Misery 3

DISHWASHER modified

Misery Week continues here at GreaterFool, where we hope you’re having a memorable day chock full of disturbing insights and a gnawing feeling your mom was wrong. The summer of 2016 will not pass without delivering a boatload of change. It started with Brexit, devolved into Trumpianism and has moved to the Crash Tax. Those of you who crave stability are likely spending more time in the WC. Be brave. More change coming.

While the TSX has gained 12% this year, the S+P 500 is ahead about 6%, with bonds, REITs and preferreds all making significant gains, a balanced 60/40 portfolio has advanced about 5.1% over the last seven months. Not bad. Such a portfolio is balanced, diversified and completely liquid. It can throw off tax-efficient capital gains and dividends or, if inside a TFSA, remain taxless. Markets have shot higher by about 9% since the Brexit mistake, which is exactly what this blog told you to expect. The people with money would make more money. The voters who sought change will get it – for the worse.

The same will hold true as the Trump thing plays out over the next 100 days, but the real action will come after the November election. More on that when autumn comes and you’re paying attention.

The misery du jour does not come for those with financial assets, but rather all the schmucks you work with, and relatives you suffer, who still believe what they hear on Global and CTV. Real estate is hot? Let’s review:

Montreal. Population 4,027,121. Increase in house prices this year: 1%, which is below the current inflation rate. Sales increase is zero. After buying and selling costs, the average buyer in Canada’s second-biggest market has lost money over the last three years.

Calgary. Population 1,235,500. House sales have declined in 20 of the last 20 months. Last month they came in a substantial 12.6% below year-ago levels. Detached home sales in 2016 have fallen by 22% below the 10-year average for the worst showing since 1996 – twenty years ago. Prices have fallen slightly in a year, and are expected to decline substantially.

Vancouver. Population 2,504,300. Sales last month toppled 30% from the previous month and are 19% lower than a year ago. Leading the decline are single-detached units, with prices following suit. The average SFD detached has declined more than $120,000 in the last sixty days. The introduction of the anti-foreign buyer tax yesterday is expected to whack a market already over-subscribed and out of gas.

Halifax. Population 417,868. The largest city in Atlantic Canada has a dormant real estate market, while the rest of the province is comatose. Overall sales activity is running about 5% behind last year, and prices haven’t move from 2015 levels, which were the same as 2014.

Saskatoon. Population 260,900. Briefly the hottest market in the land, the prairie oyster has croaked along with commodities. Sales have fallen 8% from year-ago levels, and average prices along with them. In the rural areas, crickets. Sales have collapsed 15%.

Edmonton. Population 1,363,277. Sales eroded in July, down 16% from last year, with condo transactions off 25% and single detached deals declining 16%. Prices, as you might imagine, are going nowhere, basically stagnant on annual basis. There are more than 8,000 active listings, so “buyers continue to have a good selection” deadpans the real estate board.

I could go on, of course, including Regina, St. John’s or Winnipeg. We’ll see the latest stats on the GTA tomorrow, but it’s a fact many markets in the country are starting to roll over. There are exceptions where sales and prices are up – Victoria or Hamilton, for example – others (like Oakville) where sales are falling but values hiking, and more (like London) where listings have tumbled and prices are ahead modestly. As oft stated here, all real estate is local. But most people have no true idea what’s going on. They get their news from the MSM, which gets it from the realtors. And some just make it up.

Update: Aug 4, 8 am EDT: Toronto prices up year/year in July by 16%. Sales of detached 416 houses tumble 6.5% and semi sales fall 11.5%. Listings evaporate. Market prognosis: unhealthy.

If you want a house, can afford it and live where real estate is staggering, then go ahead and buy. But if you think grabbing a property is a sure-thing investment strategy, while stocks and bonds are too risky, think again. You’ve been infected by the Re/Max-Global-Soper-Lamb-LePage-Rennie disease.

There’s only one cure. You’re dosing now.

 

 

210 comments ↓

#1 Cheese on 08.03.16 at 12:20 pm

I bought my first set of preferred shares this week, things are looking up!

#2 View on 08.03.16 at 12:23 pm

HI Garth,
You’re awesome! I have been loving the blog for years now!!

#3 Life among the Stars on 08.03.16 at 12:25 pm

This is better than shark week!

#4 Nat on 08.03.16 at 12:34 pm

Garth, What about the GTA? Will the foreign investors not just take their money from Vancouver and move it to Toronto causing an increase in value of homes that are already hot? Supply of homes is so low here. What do you forecast for the Toronto area?

#5 JRH on 08.03.16 at 12:34 pm

It’s still a good day to be above ground !

#6 Ray Skunk on 08.03.16 at 12:41 pm

Woah, ridiculously early today.

#7 Say What? on 08.03.16 at 12:48 pm

Despite all the gloom about the Calgary economy and RE, the fact is prices have barely edged downward. Unless rates go up (which they no f$%#&^% can) houses in Canada are safe. Period.

#8 Chaddywack on 08.03.16 at 4:46 pm

Not planning on buying soon, but I’m getting sick of renting. My last landlord tried to screw me out of $150 of the damage deposit because he said the place was “not clean enough.” I hear this is a common scam they do.

We threatened to take him to the Tenancy Branch and he rolled over and gave us it back right away.

I’m still renting, but I can see why people just go ahead and buy when they’re sick of things like this happening. Anyway this got me thinking…..I’m not planning on buying at the top of the market, but really if we’re planning on moving to Vancouver for the next 25-30 years is there really any harm in buying at the top? In 30 years things will be higher anyway.

Learning the dark side of being a tenant!

#9 Matt on 08.03.16 at 4:47 pm

The reason why all markets except Vcr and GTA are stagnant is simple: China buyers

Perhaps people are less insane. Fewer lattes and Vespas make a difference. — Garth

#10 Jimmy on 08.03.16 at 4:48 pm

Even too early for us firsters.

#11 Geoff on 08.03.16 at 4:48 pm

So with exceptions like Oakville where sales are down but prices are up, what RE outlook should one have?

#12 Kevin Cook on 08.03.16 at 4:52 pm

#5 Say what:

“Despite all the gloom about the Calgary economy and RE, the fact is prices have barely edged downward. Unless rates go up (which they no f$%#&^% can) houses in Canada are safe. Period.”

Lol! That was a good one!

According to Garth:

“Vancouver:
Leading the decline are single-detached units, with prices following suit. The average SFD detached has declined more than $120,000 in the last sixty days. The introduction of the anti-foreign buyer tax yesterday is expected to whack a market already over-subscribed and out of gas.”

So Vancouver house prices have “edged downward” by a mere $120,000 in the last sixty days, and that was before the game-changing “crash tax” was announced.

Yeah, nothing to see here, move along folks. Lol!!!

#13 Dracula on 08.03.16 at 4:52 pm

The official report:
http://www.cknw.com/2016/08/03/decline-in-home-sales-for-july-in-metro-vancouver-report/

#14 Zen Headspace on 08.03.16 at 4:57 pm

As has been previously noted by Garth and various blog dogs, one of the key drivers of the insanity in the real estate market is FOMO.

Our lives are often ruled by the Fear of Missing Out, or FOMO. (Never heard of FOMO? You’re missing out.)

As an emotionally ruled species, we are subject to the weakness of worrying about what we could be having as opposed to enjoying what we already have.

The house we live in, that’s affordable or maybe even paid off, isn’t good enough. Somebody we know has a bigger one, nicer one, better one, fancier one, one with marble floors, one with 7 bathrooms, is in a nicer neighborhood, and on and on. Either way, we suffer because we think that there’s something better than what we already have out there that we are missing, and that by getting it we will be happier and richer and have more status and fun and feel better about ourselves.

Some ways we let the fear of missing out rule us:

We check email, Facebook, Twitter and other social networks often, in case we’re missing something important.

We try to do the most exciting things, and are constantly in search of exciting things, because we’re worried we might miss out on the fun that others are having.

We constantly read about what other people are doing, and try to emulate them, because it sounds like they’re doing something great that we’re not.

We often want to travel the world, because it seems that other people are living amazing lives by traveling all the time.

We miss what we don’t have, miss things, places and people who we aren’t with.

We work constantly, because we think if we don’t, we might miss out on opportunities other people will get.

We feel like our own lives are poor in comparison with the great lives others are leading, and so feel bad about ourselves.

The truth is, we could run around trying to do everything exciting, buy newer and more expensive houses, and travel around the world, and always stay in touch with our smart phones, and work and party all day long without sleep … but we could never do it all. We will always be missing something.

And so, if we cannot help missing out, what is a saner alternative than letting this fear drive us? Let go of it, and realize you have everything right now.

The best in life isn’t somewhere else. It’s right where you are, at this moment. There is nothing better than exactly that.

Today’s millennial FOMO buyers are taking on unprecedented levels of risk. Those who do get into the housing market today could be the most precarious generation of buyers ever. All the easy money’s been made in housing, while the risks of owning multiply.

KEEP CALM AND SAY NO TO FOMO!
——————————————————————–

Ref: Zen Habits – The 39th Lesson BY LEO BABAUTA

Ref: ROB CARRICK Globe & Mail
“Fear Of Missing Out leaves millennials taking on big risk in housing market”.

#15 Context on 08.03.16 at 4:59 pm

Toronto – sell out if you can and rent for a few years and watch the horror show. In BC the real estate bozos are in a panic as deals are not closing and people are walking away from their deposits. This starts the train wreck as each deal links to other deals that cannot close keeping the lawyers busy with litigation. It might be too late now to sell your home in Toronto as buyers are cautious and few. Better to take a small haircut now to get out or be bald headed by next year.

#16 Neal Galou on 08.03.16 at 5:19 pm

Drat! Too late to be first today. Hopefully I can make the top 10!

#17 Happening now on 08.03.16 at 5:27 pm

Markets – Bloomberg
http://www.bloomberg.com/news/articles/2016-08-03/evans-says-one-fed-rate-hike-this-year-perhaps-appropriate

Rates aren’t going up any time soon so R/E staying put !!

#18 TurnerNation on 08.03.16 at 5:32 pm

From the Social Engineering dept. Suprised he hasn’t lost his job.

“Wasp” male expresses a view/opinion and see what follows. (Terrible trauma is experienced.)

http://www.cbc.ca/beta/news/canada/prince-edward-island/pei-wayne-easter-vegan-twitter-activist-1.3704148

“P.E.I. MP Wayne Easter tells vegan to ‘have a T-bone steak’ on Twitter
Easter says his comment was ‘inappropriate’ but he had no idea tweeter was a vegan”


Media attack it with a second volley of weapons:

http://www.cbc.ca/beta/news/canada/prince-edward-island/pei-female-mlas-politics-1.3705814

#19 Victoria Real Estate Update on 08.03.16 at 5:36 pm

# 5 Say What?

In typical realtor fashion, you post the same garbage on Garth’s site over and over.

Your realtor opinion: the only thing that can make house prices fall in Calgary is rising rates.

Then you go on to say that rates can’t rise in Canada (probably because you know that tens of thousands of Canadian mortgage holders would be screwed if that happens).

Therefore, you conclude, prices can’t fall in Calgary and Calgary’s housing market is immune to any price correction.

Your message to potential buyers: buy now in Calgary – it’s totally safe (and you need the commission).

All of your claims are completely false and lack any sort of proof in the way of factual data. Here’s why:

First, mortgage rates don’t have to rise for a major housing price correction to occur. Consider what happened in Calgary from 2007-09 while CANADIAN 5-YEAR MORTGAGE RATES WERE FALLING:

. . . . . . . . . . . . .Calgary House Prices. . . . . . . . . . . .
. . . . . . . . . (September 2007 to June 2009). . . . . . . . .
. . . . .(Percent Below September 2007 Price Level). . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 0%. . . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 0.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 1.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 1.5% . . . . . *. . . . . . . . . . . . . . . . . . . . . . . . . . .
– 2.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 2.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 3.0% . . . . . . . . . . . . . . *. . . . . . . . . . . . . . . . . . .
– 3.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 4.0%. . . . . . . . . *. . . . . . . . . . . . . . . . . . . . . . . .
– 4.5% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 5.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 5.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 6.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 6.5%. . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . . . .
– 7.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 7.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 8.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 8.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 9.0%. . . . . . . . . . . . . . . . . . . . . . .*. . . . . . . . . .
– 9.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-11.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-11.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-12.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-12.5%. . . . . . . . . . . . . . . . . . . . . . . . . . .*. . . . . . .
-13.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-13.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-14.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-14.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-15.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *. .
——————————————————————————————-
. . . . . . . .Sep. .Dec. .Mar. .Jun. .Sep. .Dec. .Mar. .Jun. .
. . . . . . . . 07. . .07. . 08. . .08. . .08. . 08. . .09. . .09. .

(Source: Teranet’s house price index)
(link)

There are plenty of other examples that prove your claim wrong. For example: Japan’s housing meltdown took place while rates were at emergency levels.

Second, rates will rise. Canadian 5-year fixed mortgage rates are controlled by the bond market, not the Bank of Canada. When rates rise in the US (this will begin soon), Canadian fixed rates will follow. History proves this to be true.

Calgary’s 2007-09 price correction will be nothing compared to what will happen next in Cowtown.

#20 paulo on 08.03.16 at 5:38 pm

so media reports would indicate the “FIX” is in the Donald
is toast. what a pussy in the end, this should shake up a few things, as if there was not enough
interesting times to be sure, personally im thinking we are screwed , over bought over leveraged real estate market, poor economic outlooks from Europe,South america,canada to name a few. house hold debt at record levels in this country ,a very significant real estate correction commencing , if you think 1989 was bad watch what happens next. keeping in mind that oil was 6% of our GDP and look how the oil slick un footed us, real estate and related is some 20% of our GDP
see the train on the tracks coming at you if you bought in the last few years -road kill comes to mind
so what to do…. 1) get out if you can 2) follow this blog on how to invest it, and rent 3) play every tax advantage to the max (legally of course) the cra has the off shore havens nailed anyway, otherwise in the very near future “cash will Be King ” there will be plenty of opportunities
caution and due diligence recommended, the next year is shaping up to be quite a ride, so get your safety belt on

#21 bdwy sktrn on 08.03.16 at 5:39 pm

The average SFD detached has declined more than $120,000 in the last sixty days.
—————-
???

detached prices up huge y/y and up slightly m/m

“the benchmark price for detached homes — an average of typical homes sold — hit $1.58 million in July, which is still running at 38 per cent above the same month a year ago and up just over one per cent from $1.56 million in June.” – vansun

Average prices are down by six digits from late Spring. Check it out. — Garth

#22 Milla on 08.03.16 at 5:40 pm

#9. Zen. It sounds as a wrong environment you are in. Not every one like that at all.

#23 Moron Face on 08.03.16 at 5:45 pm

The bond market looks interesting. It’s possible that yields bottomed in early July, forever…

#24 Mark on 08.03.16 at 5:51 pm

“Despite all the gloom about the Calgary economy and RE, the fact is prices have barely edged downward. Unless rates go up (which they no f$%#&^% can) houses in Canada are safe. Period.”

Nothing could be further from the truth, although typical Realtor jerrymandering and sugar-coating of the statistics may make it seem that way if you don’t know what’s happening “on the ground”. The typical Calgary home is down 20-30% from the 2010-2011 peak at the moment, with no end in sight to the reductions in offers.

Calgary peaked earlier than the rest of the country because so much of the economy was overwhelmingly weighted to the housing sector. I mean, take housing out of Calgary’s economy, and what else was really left over the past 5-10 years?

#25 Mark on 08.03.16 at 5:54 pm

“So with exceptions like Oakville where sales are down but prices are up, what RE outlook should one have?”

Repeat after me:

“Its the sales mix, stupid”
“Its the sales mix, stupid”
“Its the sales mix, stupid”

And, of course, down. For many years to come, if not for a generation. We’ll look at housing in 30 years like gold stock owners have looked at their holdings for the past 30. With sadness for so much lost opportunity.

#26 james on 08.03.16 at 5:57 pm

The tax on foreign buyers is probably the end of Vancouver’s boom.

Why? Not because I believe that foreign money is propping up the market.

Rather, low rates, government intervention (e.g., CMHC) and (most importantly) herd psychology are propping up the market.

People buy assets at record high prices (hint: risky) because they expect further price increases. Parents pull money out of their inflated home values using helocs and give it to their kids so their kids can get in on the sure-fire gains.

That just changed. Newspapers are flooded with stories of the damage that this will do to the market. Buyers pulling out, etc.

That, in turn, will take away that mass expectation of rising prices, and might make people think more carefully about what debt is involved in Canadian housing.

Should be interesting to see.

#27 Context on 08.03.16 at 6:00 pm

Here is another reason to sell in Toronto and the GTA as calculate the losses of tax free dollars while you watch the prices going down. The next time period for a listing has come and gone as that started months ago with the sales rush. Its going to be a long cold winter, and its not the time for greed. Garth warned you all, did he not.

#28 Canadian on 08.03.16 at 6:08 pm

#12 Zen Headspace on 08.03.16 at 4:57 pm

Your definition of “we” sounds more like the narrow population of early-twentysomething upper middle class white women. I couldn’t name a single person I know that falls into your definition of “we” that doesn’t come from that demographic.

#29 WalMark of Sadkatoon on 08.03.16 at 6:09 pm

Can’t wait for YYZ stats. I hope prices come down. Repent!

#30 Smoking Man on 08.03.16 at 6:11 pm

#21 Moron Face on 08.03.16 at 5:45 pm
The bond market looks interesting. It’s possible that yields bottomed in early July, forever…
…..
Do not invest on your own. Get an advisor r. Clearly you can’t see a down trend in the yields.

#31 S.Bby on 08.03.16 at 6:14 pm

#19 BS
Average prices are down by six digits from late Spring. Check it out. — Garth

Good Luck trying to convince that guy.

#32 I have 11 vacant house on my street. on 08.03.16 at 6:18 pm

BEST Summary yet.

You’ve been infected by the Re/Max-Global-Soper-Lamb-LePage-Rennie disease.

There’s only one cure. You’re dosing now.

#33 YVR update on 08.03.16 at 6:19 pm

#8 Matt on 08.03.16 at 4:47 pm
The reason why all markets except Vcr and GTA are stagnant is simple: China buyers

Perhaps people are less insane. Fewer lattes and Vespas make a difference. — Garth

——

Serious Garth? OMFG. Hahaha

And Matt, don’t ever mention the F word here.

#34 YVR update on 08.03.16 at 6:20 pm

Average prices are down by six digits from late Spring. Check it out. — Garth

Hahaha. No offence. But come down here and see for yourself.

All the houses now have scorecards? — Garth

#35 Freedom First on 08.03.16 at 6:27 pm

#12 Zen Headspace

Yes. Zen Headspace. You nailed it. Perfect. I live daily with an attitude of gratitude. And it has gotten easier and easier on a daily basis over the decades, simply by practicing doing the next best thing, daily, for me, and helping others.

Been thinking about how much Garth helps others, while at the same time have been reminded of John/Jack Bogle and his philosophy. No disrespect to Mr. Bogle, but GT and this Blog come out ahead of everyone.

I live in Alberta, and believe me, the anxiety and fear present here is now palpable beyond what I can describe. Keep in mind, I have been giving my “Alberta Updates” since the oil crashed in 2014, and was ostracized here for it, and called a liar, because I was, and still am, miles ahead of the msm.

That being said, while I have empathy and compassion for my fellow man, my life has never been better in any way.

As people here and everywhere else know, I firmly believe that my ability to help others is directly reliant to how well I look after myself.
It is my responsibility, and mine alone, to always put my own Freedom First. No exception.

#36 Re turner on 08.03.16 at 6:34 pm

The re-max balloons are in full flight over our cities:

http://www.remax.com/newsroom/company-info/remax-balloon/

It doesn’t take a fully cynical person to associate the re-max balloons with the re-max real estate agents, they are both full of “hot air”.

#37 earthboundmisfit on 08.03.16 at 6:34 pm

I get your enthusiasm for preferred share ETFs. I’d be grateful for your opinion. Do they have any place in registered accounts where they lose the beneficial tax status?

#38 Michael H on 08.03.16 at 6:42 pm

We’ve been renting for six years since moving to Calgary. Although times are tough here, the prices on housing just aren’t coming down. My belief is that Canadians in general are extremely resilient. We find a way to make it work. If that means dad moves out to Ontario or B.C. for a job and lives in a shack while mom and kids stay at home in the mortgaged house, so be it. Even though fundamental indicators show that we are in about the same or worse shape than the U.S. back in 2008, I believe the difference is that Canadians have that bit more grit and are not so willing to give up. My 2c

#39 Atrate on 08.03.16 at 6:52 pm

@#12 Zen Headspace
Best. Post. Ever.

#40 bdwy sktrn on 08.03.16 at 7:02 pm

Average prices are down by six digits from late Spring. Check it out. — Garth

————————-
checked.

benchmark prices up every month.

avg sold prices had a spike (sales mix?) in jan

jan 1.8265
current 1.7647

diff= 61.8k

over which time benchmark went from 1.27 to 1.578
– so the typical sfh owner is up 6 figures times 3

—————–
btw – love al the excellent posters, thanks a lot – this is the best reading on the web. (except dot-crazy vreu and mark)

Average is not benchmark. Beware Frankenumbers. — Garth

#41 Victoria Real Estate Update on 08.03.16 at 7:03 pm

VICTORIA’S HOUSING MARKET BEGINS GEARING DOWN PROCESS FOR FALLING HOUSE PRICES – AGAIN

A dramatic 23% month-over-month drop in single family home sales suggests this is true.

The number of SFHs sold across Greater Victoria has declined in each month since April 2016.

Drop in SFH sales (comparing July to previous months):

21% (March 2016 – July 2016)
36% (April – July)
30% (May – July)
23% (June – July)

The drop in sales isn’t showing up on a year-over-year basis yet, but it will soon.

There are plenty of examples of residential properties that either took extended periods of time to sell or are still sitting on the market.

For example, not too long ago I wrote about 795 Gladiola Avenue that took over 3 months to sell. This verifiable information was much different than the (unverifiable) information that local realtors posted that gave the impression that the market was so strong that almost all houses were selling with “unconditional multiple offers on day 1”.

Other examples I’ve recently noticed (there are plenty of others as well):

202-76 Gorge Road West
Days on market: 120 plus

Google the next line to view the listing:
202-76 Gorge Road West for sale

106-4040 Borden Street
Days on market: 80 plus

Google the next line to view the listing:
106-4040 Borden Street for sale

As I’ve said many times in recent months, there is a 100% chance that the current supply/demand conditions will change. I also said that house prices in Victoria will begin to fall again.

Why? It’s simple.

Victoria’s housing bubble is massive. Since 2013, this important bubble-measuring data (second chart) shows that Victoria’s bubble is as big as or bigger than bubbles in Toronto and Vancouver. It shows that over 30% of those taking out new mortgages in Victoria have done so with high loan to income ratios of at least 450%, competing with Toronto and Vancouver for top spot in the country. That is extremely high. Compared to Halifax, for example, where that number is only 5%, Victoria’s 30% is screaming: GET OUT NOW!.

Canada’s housing bubble is, perhaps, the biggest the world has seen and Victoria’s bubble is competing for top spot in the country. What the future holds for Victoria’s housing market won’t be a pleasant event for mortgage holders expecting yearly price appreciation.

#42 Interstellar Star Stuff on 08.03.16 at 7:05 pm

#32 Freedom First on 08.03.16 at 6:27 pm

#12 Zen Headspace

Yes. Zen Headspace. You nailed it. Perfect. I live daily with an attitude of gratitude. And it has gotten easier and easier on a daily basis over the decades, simply by practicing doing the next best thing, daily, for me, and helping others.

Been thinking about how much Garth helps others, while at the same time have been reminded of John/Jack Bogle and his philosophy. No disrespect to Mr. Bogle, but GT and this Blog come out ahead of everyone.

I live in Alberta, and believe me, the anxiety and fear present here is now palpable beyond what I can describe. Keep in mind, I have been giving my “Alberta Updates” since the oil crashed in 2014, and was ostracized here for it, and called a liar, because I was, and still am, miles ahead of the msm.

That being said, while I have empathy and compassion for my fellow man, my life has never been better in any way.

As people here and everywhere else know, I firmly believe that my ability to help others is directly reliant to how well I look after myself.
It is my responsibility, and mine alone, to always put my own Freedom First. No exception.


Why do you say the same thing every single day!

#43 Sebee on 08.03.16 at 7:05 pm

Are these decreases as indicated by the official Frankenumber?

#44 prairie person on 08.03.16 at 7:06 pm

A member of my family put a condo for sale in Burnaby a week ago. The result was crazy. 11 bids. 7 with no conditions. When the bids were being opened, realtors kept calling and upping their bid. The closing price was higher than the highest price the realtor had predicted. Obviously, the condo market has not cooled.

#45 Fed-up on 08.03.16 at 7:07 pm

FOMO is somewhat justified, sorry.

I know that prices are “sticky” but seriously, with the prices of houses in every major city doubling and even tripling or more in the past 15 years, where is the significant correction? If we are consoling ourselves (dare I say,”Boasting”) with “flatline” or “only” up 1 or 2% in what are mainly small markets after $27 oil, then the sideline sitters took a serious hoof to the nuts as their portfolio’s certainly didn’t earn them $500,000 or far more with a mere $50,000 investment on 1 single property in Toronto, Calgary, Edmonton, Montreal, Victoria, Vancouver and God help us, even Regina and Winterpeg.

So far, in the past 15-20 years, the only existing “risk”, was taken by those who did not buy, rented and stayed liquid and were lucky to get 6 or 7% average returns on their hard earned savings while having to blow $20,000 or more per year on rent. Remember that in order to get 6 or 7% average returns, you could not touch a dime of your money, or the returns were a lot worse. Sounds like fun right? At least you can live in your overpriced home.

Without a 50% + correction, sideliners are only kidding themselves, sorry. Until then we are just repeating ourselves and proving that simpletons who blindly walk in and buy 15% over asking of an already insane price, look like geniuses by comparison, oh and let’s not forget their 2% mortgages (free money right?). The $100,000 in property taxes, maintenance and insurance paid in the past 15 years is easily justified by $700,000+ increase in equity in the average GTA detached home. Sure, a 40-50% drop in prices would change all that, but really, who here sees that happening?

I used to think a huge downturn was inevitable, but now I sincerely doubt it. I will believe it when I see it.

#46 Prairieboy43 on 08.03.16 at 7:08 pm

TREB, annual golf tourney.
http://golf.swingbyswing.com/article/golfers-fight-on-the-fairway-of-denver-course/?utm_content=1830&utm_campaign=Golf_Course_Brawl__Emergency_Landing_on_Fairway&utm_source=newsletter&utm_medium=email&utm_term=link-5

PB43

#47 Aggregator on 08.03.16 at 7:08 pm

Some excerpts from the Independent Advisory Group's (IAG) report on the Real Estate Council of B.C. (RECBC)

Real Estate Boards and the Regulator

It is important to distinguish between the REALTOR® Code and Standards and the regulatory regime established pursuant to the Act, the Regulation and the Real Estate Council Rules. Only the latter creates the legally enforceable standards for licensee conduct and practice, and is intended to serve the public interest. In comparison, the REALTOR® Code and Standards are created by and for association members for their collective interests and are not subject to public oversight or scrutiny.

[REALTOR®] Licensee Education

The IAG thinks that a similar focus must now be placed on entry level education. Real estate licensees handle what is, for most people, the largest financial transaction they will make. Compared to other professions that handle financial transactions and give advice on those transactions, the entry level education standards for real estate licensees are low.

Representation on the Real Estate Council Board

Finally, the most important change to governance that the IAG recommends is a rebalance of the Real Estate Council itself. The ratio of industry to non-industry members that make up the governing body of the Real Estate Council, currently at fourteen to three, is not in keeping with modern governance principles.

Industry members are elected to Council by their peers and many have previously served on a local Real Estate Board. Licensees elected to Council bring industry experience to their role, but may also perceive that they owe a duty to the peers who elect them, rather than a duty to the public.

RECBC was granted self-regulation in 2005. That privilege has now been revoked as the Government takes over and enforces legal standards. Next up… TREB, who was supposed to make MLS sales price history public today, but somehow managed to weasel out at the last minute.

#48 mouldy in YVR on 08.03.16 at 7:09 pm

financial fault lines….who’s insured and who isn’t and who will pay…….when the ‘big one’ hits………….risk management………………Hello!
https://www.cdhowe.org/sites/default/files/attachments/research_papers/mixed/Commentary%20454_0.pdf

#49 common sense on 08.03.16 at 7:13 pm

How about just calling it REALITY WEEK?

#50 Linda on 08.03.16 at 7:14 pm

If RE is staggering, wouldn’t it be better to wait until it has fallen down? That way one may avoid being crushed as it topples….. & would also be better able to triage which properties are most likely to respond to treatment. As in, recover in value in the shortest amount of time, or provide best value for the effort invested.

#51 common sense on 08.03.16 at 7:15 pm

#32 Freedom First

It’s also very important that you not only take care of yourself first but also LOVE yourself first before you can take care of others.

Try working on that a bit, would ya?

#52 JP on 08.03.16 at 7:15 pm

USA recovery story getting better and better. Debt slaves in Canada are like a deer in headlights. Rate hikes coming.

http://www.morningstar.com/news/market-watch/TDJNMW_20160803423/update-oil-futures-soar-after-big-drop-in-gasoline-inventories.html

http://www.wsj.com/articles/adp-private-payrolls-rose-179-000-in-july-1470228077

#53 Squidly77 on 08.03.16 at 7:19 pm

https://pbs.twimg.com/media/Co8PFkPXgAAaYo5.jpg

#54 Contentment VS Trapped on 08.03.16 at 7:20 pm

#12 Zen Headspace

Be content with what you have; rejoice in the way things are. When you realize there is nothing lacking, the whole world belongs to you.

Lao Tzu

Greed is costly. Assembled fortunes are lost.
[Tao Te Ching chapter 44]

#55 Squidly77 on 08.03.16 at 7:26 pm

$MIC slide deck says 1/1/17 implementation of new OSFI reg

#56 BOOM! on 08.03.16 at 7:28 pm

Yeah, like the scorecard. Those investments seemed to have TRUMPED the gains in RE without all the darn associated costs, and ill-liquidity. But, the smart money knew that. Too bad it is so scarce!

My portfolio is ahead $64,360 (or 9.1%) from the 01/01/16 start line. I’ve already taken my allowance that we wanted from it for the year, so the rest is on the table. It can continue to climb the ‘wall of worry’ for the balance of this year. Naturally, next year is a fresh game.

Being diversified, debt free, disabled, and a geezer not exactly what I had expected, but it is still quite ‘do-able.’
Sure beats my 63 year old friend Dave, who hit room temperature Saturday morning. Yup, no guarantees, but every single day is a gift, even the ones that really suck.

I try not to create undue bullshit, but in our world even I find that can be difficult at times. the Hillary vs. Trump endless circus never helps quell the noise. Peace, out…

#57 DW on 08.03.16 at 7:28 pm

I apologize if this has been covered already.

Garth, do you have access to July stats already? I checked on the Vancouver real estate board’s website and found only sales data current for June.

But for the last 60 days up to June Vancouver’s prices averaged about an 11% increase?

Am I missing something?

Thanks.

#58 Misery 3 ...? on 08.03.16 at 7:31 pm

DELETED

#59 Context on 08.03.16 at 7:32 pm

The other night targeted an area and up came 500 rentals north of Toronto in cottage country. This was a lucky score as it was open and couldn’t change the target area without registration. This is a very sophisticated site in the dark that I know well with all the bells and whistles including numerous ways to make payments directly to the owner. This site is used exclusively for snowbirds in Canada and USA who own properties in Mexico. They fly down for about 5 months and with home computers rent out for the rest of the year. It appears the Canadian division owns rental properties in cottage country too. Amazing and are they paying taxes on all this rental income? The tax man should be hiring me on a part-time basis.

#60 crowdedelevatorfartz on 08.03.16 at 7:35 pm

I live in an apartment building ( with ooodles of elevators!) and I ran into one of the building supers. Seems the bank is remortgaging the building and ….for the first time in years….the bank wants to “come and check out a few random suites to “assess the value of the building” ie mortgage.

Yep, the banks are tightening up……

#61 waiting on the westcoast on 08.03.16 at 7:36 pm

Perhaps people are less insane. Fewer lattes and Vespas make a difference. — Garth

Hey – I know you were referring to hipsters but it sure comes across as beating on the Italians… Unless, could it be… a double entendre. ;-)

A property went up for sale 4 blocks from my parents place. Flat 7 acres with no structures… Asking $2.4M. My parents thought they might get $1.5M for their property just a couple of months ago. Also 7 actress with an older but well maintained larger home and a large shop and barn. But of course, they are Italian and will never sell. Probably could get close to$2M for another month or two before the insanity turns into panic…

#62 Say What? on 08.03.16 at 7:37 pm

17 Victoria Real Estate Update on 08.03.16 at 5:36 pm

For the record, I would actually love to see RE prices correct and to be at a reasonable level of 3-4 times average income. Especially in TO and for my 2 sons. One to be married soon. However, it isn’t going to happen. That bus has left town a long time ago. And I’m not a realtor. I mostly dislike them (the majority) for a number of reasons.

OK, let’s discuss.

1st. I gave Calgary just as an example of a market that has been experiencing a lot of problems for at least a year and RE still hasn’t fallen appreciably. I’m simply trying to make a point about how strong RE is in Canada. I do admit that Calgary is one of the few places in Canada that has some risk. I personally wouldn’t buy there right now. However, I will say that in 15 years, RE prices in Calgary will be far higher than they are today. Your own example of the price correction of 2007-2009 would indicate that prices will recover and go even higher.

2nd. I say rates will NOT rise. Garth has been making the same statement about the bond market for years. Well, the bond market has willingly accepted low returns for the last eight years. So why, all of a sudden, would it not any longer. Central bankers around the world are not raising rates (they’re lowering them) and there is no place for the bond market to go for higher returns. That includes the US. A 1/4 point rate increase is nothing.

3rd. Your example of Japan is not applicable. The big difference between Japan and Canada is the population growth. Japan is on the decline and their population is aging. So, of course, hosing demand will not be strong. Canada’s population, however, is growing massively. Especially Toronto. There’s a fresh planeload of immigrants landing at Pearson every 10 minutes. I have nothing against immigrants. My parents immigrated to Canada in 1951. The point is that immigrants do increase the overall demand for housing and prices are always based on supply and demand.

4th, 5th, 6th and 7th. Canada’s fixed rates are NOT going to rise. Not appreciably. Do you want to know how I know that? Simple. Everyone, one way or another, would be screwed if they did and we would probably have a financial collapse. A financial collapse might come anyway because very many of us are living well beyond our means, but, for example, a 3 point rate increase in the next 2 years would be murder.

#63 the Jaguar on 08.03.16 at 7:45 pm

#15 Victoria Real Estate Update:

Mortgage rates went up 20 basis points across the board today at one Bank. Five year rate is now 4.94

#64 the Jaguar on 08.03.16 at 7:46 pm

Darn. That was meant for poster #17

#65 Andrew Woburn on 08.03.16 at 7:49 pm

There goes the Sunshine Coast.

– Norway May Build an Underwater Tunnel to Ford the Fjords

“Conventional bridges and tunnels sound like obvious solutions, and Norway has its fair share of those. But those come with their own problems: the floor of every fjord has its own delicate geology, bridges can disrupt maritime activities, and steel trusses risk sullying the pristine natural beauty.

A hybrid approach to the coast’s impassability might be the ticket, and it looks as if one could actually get built. Norway’s public roads administration has proposed building the world’s first “submerged floating tunnels” along E39. These would be, essentially, tubes sitting up to 100 feet beneath the water’s surface, tethered to floating pontoons and seabed anchors. Officials estimate that a permanent system of these crossings could cut trip times along the coast in half, at a cost of $25 billion..”

http://www.citylab.com/design/2016/08/underwater-tunnel-norway-fjords/494093/?utm_source=feed

#66 Misery 3 ...? on 08.03.16 at 7:50 pm

DELETED

#67 The Wet Coast on 08.03.16 at 8:10 pm

I assume the July RE sales numbers included all the deals trying to close under the wire to avoid the tax. My assumption is that a sale is only booked in the sales stats once it closes. If this is true, the July numbers would have been brutal had they not got a boost from the future sales rushing to avoid the tax. So….a pile of future sales just got booked in July. August will have some of this from Aug 1….but September won’t. If my assumptions are right, then July was much worse that the numbers show.

Sales are counted when accepted, not closed. — Garth

#68 LP on 08.03.16 at 8:10 pm

re #12 Zen Headspace on 08.03.16 at 4:57 pm

The following is extrapolated from a blog post I get several times a week. It says a lot about how some of us live and others would like to live.

…Luke 12 tells the story of a rich man with a great abundance of crops, and having outgrown a place to store it all, didn’t know what to do—such a problem! Should he tear down his barn and build something huge enough to keep his growing bounty? He didn’t seem to be inclined to share. It’s not hard to guess what God had to say about this preoccupation with abundance.

Unfortunately, this rings true for me and maybe for you, too. My husband and I actually paid to store stuff we had no room for and probably didn’t need. We have an attic so full, we may be found dead in our bed one day, crushed by the collapsed ceiling above and the fallen boxes of… I don’t remember. I am ashamed every time I throw out refrigerated food that has expired. Sound familiar? As a society, have we lost our grip on the concept of “enough”? A bigger house? More eating out? What do we all have that could make someone else’s life better? What is enough for you and for me?

There is a song often sung during the Jewish Seder meal, “Dayenu,” which means “it would have been enough.” It has many verses that recount the events of the Passover story. After each verse, everyone sings the dayenu refrain. “If He had brought us out of Egypt, …if He had fed us manna, …If He had given us the Torah,” it would have been enough.

Dayenu means we must not take for granted what we have at this moment, as individuals or in community. Dayenu—enough—suggests that while we juggle the baggage of full lives but still look for more, we’re missing out on the today God has already blessed. We’re missing out on the opportunity for gratitude. Receiving enough is nothing short of a miracle when many only know scarcity.

…As I write this, I will become 70 years old next birthday. I hope that’s not enough, but if it is, wow, and thank you, God.

Dayenu.

#69 Chaddywack on 08.03.16 at 8:20 pm

@24 james

Well said! In talking to some people back home in Vancouver I really think that the damage from the foreign buyer’s tax is the sudden expectation that prices are going to fall. This means drying up buyers, sellers start listing hoping to cash out by offering deals etc. (to foreign nationals only–Canadians pay full price….according to them).

Fear is a hugely powerful emotion and has distorted the whole market. Any PhD psych students here? There is a thesis topic for you!

#70 Entrepreneur on 08.03.16 at 8:24 pm

“It started with Brexit, devolved Trumpianism and has moved to the Crash Tax.” GT

The change could be that people are waking up to what is really going on because of the internet.

And/or more older people, less younger people, less, less of everything.

The bottom line is that people want jobs to support their families and have fulfillments. Do the young people have that, NO.

Liberal Premier of B.C. sends our jobs overseas. How does help the people who she is suppose to be representing? The Premier should talk and act for ALL the people of the land and give the jobs to the people of that land.

Brexit was the right thing to do as the people of the land are the number one prority (first Not last). Let the people decide what is right and what is wrong, the law of the land.

Right now the sad climate change is getting worse according to the news but us older ones do not need the news to know that as we see it in our eyes and the crap that is politicalized.

#71 Smoking Man on 08.03.16 at 8:27 pm

Every year around this time of year we hear, real estate is done only to surge the next spring.

Real Estate prices are seasonal. IN GTA, Supply and demand drives the market. Positive population flow with no rate spike guarantees a hotter spring market year after year.

In Shlong Branch the April average price vs the following Dec price is about 75k.

Don’t hold your breath for a GTA correction anytime soon. Get ready for even higher prices in the spring.

#72 nonplused on 08.03.16 at 8:28 pm

Who the heck cares what’s happening in Saskatoon? The locals don’t even care they all want to get the heck out of there as soon as they finish high school. Saskatoon is a bunch of grocery stores in the middle of nowhere.

#7 Chaddywack

You’d buy a house over $150? My experience with landlords is there are only 2 ways to deal with the damage deposit. Forfeit it when you move out or provide a receipt that shows you hired a cleaning company to go over the property once your stuff was out. Do which ever is cheaper. He knows you didn’t clean it. Why would you, you’re moving out!

#24 james

That’s a good point. If the perception is that YVR is going up due to foreign money and they now basically banned it, what is the perception to be that would cause prices to continue going higher.

#73 hope & ruin on 08.03.16 at 8:46 pm

The voters who sought change will get it – for the worse.
…………………………………………………………………….

Heard the UK is negotiating a free trade deal with China lol. I’m being serious.

#74 Context on 08.03.16 at 8:47 pm

Lot of talk about foreign money but this never caused the last two crashes in Toronto. The speculation that occurred involved lawyers, real estate agents, mortgage brokers and all ethnic groups living in the City of Toronto. They all piled in to flip real estate and during these crashes foreign money coming in was not apparent.

#75 Doug in London on 08.03.16 at 8:51 pm

Yes, while housing may be falling apart in some markets, my stocks, equity ETFs, REITS, and those beloved preferred share ETFs (still cheap but not as cheap as earlier this year) still hum along paying out dividends and distributions. So while some of you may worry about housing, I’ll spend the summer doing more fun things. The Niagara River jet boat ride last week was great fun, and I plan to get in a few more skydives at The Bend (Grand Bend, that is) before the year ends.

#76 Victoria Real Estate Update on 08.03.16 at 8:51 pm

# 62 Say What?

Again, no stats to back your claims.

Japan’s housing bust began in 1991 and lasted approximately 15 years. The bulk of the decline was in the first 10 years (1991-2001). (Source: Bank of Japan)

From 1991 to 2001, Japan’s population grew from approximately 124 million to 127 million.

Japan’s population did not drop during its housing bust as you suggest.

Japan’s housing bust is one that all Canadians should learn about as an example that shows how house prices can crash even though rates are held at emergency levels.

Calgary’s price decline from 2007-09 does not prove that prices in that city will keep rising. lol That’s ridiculous. The stuff realtors will say to make a sale.

If you really think that house prices in Calgary won’t fall then my advice to you is that you should buy anything and everything you can and rack up as much debt as possible.

Canadian 5-year fixed mortgage rates will rise. It’s inevitable. As I said, Canadian fixed rates will move higher along with American rates.

That rates in Canada haven’t moved higher yet, despite Garth’s warnings, is not a logical reason to argue that rates in Canada will never rise. That’s realtor logic.

Obviously you’ll say anything to try to convince others that now is a good time to buy in Calgary.

However, the next months and years will likely prove that now is the worst possible time to buy a property in Calgary.

#77 Andrew Woburn on 08.03.16 at 8:56 pm

“America owns the finish line!” ranted Joe Biden at the DNC.

Well dude, if 40% of US teenagers are innumerate and 18% are illiterate, that finish line may already be pawned to the Asians. Britain isn’t any better. We may not have to fret about the burden of white privilege much longer.

https://gallery.mailchimp.com/451473e81730c5a3ae680c489/images/f29988c9-49b1-41f6-9505-9421875262c3.png

#78 Freedom First on 08.03.16 at 9:04 pm

#51 common sense

To know me is to love me.

#79 Freedom First on 08.03.16 at 9:07 pm

#42 Interstellar Star Stuff

You need to read more of my Posts. But then again, I already know you are a little slow on the uptake.

#80 BAIL ME OUT , I'M TOO BIG TO FAIL on 08.03.16 at 9:07 pm

DELETED

#81 cramar on 08.03.16 at 9:19 pm

#14 Zen Headspace on 08.03.16 at 4:57 pm

Right on! (Have Babauta’s book, The Power of Less)

Those who are a part of the urban rat-race and motivated by FOMO, really are MISSING OUT!

– Missing out on having no monthly debt payments!
– Missing out on owing no money to a bank, institution, or anyone!
– Missing out on the peace of mind that comes from living within your means
– Missing out on having more than sufficient funds each month
– Missing out on growing investment assets
– Missing out on focusing on personal growth rather than worrying about finances or buying more stuff
– Missing out on lower stress levels
– Missing out on peace of mind and tranquility.

—————–

#35 Freedom First on 08.03.16 at 6:27 pm

Two. Thumbs. Up.

#82 WalMark of Sadkatoon on 08.03.16 at 9:25 pm

I would actually love to see RE prices correct and to be at a reasonable level of 3-4 times average income. Especially in TO…

me too

me three

unfortunately that’s a fantasy

#83 Andrew Woburn on 08.03.16 at 9:26 pm

#62 Say What? on 08.03.16 at 7:37 pm

Canada’s population, however, is growing massively. Especially Toronto. There’s a fresh planeload of immigrants landing at Pearson every 10 minutes. I have nothing against immigrants. My parents immigrated to Canada in 1951. The point is that immigrants do increase the overall demand for housing and prices are always based on supply and demand.
================

Um. You might want to retract the word “massively”. The rate of growth is slowing so much that, without immigrants, we will be a zero growth pretty soon. At least according to StatsCan. Given that most immigrants seem to want to live in three cities, the long term prospects for RE in the rest of the country are not great.

http://www.statcan.gc.ca/pub/11-630-x/11-630-x2014001-eng.htm

Also, as far as I know, the number of immigrants has been fairly stable for some years so their impact on housing is already baked into the price. However if jobs dry up and city bug shacks start costing $2MM, they may stop coming.

#84 Metaxa on 08.03.16 at 9:28 pm

@ #77 Andrew Woburn

Innumeracy is on display on this blog’s comment section almost daily, certainly weekly. Folks who don’t or won’t understand a 15% price drop with a 15% tax then added not being of benefit to those who exhibit a woeful lack of comprehension about how a progressive tax regime works…so its not just the kids, eh?

I spent my adult career years owning and running small food service joints, like diners and cafes. Having the electronic till crap out was a major issue…they couldn’t make change!
I thought I’d have to teach them about how to properly serve a plate of fries and gravy, instead I ended up teaching them Grade 5 math.

I will say this, once they realized they needed to know how to do it without the till being their calculator they did pick up on it fast…its not them, its how they are taught.

And in many jurisdictions south of us how teachers and schools are funded.

#85 aerozone on 08.03.16 at 9:30 pm

Garth, did you say dosing?
Does this mean an haute shot of ‘spro might be
had at the Belfountain Store?

#86 Tony on 08.03.16 at 9:31 pm

Re: #4 Nat on 08.03.16 at 12:34 pm

Vancouver=Roadkill
GTA=Sinkhole

#87 Smoking Man on 08.03.16 at 9:31 pm

Get Ready for Trump as the next President of the USA.

So now we have the Khan rebuttal, poor guy lost a kid in the war. Trump chirps him for the attack at the DNC and MSM goes on a wild frenzzy having mister Khan on every network playing the bitch splapped victim. Well as it turns out, Mr Khan a bit more connected to the elite and power brokers in his business than the narrative pumped out by MSM.

Even some of Trumps handler’s don’t get it and are trying to get him to tone it down. What’s Trump do? he doubles down on the guy. Brilliant maneuver.

The old model of MSM deciding who wins and who loses is broken.

Well Trump gets sure gets it:
The more outrageous Trump is, the more he can get all of the MSM to bust his balls 24/7, the more his support grows without spending dime.

Everybody knows 911 was an inside job. Everybody knows Building 7 fell at freefall speed. Everybody knows MSM lies. And everybody knows Hillary is corrupt to the core. And the more they see MSM and Killary in bed together the more it hurts Killary.

https://www.youtube.com/watch?v=Lin-a2lTelg

The Herd apart for the urban dwelling, over schooled 1% cyclist’s, climate change Nazis who are so mind fkd would still vote for Killary even if she came into their homes and slaughtered there families. It would be to PC incorrect to do otherwise.

Trump will destroy the MSM narrative at the debates. He will Triple Down on Khan….
He will explain that the reason why wages are stagnate, legal Blacks and Hispanics can’t get good paying jobs because 13 million illegals are flooding the labour market with cheap labour rates. While corps make out like bandits.

The woman card….. Just watch how he plays that one. Not allowed to talk about it at the moment.

Now if anyone wants to me the next Prime minster of Canada.
Get Smoking Man on your team.

I don’t care if your left or right. I’m a slut, Pay my ridicules consulting fee and I’m yours.

Dr Smoking Man
PhD Herdonomics.

#88 DON on 08.03.16 at 9:34 pm

@ VREU and Jaguar

I don’t think ‘What’s Up’ or ‘Happening Now’ will every get it – perhaps they have a lot of skin in the game.

For them it is not even possible for a decline to happen well…at least until it happens and is staring them straight in the face. I think back to the Big Short where the two brokers were living the high life and then not.

#89 Tony on 08.03.16 at 9:38 pm

Re: #7 Say What? on 08.03.16 at 12:48 pm

Take a look on mls, the listing prices are down about 10 percent from November 2014 but to sell a house you have to list 35 percent or more lower than the current market price to even get any offer. All other listings simply expire every 90 days.

#90 Smoking Man on 08.03.16 at 9:50 pm

It’s over Clint Eastwood voting Trump.

CLINT EASTWOOD BLASTS ‘PUSSY GENERATION’ FKEN GET OVER IT.

http://www.breitbart.com/big-hollywood/2016/08/03/clint-eastwood-donald-trump-challenging-kiss-ass-generation/

http://www.thewrap.com/clint-eastwood-donald-trump-racism/

Man hating Ghost busters a total flop, pass T2 and Wynee a Kleenex.

http://www.breitbart.com/tech/2016/08/03/no-ghostbusters-hasnt-made-back-production-budget/

#91 Toronto1 on 08.03.16 at 9:54 pm

Stay out of the market for the next few months, or at least until the govt finance committe is over. Who knows what kinds of laws will be passed. The crash tax is the start, soon you will see a increase cap gains taxes, land transfer taxes, cmhc fees etc… CRA will offer an amnesty then go after second suites. Municpalties will jump on and add permit fees and property tax increases etc…

That crash tax just opened pandoras box for govt taxation

#92 DON on 08.03.16 at 9:55 pm

The next secret the BC liberal government is trying to get ahead of – news has already started to leak out. The main question is why didn’t hey act before. Why did they allow this to get out of hand. It’s obvious they didn’t care until people started to notice.

“In Vancouver, Quebec millionaire migration has gone from real estate ‘conspiracy theory’ to premier-level concern

Should new millionaire migrants forfeit their C$800,000 ‘investment’ if they do not submit Canadian tax returns, and show they live in Quebec?”

http://www.scmp.com/news/world/united-states-canada/article/1998883/vancouver-quebec-millionaire-migration-has-gone-real

#93 just the facts mam on 08.03.16 at 10:04 pm

there are towns and cities near Toronto where you can buy a detached house for less than the replacement cost, this is a fact

#94 Say What? on 08.03.16 at 10:06 pm

#76 Victoria Real Estate Update on 08.03.16 at 8:51 pm

So, Japans population grew from 124 to 127 million in a span of 10 years. That’s less than 2.5% over 10 years! That is very modest growth and definitely a decline over their previous performance. Especially post war. Regardless, Canada’s population growth is far higher and is focused on 2 major cities. This will not change anytime soon. The demand in these 2 cities will stay strong.

Regarding Calgary, you must not have read my posts. Read them again.

Regarding rates, the fact that higher rates, as predicted by Garth, have not materialized is not my argument for stating that they will not rise. Read my post again.

Also, you keep stating that I don’t provide stats. Well, stats have to be applied and interpreted judiciously. For example, the Japanese population stats you provided don’t support your argument. They support mine.

Also, as to my contention and conclusion regarding rates, how can any stats be provided for support. It is simply my contention that rates will not rise and it is simply my conclusion that we would be screwed if rates were to rise. Too much dammed debt.

Also, for the last time, I’m not a realtor and I don’t live in Calgary. I have never even visited Calgary.

#95 M on 08.03.16 at 10:06 pm

#41 Victoria Real Estate Update

You make some interesting comments today:

Victoria’s housing bubble is massive. Since 2013, this important bubble-measuring data (second chart) shows that Victoria’s bubble is as big as or bigger than bubbles in Toronto and Vancouver. It shows that over 30% of those taking out new mortgages in Victoria have done so with high loan to income ratios of at least 450%, competing with Toronto and Vancouver for top spot in the country. That is extremely high. Compared to Halifax, for example, where that number is only 5%, Victoria’s 30% is screaming: GET OUT NOW!.
Canada’s housing bubble is, perhaps, the biggest the world has seen and Victoria’s bubble is competing for top spot in the country. What the future holds for Victoria’s housing market won’t be a pleasant event for mortgage holders expecting yearly price appreciation.

I seem to remember not too long ago you were stating there was no bubble in Victoria and prices have not increased and now Victoria is the biggest bubble of them all. If I had the energy or the time I would dig up a few of your posts and quote the comments, but why bother!
Prices are up in the region. Schools are packed, and the stores are busy. Tourists everywhere and lineups at the ferries. Are prices up a lot? Not really. Probably many renters and new buyers taking advantage of the low rates.
Might I suggest you get your own housing blog. Then you can scream all you want about the impending doom. Post ridiculous charts and call posters names.

#96 Smoking Man on 08.03.16 at 10:09 pm

My last drunken message to anyone non white, and any white, don’t ever feel like a victim. Don’t ever blame mistakes or bad bets on someone else. Take ownership and learn from them.

Try again. It takes about 10 attempts at making it, 9 failures usually come first.

Never stop trying to be your own boss.

The moment you play the victim card is the day you give up, through in the towel and you lose the opportunity to make it.

Dr Smoking Man
Phd Herdonomics

#97 ANON on 08.03.16 at 10:15 pm

It is getting interesting.

#98 Hotdogs from Heaven on 08.03.16 at 10:21 pm

#83 Andrew Woburn on 08.03.16 at 9:26 pm

Also, as far as I know, the number of immigrants has been fairly stable for some years so their impact on housing is already baked into the price. However if jobs dry up and city bug shacks start costing $2MM, they may stop coming.

—————————————————–

I am always amazed how the wealthier than average posters on this board assume that ALL immigrants are rich, like the Chinese and Persians to the north of Toronto. They are the minority. Most immigrants come to Canada with an average of just over $20,000 in savings for the whole family and are more likely to struggle with their monthly rent than be looking for a house or condo.

Toronto’s 13 high needs neighborhoods are all majority foreign born. Immigrants also make up the majority of the more than 100,000 families currently on the waiting list for subsidized housing.

If you are counting on immigrants to keep this bubble inflated then you really need to get out more and see what life is like in Scarborough, East York, North York and north Etobicoke. Those areas are more reflective of Torontonians’ financial desperation and not the shiny new condos in the downtown core.

#99 Nelley on 08.03.16 at 10:22 pm

#87Smoking Man-Trump is the President the USA needs, but Crooked Hillary is the President the zombies deserve.

#100 Freedom First on 08.03.16 at 10:24 pm

I love everybody and treat everyone I meet with respect and kindness. I am the kindest man I have ever met. I am a zen master.

#101 Born to be Free on 08.03.16 at 10:24 pm

#28 Canadian,
Once upon a time, there was a freeman exchanged his birth right and enslaved himself to a life long feast.

Since then, he turned into an obese beast, as he could not stop eating due to inability of feeling satisfied…

#102 zenheadspace on 08.03.16 at 10:26 pm

#22 Milla

See: #35 Freedom First, #39 Atrate, #54 Contentment vs Trapped, #68 LP.

Just sayin’.

#103 WUL on 08.03.16 at 10:33 pm

A comical minor, hiccup by Jason Kenney on the news the other night as he launches his foray to become the leader of the AB PC’s and then Unite the Right. A tour of the BPOE in a Ram pickup no less. On his MP’s salary.

A knock against him from both left and right is that he has had no connection to Athabasca for a long time as he luxuriated on the banks of the Rideau.

In his interview he tried to temper the criticism by pointing out he had lived in Edmonton for 7 years. Then he proceeded to say he was looking forward to visiting Whitelock and Peace River, Alberta.

Uh Jason, there is a Whitecourt, Alberta and a Westlock, Alberta but there is not now, nor has there ever been a Whitelock, Alberta.

This should be fun.

Now to get back on topic, there will always be a Calgary.

#104 Aggregator on 08.03.16 at 10:38 pm

#92 DON

There's something really fishy about this Ian Young dude, who says he works for a "Chinese boss". He's totally fixated on wealthy fugitives and he doesn't discuss anything else related to domestic housing activity.

Call me a conspiracy nut, but it almost seems like he's part of the PRC's Operation Fox Hunt.

#105 joblo on 08.03.16 at 10:41 pm

For fellow blog dogs:

https://twitter.com/dog_rates/with_replies?lang=en

#106 zenheadspace on 08.03.16 at 10:44 pm

#68 LP

“Dayenu means we must not take for granted what we have at this moment, as individuals or in community. Dayenu—enough—suggests that while we juggle the baggage of full lives but still look for more, we’re missing out on the today God has already blessed. We’re missing out on the opportunity for gratitude. Receiving enough is nothing short of a miracle when many only know scarcity.”
——————————————————————-
You are correct LP.

Greed is perpetuated by those who do not realize when they have enough. The unbridled greed becomes a feeding frenzy, leading to irrational behaviour. There’s a lot of dumb money in the housing market right now with more greedy zombies getting sucked in every day. Bubble bubble toil and trouble. The latest participants will soon be suffering, unfortunately. Others will have to wait many many years before reaping any financial rewards, if any.

We often want more than we have now. More money, more gadgets, better furniture, a better house, a better car, more clothes, more shoes, more success.

And what happens when we get more? We aren’t satisfied, because there are new ads for new iPods, for new laptops, for new iPhones, for new cars, for new clothes, new houses. We have to have those. It’s impossible to satisfy that hunger for more, because our culture is not satisfied with what we have, but is geared to wanting more. It’s consumerism gone wild, and it’s the official religion of the industrialized world.

We all need a little more dayenu in our lives.
Day-day-enu, day-day-enu, day-day-enu, dayenu dayenu!

#107 Jas on 08.03.16 at 10:50 pm

Garth:
Please send an email to my wife. And drill some sense into her ‘head’

#108 Ontario's Left Coast on 08.03.16 at 10:54 pm

Haha, I can’t go a day without my dose of Greater Fool. Thanks, Garth, for all you do.

#109 BOOM! on 08.03.16 at 10:55 pm

#87 Smoking Man

SO True!!

Great audio link, too! thanks!

#110 Boombust on 08.03.16 at 10:57 pm

I have been delving into the July REBGV stats and they don’t look like anything that is being reported in the local press here in Metro Vancouver.

For example, The Vancouver Sun states that sales are off by 20%, which is nonsense. (the West Side of Vancouver is off by 35% and Richmond is off by 47%)…blah blah blah…

In other words, go and see for yourself. Google: REBGV stats, put in the month/year on the drop down menu and see the year over year “wreckage”” with your very own eyes.

Quite “daunting” to say the least.

#111 Snowboid on 08.03.16 at 11:04 pm

Update on Kelowna RE is doing from 2008:

Residential SFH:

Jul 2008 Av – $512,811
Jul 2013 Av – $479,258
Jul 2014 Av – $528,031
Jul 2015 Av – $506,539
Jul 2016 Av – $624,773

Condo:

Jul 2008 Av – $315,707
Jul 2013 Av – $254.044
Jul 2014 Av – $255,734
Jul 2015 Av – $259,296
Jul 2016 Av – $290,443

Residential Waterfront:

Jul 2008 Av – $2,445,000
Jul 2013 Av – $1,668,600
Jul 2014 Av – $2,042,143
Jul 2015 Av – $1,984,953
Jul 2016 Av – $1,588,692

Finally, we can now say that SFH residential has caught up to 2008 sale prices!

But after inflation that amounts to about 1.2% increase per year. Also a caveat, the published stats for July 2016 refer to July 2015 stats that don’t jive with their archived July 2015 figures. Strange?

Not so good for condos and waterfront, but hey… all that HVM is heading our way!

#112 Smoking Man on 08.03.16 at 11:09 pm

Last night as much as I drank I could not sleep.

Pops, his first day underground. At about 1:30 I jumped into the truck and headed toward the cemetery.

Sorry MADD. Cut me some slack. I can land a 747 on the island airport on ms flight simulator after a 26 er of JD. Had to jump the fence. Place was closed.

I was screaming at the worms. Not today. Give him some respect. One more day….

Life ears life.. There is a family of worms feasting on my dad’s flash..

He wouldn’t mind….

He loved everything.

#113 Who luvs ya baby on 08.03.16 at 11:17 pm

#100 Freedom First on 08.03.16 at 10:24 pm

I love everybody and treat everyone I meet with respect and kindness. I am the kindest man I have ever met. I am a zen master.

The joys of self-love.

#114 Funny Scenario on 08.03.16 at 11:22 pm

Will jist drop this heee http://www.theaustralian.com.au/business/opinion/robert-gottliebsen/chinese-buyers-are-starting-to-rescind-on-apartment-contracts/news-story/85bca62df3c98693e1ad6832a9cd9b65

excerpt

The unthinkable has started to happen. The mass of Chinese property buyers who snapped up Australian apartments “off the plan” on the basis of a 10 per cent deposit have started to walk away from their agreements in Sydney.

#115 When will people learn on 08.03.16 at 11:30 pm

No GTA correction without a move in rates, and that’s not happening anytime soon.

#116 iffy immigrant on 08.03.16 at 11:31 pm

#32 Freedom First
“LOVE yourself first before you can take care of others.”

If you love yourself first you will be taking care of exclusively yourself and nobody else.

#117 Berta on 08.03.16 at 11:32 pm

Hey Blog Dogs! I’ve followed Garth for years now and on the heels of the foreign buyers tax (anti HAM spam) loads of buyers are getting pooched with the surprise 15% being added to their closing costs. I’ve started a petition asking BC Housing – a crown corp and the largest mortgage provider in BC to step in and provide mortgage financing to these poor folks to cover the cost of this 15% smackdown. Please click on the link to check it out and sign on.

https://www.change.org/p/rich-coleman-mla-leg-bc-ca-to-help-desperate-mid-purchase-buyers-crushed-by-the-bc-govt-s-new-15-tax-on-real-estate

The BC Gov created this problem and the BC Gov has the mechanism to step up and help resolve it. Sign on, cause fair is fair.

#118 Victoria Real Estate Update on 08.03.16 at 11:35 pm

# 95 M

You have provided no proof to back any of your claims. Nothing you say I wrote is true, past or present.

Please provide a quote and date for you claim that I wrote that “… not too long ago you were stating there was no bubble in Victoria…”

You wrote that you could “dig up a few of your posts and quote the comments, but why bother!”

That’s a lie and you know it. You know that would be impossible to do.

It’s always interesting dealing with realtors who post on this site. They all do the same things every time. Here’s a short list.

1. Always post under a different name each time.

2. Post incorrect information. We all remember the local media quoting realtors as saying that buyers from China were “moving Victoria’s market”. Of course only 0.68% of all real estate deals in Victoria went to buyers from all of Asia, not just China. The source of that information was Victoria’s R/E board.

Plenty of that false information was posted on Garth’s site.

3. Use what they think they see around town as proof that house prices can only go higher. For example:

“schools are packed” – Based on what information? Are you saying schools were empty when prices were falling 2 to 3 years ago? How would your claim that “schools are packed” have anything to do with the future direction of house prices?

“stores are busy” – Again, what do you base this on? I don’t know if you noticed but it’s summer and that means it’s tourist season in Victoria. Stores are always busy with tourists in summer as are restaurants.

“tourists are everywhere” – If it wasn’t tourist season in Victoria and tourists were everywhere, then you might have something. lol As it stands, you don’t.

“lineups at the ferries” – And that’s unusual in the summer? lol It’s tourist season.

These type of comments are always funny to read and I encourage realtors to continue with this.

In the past, other realtors have come up with some equally ridiculous reasons as to why house prices in Victoria can only go higher and how it’s different this time in Victoria. Examples:

“… my friends cell phone plans and cable packages are expensive…”

“… I noticed more (foreigners) at the mall…”

These comments may have been posted by you, under a different name of course.

Please post quotes to prove that I “call posters names”. I’d really like to see that. That’s right… you don’t have the time to do that.

Impending doom to a realtor means anything other than higher prices each year. What I write about isn’t doom and gloom.

I write about realistic expectations of the future performance of Victoria’s housing market based on economic fundamentals, such as price-to-income ratio. The same sorts of things that Garth writes about or that Robert Shiller used to predict the US housing bust.

It’s important for potential buyers to understand that, for example, when gains in house prices far exceed income gains, we can expect a major market correction.

Earlier I posted a link to a chart that showed how Victorians have stretched themselves as much as those in Vancouver and Toronto to buy houses (the 450% chart). This is a bad sign for Victoria.

I’ve challenged realtors in the past to come up with an example of a country with a housing bubble that didn’t go through a major, economy-shuddering price correction. So far no realtor has been able to provide an example of this.

I predict that you will use another name if you post another comment.

I’ve always used verifiable facts to back what I write about. Today’s posts were no different.

#119 Shawn on 08.03.16 at 11:36 pm

Numeracy Issues?

@ #77 Andrew Woburn

Innumeracy is on display on this blog’s comment section almost daily, certainly weekly. Folks who don’t or won’t understand a 15% price drop with a 15% tax then added not being of benefit.

*****************************************
A 15% price drop to offset the 15% tax benefits the buyer and over compensates for the tax of course.

But it works a lot better from a marketing perspective than saying we will give you a 13% discount to offset the 15% tax.

These people are tying to sell Condos in the face of a probable price correction due to the tax and other reason. They likely don’t give a crap about the little math difference there.

#120 WUL on 08.03.16 at 11:37 pm

A sad day, IMHO, for Alberta and Canada. Mel Hurtig has passed away. I met him one day as a kid at the Peacock Inn on Gasoline Alley south of Red Deer. He “battled like hell against the sellouts in this Country.” for most of his adult life. If you do not have his “Canadian Encyclopedia” in your house, do your kids a favour and buy it.

http://www.theglobeandmail.com/news/national/publisher-author-and-political-agitator-mel-hurtig-dies-at-84/article31268864/

#121 Andrew Woburn on 08.03.16 at 11:38 pm

#84 Metaxa on 08.03.16 at 9:28 pm

I will say this, once they realized they needed to know how to do it without the till being their calculator they did pick up on it fast…its not them, its how they are taught.

And in many jurisdictions south of us how teachers and schools are funded.

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

Totally agree. Today’s kids are not stupid.

But my generation had no rights at school other than to be ruthlessly drilled in math and spelling until our teachers were satisfied we knew at least the basics. There was no point complaining to our parents. They would just say they had it worse.

If the poor little snowflakes really want to know and feel true victimhood, they should ponder what enlightened educators and the erosion of school discipline have done for them.

#122 Dan on 08.03.16 at 11:39 pm

Millennial FOMOs – I like that one.

The few of us left with no debt, renting, sitting in cash and waiting for the crash, are just flat out suckers.

There will be NO comeuppance for those living beyond their means.

Governments and central banks will just bail out the irresponsible if something happens (like a slight increase in treasury yields) anyway. A deflationary cleanout can’t come soon enough for all asset classes, but it won’t happen in my lifetime.

#123 Betting Man on 08.03.16 at 11:43 pm

Alright, I am now putting my betting money behind a Trump win based the consistently inaccurate predictions on this blog. Shall we review:

Brexit is a blip and will not happen – it happened

There will be no ‘one and done’ rate increase as the US will raise rates with 4 alone in 2016 – nope, 2016 increases are off the books and 2017 seems like a fantasy

There is no foreign capital impacting YVR and GTA markets, softened initially to less than 5% of an impact – now the stats are coming out from the provincial government that foreign capital purchases in YVR are almost the equivalent of purchasing all new construction, 10% across the board, and almost 20% in some metro cities.

The BOC will not cut rates – well, they did twice in 2015 and it looks like another this fall.

#124 Shawn on 08.03.16 at 11:44 pm

Sorry, the quote about innumeracy (which, hilariously, was backward) was from Metaxa at 84 not Andrew Woburn.

#125 Dominos on 08.03.16 at 11:48 pm

Why does everyone think that a tax in metro van will increase prices in the rest of the Province?

The surrounding markets on the island and interior were only going up because of Vancouverites cashing out and fleeing Vancouver. It was a domino effect from foreign purchases in Van.

If those dry up from the tax, prices will actually recede in those surrounding communities – not go up!

Foreign capital, namely Chinese like to live amongst their established ethnic enclaves. There are no ethnic enclaves in the rest of BC outside of metro van. A few rich ones might test the waters in some communities, but there wi be no flood like in Vancouver. Its not rocket science.

#126 Dominos on 08.03.16 at 11:49 pm

Typical realtor spin that prices in the rest of the Province will increase because the foreign tax comes in effect.

The surrounding markets on the island and interior were only going up because of Vancouverites cashing out and fleeing Vancouver. It was a domino effect from foreign purchases in Van.

If those dry up from the tax, prices will actually recede in those surrounding communities – not go up!

Foreign capital, namely Chinese like to live amongst their established ethnic enclaves. There are no ethnic enclaves in the rest of BC outside of metro van. A few rich ones might test the waters in some communities, but there wi be no flood like in Vancouver. Its not rocket science.

#127 Frank on 08.03.16 at 11:54 pm

#19 VREU

Hahahahha are you serious? You’re using the second worse financial collapse in history as a warning for what could happen?

#128 Ponzius Pilatus on 08.04.16 at 12:03 am

Zen Space, or whatever.
Get out of your rented basement more often.
The mould spores are messing up your mind.

#129 Ponzius Pilatus on 08.04.16 at 12:08 am

#44 prairie person on 08.03.16 at 7:06 pm
A member of my family put a condo for sale in Burnaby a week ago. The result was crazy. 11 bids. 7 with no conditions. When the bids were being opened, realtors kept calling and upping their bid. The closing price was higher than the highest price the realtor had predicted. Obviously, the condo market has not cooled.
————
Obviously, you are a realtor.
Details, please.
Or bugger off.

#130 meslippery on 08.04.16 at 12:25 am

#141 Nemesis on 08.03.16 at 2:43 pm
or do drugs or have sex—in captivity
————–
Yeah the back seat in a field or even better a van.

#131 millenial1982 on 08.04.16 at 12:52 am

#71 Smoking Man on 08.03.16 at 8:27 pm
Every year around this time of year we hear, real estate is done only to surge the next spring.

Real Estate prices are seasonal. IN GTA, Supply and demand drives the market. Positive population flow with no rate spike guarantees a hotter spring market year after year.

In Shlong Branch the April average price vs the following Dec price is about 75k.

Don’t hold your breath for a GTA correction anytime soon. Get ready for even higher prices in the spring.
———————————————————-
Supply and demand makes a case for liquidity but the notion that it alone increases prices on a total ascent projection is absurd. Price is determined on what people can afford and once that’s beyond market fudamentals (what the average family can afford etc) the game changes to how stupid those people are and how far the machine can bend to meet their needs to feed the greed of them both.The ceiling eventually comes if wages are stagnant and the tricks run out. Think USA 2008 lots of supply and demand there but the system ultimately failed. Just admit you were schooled by a millenial who slept through the mind [email protected] classes. You must have paid more attention than me…

#132 Squish on 08.04.16 at 2:05 am

#8 Chaddywack on 08.03.16 at 4:46 pm
“I’m not planning on buying at the top of the market, but really if we’re planning on moving to Vancouver for the next 25-30 years is there really any harm in buying at the top? In 30 years things will be higher anyway.”

———

If, when you go to renew your mortgage, your home is valued at less than what you still owe, you may well be forced to come up with the difference in order to secure continued financing.

A surprise demand for a hundred grand you don’t have, in order to keep your house, would be just one good reason.

#133 Bill F on 08.04.16 at 2:20 am

Here are some interesting REBGV (down 38% y-o-y) stats for sales of detached homes on a year over year basis. Have a look at the following sales declines from July, 2015.

Richmond -47%
Burnaby -38%
Coquitlam -41%
Port Moody -36%
Port Coquitlam -36%
East Van -37%
West Side – 35%
West Van -41%
North Van -45%
New Westminster-37%
Maple Ridge -38%

These sales were BEFORE the new 15% tax took effect. They are also following on the heels of declines seen from May to June, 2016…

Looks like a major bust is at hand if this trend continues.

#134 Joe2.0 on 08.04.16 at 2:54 am

Went to UHaul today to book a truck.
The manager said he couldn’t supply one.
He said 1100 trucks were rented by people buying outside of Vancouver, and none were being brought back by people moving to Vancouver.

#135 Kenchie on 08.04.16 at 3:16 am

#28 Canadian on 08.03.16 at 6:08 pm
“#12 Zen Headspace on 08.03.16 at 4:57 pm

Your definition of “we” sounds more like the narrow population of early-twentysomething upper middle class white women. I couldn’t name a single person I know that falls into your definition of “we” that doesn’t come from that demographic.”

———————–

I know copious amounts of Asian-Canadians that have deluded amounts of FOMO in Van. It’s crazy. At least now, after the imposition of this new foreigner tax, they are starting to realize their delusion.

One of my friends has decided he wants to live at home for a little longer (i.e. not go to open houses every weekend), and perhaps may rent before buying. That’s a 180 degree change from earlier this year when he sold his condo that put $160,000 in his bank account.

#136 Kenchie on 08.04.16 at 3:36 am

#60 crowdedelevatorfartz on 08.03.16 at 7:35 pm
“I live in an apartment building ( with ooodles of elevators!) and I ran into one of the building supers. Seems the bank is remortgaging the building and ….for the first time in years….the bank wants to “come and check out a few random suites to “assess the value of the building” ie mortgage.

Yep, the banks are tightening up……”

————————————————

This is standard for refinancings (i.e. increasing leverage or extending the amortization period). And if they are applying for CMHC coverage, then the CMHC send their own valuers to assess the building as well.

Only when there is a straight renewal of the same mortgage do they just ask for the last year’s financials, this year’s operating budget, rent roll, building condition report, a recent appraisal from a AACI-acredited firm, and Phase 1 environmental report. Of course, if it’s a refinancing, then all of these get sent too.

Who’s the landlord, if I may ask?

#137 Bram on 08.04.16 at 3:38 am

#49 common sense on 08.03.16 at 7:13 pm

Good tag line.
Could add a pun with capitals in there:

Discovery Channel Presents…

REALiTY WEEK

#138 Kenchie on 08.04.16 at 3:51 am

#87 Smoking Man on 08.03.16 at 9:31 pm
“Get Ready for Trump as the next President of the USA….”

Your rant is funny, but not persuasive. Last week, 538.com had Hillary’s forecasted chance to win at 53%. Now it’s at about 73%. Forecast-smorecast, I’m sure you’ll say. It’s likely to change going forward, but at this point it will take a miracle to get Trump elected…

http://projects.fivethirtyeight.com/2016-election-forecast/

#139 Kenchie on 08.04.16 at 3:59 am

#90 Smoking Man on 08.03.16 at 9:50 pm
“It’s over Clint Eastwood voting Trump.”

He also endorsed Romney… and probably McCain too… Furthermore, his generation is passé. Declining in numbers and spirit. He can call millennials pussies all he wants, but soon he’ll need millennials to change his diapers. Just sayin’…

#140 Truth or Dare on 08.04.16 at 6:13 am

Proud to announce that we’ve driven the CBC out of SE ASIA. The CBC line to SE ASIA went dead today stating the broadcast was no longer authorized for this region.

“We’re sorry, this content is not available in your location.”

The open comments to the CBC on their political propaganda to Asia out of Canada have been consistently scathing and they were held in contempt for falsely reporting PM Dingbats ‘popularity’….(apparently so much so that ‘Canadian Content’ to the millions of Asians more curious about Canada than ever since the political coup against Stephen Harper)….went black.

Good luck Canada….swilling down the Trudeau Liberal bathwater. You’re the only ones in the world who’ll drink it unfiltered. So much for Canadian influence in Asia. There’s always the UK and American media to protect and defend Canada’s reputation.

Good riddance to bad rubbish CBC.ca…victory over propaganda is sweet.

Now if only Canadians could get back to commenting on all the other media outlets within Canada that have shut down opposition.

#141 Zen Headspace on 08.04.16 at 6:29 am

#96 Smoking Man

“…to anyone non white, and any white, don’t ever feel like a victim. ”
——————————————————————–

Smoking Man is right again. He deserves that PhD.

#142 Wordpress International on 08.04.16 at 6:36 am

#94 Say What?

“Regarding Calgary, you must not have read my posts. Read them again.”

——————————————————————–

Nobody cares. Seriously. I mean it.

#143 Wordpress International on 08.04.16 at 7:06 am

#14 Zen Headspace says:

“The best in life isn’t somewhere else. It’s right where you are, at this moment. There is nothing better than exactly that.”

You have posted some very intelligent, inspiring, relevant, educational, and interesting comments.

I enjoy them and thank you for your contribution to this blog. Unfortunately, I don’t believe that most of the readers – at least those that post comments here – have the mental capacity to appreciate what you are saying, or the philosophical perspective that you bring to what is otherwise a rather dry financial debate.

From what I read in the comments section, there are a lot of people who simply want to be argumentative for argument’s sake. They refute the sound financial advice and logic that Garth puts forth, and blather on inanely with their opinions based on their anecdotal narrow personal experiences. They hear but do not listen.

You are doing us all a great service by bringing a little “Zen” into our lives.

#144 Nelley on 08.04.16 at 7:18 am

#139Kenchie-you miss the point-Clint Eastwood (at the age of 86) could be wearing supersized depends-you are still a soft little pussy.

#145 Bottoms_Up on 08.04.16 at 7:59 am

#8 Chaddywack on 08.03.16 at 4:46 pm
———————————-
I, too, use to use these things as rationale to buy a house. But my complaints of $30/mo rent increase have now turned to increases in property tax, cost of maintenance, unforeseen repairs. Putting it all into perspective, renting was definitely the less stressful way to live.

#146 crowdedelevatorfartz on 08.04.16 at 8:10 am

@#136 kenchie
“Who’s the landlord, if I may ask?”
********************************************
Its a numbered company but the rumour is a multimillionaire family from the Phillipines.
Yeah I’ve dealt with building mortgage assessment before in my old line of work but the building super has been here for over 10 years and cant remember any assessment other than a prefunctory “drive by”.
Apparently they want to check it top to bottom this time.

#147 Smoking Man on 08.04.16 at 8:49 am

BOE CUTS RATES TO 0.25

Guess who’s next….. But than again… Toronto Real Estate on Fire. Huge sales numbers. Huge price gains.

No inventory……

Sucks to be a basement dweller…

Toronto detached sales down 6.5%, semis down 11%, listings down 32%. Nothing ‘on fire’ about this market as price rises on thinning volume. — Garth

#148 Wild Albertan Gonads on 08.04.16 at 9:04 am

There’s only one cure. You’re dosing now.

Actually having a few beers.. cures all… Don’t you ever go on vacation?

#149 Nelley on 08.04.16 at 9:26 am

#143-Wordpress-Posters complained that Zen was generalizing from a purely female perspective (don’t buy so many shoes, spend so much time on Facebook, obsess over home decor, etc.etc)-I assume you are female so you like it. They understand he/she’s point-but they aren’t part of his audience.

#150 Zen Headspace on 08.04.16 at 9:27 am

#131 Millenial1982
“Price is determined on what people can afford and once that’s beyond market fundamentals (what the average family can afford etc) the game changes to how stupid those people are and how far the machine can bend to meet their needs to feed the greed of them both.”
——————————————————————–
You speak the truth, Grasshopper. Greed and FOMO will bring everyone down. Those who have arrived to the party too late, or are just showing up, will find that all the drugs are gone, all the booze has been consumed, and all the hot babes are taken. Fun’s over.

#151 White Crock BC on 08.04.16 at 10:14 am

Yep, the market is definitely “rolling over”…

http://www.theglobeandmail.com/real-estate/the-market/troubling-trend-seen-as-toronto-posts-record-july-home-sales/article31270381/

If you look only at price, you are a fool. — Garth

#152 Neil Armstrong on 08.04.16 at 10:20 am

Daily Dose of Disruption: Clearing up the confusion circulating on Lithium Mining:

http://cleantechnica.com/2016/05/12/lithium-mining-vs-oil-sands-meme-thorough-response/

#153 Say What? on 08.04.16 at 11:00 am

#142 WordPress International on 08.04.16 at 6:36 am

Nobody cares. Seriously. I mean it.

———————————————————

Nobody? Do you speak for everybody? You must be a delusional megalomaniac. FYI, my mother cares.

#154 Smoking Man on 08.04.16 at 11:07 am

#147 Smoking Man on 08.04.16 at 8:49 am
BOE CUTS RATES TO 0.25

Guess who’s next….. But than again… Toronto Real Estate on Fire. Huge sales numbers. Huge price gains.

No inventory……

Sucks to be a basement dweller…

Toronto detached sales down 6.5%, semis down 11%, listings down 32%. Nothing ‘on fire’ about this market as price rises on thinning volume. — Garth
…….

Since when do real numbers matter. My comment was based on what was reported on Main Stream Radio today….. 1010 am

Ask yourself.. Does the Herd actually look at the stats.. Nope…… They listen to radio. Watch TV who all who benefit from real estate add revenue….

They ain’t going to tell the truth.

#155 Mr. Frugal on 08.04.16 at 11:09 am

Yup, Canada has it’s problems. Housing is expensive and the economy is weak. But look on the bright side. At least we don’t have migrants fire bombing city buses.

http://video.foxnews.com/v/5070861097001/street-gang-of-migrants-torch-city-bus-in-paris/?#sp=show-clips

#156 CJBob on 08.04.16 at 11:27 am

Toronto detached sales down 6.5%, semis down 11%, listings down 32%. Nothing ‘on fire’ about this market as price rises on thinning volume. — Garth

If you look only at price, you are a fool. — Garth
______________________
Prices up, listings down 32%. Not sure what your idea of a hot market is then.

Your call on Vancouver might be correct, you might want to rethink these two comments on YYZ if you want maintain any credibility though. I don’t get it.

#157 TurnerNation on 08.04.16 at 11:29 am

How to spot daily fake news.
Screen flashed:

Sheriff’s officials say … Jenner [ne Bruce] involved in car accident.

-problems, police would not put out a press release for a crash. Nor release names of private parties.
If someone like a reporter made a freedom of information type request the source would be: “Reporter learns…”.

This is all about keeping the Trans agenda out front. A new world order race of genderless non thinking worker bee slaves.

Every country and Intel and military division has huge number of people trolling forums and putting out fake or dis information. It’s just good business and (info) war is a good business.

#158 cramar on 08.04.16 at 11:47 am

Just got an email from son in Chicago. He owns 3 condos and 6 parking spaces. Cash-strapped Chicago has just hiked his taxes 33%. His personal 3BR condo went from $4500 to $6,000/yr! So he is planning to sell most of his RE holdings.

Can’t happen in a Cdn city? Naw! We is different here!

#159 Ponzius Pilatus on 08.04.16 at 12:03 pm

#147 Smoking Man on 08.04.16 at 8:49 am
BOE CUTS RATES TO 0.25

Guess who’s next….. But than again… Toronto Real Estate on Fire. Huge sales numbers. Huge price gains.

No inventory……

Sucks to be a basement dweller…

Toronto detached sales down 6.5%, semis down 11%, listings down 32%. Nothing ‘on fire’ about this market as price rises on thinning volume. — Garth
—————-
Who would have thought?
SM a realtor!

#160 Context on 08.04.16 at 12:16 pm

These are figures reported by the Toronto Real Estate Board so keep that thought in mind. This represents a controlling mechanism pertaining to their listing transactions only. There is a huge amount of inventory that is not listed for properties in the core of Toronto and the GTA that is a hidden market at bargain prices.

#161 TRT on 08.04.16 at 12:28 pm

Can anyone tell me what the Property transfer tax is in Mississauga? Might buy a semi there this week.

Temporary Immigration (students, etc) and Permanent Residents bringing all their overseas cash is causing the booms in YVR and YYZ only.

Time to buy if listings that low. People are afraid to list…that’s why they are low. Just like YVR last year.

Buy and make yourself a cool $300,000 by spring.

#162 Nemesis on 08.04.16 at 12:32 pm

#SweetThursday,Or… #”TheBlueberriesOfWrath”… #EastOfRichmond&… #ThePasturesOfHeaven*…

[G&M] – How B.C.’s hot real-estate market is putting a chill on the blueberry patch

“As it turns out, the same wave of Chinese wealth that has fuelled Pacific real-estate booms has also contributed to an unexpected glut of blueberries.

Chinese investors riding a hot property market along the Pacific Coast have socked millions into a belt of protected farmland around Vancouver, long a destination for Asian immigrants, and many have taken advantage of Canadian agricultural tax breaks, agents and farmers said.

Because much of the land is restricted to farming, rents have remained stubbornly low. Veteran farmers and entrepreneurial newcomers have snapped up the cheap leases, eager to cash in on the blueberry’s ascent as a super food and the promise that a trade deal with China would open the world’s second-largest economy to fresh Canadian exports.

But demand has yet to meet bullish projections. Delayed trade negotiations and a surge in global blueberry production have prevented China’s rising middle class from eating enough of the British Columbia bumper crop that Chinese investors helped sow.

The result: a bubble for Vancouver area farmland and a bust for berries.”…

http://www.theglobeandmail.com/news/british-columbia/how-bcs-hot-real-estate-market-is-putting-a-chill-on-the-blueberrypatch/article31270324/

[*With apologies to John Steinbeck]

#163 TurnerNation on 08.04.16 at 12:44 pm

Killing us softly:

Keg’s burger + fries jumped $2 to $18.
Stuff I paid $1 for at Dollarama now is 1.25-1.50

All bought using after tax dollars (50% gone to taxes – here,cue Con trope that it’s paying for our military (outclassed by most 3rd world despot countries) or Lib screeds that social services come from this (well if cops don’t liquidate mentally ill first).

All of this subject to a 14% consumption tax.
Plus tip.

Largest open air concentration camp folks.

#164 DisgustMadeMePost on 08.04.16 at 12:46 pm

#117 Berta on 08.03.16 at 11:32 pm
Hey Blog Dogs! I’ve followed Garth for years now and on the heels of the foreign buyers tax (anti HAM spam) loads of buyers are getting pooched with the surprise 15% being added to their closing costs. I’ve started a petition asking BC Housing – a crown corp and the largest mortgage provider in BC to step in and provide mortgage financing to these poor folks to cover the cost of this 15% smackdown. Please click on the link to check it out and sign on……

……..

Well, I will be interested to see if you have any support for this petition. First thought is probably not. Not that I don’t think it’s a lousy position for some of these would be buyers to be in but I won’t be signing. Perhaps deposits should be returned instead. I’d go for that.

I recall the answer to many of our young people wanting to own their own space …. The entitled brats.. Wanting property so soon in their lives. Suck it up. Quit whining. Rent something for a while. Or better yet, get out of this city. Just cuz you were born here and have lived here for 30 years and have a job here doesn’t give you the right to housing or the right to stay.

#165 DisgustMadeMePost on 08.04.16 at 12:49 pm

And Ms Clark is probably looking to appease mobs with the vote, not otherwise.

#166 BOOM! on 08.04.16 at 12:53 pm

#68 LP

Great Post!! Too often, we are more concerned with ‘getting’ and so often overlook the fact we already have ‘more than enough.’ Dayenu.

#167 Rexx Rock on 08.04.16 at 1:00 pm

Victoria real estate is flying high again.Its funny here,many retirees and young high income earners move here and don’t care about inflated prices.Its about lifestyle and weather.Just don’t walk downtown alone at night because of all the crime.
But overall house prices just keep going up every year just like Vancouver.One day it will end when the east is sunny and warm all year round if global warming is true.

#168 Context on 08.04.16 at 1:05 pm

Its time for a hypothetical which was real a few weeks ago. The subject property was listed for a month or so with home averages $1.7 million on the beltline trail and it came off to be rented out instead with a lease that could be negotiated. The #14 was a 3 minute walk taking one in minutes to the subway. This mansion was fully renovated; the backyard was a park setting with no grass to cut; lots of car parking; a balcony on the second floor; a wood burning fireplace in the living room; and a modern heating system was in place to control areas. I located the video for the non sale and inside was a Hollywood setting. There are 3 bedrooms and an office area and a fully finished recreation room which was not shown. Asking rent $2,400 per month, and a dog was allowed and a fireplace may have been in the recreation room but never saw it. Yes someone in this room knew about it but won’t sell to rent as prices are going higher. There are bargains to be had.

#169 YVRpeasant on 08.04.16 at 1:18 pm

#132 Squish

“If, when you go to renew your mortgage, your home is valued at less than what you still owe, you may well be forced to come up with the difference in order to secure continued financing.

A surprise demand for a hundred grand you don’t have, in order to keep your house, would be just one good reason”

Does this actually happen? Someone told me it happened to them but I couldn’t find any discussion of it online.

Is it common in underwater mortgage scenarios?

#170 DisgustMadeMePost on 08.04.16 at 1:23 pm

#117 Berta

Sorry! Not to belabour the point but why fight for the right to pay the highest price? The market is crumbling even on it’s own. Likely these buyers will be able to find a place at least 15% reduced very soon.

#171 Okanagan Man on 08.04.16 at 1:30 pm

Hey VREU; I think some graphs showing the declines in Victoria Real estate are in order. BA HA HA HA….

You predicting that a major price decline could begin in April. I guess your prediction was a bit off as the Victoria market has been and still is on fire. Yes and definitely not because of HAM……yet.

#172 Tudval on 08.04.16 at 1:36 pm

Actually the latest numbers for the GTA were quite healthy. The drop in sales in the 416, due to the shortage of listings (there’s literally next to nothing in the detached segment – ie 1 month supply), were more than compensated by increases in the surrounding areas. But summer months are not much of an indication anyway. Price gains Y/Y are showing better than in the previous months mostly due to the fact that last year there was noticeable softening between June and September. Which as we found out this spring, was meaningless, probably due to the elections and the NDP leading in the polls at that time.

#173 Victoria Real Estate Update on 08.04.16 at 1:47 pm

# 167 Rexx Rock

“But overall house prices just keep going up every year like Vancouver.”

More realtor BS.

In typical realtor fashion, you’ve provided no proof to back any of your claims.

This chart, with date from the house price indices of the Vancouver and Victoria R/E boards, proves you wrong.

House prices don’t go up every year in Victoria.

. . . . . . . . . . . .House Prices. . . . . . . . . . . . . .
. .Percent Above/Below March 2010 Price Level. .
. . . . . . . x = Vancouver, * = Oak Bay. . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+15%. . . . . . . . . . . . . . . .x. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . x. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+10% . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+ 5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
….0%. . . x*. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 5%. . . . . . . . . . . . . . . . *. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . . . *. . . .
—————————————————————————–
. . . . . . March . . . . . . .March. . . . . .January. .
. . . . . . .2010. . . . . . .. 2012. . . . . . .2014. . .

(sources: Victoria’s R/E board, Vancouver’s R/E board)

This information was taken from the local board’s frankenumber price index. It’s safe to assume that SFH prices in Oak Bay fell significantly more than 10.6% from 2010 to the beginning of 2014.

Obviously Vancouver retirees didn’t just discover Victoria in 2016. They knew about it from 2010-13 as well, when house prices fell in Victoria.

I haven’t seen any evidence that shows that there has been a sudden, dramatic increase in the number of Vancouver retirees moving to Victoria in 2016.

Realtors love to make claims without providing any facts to back what they say. It’s all about making the housing market look like it’s ready to make huge gains. This is done to make people buy houses. In early 2015, local realtors were quoted by the local media as saying that buyers from China were “moving the market”. However, the data from the local board showed only 0.68% of all deals in Victoria went to buyers from Asia.

You have a reputation of making false claims that are not substantiated by facts. Your post solidifies your reputation.

#174 S.Bby on 08.04.16 at 1:59 pm

#163 TurnerNation
Killing us softly:

Keg’s burger + fries jumped $2 to $18.
Stuff I paid $1 for at Dollarama now is 1.25-1.50

Yup. Price for my haircut just went up $3.00
But I can still get a cheap mortgage…

#175 Victoria Real Estate Update on 08.04.16 at 2:05 pm

# 94 Say What?

You stated that Japan’s population declined during their housing bust.

I proved you wrong. The percent increase in population during the bust isn’t the issue. That you’ve tried to make it the issue makes you look foolish.

Admit that you were wrong and that Japan’s housing bust is an example that all Canadians should study before making the assumption that house prices can’t fall if rates remain at emergency levels.

Of course rates will rise. That’s a given.

Your posts provided nothing of value.

You can’t prove that you’re not a realtor. What you write certainly sounds like realtor propaganda.

Since you can’t find information about Japan’s population growth on your own, here it is.

This link provides information about Japan’s population growth from 1991 to 2001.

#176 dontcallmeshirley on 08.04.16 at 2:06 pm

If you look only at price, you are a fool. — Garth

Banks re-finance and offer LOCs on recent prices, volume is irrelevant.

#177 S.Bby on 08.04.16 at 2:10 pm

#117 Berta

So how much are you losing?

#178 Victoria Real Estate Update on 08.04.16 at 2:12 pm

# 127 Frank

Again, you forget that I’ve provided information in the past that shows how 50 different countries went through major housing price corrections over the last 40 years.

If you studied those examples, you’d find that they are all unique in some ways and the same in other ways.

Overall, Canada fits right in with these examples. The same in some ways and different in others.

The common link is that every country had a housing bubble and it didn’t matter how they got there. The result was the same – a major housing price correction that shook the foundations of the economy.

No matter how you slice it, it isn’t different in Canada.

It isn’t about what could happen, it’s about what will happen.

Canada is next.

#179 Context on 08.04.16 at 2:23 pm

Huffington Post has the story about Vancouver titled B.C. Real Estate In Absolute Mayhem. CMHC also issued a red alert which will be coming eventually to Toronto. One real estate dude analyzed the stats for Vancouver and said sales were down by 75%. Citizens are in a panic and running away from closings.

#180 Noel on 08.04.16 at 3:04 pm

#178 Victoria Real Estate Update

How many real estate corrections occurred in a global environment of emergency and negative interest rates, with no signs of tightening in any advanced economies?

#181 Context on 08.04.16 at 3:25 pm

TRT is thinking about buying a semi sometime this week in Mississauga. This is an area of many parts and have the stats as each area can be different; some good and bad. The latest stats on the whole area is the medium listings and prices have taken a sharp downturn in July. Time to be very cautious in buying anything and there are now bank owned power of sales by the hundreds in the Toronto area too.

#182 Victoria Real Estate Update on 08.04.16 at 3:45 pm

# 171 Okanagan Man

I made no firm prediction that house prices would begin to fall in April. So what is your point?

Earlier this year I wrote that house prices in Victoria could begin to fall again at any time.

I stand by that statement.

#183 Smartalox on 08.04.16 at 3:50 pm

@ Berta #117:

BC Housing is intended to support the lowest end of the Real Estate market in BC, doing things like re-financing apartment buildings that are on the brink of being condemned to prevent low income residents from being cast out on the street because the owners can’t afford to make repairs.

It is not a mortgage bail-out tool to enhance the chances that middle-class homeowners can sell their over-priced properties.

If you wanted to petition the BC government to do something responsible and progressive with the foreign buyer tax, have them allow foreigners that earn income in BC, write a percentage of their ‘welcome tax’ off on their BC income taxes, say over a 5 or 10-year period.

That would encourage foreigners who come here to participate in the economy, while discouraging flipping and speculation.

#184 Penny Henny on 08.04.16 at 4:00 pm

If cottages are the canary in the coal mine for Toronto real estate then I would conclude everything is doing fine.

-In the $750,000 to $1-million range, any Muskoka cottage that’s not falling apart will sell within a week or two, he adds.

http://www.theglobeandmail.com/real-estate/toronto/torontos-real-estate-mania-hits-muskoka-cottage-country/article31256572/

#185 bdwy sktrn on 08.04.16 at 4:07 pm

#178 Victoria Real Estate Update on 08.04.16 at 2:12 pm
————————–

you sure seem to love being dead wrong in your forecasts of victoria houses.

keep talking, though, it’s fun to watch you squirm

#186 Rookie57 on 08.04.16 at 4:14 pm

In assessing RE I have always considered what my Japanese friends went through during the Japanese RE bubble. They bought their place for about US $1 million back in the late 80’s/early 90’s when RE prices peaked. Today their place is valued around US $250,000-US $300,000. Over this time period the husband has had to work into his late 60’s in order to pay back their mortgage. Basically he has worked as a debt slave over this period in order to pay back his loan. Something to consider when buying RE at, or near, its peak.

#187 jess on 08.04.16 at 4:21 pm

“algorithmic auditing.”
Machine Bias
software used across the country to predict future criminals.
by Julia Angwin, Jeff Larson, Surya Mattu and Lauren Kirchner, ProPublica
May 23, 2016
https://www.propublica.org/article/machine-bias-risk-assessments-in-criminal-sentencing
https://www.propublica.org/article/propublica-responds-to-companys-critique-of-machine-bias-story
“Danielle Citron, law professor at the University of Maryland. “The idea that we are going to live with a 40% inaccurate result, that is skewed against a subordinated group, to me is a mind-boggling way to think about accuracy.”
==========================

” Learn how things are taxed….”
general purpose accounts comply with disclosure requirements across 40 plus accounting standards
special purpose accounts follow as few as 5 standards.
Special purpose accounts also allow multinationals to avoid audited disclosures of transactions and balances with related parties in foreign jurisdictions including tax havens,” says Knapp.
http://www.michaelwest.com.au/oligarchs-of-the-treasure-islands/

updating algo’s?
“The execution window for a CDS index trade was 35–45 seconds in 2004. Now, it’s three seconds and shrinking.”

single Credit Default Swaps
http://www.risk.net/risk-magazine/analysis/2440286/credit-house-of-the-year-citi
Former Bof England Mervyn King joins citi

#188 Mark on 08.04.16 at 4:22 pm

“Actually the latest numbers for the GTA were quite healthy. The drop in sales in the 416, due to the shortage of listings (there’s literally next to nothing in the detached segment – ie 1 month supply), “

If actual price increases on individual properties existed to the extent the Realtors claim (and the ‘increases’ weren’t just due to sales mix adjustments as I’ve been suggesting all along), then supply should be exploding at this point. But we’re not seeing that happen, lending credence to the fact that prices have spent a while in stagnation, and Realtors are advising, based on similar local sales, that individual properties haven’t appreciated anywhere near as much, if any, compared to the so-called non-sales-mix-adjusted transactional ‘averages’.

This sort of behavior was seen at the tail end of the US housing bust as well. I’m sure many watchers of “The Big Short” recall a certain investment bank claiming that prices had actually been rising, well into 2007/2008, when the physical situation “on the ground” was that of dramatic weakness. Similar sales mix changes were definitely in play as well in that era.

#189 bragger on 08.04.16 at 4:24 pm

I just came here to say “in your face” to garth. You cry racesm every time anyone suggests that there should be a tax on foreign ownership.

You loose Mr Turner.

A tax never solved anything. Next time spellcheck. — Garth

#190 Freedom First on 08.04.16 at 4:27 pm

#100 Freedom First

#100 Freedom First Impersonator fan club President. Thank you! I could not have said it better!

#191 Say What? on 08.04.16 at 4:43 pm

#175 Victoria Real Estate Update on 08.04.16 at 2:05 pm

Sir, you state, that “the percent increase in population during the bust isn’t the issue.” Are you being purposely obtuse? Of course it plays a big factor in their housing bust. Japanese population growth has actually been negative in the last few years. Also, the median age in Japan has been getting much higher. It was almost 47 in 2016. Slow/negative population growth and an older population in Japan have helped to curtail demand. I’m sure you know about supply and demand. Regardless, I do not believe that you can correlate Japan’s housing situation with Canada in any way.

Regarding rates, I do not believe they will rise substantially for a very long time. The central bankers around the world have shown that are willing to drive them into the ground (below ground even) to “save the economy.” I believe the housing busts you present as evidence of Canada’s eventual fate have no correlation to Canada’s housing situation.

By the way, of course I can’t prove I’m NOT a realtor. It is logically impossible to prove a negative. Don’t you know that?

#192 Context on 08.04.16 at 4:47 pm

#184 Penny Henny:- Of course there is an official shortage of listings because sales are taking place elsewhere and rentals are numerous. The buyer of a cottage panics with little choice of listings so he makes an offer quickly.

#193 Victoria Real Estate Update on 08.04.16 at 4:49 pm

# 180 Noel

I’ve said many times that it’s unlikely that one could find an example of a country with a housing bubble that intentionally pricked it by tightening policy. If you can find an example, then that would be only one example.

Housing bubbles have a way of deflating on their own when the average family can no longer afford the average home. It’s virtually impossible to stop once it begins. Ask Japan, the US, Greece, Ireland, Spain, etc. and any of the other 40 plus countries that went through the housing bubble experience.

As I have said many times, Canada doesn’t need to tighten policy for its major housing correction to occur.

It won’t be necessary for rates to rise either for Canada’s housing bubble to deflate. However, rates will begin moving higher soon.

All housing bubbles deflate and that process not only results in much lower house prices for a long time but it also significantly weakens the economy. The process is brutal, as Wolf Richter says.

#194 Victoria Real Estate Update on 08.04.16 at 4:53 pm

# 185 bdwy sktrn

Do you have a quote to back what you’ve claimed?

Again, I made no prediction as to exactly when house prices in Victoria would begin to fall again.

I did say that house prices would begin to fall again.

Big difference.

#195 WalMark of Sadkatoon on 08.04.16 at 4:58 pm

As I feared

YYZ real estate prices continue their multi-year increased

http://www.cbc.ca/beta/news/canada/toronto/troubling-trend-as-toronto-real-estate-market-sees-record-sales-for-july-1.3707386

Screwed

#196 WalMark of Sadkatoon on 08.04.16 at 5:00 pm

The drop in sales in the 416, due to the shortage of listings (there’s literally next to nothing in the detached segment – ie 1 month supply)

Damn that’s really really short supply.

Crazy.

No wonder Toronto RE prices are through the proverbial roof!

#197 WalMark of Sadkatoon on 08.04.16 at 5:01 pm

According to a simple Google search, Toronto real estate prices are rising despite (or in spite of) the sales mix.

That city will be doomed

#198 jess on 08.04.16 at 5:17 pm

Citigroup bought $250 billion of Credit Default Swaps from Deutsche Bank in 2013. Bloomberg News
Deutsche Bank ~ $17.32 billion in equity capital vs a portfolio of derivatives ~ of $50 trillion notional as of December 31, 2015.
http://www.occ.gov/topics/capital-markets/financial-markets/derivatives/dq116.pdf
===============================
GERMANY june report
“Low profitability, rooted in banks’ and insurers’ business models, is exacerbated by the low interest rates.
The low interest rates are helping to boost credit demand and stimulate growth. However, prevailing business models make banks and life insurers particularly vulnerable to the associated adverse side-effects of unconventional monetary policy. Banks faced with falling net interest margins may be tempted to adopt risky search-for-yield strategies, and bank equity prices have been dropping markedly. Low profitability of life insurers hampers their ability to pay guaranteed yields to policyholders. Real estate assets, while currently broadly in line with fundamentals, could become overvalued”
Recent real estate developments warrant monitoring as pockets of vulnerability may be emerging (Box 1). page 10
http://www.harperpetersen.com/harpex/harpexVP.do
https://www.imf.org/external/pubs/ft/scr/2016/cr16189.pdf

#199 bdwy sktrn on 08.04.16 at 5:26 pm

That city will be doomed
——————
i’d sure feel doomed if i had to live there

rode the skytrain yesterday out to surrey. wow. prob saw 100 large scale buildings going up from the train and a drive down king george. this place is exploding.

i wish i sold cement.

#200 Julie K. on 08.04.16 at 5:36 pm

Odd vibe in here today.

Even Garth’s miserable post is less pathetic than usual.

What’s up, dogs?

#augustdoldrums

#201 bah bah bleet bleet on 08.04.16 at 5:53 pm

#163 TurnerNation on 08.04.16 at 12:44 pm
Killing us softly:

Keg’s burger + fries jumped $2 to $18.
Stuff I paid $1 for at Dollarama now is 1.25-1.50

All bought using after tax dollars (50% gone to taxes – here,cue Con trope that it’s paying for our military (outclassed by most 3rd world despot countries) or Lib screeds that social services come from this (well if cops don’t liquidate mentally ill first).

All of this subject to a 14% consumption tax.
Plus tip.

Largest open air concentration camp folks.

—-
and thats the truth
you could stop going to the keg and dollarama
of course the hand on your leash would prefer that you make up a protest sign, and march around in circles..

#202 Context on 08.04.16 at 5:56 pm

You must realize that technology has changed the equation during the past decade with real estate sales and rentals. There is the old official system for stats which today are being fudged by the powers to be running the real estate cartel. Now with internet technology there is a parallel system in competition where sales and rentals are taking place with the older system. Just look at the buying trends for products and services as one no longer has to shop the stores but most can be done on the computer for delivery.

#203 CBC Overseas... on 08.04.16 at 6:40 pm

#140 Truth or Dare

Get a VPN service like PIA that has a server in Hong Kong and then you can continue to enjoy Radio Moscow broadcasts from Canada, as I do here in Europe.

#204 Tudval on 08.04.16 at 7:01 pm

About the ‘price rising in thinner volume’ assertion. This is not the correct way to look at it imho. 416 is just one area in the GTA. There are so few listings, but prices going up in the 905 on strong volume negates any bearish implications for the 416. Like saying Rosedale prices going up on NO volume (gap) would mean that prices might go down there, even though they are rising on good volume in North Toronto. Price correlation has been quite stable between different established areas in the GTA for 100 years.

#205 Tudval on 08.04.16 at 7:30 pm

#196 Looking at numbers and from my own observations ‘on the ground’, the dismal supply of 3-4 bdrms detached in the 416 can be explained by little or no move-up activity. It costs a cool million + closing costs to move to one of the 2 storey detached being built. Taxes, building costs, and profit expectations are out of control though nobody seems to want to talk about that. Construction loans are 8-10%, it takes many months to get the permits, all-in-all about 2 years turn-around. 3-400k before you even get to pay the workers, materials etc…

Makes little sense to move for just a little more space considering the closing costs, so people dig in – build aditions and renovate. Which also means those wanting to move up form condos (or in fact down) find themselves stuck.

Some of the shiny new 3.5-5000 sq ft 2 storey might go to foreign buyers indeed, as few locals will pay the difference if they are somewhat content with their current accomodation. But that doesn’t mean that eliminating the foreign buyer would make these houses any cheaper, they simply will stop building them.

#206 Jas on 08.04.16 at 7:37 pm

Garth:
We know Canadian money can’t afford to purchase in GTA and Vancouver. Instead of 15% tax let us hear how you’ll fix the runaway prices.

I’d say that let there be 30% tax across the board, coast to coast. This will kill the speculators and over time make houses within reach of ordinary Joe.
Sometimes the bitter medicine is the only cure for the ailment.
What do ya you?

#207 Jas on 08.04.16 at 7:39 pm

sorry Garth, the last sentence should read:
What do ya say?

#208 Tommy Tom Tom on 08.04.16 at 11:18 pm

I eagerly await Misery 781

#209 Rational Optimist on 08.05.16 at 1:17 pm

Another disappointing jobs report here. Another phenomenal jobs report down in the U.S. And both May and June were revised upwards, to boot.

#210 Context on 08.05.16 at 3:50 pm

#205 Tudval: – why buy and not rent? There is a mansion in Rosedale that has been gutted and is empty with everything new inside just north of Bloor Street. The bus stop is a minute walk around the corner and quickly brings you to the subway stop. Can you afford and negotiate a good lease for $1,900 a month? This is the asking price to live like a millionaire.