loans are also being written against housing units which realistically don’t have 25 years of service life remaining without massive, if not complete re-investment.

The problem with the CMHC, the problem with government policy around age discrimination, is that bankers are no longer making these judgements. Sure, silently and in the background, they’re assigning higher risk characteristics to such loans (and buying CMHC subprime insurance against them), but nobody is telling the buyers, “no, this sort of loan isn’t appropriate at your stage of life”. In fact, they’re not even allowed to in most circumstances, even if they wanted to.

Hence, in combination with out-of-control “family landlord” speculation (as seen in Toronto/Vancouver, where extended families own dozens of units heavily on mortgages, and have a vested interest in manipulating public perception of prices even though they’ve been stagnant for 3 years now), we have a very toxic situation created in Canada’s RE marketplace.

I’ve been imagining a 60% slash coast to coast, obviously skipping over outposts where a home can be had for less the the lumber it’s nailed together with is worth, for over two years now.

In an ordinary marketplace, houses basically peak in price at the time they’re delivered brand-new. Inflation might keep them flat over time, but without inflation, house prices naturally should fall on account of physical depreciation.

Real house price increases on identical housing units are a historic anomaly. And a lot of people are about to find that out. Its not called “real estate” for nothing, after all.

#105 ROTFL on 07.14.16 at 5:12 am

#73 Realistic returns — “If I put 200k in solid dividend paying stocks and reits do you think I can get 8% annual return? I want to offset […]”

Nooooooooo. The 8%, even if you manage to achieve it, is an AVERAGE. If you have to take out 8% every year to pay for other stuff, you run a huge risk of having to sell stuff in a year where returns are less than 8%. Obviously, this would be “sell low” which isn’t part of any good investing aphorisms.

But if you really do want to try this at home, find a brokerage with the lowest margin interest rates (hint, not a big Canadian one), pick a diverse portfolio of absolutely-won’t-cut-the-dividend stocks, ETFs and REITs, and lever up to where you get an 8.5% cash yield. It’s not impossible, and you don’t need a CFA to do it, but you do need to invest far more time into it than just reading the Globe’s business section every Saturday.

#106 ROTFL on 07.14.16 at 5:23 am

#89 46 and 2 — “Simple question….how is the real estate market going to crash in both Van and TO when people continue to move there in droves not just from within Canada but from around the world.”

Simple answer: Same way it crashed in many other cities. You can probably count on two hands the cities which have shrunk recently, starting with Detroit, maybe Buffalo and Las Vegas, but there are far more cities where real estate prices have declined.

https://fred.stlouisfed.org/graph/?g=5qcF
http://ca.spindices.com/indices/real-estate/sp-case-shiller-fl-miami-home-price-index

Any questions?

#107 Bernir Nickels on 07.14.16 at 5:49 am

Germany goes negative

http://www.reuters.com/article/eurozone-bonds-idUSL8N19Z1QW

Dow futures rocket 120++

Think there’s a correlation? Stocks are going ballistic, there’s nothing to bond investing except loss. Since Brexit my dividend portfolio of boring stocks every day has been five figures.

#108 TnT on 07.14.16 at 7:38 am

#102 Blog Dog Joe on 07.14.16 at 2:23 am

Cisgendered

As with innovative technology, our society is also experiencing rapid evolution. It doesn’t take long for anything, and now, anyone to quickly fall behind.

Denying the existence of innovative technology is very much like denying the social changes that is in plain site and there are plenty of “old timers” who post here that feel comfortable shaking their “proverbial fists” at this new world. Best to adopt or be left behind.

#109 maxx on 07.14.16 at 8:20 am

“Two point three million, by the way, is 34 times more than the average income in Vancouver.”

We bought our first house in Montreal 31 years ago, at exactly 1 times our combined gross income. The market price for it today is just under 4.5 times what we paid then.

Canadians have gone completely insane. Vancouverites are far beyond that, drooling, moaning and bouncing off the walls.

I completely agree with those investment sharks looking to short the Canadian re market.

#110 fancy_pants on 07.14.16 at 8:25 am

go figure. Amazing what a safe, stable, non-war torn, wealthy, spacious country will do to RE prices when the doors are opened.

The ‘door’ has been open the same crack for decades. Immigration continues to be about 0.8% of the population annually. Let’s be accurate. The bulk of real estate appreciation continues to come from local-to-local transactions, not local-to-foreign buyer. — Garth

#111 fancy_pants on 07.14.16 at 8:37 am

How long before they start the machines for another round of QE? the only way to service public debt is with more public debt. That is why rates will NEVER rise again unless a reset button of some sort is pressed. Stock markets and RE will continue to expand under such conditions of endless growth of debt in the absence of the growth of production.

I expect ’08 to happen all over again within a year or two. If you think we in North America are that far off from scenarios that are being played out in Venezuela, you are very naive.
http://www.ctvnews.ca/world/venezuela-turns-to-military-to-combat-food-shortages-1.2984594
http://news.nationalpost.com/full-comment/kelly-mcparland-venezuela-the-socialist-dystopia

#112 Bytor the Snow Dog on 07.14.16 at 8:46 am

Way to go Garth. Way to go!

The title pic for this blog entry is going to piss off another special interest group- the PETA people.

By the way, did you know I’m a PETA member?

People Eating Tasty Animals.

#113 46 and 2 on 07.14.16 at 9:08 am

Simple answer: Same way it crashed in many other cities. You can probably count on two hands the cities which have shrunk recently, starting with Detroit, maybe Buffalo and Las Vegas, but there are far more cities where real estate prices have declined.

“Retreat”, “shrink” and “slow down” are far different than crash. AND – once again….if you actually believe that the powers that be will allow the RE market to follow a huge swing downward in short period of time you are all wrong.

Our protected and contained banking system as well as CMHC will not allow this to happen. Any cracks will be filled in by the Feds behind closed doors.

We will never know how much the CIBC received from the taxpayer in 2009. You will never know how much the feds will or might be shoring up the banks and the CMHC.

If Van and TO are going to head down it is going to be slow and controlled over years and years.

#114 Andrewt on 07.14.16 at 9:13 am

#103 Zane Boy on 07.14.16 at 2:55 am
Toronto has always been so envious that Vancouver is a more desirable place to live for foreign nationals and others intending to stay for the free everything Canada offers to anyone stupid enough to eventually pay taxes here.

“Two point three million, by the way, is 34 times more than the average income in Vancouver. Let’s compare that to the GTA, where 300% more people live, incomes are higher, there’s an actual economy, The average detached two-story house here costs $975,937 – a 42% reduction from Delusia, yet still the second-hottest property market in the country with the same low mortgage rates and restricted supply of available listings.”

Toronto is and always will be a bunghole of loserdom, it’s a statistical fact.

Yeah, all this diversity, night life and culture is a real drag. We even have more pot dispensaries now. How’s the weather in Vancouver today? It’s summer here.

#115 Contrarian Coyote on 07.14.16 at 9:20 am

#104 Mark on 07.14.16 at 3:21 am
“Also for the higher priced homes, as the borrowers already have to qualify at 25 yr amortization standards, whether they chose to opt for a longer period is up to them. To restrict the period to 25 years, shouldn’t break anyone financially, as they have to qualify at that already, but it may help to stop some of the over exuberance.”

One small note about those 25-year amortizations — they’re being written to people who, realistically, don’t have 25 years of employment income even left in their lifetime. Such loans are also being written against housing units which realistically don’t have 25 years of service life remaining without massive, if not complete re-investment.

This what I can’t get my head around. I’m happily renting and here stories like this from a relative who works in the admin side of real estate. The Kawarthas is getting a good amount of people fleeing the GTA (smart!) and it’s also driving the locals to cash out and “level-up” their own homes and buy more expensive. Craziness.

Even listening to co-workers in the mid- to late-thirties with 20 & 25 year mortgages. And these co-workers are in a non-profit. I wouldn’t be able to sleep at night with that situation hanging over my head. My wife and I both like to be mobile for job opportunities around Ontario and Canada if needed.

#116 TurnerNation on 07.14.16 at 9:21 am

Another day…another “undesirable” eliminated by Sunshine Listers of the State.
What a threat this likely mentally ill homeless trespasser would have posed. I wasn’t there so this is my theory.
No option but to extinguish him.

Remember this tax farm slaves the next time you are told to hero worship. Produce taxes or your life is over. I shed tears for nobody. Reap, sow.

http://www.cbc.ca/beta/news/canada/toronto/siu-investigation-1.3640897

“They’ll stone you just like they said they would”

#117 mishuko on 07.14.16 at 9:53 am

My god the double standard of SJW. Smoking man you see the CBC post? She calls herself a ‘broad’ but money on the table says if Garth or a manly man actually called her that the SJW feminazi’s would get their ‘undergarments’ in a bunch and call us mysogiznic sexists…

I’m guessing parents were being parents and she stepped up trying to protect some tantrum throwing child because they are entitled to everything? (speculation)

http://www.cbc.ca/news/canada/toronto/toronto-star-rosie-dimanno-charged-1.3678149

#118 Ole Doberman on 07.14.16 at 10:02 am

OMG I can’t take it anymore!

Every morning waking up to headlines like this:

http://www.bnn.ca/canadian-new-home-prices-grow-at-fastest-pace-in-nearly-9-years-1.526570

When will this madness end! I gotta sit down…..

#119 toastybagel on 07.14.16 at 10:07 am

Garth,

You’re so quick to remove racist/anti immigrant comments, but what about the increasingly awful sexist ones that are arguably more hateful? I’d like to read this blog without a side of misogyny… it’s exhausting to read.

Also, a story about crazy TO. I know millenials buying 1bdr 500sqft condos at 500k and bragging about how it will double in 5 years…. of course buying with a large down payment from mom and dad. This is really what’s driving the TO condo market… stupid bidding wars on crummy places from millenials with 0 financial literacy besides “housing is safe, it only goes up!!’ and “renting is for losers!”

On racism and sexism: you have no idea what comments I remove, which never see the light of day. I assure you there are many improper comments regarding gender as there are about race. So stuff it. — Garth

#120 Enough...good for you Garth on 07.14.16 at 10:37 am

Good you realize you are dealing with the fanaticism of greed and avarice in YVR RE. Less than predictable results when you rained on their parade.

Fanatics cannot be reasoned with until their leader is no longer.

You will be vindicated…soon enough.

In the meantime, back to writing about all the other things you advise about so well.

#121 Victor V on 07.14.16 at 10:43 am

Joe Oliver: The last thing homebuyers need is new taxes in the name of a hyped-up ‘housing crisis’

http://business.financialpost.com/fp-comment/joe-oliver-the-last-thing-homebuyers-need-is-new-taxes-in-the-name-of-a-hyped-up-housing-crisis

#122 Sean on 07.14.16 at 10:45 am

Where did all the money come from? I’m not saying I disagree with you, just wondering. If it’s not foreign money then is it JUST cheap money? How can you go from 11% to 91% over 1 mil — $2.36 million average in only 10 years when incomes have essentially stayed flat. This has got to be the mother of all bubbles. So many millionaires that aren’t cashing their lottery tickets.

#123 45north on 07.14.16 at 11:00 am

talking about the price of a house in Vancouver: Two point three million, by the way, is 34 times more than the average income in Vancouver.

34 times! in other words Vancouver house prices bear no relation to fundamentals. Vancouver is going to crash and crash hard. This is uncharted territory.

#124 SqrlGrl on 07.14.16 at 11:01 am

#20 MF on 07.13.16 at 6:42 pm

Dear MF,

You’re an idiot. This is a financial blog; go spout your archaic views over at RooshV with the rest of the pathetic trolls.

Signed,
A 33 year old woman

#125 45north on 07.14.16 at 11:04 am

Donald Trump:

Next week’s convention in Cleveland is shaping up to be one of the greatest political disasters since the fall of Rome, and would be so if the delegates did nothing but confirm the U.S. presidential nomination of Donald Trump. There never was a candidate so unfit for high office: deficient in experience, character, ability or relevant knowledge of any kind; without serious policies on most issues and with wholly unserious ones on a few; his message a fusion of hostility to immigrants, fear of Muslims, and economic illiteracy, the whole salted with lies, insults, bombast and braggadocio.

http://www.ottawacitizen.com/andrew+coyne+fascinating+spectacle+political+parties+being+torn+apart/12056878/story.html

Andrew Coyne writes well. I don’t follow British politics but here’s his take on Jeremy Corbyn:

In some ways Corbyn is Trump’s opposite: where Trump is untethered to any ideology, Corbyn is a fairly conventional relic of the British hard-left; while Trump revels in a certain chest-beating machismo, circa 1961, Corbyn exhibits no discernible vital signs.

#126 Gonkman on 07.14.16 at 11:34 am

#124 SqrlGrl on 07.14.16 at 11:01 am
#20 MF on 07.13.16 at 6:42 pm

Dear MF,

You’re an idiot. This is a financial blog; go spout your archaic views over at RooshV with the rest of the pathetic trolls.

Signed,
A 33 year old woman

————————————————————————————————

@SqrlGrl

Then tell your breatheren Feminazis to stop making a “Financial Segment” on CBC into a Twitter fest of “Lets Shame Men for absolutely nothing”

I’ll fix your signature with 2 options.

Married?

Signed,
A 33 year old woman who’s husband wears my Panties as I make him hold my purse while I get my Mommy Bob Haircut Trimmed.

Non Married?

Signed,
A 33 year old woman who’s hit the wall and lives alone with her 2 Cats, Follows Facebook and looking for a white knight to love her. Oh.. and has an MBA!!

P.S. Nice Retort… as mentioned in earlier comments “You’re An Idiot” doesn’t win an argument. It just re-enforces you having nothing useful to contribute other than hate and shaming.

@MF

Ignore the Feminazi Haters and White Knight Manginas. You have seen the light and know the way.

As Smokey would put it… You have left the “Herd”.

#127 Alex n Calgary on 07.14.16 at 11:53 am

Its funny Vancouver, how does it keep going? I have to admit last time I was there, a month ago, I sure did see a lot of Chinese people. That being said the majority like you say are locals, buying and selling to each other, just like in Toronto, which likely has a much higher % of recent immigrants then Vancouver. How long can it keep going? I thought it’d come down years ago, but they keep buying and selling, presumedly making money? Probably not in a lot of situations, but that Chinese model of spending Zero bucks until your old and putting it all into houses for retirement seems to be running true. Calgary, well, its just realtors putting out notices of what a great time it is to buy now, before oil startings surging again and houses take off, a tiny lull in the storm they’d have you believe. Low cost multi-stage Shale-frak is the new world of oil and it is minor % in canada compared to heavy Bitumen, oil isn’t coming back, Calgary should moderate quite a bit coming up, but then again how hard is this to predict right? really really hard. I woudln’t do interviews anymore and get berated, people are in deep doo doo and looking to vent rage at someone, vent there MBA powered rage (experts, LOL I laughed so hard at that yesterday!)

#128 Noel on 07.14.16 at 11:53 am

#61 young & foolish on 07.13.16 at 8:34 pm
Lots of proud renters on here (including me) … but hey, obviously somebody has to own !

Among my youngish contemporaries the sentiment about financial assets is that they are extremely volatile and perhaps even rigged. So, they’d rather buy RE.
Have you been watching the markets lately? Record highs despite low earnings and low growth outlook. WTF? No, this has nothing to do with easy money?

Right now it has a lot to do with 287,000 new US jobs created in June. — Garth

____________________

But May jobs revised downwards.

Avg job gains:

Q4 2015: ~280k
Q1 2016: ~200k
Q2 2016: ~150k

The trend on US jobs is DOWN – latest jobs report is not the reason for record stock prices.

Wrong. In the 96% range, the US is reaching a stage of full employment after a decade of gains. Of course overall annual job creation moderates as that condition matures. Glad you’re not managing money. — Garth

#129 TurnerNation on 07.14.16 at 12:15 pm

Should I be bitter I’ll never be considered for a Sunshine List job in my homeland?
Ah well I’ll stick to Capitalism.

CBC website headline today “Most Canadian police forces much whiter than their communities”

I hate it when people only see [my] skin color. Am I a piece meat to be graded on my tone.

http://www.cbc.ca/beta/news/canada/police-diversity-canada-1.3677952

#130 Cdn Flyer on 07.14.16 at 12:26 pm

#23 Randy on 07.13.16 at 6:47 pm
Bill Tufts @BillTufts
Canada has 40,000 Revenue Canada tax collectors but only 20,000 in Armed Forces.

…..cause we are Peacekeepers

Not even close to the truth

Full-time military: 68,000. Reservists: 27,000. Civilian employees: 24,000. Total CRA employees: 37,800. Lesson: don’t believe everything you read on the Internet (or especially in the comment section). — Garth

#131 TurnerNation on 07.14.16 at 12:27 pm

#124 MF’s comments seems rather modern and of today. Just this weekend I wondered why maybe 30% of women I see in my downtown area have many and visible tattoos – traditionally a man’s thing.
Debate remains open.

#132 Damifino on 07.14.16 at 12:34 pm

#113 46 and 2

““Retreat”, “shrink” and “slow down” are far different than crash”
————————————–

When all one has is a sliver of equity and a mountain of debt, they are precisely the same.

#133 ROTFL on 07.14.16 at 12:36 pm

#113 46 and 2 — ““Retreat”, “shrink” and “slow down” are far different than crash. AND – once again….if you actually believe that the powers that be will allow the RE market to follow a huge swing downward in short period of time you are all wrong. […] If Van and TO are going to head down it is going to be slow and controlled over years and years.”

I didn’t make a prediction; I merely illustrated what has happened elsewhere. Vancouver and Toronto have both experienced crap real estate markets before, and many other countries have had real estate crashes recently that “the powers that be” obviously didn’t want. What are the powers going to do in Canada that they weren’t willing to do elsewhere? You’ve only got about two choices: Serious inflation, or direct support of the market through large scale government buying programs or mortgage forgiveness. I doubt we’ll see either.

And if you want to split hairs and differentiate between a crash and a slow melt, explain it to an underwater homeowner who’s getting no bids, a mortgage portfolio manager with a pile of NPLs, or an economist looking at negative GDP growth as everyone pays down debt instead of spending.

#134 Pre-retiree on 07.14.16 at 12:43 pm

#50 – Here in Vancouver the “For Sale” signs are popping up like weeds.

_______________________

Of course. Garth is responsible for this. He told everyone to “Get out”, and they are. ;)

#135 Pre-retiree on 07.14.16 at 12:50 pm

77 JSS

“Garth, any comments about Pokemon Go?”
————————–

I doubt Garth would waste keystrokes on that but I’ll give it a go: It’s a vacuous diversionary pastime for the mindless masses designed to keep them defocused from serious issues. It’s working.
_________________

Well said. There are so many other vacuous diversionary pastimes out there – just take the iPhone, for example.

#136 Nelley on 07.14.16 at 12:55 pm

#12545North-MSM hacks like Coyne are losing influence almost daily-they don’t or won’t get the message-the public feels that the “experienced” politicians are pure unadulterated CRAP. I love how the loser says Trump “has no ability or relevant knowledge of any kind”-LOL.

#137 Nemesis on 07.14.16 at 12:56 pm

#ThursdayMischief,Or… #RentingNoFunSayFung&Sung…

[CBC] – Accusations of racism stifling Vancouver’s housing debate, say activists: Without asking real questions we won’t find real answers, say community activists

…”Justin Fung, a member of Housing Action for Local Taxpayers, says accusations of racism are being used as a “smokescreen” to bring difficult conversation to a halt.

“There’s a lot of folks making a lot of money off of Chinese money,” he said. “These are primarily people in the real estate industry: the realtors, the property developers. They certainly want to continue seeing this happen.”

“In the time I’ve been following this, the race card’s been pulled multiple times … and it’s not the Chinese folks that are saying it.”

Fung says “we have to separate the colour of the people from the colour of the money” to keep the debate healthy.”…

http://www.cbc.ca/news/canada/british-columbia/housing-affordability-racism-1.3676601

#BonusFungFun,Or… #Newman&CruiseRackTheirBalls… #TheColorOfMoneyCirca1986…

https://youtu.be/HtCuJx4Du_U

#138 Smoking Man on 07.14.16 at 1:06 pm

#117 mishuko on 07.14.16 at 9:53 am
My god the double standard of SJW. Smoking man you see the CBC post? She calls herself a ‘broad’ but money on the table says if Garth or a manly man actually called her that the SJW feminazi’s would get their ‘undergarments’ in a bunch and call us mysogiznic sexists…

I’m guessing parents were being parents and she stepped up trying to protect some tantrum throwing child because they are entitled to everything? (speculation)

http://www.cbc.ca/news/canada/toronto/toronto-star-rosie-dimanno-charged-1.3678149
……

The left has always been violent… Seems like she lost her shit defending some kid that was being abused. That’s all we know from her twitter account.

She’s to stupid to see that anything she says will be used against her.

Assault is assault no matter what induced it. Of whatever high moral ground she thinks she has, she just made her lawyers job a nightmare.

Liberals are idiots.

#139 Smoking Man on 07.14.16 at 1:17 pm

#119 toastybagel on 07.14.16 at 10:07 am
Garth,

You’re so quick to remove racist/anti immigrant comments, but what about the increasingly awful sexist ones that are arguably more hateful? I’d like to read this blog without a side of misogyny… it’s exhausting to read.

Also, a story about crazy TO. I know millenials buying 1bdr 500sqft condos at 500k and bragging about how it will double in 5 years…. of course buying with a large down payment from mom and dad. This is really what’s driving the TO condo market… stupid bidding wars on crummy places from millenials with 0 financial literacy besides “housing is safe, it only goes up!!’ and “renting is for losers!”

On racism and sexism: you have no idea what comments I remove, which never see the light of day. I assure you there are many improper comments regarding gender as there are about race. So stuff it. — Garth
……

People are so sensitive.

My wife and I have been doing some serious powerwalking last few months.

She has a rather large set of healthy lungs. If you know what I mean. As we walk by dudes, they can’t help themselves, their eyes gravitate to the bounce.
Almost every single time.

No matter how much mind fking and cultural Marxism is shoved down our throughts.

Nothing will change.

200k years of evolution bitches. Humans are wired to reproduce.

Dr Smoking Man
PhD Herdonomics

#140 Aggregator on 07.14.16 at 1:19 pm

Pre-selling and re-selling: Vancouver realtor calling foul on ‘impossible’ condo market

A Vancouver realtor is irritated that would-be buyers are increasingly missing out on condo sales due to developers selling out units to friends, family, and investors before opening to the public.

Telus Garden Resales Explode

There are a total of 428 units in the Telus Garden building. Up to this point 68/428 have been either assigned, sold upon move in date, or are currently listed for sale without ever being lived in. That means 15.88% of the building has basically been flipped for a profit.

Ahh, but what they don't tell you is that developers are far clever then that, because they call occupancy status (when a property title is transferred to the assignment holder at which point they must get an mortgage), they can control the number of units being released into the market simply by calling occupancy by floor, in turn, releasing only a small amount of units at a time. That way insiders can sell their units first at top prices.

No conflict of interest here. Just the usual unregulated real estate market bending over market participants who didn't bother reading the fine print in their contracts. If they did this in the financial world they'd go to jail.

#141 IHCTD9 on 07.14.16 at 1:23 pm

#20 MF on 07.13.16 at 6:42 pm
#258 rjrt81 on 07.13.16 at 2:32 pm

Lol I’m 33, not some “dinosaur”. What did my comment have to do with telling women what to do with their lives?

Have you spoken to any 33 year old women in your life? How old are you? Do me a favour. Go talk to any 30 year old woman outside and you will hear that having kids is becoming a high priority for most. A lot of them saw the boomer women get older and wait until it was too late. The push is for younger families now.
___________________________________________

I think you are correct, and I think there will two classes of women developing: The single hard left SJW-#deathtothepatriarchypsychofeminazis that thankfully will ultimately recycle their genes back into the dust as fertilizer without ever having passed them on, and the regular run of the mill women that just want to live a traditional life.

Statistically, once a women hits 30, her chances of marriage start dropping disproportionately compared to a male. By the time she hits 35 it’s pretty much game over for a whole slew of reasons.

I have watched a massive displacement of older folks with new young families in the little southern Ontario village where I live over the last 3 years. The two most recent guys who moved in have great looking philipina wives :). These appear to be working moms, all with kids so far.

This came as a bit of a surprise to me, although a welcome one. Despite all the financial stupidity and division going on in the big urban centers, life outside the metropolii is evidently carrying on as it always has. The only noticeable difference so far from days gone by appears to be the wives are now more Asian and less White.

#142 SqrlGrl on 07.14.16 at 1:28 pm

#126 Gonkman on 07.14.16 at 11:34 am

Thank you for the good laugh. Now that you’re finished spewing your own hypocritical vitriol perhaps we can get back to discussing economic, real estate and financial matters on this FINANCE blog, hmmm?

#143 Doug in London on 07.14.16 at 1:36 pm

Why would anybody in their right mind even think of buying a house in overpriced Toronto or Vancouver in recent times when there have been far better deals to be had elsewhere? Has anyone looked at stock markets lately? If, late last year or early this year you had bought stocks or ETFs when they were on sale you would have made some good capital gains now. Not only that but you would have also pocketed some dividends or distributions along the way. Brexit vote going to shake up stock markets? As a 19th century Brit said, bah, humbug!

#144 Noel on 07.14.16 at 1:40 pm

Wrong. In the 96% range, the US is reaching a stage of full employment after a decade of gains. Of course overall annual job creation moderates as that condition matures. Glad you’re not managing money. — Garth
__________________________

Easiest way to hit full employment is to change the definition of what full employment is. Which is what the BLS did in the 90s. Under the old definition unemployment is around 10-15% – far from full employment.

Also there haven’t been any real wage gains in the US in decades and participation rates are at their lowest since the 70s.

The gains are largely an illusion, the US job market is historically weak right now.

Wrong. The recovery since 2009, halving the jobless rate has been robust. If you want to fret, then do it for Canada. — Garth

#145 ExceptTheMongols on 07.14.16 at 1:43 pm

Good call on ignoring Global and HuffPo. They would have both hung you out to dry in short order.

#146 Smoking Man on 07.14.16 at 1:46 pm

#142 SqrlGrl on 07.14.16 at 1:28 pm
#126 Gonkman on 07.14.16 at 11:34 am

Thank you for the good laugh. Now that you’re finished spewing your own hypocritical vitriol perhaps we can get back to discussing economic, real estate and financial matters on this FINANCE blog, hmmm?
…….

Thank you for the laugh. When I read your posts all I hear in the back ground is the sound of a squealing cat.

#147 Brazil ex-pat on 07.14.16 at 2:01 pm

Statistically, once a women hits 30, her chances of marriage start dropping disproportionately compared to a male. By the time she hits 35 it’s pretty much game over for a whole slew of reasons.

I have watched a massive displacement of older folks with new young families in the little southern Ontario village where I live over the last 3 years. The two most recent guys who moved in have great looking philipina wives :). These appear to be working moms, all with kids so far.

This came as a bit of a surprise to me, although a welcome one. Despite all the financial stupidity and division going on in the big urban centers, life outside the metropolii is evidently carrying on as it always has. The only noticeable difference so far from days gone by appears to be the wives are now more Asian and less White.

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

It also does not help that 35 year old women are terribly out of shape…..

#148 ROTFL on 07.14.16 at 2:12 pm

the US is reaching a stage of full employment

– The US is close to full employment with U6 and housing starts currently at levels associated with the troughs of recessions in the 1950-2002 period

– Trump is unelectable

– One can expect about 7% on average from a balanced portfolio going forward

Each of these statements might be true, but I seriously doubt they can all be true simultaneously — that’s an incoherent worldview, IMHO.

(a) The ‘full employment’ assessment is what I have reported here, and sourced. It was not my statement. (b) Trump is absolutely unelectable. Pray I am not wrong. (c) In the current low-yield world, I have oft stated 6% is a reasonable long-term return expectation. So far in 2016 a balanced portfolio has gained more than 5% (six months). — Garth

#149 maxx on 07.14.16 at 2:16 pm

#24 Long Branch Apprentice on 07.13.16 at 6:47 pm

“Math is hard……………Come to think of it, thinking is hard too.”

Thinking is easy……what’s hard is uncoupling your mind from decades of MSM bs, peer pressure and the brand of “behavior” deemed politically correct.
I never cease to be amazed at how effectively the herd mentality causes even the most educated of people to sway under its influence.

#150 Neil Armstrong on 07.14.16 at 2:30 pm

Daily Dose of Disruption: nothing to do with the global warming debate, it is now cheaper to generate power using solar than using natural gas or coal. Fossil fuels are finished.

http://www.cbc.ca/news/technology/clean-disruption-renewable-energy-canada-1.3470590

The Chinese electric cars are coming!

“Tesla’s new Model 3 is designed to compete with the coming onslaught of Made in China electric vehicles…BYD is the leader. As a result of these numbers, the Warren Buffet backed BYD is bigger than the glamorous California company Tesla, having sold 58,000 EVs in 2015, an increase of 208%. ” – http://www.forbes.com/sites/kenrapoza/2016/04/29/inspired-by-tesla-china-guns-for-affordable-electric-car-market/#26f73cc35058

And don’t forget about India! All electric by 2030. http://economictimes.indiatimes.com/industry/auto/news/industry/india-aims-to-become-100-e-vehicle-nation-by-2030-piyush-goyal/articleshow/51551706.cms

#151 45north on 07.14.16 at 2:39 pm

46 and 2:

“Retreat”, “shrink” and “slow down” are far different than crash. AND – once again….if you actually believe that the powers that be will allow the RE market to follow a huge swing downward in short period of time you are all wrong.

Damifino’s answer was pretty good: When all one has is a sliver of equity and a mountain of debt, they are precisely the same.

Chaddywack gave us the story of a guy in Vancouver who mortgaged his one house to buy four more. If the Vancouver real estate market shrinks just a little bit he’s underwater. So he hangs on because otherwise he has to write four cheques.

As to the powers that be: they don’t support the market like real buyers and sellers. Here’s how the Federal Liberals will handle a crash in Vancouver real estate:

– most of the people in distress bought their houses under the CMHC rules at the time of the former Conservative Government

– we warned you

– announce new community housing projects where you can live

#152 Neil Armstrong on 07.14.16 at 2:40 pm

“I’m driving on sunshine… a gas station, what’s that?” – George Schultz, Reagan’s Sec of State and Nixon’s Sec of Treasury: https://youtu.be/KR39TfpyAgY

#153 Rexx Rock on 07.14.16 at 2:47 pm

We all know real estate in the last few years in B.C. and Ontario have been a great investment.People have become wealthy for just owning a dumpy house but how long can we keep selling each other dumpy houses until its becomes down right risky?Time will tell,congrats to all flippers!!!

#154 ROTFL on 07.14.16 at 2:58 pm

The ‘full employment’ assessment is what I have reported here, and sourced. It was not my statement.

OK, fair enough. But I’ve been hearing “nearing full employment” from various voting and nonvoting members of the Fed (and their gadfly hangers-on) for about two years now, invariably followed by “so it’s time to raise rates.” I don’t know that the US ISN’T nearing full employment — but as I said, with housing starts and U6 at these levels, we’d all better hope it isn’t, otherwise we shouldn’t be surprised if Trump is putting one hand on the bible next January.

My take on the people who say we’re nearing full employment is that they are asserting it as a justification for Fed raises, rather than a reasoned opinion backed by facts. There certainly hasn’t been enough wage inflation to vindicate those who were saying it a year and two ago. And if it is true, we should expect a bit of a slowdown in GDP growth as the economy shifts from an expansionary mode to steady(ish)-state full capacity. That would imply a going-forward real GDP of maybe 1.5-2% — which, again, is the kind of thing that gets people like Trump elected.

I wish I had the answer. It would tell me whether to seek further growth stories for my portfolio, or just stuff it full of companies collecting juicy and sustainable economic rents and be satisfied with those. In Europe and North America, I suspect that may be a question we’ll be grappling with for the rest of this century. Demographics, income inequality and labour’s loss of bargaining power may lead to a long period of growth slower than any of us are used to.

#155 Cagey Bee on 07.14.16 at 3:10 pm

One aspect of the ridiculous prices in YVR I don’t see mentioned much is the effect it has on rising property taxes for small businesses.

One of the things I love most about this city is the lack of big box chain stores. There’s a strong artist community & tons of great indie restaurants & shops. I’m seeing a lot of these businesses close or relocate due to rising rents. When the rest of Vancouver looks just like Robson St, who’d want to live here anyway?

#156 Mr. Frugal on 07.14.16 at 3:22 pm

#20 MF on 07.13.16 at 6:42 pm
#258 rjrt81 on 07.13.16 at 2:32 pm

Lol I’m 33, not some “dinosaur”. What did my comment have to do with telling women what to do with their lives?

Have you spoken to any 33 year old women in your life? How old are you? Do me a favour. Go talk to any 30 year old woman outside and you will hear that having kids is becoming a high priority for most. A lot of them saw the boomer women get older and wait until it was too late. The push is for younger families now.

The reality is Many of these women have spent the last ten years studying and “building careers”, and now when they have to find a suitable mate it is more difficult. It’s also more difficult having kids as women get older. That’s 1 million years of evolution that will never change.

The other part of my post addressed the fact that a lot of women do not know what it means to be feminine anymore. Feminine women are what the vast majority of men are
Looking for. Again, go argue with millions of years of evolution if you disagree.

MF

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

I think you are right on the money! We chose to start our family early. Our last child was born before my wife was 30. My wife was a stay-at-home mom for 7 years. While this involved a fair bit of financial sacrifice it was certainly worth it. My wife tells me that she really appreciated the opportunity to be at home and raise our kids. Our sons are in university now and when I talk with them about this very subject, they both agree that having a parent at home was the best thing ever. Kids need all of the attention we can possibly give them.

Work to live don’t live to work.

#157 jess on 07.14.16 at 3:28 pm

july 1996
Britain’s Mr. Europe
David Davis MP the British minister of Europe
http://www.taxresearch.org.uk/Documents/DavidDavies.pdf#page=1&zoom=auto,-12,841

#158 rainclouds on 07.14.16 at 3:33 pm

Woah Dude, the Huff Post?

BTW thanks for ensuring the DAILY negative Van-stupid RE articles keep coming……..weakly counterbalanced by Royal Lepage pumping

#159 ROTFL on 07.14.16 at 3:37 pm

P.S. ‘Robust’?

The reason many of us did well in the equity markets in the last few years is that so many didn’t believe in the US recovery. And the reason for that is that it was anything but robust. Anaemic, L-shaped, halting, questioned every January thru June for three years running, cleanest dirty shirt, continuous succour to every-day-is-a-shit-sandwich news sites like zeroedge, but better than Venezuela, Russia or Greece. The beatings have continued, and morale hasn’t improved. It was (is? has been?) a great bull market for those of us who were in it, though.

#160 Ole Doberman on 07.14.16 at 3:58 pm

Nothing will change.

200k years of evolution bitches. Humans are wired to reproduce.

Dr Smoking Man
PhD Herdonomics
———————————————————-

Exactly. What we call puppy love or infatuation is just sex hormones subconsciously getting you to breed.

Its’ the way God designed us so we keep the world populated since Noah and the flood – indeed nothing changes.

Garth what are your thoughts on this…..

#161 jess on 07.14.16 at 4:05 pm

DO inverse mergers in Ireland makes gdp go up – jobs go down?
Alex Molinaroli, Chairman, President and CEO, Johnson Controls response to merger with tyco
http://www.bizjournals.com/milwaukee/news/2016/03/08/molinaroli-op-ed-responds-to-clinton-sanders.html
===================================
Johnson Controls Settles China Corruption Case With SECJustice Department declines to bring charges against company partly because of its cooperation

According to the SEC’s order instituting a settled cease-and-desist proceeding against Johnson Controls violated the books and records provision of the FCPA, the SEC said, and the company agreed to a disgorgement of $11.8 million, including $1.3 million in prejudgment interest and a civil penalty of $1.2 million.”
============
York International
U.S. SECURITIES AND EXCHANGE COMMISSIONLitigation Release No. 20319 / October 1, 2007Securities and Exchange Commission v. York International Corporation, 07 CV 01750 (D.D.C.)(RCL)SEC Files Settled Foreign Corrupt Practices Act Charges Against York International Corporation For Improper Payments to UAE Officials, to Iraq Under the U.N. Oil for Food Program, and to Others – – Company Agrees to Pay Over $12 Million and to Retain an Independent Compliance Monitor

” A total of 854 improper consultancy payments were made on approximately 774 contracts — 302 projects involved government end-users, such as government owned companies, public hospitals, or schools.
https://www.sec.gov/litigation/litreleases/2007/lr20319.htm

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•Despite JCI’s efforts to remediate China Marine, the bribery continued.
•From 2007 to 2013, the managing director of China Marine, with the aid of approximately eighteen China Marine employees
in three offices, continued the bribery and theft that began under his predecessor by using vendors instead of agents to facilitate
the improper payments.
•Johnson Controls limited the use of agents, and thus the employees used the vendor scheme to create slush funds. The employees fashioned the improper scheme using vendors because vendor transactions were considered low risk by JCI due to the low
dollar value of the transactionswith the average vendor payment approximately $3400.
•Johnson Controls’ internal controls over vendor payments were less rigorous, and China Marine operated with very little oversight by JCI’s Denmark office, which oversaw the Global Marine business. Even in the instances where managers in Denmark did a review, they did not understand some of the highly customized transactions at China Marine or the projects involving the sham vendors.
•Johnson Controls self-reported this misconduct to the SEC and cooperated with the investigation
https://www.sec.gov/litigation/admin/2016/34-78287-s.pdf

#162 Lolo on 07.14.16 at 4:14 pm

My overall portfolio YTD is up over 5%; my husband’s RRSP portfolio is up about 10%YTD (This is in part because I put in a chunk in a spousal rrsp during the BREXIT downturn). And he STILL thinks we should consider ‘investing’ in a condo to flip for profit (in YVR). Good thing I have veto power.

#163 robert james on 07.14.16 at 4:20 pm

http://www.straight.com/news/735161/revisiting-real-estate-race-and-how-foreign-buyers-narrative-came-dominate-vancouver

#164 Damifino on 07.14.16 at 4:22 pm

#147 Brazil

“By the time she hits 35 it’s pretty much game over for a whole slew of reasons.”
—————————

A thirty-five-year old woman of good health and average appearance would be light years out of my league. But I wouldn’t marry one even if I could.

I’m married to a fantastic, level-headed woman of my own generation who loves me dearly. She even reads this blog from time to time and agrees with most of what Garth has to say (even when the message is served up with a touch more misanthropy than suits her tastes). She’s learned to look beyond that and assimilate the useful information contained within.

I tell ya, folks… she’s a real peach.

BTW, don’t get your hair in a dander over the expression ‘peach’. It’s a good thing.

#165 Globalist on 07.14.16 at 4:23 pm

Man, this other uberpessimistic blogger is the bomb:
http://ponziworld.blogspot.com/2016/07/globalized-euthanasia.html

I actually found that blog in this very comment section. You have to admit the guy has a point at times.

#166 James on 07.14.16 at 4:28 pm

#139 Smoking Man on 07.14.16 at 1:17 pm
#119 toastybagel on 07.14.16 at 10:07 am
Garth,
You’re so quick to remove racist/anti immigrant comments, but what about the increasingly awful sexist ones that are arguably more hateful? I’d like to read this blog without a side of misogyny… it’s exhausting to read.
Also, a story about crazy TO. I know millenials buying 1bdr 500sqft condos at 500k and bragging about how it will double in 5 years…. of course buying with a large down payment from mom and dad. This is really what’s driving the TO condo market… stupid bidding wars on crummy places from millenials with 0 financial literacy besides “housing is safe, it only goes up!!’ and “renting is for losers!”
On racism and sexism: you have no idea what comments I remove, which never see the light of day. I assure you there are many improper comments regarding gender as there are about race. So stuff it. — Garth
………………………………………………
People are so sensitive.
My wife and I have been doing some serious powerwalking last few months.
She has a rather large set of healthy lungs. If you know what I mean. As we walk by dudes, they can’t help themselves, their eyes gravitate to the bounce.
Almost every single time.
No matter how much mind fking and cultural Marxism is shoved down our throughts.
Nothing will change.
200k years of evolution bitches. Humans are wired to reproduce.
Dr Smoking Man
PhD Herdonomics
………………………………………………………………….
Ha, ha, ha isn’t this wife that same one you called the HAG?
We all thought you were secretly trying to off her so you could run off with Shirley.

#167 YVR on 07.14.16 at 4:45 pm

The ‘door’ has been open the same crack for decades. Immigration continues to be about 0.8% of the population annually. Let’s be accurate. The bulk of real estate appreciation continues to come from local-to-local transactions, not local-to-foreign buyer. — Garth
////////////
Garth, I have seen you make this mistake before. Immigrants buying ARE local-to-local transactions. Foreign-to-local transactions do not include immigrants, by default. And either way, it says nothing about the source of funds, which is the only thing that matters in terms of price growth.

A big part of the price boom in my little suburb of YVR has been Mainland Chinese new immigrants. Given what has happened to property prices in Chinese 1st tier cities in the last 12 months, they are taking that money and plopping it down here.

This is external source of cash is stimulating prices, pushing everyone up the property ladder.

Immigrants are Canadians. They are local. They live here. They’re equal to you. — Garth

#168 BS on 07.14.16 at 5:13 pm

150 Neil Armstrong on 07.14.16 at 2:30 pm

Daily Dose of Disruption: nothing to do with the global warming debate, it is now cheaper to generate power using solar than using natural gas or coal. Fossil fuels are finished.

But the ‘study’ has nothing to do with reality. The conclusion of the study that green energy will be cheaper than fossil fuels was a given even before the study was started. Just look at who funded the study and their objective.

The goal of the group — which is backed by Hollywood heavyweights Mark Ruffalo and Leonardo DiCaprio — is to ultimately move the world toward 100-per-cent renewable energy use.

Do you think there was a possibility the green activists would fund a study that came to any other conclusion?

#169 NoName on 07.14.16 at 5:16 pm

https://youtu.be/kEGuHdKn0Lc

Those foreign people…

#170 greyhound on 07.14.16 at 6:06 pm

The old saying goes that you either look like a fool before the trend change or you look like a fool after it. And as we approach the tipping point in the real estate trend, folks get more desperately attached to it and attack more viciously anyone who questions the actions they’ve taken based on the old trend. It’s human nature.
Mr Turner is right of course, & has probably already saved some folks from getting hurt badly, but I don’t image that being “right” just now is very much fun.

#171 BOOM! on 07.14.16 at 6:11 pm

Employment seems much more robust than a few months ago. None I know is unemployed except by their own choice now. (early retirement, or in school for the young, they usually have some PT thing).

Real Estate heating up new 3 br ranches full basement on those $7500 lists hit $159,000 !!!

Virtually NO complaining about the way ‘things are.’ Biggest complaint, is the lack of desirable presidential candidates come November. I tend to agree, although Io hope the minority candidates make a respectable showing.

Hillary, or Trump… not much to look forward to in either one…

In the meantime, all seems pretty decent to me. There is still time for a party surprise via their conventions.

Trump selects the detestable IN Governor for his running mate, another clueless conservative dud.

Bar Time on Thursday!!

M64WI

#172 Herb on 07.14.16 at 6:26 pm

#168 BS,

and who do you suppose funded the studies that showed that there was no fossil fuel problem, and ensured that funded studies came to this conclusion?

BS is available to all sides, activists as well as corporations. The trick is to penetrate the propaganda fog. Give you a hint: Where is the most money at stake, and hence the greater self-interest?