When will it end?

BAD 2 modified
RYAN  By Guest Blogger Ryan Lewenza

In my first blog post I focused on the equity markets outlining our continued bullish view of global equities. Reviews of this post were mixed (this is putting it nicely with one Blog Dog commenting “next time I’m at the Doctors office and my Doctor tells me to relax I’m going to tell her that I’m having a severe case of Lewenza”).

Ouch! After reading the comments, and falling into a deep, dark hole of depression, I thought to myself that maybe it was the topic rather than the analysis (at least this is what I told my therapist). So today I’m going to switch gears from what I normally write about and take a shot at the Canadian housing market, since this seems to be a pretty common theme here on greaterfool.ca.

Yes, yes, I know I’m no Garth Turner. Recognizing that my knowledge of the Canadian housing market pales in comparison to Garth’s (but I know more about the stock market so there Garth!), here is my sorry attempt to provide my take on the Canadian housing market. Spoiler alert! I also see a correction looming on the horizon, but believe a catalyst (e.g., higher interest rates, recession) is needed to spark the inevitable correction.

To answer the question, “when will it end?” for the Canadian housing market, you have to look at some of the root causes of this incredible asset appreciation/bubble. In my view, the key driving forces behind our skyrocketing home prices are record low interest rates, rising debt levels and to a small extent foreign money, notably in the large urban cities like Vancouver and Toronto.

While the B.C. government has only recently started to track and disseminate home purchases by foreign nationals, the early data shows that between 5% and 10% of Vancouver home purchases come from foreign buyers. These numbers are in-line with Garth’s estimates and like him we recognize that these numbers represent a small minority, thus not having a huge impact on our overall housing market. But it’s still something that needs to be monitored especially with the B.C. government introducing a new 15% tax on residential purchases in Metro Vancouver for foreign buyers. It will be very interesting to see what impact, if any, this will have on the Vancouver and broader B.C. real estate market.

Early indications are that sales activity has responded to the new tax with sales down and a number of deals collapsing in recent weeks. According to one Vancouver realtor, the market is in “absolute mayhem’’ following the introduction of the new tax. We will be monitoring the data very closely in the following months to see if this new tax will actually have an impact on the overheated and overvalued B.C. housing market.

In our view the record low interest rates and ballooning Canadian debt levels have been the largest contributors to our housing bubble. Interest rates globally have been in a secular decline for decades, but have plumbed to new lows following the 2008 financial crisis. In response to the financial crisis and anemic economic recovery, central banks around the world have continued to cut rates even lower, hitting record lows in many places.

For example, in the U.K. following Brexit, the Bank of England slashed their benchmark interest rate to the lowest level seen since the Bank of England was established in 1694 of 0.25%. Currently there are over $8.7 trillion in debt securities around the globe with negative interest rates and closer to home, our benchmark rate sits at just 0.50% with some believing the Bank of Canada will cut even further. This is not rocket science. With interest and mortgage rates at such historically low levels, this has encouraged more Canadians to get into the housing market and lever up with bigger and bigger mortgages.

As proof, the Canadian home ownership rate has risen from 62% in the early 1980s to roughly 68% today, while Canadian household debt to income has jumped from 107% in 2000 to a new record high of 168%. Below we illustrate this relationship of falling interest rates, rising home values, and skyrocketing Canadian debt levels. So, the question then is, what will bring about change and lead to a slowdown in the housing market, and possibly worse, the bursting of the Canadian housing bubble?

CHART 1

CHART 2

As discussed at the outset, I believe a catalyst is likely necessary to precipitate change and cool down this overheated market. I see three potential factors that could achieve this. First, is a rise in Canadian interest rates which I believe is a late-2017 and possibly 2018 story. Second, is a severe recession which we do not foresee occurring over the next 12-24 months. Or lastly, some type of regulatory or government change like the new 15% tax on foreign purchases.

Time will tell which factor will turn out to be the catalyst, but rest assured, it’s going to happen. Nothing goes straight up forever.

Ryan Lewenza is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

190 comments ↓

#1 MPAC on 08.13.16 at 2:51 pm

FIRST!

#2 bdwy sktrn on 08.13.16 at 3:09 pm

Time will tell which factor will turn out to be the catalyst,
———————
so, just a few more years then?

#3 bdwy sktrn on 08.13.16 at 3:10 pm

btw wtf happened to the flopper?

#4 Scott in Gibsons on 08.13.16 at 3:26 pm

Remembering back to the US housing bubble run-up (wow, was it really TEN YEARS ago?!); the root cause was the hiding of risk by the financial system. Stupid risky mortgages were made then passed on the Wall Street to fraudulently turn into triple A securities. When the fraud was exposed Wall Street had to be rescued by the Fed through low rates and by buying up the bad securities. This was the main reason for the emergency actions of the Fedand Treasury, not to help main street. Another major factor was Americans ability to walk away from underwater mortgages, something not available to Canadians.

In Canada the risk is being hidden through CMHC. (you forgot to mention them Ryan). If Canadian lenders had to assume the full risk of the mortgages they write Canadian debt levels and home prices would be much lower. When our RE correction finally comes it will be felt both by the lenders and the taxpayers.

It would be wrong for Garth or Ryan to lay any blame for a Vancouver RE correction on the new 15% tax. They have claimed that foreign buyers are a minimal influence on prices so a 15% tax on a minor influence would have little impact on the market in their estimation.

#5 Rate normalization on 08.13.16 at 3:28 pm

Wouldn’t normalization of rates bankrupt all Western economies, all drowning in unprecedented debt?

#6 Catalyst on 08.13.16 at 3:31 pm

“A catalyst is likely necessary…”

Funny you mention this…

A Stunning Admission From Deutsche Bank Why A Shock Is Needed To Collapse The Market, And Force A Real Panic

http://www.zerohedge.com/news/2016-08-13/stunning-admission-deutsche-bank-why-shock-needed-collapse-market-and-force-real-pan

#7 Victoria Real Estate Update on 08.13.16 at 3:35 pm

Hi Ryan, I think you have some good points, however, I disagree with your assertion that there must be some sort of economic shock to begin the inevitable housing market correction in Canada.

It could happen the other way around, like it did in the US.

First, house prices begin to fall as a result of the average family not being able to afford the average home. This does not requires an economic shock (even with record-low rates).

As a result, the economy weakens, moving it into recession (or deeper into recession). Consumers spending slows (a third of the Canadian economy is based on consumer spending). More jobs are lost, fewer house sales, less construction materials sold, etc. This pushes house prices down.

#8 Context on 08.13.16 at 3:35 pm

This is all old news so what else do you have?

#9 Ryan Lewenza on 08.13.16 at 3:56 pm

Bdwy sktrn “so, just a few more years?”

For a number of years I felt the housing market was grossly overvalued and was destined for a crash. But after reading more books on asset bubbles (Shillers Irrational Exurberance being the best one) I realized that assets can remain overvalued for a long time. Look at the US stock market in late 90s. From these different books and papers on asset bubbles I learned that asset bubbles need a spark or more accurately a prick. With this new knowledge I’ve come to the conclusion that our housing bubble will also need that prick to set it off, so looking at those potential factors (eg interest rates, regulatory change) I think we could still be another year away before we finally see that long awaited housing correction. – Ryan L

#10 MF on 08.13.16 at 4:08 pm

” this. First, is a rise in Canadian interest rates which I believe is a late-2017 and possibly 2018 story.”

-Ryan, what makes this the period where rates finally start to rise? We’ve heard that rates will rise for years, and yet they are still at “emergency” levels.

What about national debt levels? It looks like everywhere around the world this economic “experiment” has produced nothing but low growth and asset bubbles. The response from the Cb’s is to continue to force rates down further in hopes of eeking out some growth. It looks like the economy then becomes even more dependent on this stimulus/low rates as we get more in debt. This all means it will be more painful to “normalize” raise rates when they actually do rise.

So why 2017/18? Where will the growth come from? Will they be a stock market correction too (since we are at all time highs)?

MF

#11 MF on 08.13.16 at 4:09 pm

To last post,

I am referring to the US stock market all time high.

MF

#12 Ryan Lewenza on 08.13.16 at 4:10 pm

Rate normalization “Wouldn’t rate normalization bankrupt all western economies”

No! This is hyperbole and not well supported by facts. First I see rates ultimately moving higher (this is not some bold call with rates basically at zero) but them remaining low from an historical perspective. For example in the US rates are likely to peak around 2-2.5% versus the 4-5% seen before the financial crisis. Second not every country is loaded to the gills with debt. Yes US, Japan and Italy to name a few have high debt loads but it’s a stretch to say every western country does. Finally, if rates go higher then I expect then we’ll figure it out. We always do and it’s why the doomsdayers get it wrong. – Ryan L

#13 Ryan Lewenza on 08.13.16 at 4:16 pm

MF “why late 2017 or early 2018”?

It all has to do with oil prices. I see then recovering in 2017 which will boost our economy and lead to the Bank of Canada hiking rates in late 2017/early 2018. That’s how I came up with that forecast. – Ryan L

#14 cmj on 08.13.16 at 4:17 pm

The 15% foreign tax has cooled some of the Vancouver market. Purchasers have moved out further to avoid the tax. Christy’s 15% solution did not address our very complex heated market. There are innocent homeowners caught in the crossfires because they are involved in the chain of seller/purchaser.
Our real estate is also fueled by BCers purchasing multiple properties for investments. Flippers could have been identified through the land titles act and paid a premium tax. This includes homeowners and realtors who were involved in these kinds of dealings

#15 Directm on 08.13.16 at 4:29 pm

Ryan, what do you think of the theory (I heard about it on this site) that claims housing and Canadian asset prices will stay roughly the same or grow slightly in CDN dollars but will collapse in US dollars. If the CDN dollar drops 30% then housing would be worth 30% less…correct?

#16 Shawn on 08.13.16 at 4:34 pm

Hi Ryan,

What’s your $CAD target for 2017-18?

Also, do you think a bear market in Canadian housing will hurt Canadian bank earnings and ultimately their share prices?

Thanks.

#17 Smoking Man on 08.13.16 at 4:36 pm

Ouch! After reading the comments, and falling into a deep, dark hole of depression,-Ryan

Ryan, Ryan, Ryan, seriously is your skin that thin. You got off lightly last week. Welcome to the rabid dog pound.

I agree with you, that real estate defiantly needs a big prick to penetrate this stubborn balloon, and if you think a few spikes in interest rates will do that, you don’t understand the herd. Not even close.

If fact when I look into my Alien crystal ball, all I see is negative rates and helicopter money. In fact, Bonds, equities, and real estate will rock and roll for years, and years to come.

Central banks world over can print as much money as they want, it’s created out of thin air, so long as they all do it together no one country gets an advantage over another. And central banks all have secret little powwows before any one bank changes its monetary policy. They all work together to try and maintain balance.

How do I know this, Like you, I am a former Bay Street Dude, In my case a seriously kick ass code smith, who knows how to keep his mouth shut and his ears open, especially when getting hammered with the boys on Lake Joseph.

My advantage is anyone I drink with is long gone over the rainbow long before I even get a buzz going….

Dr. Smoking Man
Ph.D. Herdonomics.

If you need any advice, feel free to ask. but do it before 10pm that’s when uncle Jack visits… I’m sure you will meet him tonight.

#18 Jean Claude VanDammeCouver on 08.13.16 at 4:40 pm

Given your experience as an equity analyst and now portoflio manager, how do you feel about shorting? Do you think it’s a bad thing (betting against companies who employ people) or do you think it’s a valuable and necessary part of capital markets? I ask because I’m getting an itchy trigger finger, but I wouldn’t short, I would use long term put options.

#19 Jean Claude VanDammeCouver on 08.13.16 at 4:42 pm

Oh and yes I’m aware Garth doesn’t recommend individual stocks, so obviously he wouldn’t recommend individual put options either. And he probably doesn’t recommend put options at all. I’m not asking about whether you recommend it for your clients, I’m just talking about the business of shorting/put options in general.

#20 TurnerNation on 08.13.16 at 4:48 pm

Last Saturday’s was delivered with all the stiffness of a school book report: “So in conclusion that is why you should by Reits and read this book”

Smoking man needs to take new guys to Seneca to losen up with tawdry cover bands and aimless cougars and cheap rotgut. What could go right?

#21 Freedom First on 08.13.16 at 4:51 pm

The Alberta economy is in the crapper. I announced it was going down on here, long before the msm, who only reported it when they could no longer hide it.

The Canadian economy is falling fast. Big time.

I know emotions, as I have complete control over my own. The trigger for a stampede from the overheated Canadian housing markets: …..”Fear”…… and nobody saw it coming;

…………………………………………………………
Yes. Worried about Flop. Hopefully, he is still healthy, working, married, and in good humour. All in all, he is a friendly dude, if somewhat misguided. Given time, I am sure I can fix that.

#22 Context on 08.13.16 at 4:52 pm

Ryan is the glass half empty or half full. Real Estate prices are correcting now in the condo market and the pre-sales by builders or their agents are flooding the net at discounts.

#23 BOOM! on 08.13.16 at 4:57 pm

Ryan-

While I wish you are correct, I dos not think we will see ‘meaningful’ rate rises.

As an American we have seen ‘chicken little’ Janet Yellin, tell us the FED is a data driven agency, as a reason NOT to raise rates, then turn around and raise them (dec 15) by .25% when the data was clearly less supportive.

To say the FED at least talks out of both ends, is apparent.

No rate hikes to eek out the last gasp of an economy clearly at risk, because of low interest rates, and hardly benefitting by them.

The fault, perhaps is in the data. We clearly count new loans and the rolling over of extend and pretend lending as part of GDP rather than viewing the banking sector as the parasite to production it has grown into being.

After each recession more debt on the books, more lending to tell us ‘all is well.’ Me thinks there is what used to be known as Bullshit lurking in there.

Share buy backs with borrowed $$ all too often a wall st occurrence leaves a weaker corporation in its wake.

Perhaps we fail to see the implications of this in todays more myopic view.

No, you will not see ‘meaningful’ rate increases and the attendant pain it will bring (repayment time) until the last gasps of the economy as we know it, sorry.

Then the crap clearing that should have followed the 2008 melt-down can begin in earnest!

#24 LP on 08.13.16 at 5:03 pm

#21 Freedom First on 08.13.16 at 4:51 pm
…………………………………………………………
Yes. Worried about Flop. Hopefully, he is still healthy, working, married, and in good humour. All in all, he is a friendly dude, if somewhat misguided. Given time, I am sure I can fix that.
…………………………………………………………
Flopper announced on here a week or so ago that he was leaving to go camping. Stop worrying; unless he comes to his senses while away, he’ll be back as soon as in range.

#25 Smoking Man on 08.13.16 at 5:05 pm

#21 Freedom First on 08.13.16 at 4:51 pm
The Alberta economy is in the crapper. I announced it was going down on here, long before the msm, who only reported it when they could no longer hide it.

The Canadian economy is falling fast. Big time.

I know emotions, as I have complete control over my own. The trigger for a stampede from the overheated Canadian housing markets: …..”Fear”…… and nobody saw it coming;

…………………………………………………………
Yes. Worried about Flop. Hopefully, he is still healthy, working, married, and in good humour. All in all, he is a friendly dude, if somewhat misguided. Given time, I am sure I can fix that.
…..

Hey, Fellow Dudist priest, what happened to:

Freedom First
Ph.D. Freedomnomics.
Had nice ring to it.

#26 F.dover on 08.13.16 at 5:06 pm

Every day people say that the rates can’t rise today, but they certainly will by this time next year! It has been said over and over now, going on eight years. 666 central bank cuts world wide in total at this point according to Ponzi World.com
It looks to me like the possibility of a hike is getting worse as this thing reaches the decade mark.
Perhaps one would sound much more astute to state that rates might go up at this time two years from now.

#27 AR on 08.13.16 at 5:06 pm

We get lots of entertaining housing market analysis here. Was looking forward to more stock market analysis and general financial advice from the weekenders.

Eg. What’s the best way to manage RRSP withdrawals prior to age 60, if you’re not certain about annual earnings. Monthly payments or lump sum payments? How do you minimize tax at source – or can you? If you take a lump sum and then get a big contract (income bump) then you take a tax hit. These kinds of discussions would be useful.

#28 dartanian on 08.13.16 at 5:10 pm

first
Ryan there is some possibility that housing valuations are based more on psychological factors than economic ones. Herd mentality is hard to predict but I
think that most blog dogs here would admit that the sentiment
towards housing has already shifted from “housing is a great investment” to “who knows what is going to happen with housing”.
If the herd shifts to “get out of housing” then FOMO goes in the opposite direction than it has been going and the errosion in prices could be the
precipitative factor in the next economic transition. Time will tell.

second
Garth’s LOC using RRSP withdrawls to pay the interest idea is interesting. Wouldn’t it be awesome to retire and have your RRSP allready transfered out tax free while paying off and investment load.
Why wouldn’t we all do this?

third
Shouldn’t we all just short Herbalife

#29 paulo on 08.13.16 at 5:16 pm

well Ryan i think your on the right track in most cases , oil though, i do not see moving very much in the next 5 years
supply and demand principals
the catalyst may already have surfaced, that being the fact that the first time buyer is all but shut out of the market in many regions including 2 of the largest, GTA & YVR
Than there are the trickle down effects, imagine $10 bucks for that coffee at tims , there are no sunny beaches for people to live on,businesses will find it increasingly impossible to hire workers especially service type industries and our sky high real estate and rent levels will discourage companies from setting up in the effected areas , and existing ones will be on the move to less costly areas. lastly there is the loss of discretionary spending by a ever increasing demographic,people that are pickled in debt or house poor are pulling in there spending , causing a added drag on the rest of the economy
so with a estimated 20% of our otherwise dead in the water economy’s GDP tied to residential real estate and related services im thinking we are up the creek sans paddle it will not end well

#30 NoName on 08.13.16 at 5:17 pm

Hello Mr Ryan Lewenza

Considering that rate will be low for some time what is you take on 80/20 portfolio? 80%equity 20%preferds no bonds?

#31 slim on 08.13.16 at 5:19 pm

“From these different books and papers on asset bubbles I learned that asset bubbles need a spark or more accurately a prick.”

Speaking of who. What if Trump is elected President? And we have nationalism rearing its ugly head in the EU, too. Bill’s better half, Hillary’s entertaining the idea of sending troops into Syria. Along with the drone hit teams. More sparks?

#32 AK on 08.13.16 at 5:20 pm

#21 Freedom First on 08.13.16 at 4:51 pm

“Yes. Worried about Flop. Hopefully, he is still healthy, working, married, and in good humour. All in all, he is a friendly dude, if somewhat misguided. Given time, I am sure I can fix that.”
———————————————————–
Sir, I am a big fan.

#33 Context on 08.13.16 at 5:22 pm

The higher authority over the central banks called BIS adds greatly to any decisions.

#34 Joe2.0 on 08.13.16 at 5:23 pm

So if interest rates are left low the amount of borrowers will remain high thus continuing to increase banks worth on paper allowing them more financial leverage aka derivatives?

#35 AK on 08.13.16 at 5:24 pm

“I see three potential factors that could achieve this. First, is a rise in Canadian interest rates which I believe is a late-2017 and possibly 2018 story.”
———————————————————-
Hard to say what Canada will do, but watch out for The Fed.

Once the election is out of the way, The Fed will put the pedal o the medal.

#36 MF on 08.13.16 at 5:25 pm

#23 BOOM! on 08.13.16 at 4:57 pm

Yup. It’s always just over the horizon..sort of like a rainbow and a pot of gold.

They keep telling us this to placate us so the failed scheme can continue a little longer (kick the can down the road).

Lol oil rising in 2017. Oil has already risen a lot since February.

They are backed into a corner and they know it. A world addicted to never ending “stimulus” like a dying patient in a vegetative state living on a breathing ventilator. He’s still breathing!! It’s working! Huge success for modern medicine!

MF

#37 Ryan Lewenza on 08.13.16 at 5:26 pm

Directm. “If CAD drops 30% then housing drops 30% correct?”

Yes for a US resident but not a Canadian resident. Since we live in Canada, make Canadian dollars and buy homes in Canadian dollars, the CAD/US exchange rate has no impact. Now if you sold your home and then converted your home proceeds into US dollars after that 30% drop then that would be true. But if you don’t convert then the CAD/US exchange rate doesn’t matter. And the CAD is not going to drop 30% anyways. – Ryan L

#38 Ryan Lewenza on 08.13.16 at 5:36 pm

Shawn “What is your outlook for CAD in 2017/18 and will bank earnings be impacted by housing correction.”

Based on my expectations of $60 oil in 2017 and my regression model of CAD/US exchange rate and oil prices I see the CAD rising to 82.5 to 85 cents in 2017/18. Short term CAD could fall a bit more but 1-2 years out I see it higher as oil prices recover. On bank earnings yes they will see some hits to earnings if we see that housing correction but i don’t expect it to be material. The banks have an oligopoly, are well diversified with many different business units and increasingly have more US exposure. Those that think the CAD banks will turn out like the US banks following their housing collapse will be wrong in my opinion. – Ryan L

#39 Ryan Lewenza on 08.13.16 at 5:51 pm

AR “Was looking for more stock market analysis and general financial advice from the weekenders.”

Agreed this will be the focus of our weekend posts generally. But I wanted to share my thoughts on this crazy housing market. Stay tuned for more market analysis. – Ryan L

#40 hola on 08.13.16 at 5:51 pm

“in the U.K. following Brexit, the Bank of England slashed their benchmark interest rate”

Hhhmmmm

Interest rates been dropping since the GFC. The latest .25% drop is not a result of brexit. It was going to happen anyway, and will likely drop again.

#41 Lulu on 08.13.16 at 5:55 pm

I’m more interested to know who will be the Ultimate Black Swan and swing it’s wing to clamp down everything. Should we have a bet on this instead keep predicting interest rate rise, recession when to happen and such?

Maybe a natural disaster in BC will do just that? Ma Nature always correct things!!

#42 Context on 08.13.16 at 5:57 pm

Someone had to tell Ryan the answer that he cannot figure out and beat me to it. Once the herd comes home from a hard days work and sees their address has been changed to 101 they will know the game has changed course.

#43 Freedom First on 08.13.16 at 6:00 pm

#32 AK on 08.13.16 at 5:20 pm

#21 Freedom First on 08.13.16 at 4:51 pm

“Yes. Worried about Flop. Hopefully, he is still healthy, working, married, and in good humour. All in all, he is a friendly dude, if somewhat misguided. Given time, I am sure I can fix that.”
———————————————————–
Sir, I am a big fan.

FF007

I get that all the time. As a lifetime member of the Alberta In-breeders Association, I welcome you to this blog.

#44 Mark on 08.13.16 at 6:00 pm

The output gap (ie: the gap between the economy’s ability to produce goods, and the domestic demand for goods) is wide enough in Canada to drive a bus through at this point, and appears to be widening. So no increases to Canadian policy interest rates for many, many years to come.

Housing has been stagnating/falling for the past 3 years in wake of the catalyst of Flaherty cracking down on the CMHC in Budget 2013. This has kept Canadian inflation under control despite losses in the currency against our main trading partner which reached over 30% last year. As housing prices continue to fall across Canada, the economy will continue to weaken with little in the way of demand drivers to revive it.

Canadian equities look attractive. At a modest P/E of 15 for the TSX index, even if you assume no real growth, that’s nearly a 6% equity risk premium against the quoted yield of the 30-year GoC debt. Compared to the S&P500, the value represented in the TSX is tremendous. There’s even more upside to the TSX if you assume that its deeply cyclical sectors will start to show some life. While with the S&P500, many of its key cyclical sectors are in extremely bubbly territory (ie: tech).

“Those that think the CAD banks will turn out like the US banks following their housing collapse will be wrong in my opinion. “

Agree fully here. The structure of Canadian banking is dramatically different. Namely, Canadian banks don’t really take interest rate risk and run nearly perfectly asset-liability matched. The US banking sector, OTOH, ran a massive duration mismatch in their portfolios deliberately as a matter of policy — borrowing short-term funds from their customers, and investing them in long-term mortgages. A sure-fire recipe for disaster when the long-end of the curve blew out.

So if interest rates are left low the amount of borrowers will remain high thus continuing to increase banks worth on paper allowing them more financial leverage aka derivatives?

Low rates eventually destroy the value of assets such as RE by over-stimulating their supply to market. In such case, the natural course of action for the financial system is to tighten credit as defaults accelerate. To inhibit the additional production of supply.

#45 Ryan Lewenza on 08.13.16 at 6:05 pm

Jean Claude Van Damme “Do you use/recommend shorting or using puts.”

Shorting stocks and using options are for more sophisticated investors. I occasionally employ these tools particularly writing calls on my stocks/etfs. But this is not something we use in our practice and with our clients. Most clients just want to keep things simple, minimize risk (options and shorting are higher risk) and earn reasonable rates of return of 5-7% which we believe we can accomplish over the long-run. – Ryan L

#46 bdwy sktrn on 08.13.16 at 6:12 pm

RYAN ” In my view, the key driving forces behind our ***skyrocketing home prices***….

MARK “***Housing has been stagnating/falling*** for the past 3 years”

—-
black is white , war is peace. mark is jealous and bitter.

#47 Mark on 08.13.16 at 6:15 pm

“Garth’s LOC using RRSP withdrawls to pay the interest idea is interesting. Wouldn’t it be awesome to retire and have your RRSP allready transfered out tax free while paying off and investment load.
Why wouldn’t we all do this?”

At this point, to implement Garth’s strategy of the RRSP meltdown, the notional amounts involved would be huge. It costs what, $7500/year to finance $500k these days? The RRSP “meltdown” would take ages for most and those are really eye-popping amounts required in debt to make it happen.

It was a strategy that perhaps was more valid when rates were 5-6%, and $500k notional could “melt” $25-$30k/year. But nowadays, lol. With the heavy fixed income weighting that most have in their RRSPs, and the current interest rate environment (which is likely to persist for a long time to come) — RRSPs can basically be thought of as being ‘self-melting’.

So not saying that Garth’s strategy is totally irrelevant. That’d be something a person would have to discuss with Garth (or their financial planner) individually with their own particular circumstances. But its a lot more challenging/problematic today to structure on a reasonable basis than it was in the higher rate environment.

#48 Basil Fawlty on 08.13.16 at 6:20 pm

Increased interest rates will shatter the budgets of many countries. In addition, the bulk of the estimated $1.5 Quadrillion in derivatives are tied to interest rate bets, which will falter when rates increase.
They have told us for seven years that rates would be increasing and we have seen a .25% increase. At the same time, we now have $13T in sovereign bonds paying negative rates.
Seems like the hype is the idea that rates will go up.

#49 Dual Citizen In Canada on 08.13.16 at 6:41 pm

Hey Ryan, Donald Trump is your catalyst, that prick(‘s our bubble)!

#50 Dispatches from Under the Bridge on 08.13.16 at 6:45 pm

Vladimir Trudeau will fix the whole housing bubble thing as soon as he can find his shirt.

#51 Joe piscapo on 08.13.16 at 6:45 pm

Saw garths 2008 greater fool book at value village today in Burlington. Also found mike tysons undisputed truth and Slash’s book.

#52 young & foolish on 08.13.16 at 6:51 pm

“They are backed into a corner and they know it.”

Many people say this about the Central banks, but I wonder if this coordinated “stimulus” is part of a new way to develop and control markets on a global scale.

#53 Keith in Calgary on 08.13.16 at 6:53 pm

Rates are not going up in our lifetime…….and we are already in a severe recession.

The YVR tax is just icing on a cake that’s already baked.

RE is sticky on the way down because emotional denial is huge, until the bailiff is at the door with a piece of paper that has REALITY written all over it.

#54 Context on 08.13.16 at 6:55 pm

Ryan what do you anticipate for real estate in cottage country north of Toronto?

#55 conan on 08.13.16 at 6:59 pm

ETFs force a “buy and hold mentality”. Might have worked well over the last 10 years, but not going forward.

Garth what is with the 7 month return on your portfolio? You should report like everyone else has to.

Mixed messages in this post. Bullish on markets going forward but final paragraph screams caution, concern, and reason for worry. I call this Garth insurance.

Anyway, rant mode off. Much better article then last time Ryan. I hope Garth did not fuss over it and let you do your thing.

P.S. You look like a funeral director in your pic.

#56 Original dave on 08.13.16 at 7:05 pm

Ryan, how about this….sub prime company like home capital group starts taking it on the chin. Weren’t close to 50 brokerages in deep doo doo over fraudulent loans? We dont have as many sub prime lenders but in the U.S, they were the first to show signs of weakness. It’s entirely possible the Canadian versions show some weakness and things start to unravel from there.

#57 Balmuto on 08.13.16 at 7:11 pm

#44 Mark on 08.13.16 at 6:00 pm

“Housing has been stagnating/falling for the past 3 years in wake of the catalyst of Flaherty cracking down on the CMHC in Budget 2013.”

You’re not gaining any traction with this ridiculous assertion. To paraphrase David Cameron: For heaven’s sake man, give it up!

#58 westcdn on 08.13.16 at 7:17 pm

I think that taxing a portion of the capital gain from the sale of residential property would help cool RE prices. I wonder if there is any politician willing to champion the idea – can you say unemployed and pension less. Otherwise, we just let property and transfer taxes do the job.

I got a kick from the radio interview of Ross Kay (RE expert extraordinaire). He pointed out that 10 years ago, realtors had to hustle for half the commission they get today. In Vancouver today, a realtor gets twice as much for half the work. It is a good dig if you can get the listing. It is no wonder the RE cartel work hard to prevent sellers from seeing the obvious. If you want to buy or sell residential property, I think public disclosure of the transaction is in order. We really don’t have privacy from the government anyway. If we want to take control back from governments, this is one step in the right direction.

Here is one for the books – a German politician claims the elites are not the problem, it is the people. Well yes, we can be unruly and stupid but so can the elites.
http://www.zerohedge.com/news/2016-08-13/german-president-booed-attacked-after-claiming-people-are-problem-not-elites

Can you smell what the elites and their cronies are cooking?

#59 Original dave on 08.13.16 at 7:20 pm

I just wanted to add that I disagree. A catalyst will enforce a decline but it isn’t a must. A bubble is a bubble. A small decline leaves a lot of over head resistence making others to want to exit triggering more declines. Your post is a safe bet. To make that claim is equivalent to suggesting that no housing bubble has ever declined without a catalyst. Was that true for places like Japan in the 90’s? Every bubble is the same – only the asset changes

#60 Panini on 08.13.16 at 7:24 pm

Mr. (Real Estate) Market is driven by fear and greed. Fear and greed of the herd. In the early 90’s we went through a fear cycle, and we are currently going through a greed cycle. Low interest rates, high debt, are the cause of the current vicious greed cycle. Ryan hit the nail on its head. A catalyst is needed. to change the herd’s beliefs or their ability to service debt. Wife signs proof of income letters for her employees. The number of minimum wage earners seeking half-million dollar mortgages is ridiculous.

CMHC would have been worth a mention. It shifts risk away from the banks which, in turn, drives higher mortgage approval rates.. That’s a major factor.

Before the herd’s sentiment genuinely changes there won’t be a real estate market correction.

#61 };-) aka Devil's Advocate on 08.13.16 at 7:36 pm

Ryan:

Think you know more than you give yourself credit for. Garth has been calling for a correction “for ever…”. You are calling for it sooner than later this late into your foray to the realm. Your timing is better.

As to what will be the catalyst that spurs the “correction”?… it is, as Garth will tell you, always fear and/or greed as human sentiment and preoccupation with house porn clouds their judgment to overreact to anything that threatens their Kardashian dreams.

#62 Tony on 08.13.16 at 7:37 pm

Firstly America has been in recession for all of this year and secondly anyone that’s bullish on stocks is someone looking to sell something. I buy deep out of the money puts each month knowing full well one day the American stock markets will be closed for 2 weeks to a month with a re-open at least 50 percent lower on the major indexes. I’m shorting Teck Corporation at the end of this September. I’ll be buying back the shares at 5 dollars Canadian at the end of January 2017 or at the start of February 2017. If you’re really lucky I’ll get you some tips in due time maybe even some stocks you can play long while hedging the market indexes for the inevitable collapse. Thank me later.

#63 Tony on 08.13.16 at 7:44 pm

DELETED

#64 Freedom First on 08.13.16 at 7:45 pm

Sorry I can’t hang around the blog tonight guys, just got a call from my cousin Charlene and she said she’s “ready!”
Yeehaw! Freedom First out.

#65 Freedom First on 08.13.16 at 7:46 pm

#25 Smoking Man

Smoking Man, as with everything in my life, I don’t want to overdo it. I am very sure that all of my previous as well as future girlfriends can, and will, vouch for that.

fan #33

#66 Tony on 08.13.16 at 7:55 pm

Re: #53 Context on 08.13.16 at 6:55 pm

Recall the housing crash in America. Stockton down 70 percent. Fort Myers down 70 percent. Texas, Kansas, Ohio and small cities where prices never went up fell around 10 percent. The same thing will happen in Canada Vancouver down 70 percent, Toronto down 60 percent and cottage country excluding Port Perry should fall around 10 to 15 percent.

#67 AK on 08.13.16 at 7:58 pm

#61 Tony on 08.13.16 at 7:37 pm

“Firstly America has been in recession for all of this year and secondly anyone that’s bullish on stocks is someone looking to sell something. I buy deep out of the money puts each month knowing full well one day the American stock markets will be closed for 2 weeks to a month with a re-open at least 50 percent lower on the major indexes. I’m shorting Teck Corporation at the end of this September. I’ll be buying back the shares at 5 dollars Canadian at the end of January 2017 or at the start of February 2017. If you’re really lucky I’ll get you some tips in due time maybe even some stocks you can play long while hedging the market indexes for the inevitable collapse. Thank me later.”
———————————————————-
LOL. The downside for having a blog on a Saturday is that some people are dipping into the sauce.

It is, what it is.

#68 Freedom First on 08.13.16 at 8:03 pm

#32 AK

#21 is me. # 43 is a member of my “Freedom First Impersonator” fan club.

I Post about 40% of the Freedom First comments. I get a kick out of, and appreciate all of the Freedom First Impersonators.

#32 AK. thanks. I’m a big fan of me too!

#69 Entrepreneur on 08.13.16 at 8:10 pm

“the early data 5% and 10% of Vancouver purchases come from foreign buyers”…RL

In GT’s pie graph only 3% to 5% foreign buyers, already a discrepancy from your above statement.

As for the low interest rate, Mark Carney kept them low here in Canada (many disagreed) and now he is in England keeping them low (many over there are in disagreement).

How else would anyone react to low interest rates (and to any other incentive to buy)? Normal instinct and now the blame.

I agree with the third one, the 15% foreign tax, is the
the catalyst for the bubble but time will tell.

#70 BOOM! on 08.13.16 at 8:11 pm

Where Canadian housing prices are headed… I do not know. At a national debt / lending ratio at ~about 168% of household income and present homeownership at 68% it seems the supply of “Greater Fools” should nearly be exhausted.

Naturally financing un-qualified buyers through various fraudulent schemes worked well in the U.S. until it suddenly didn’t. Maybe Canadians will try this same “Magic” if it has not already been applied.

Those numbers tell me it is not an enviable situation.

MF-

While the US equity markets are setting new highs, the earnings reports are not all that rosey. I would not be expecting a string of new daily highs. Still, dividends are being paid.

I doubt we will see anything more than -perhaps- a .25% rate hike in Dec. if Yellin doesn’t see her data, or shadow.

The big question is what happens next with China.

Europe will languish with Mario at the helm, and banks in terminal troubles there. It’s a Goldman thing I guess…

They’re doing the lord’s work, they’ll tell you.

#71 jess on 08.13.16 at 8:23 pm

Banks Ask Fed For Five-Year Extension On Volcker Rule Compliance

Aug 12 2016 | 2:04pm ET

“Major Wall Street financial institutions are seeking U.S. Federal Reserve approval to delay compliance with the Volcker Rule for an additional five years in order to deal with illiquid fund investments, Reuters reports.”

#72 jess on 08.13.16 at 8:24 pm

Civilian Labor Force Participation Rate, January 2007 to June 2016 St. Louis Federal Reserve
FROM 66.4 2007 to 62.8 July 2016 seasonly adjusted
https://fred.stlouisfed.org/series/CIVPART

july 2016 seasonably adjusted -look at U3 and compare with U6 unemployment numbers
The Bureau of Labor Statistics
http://www.bls.gov/news.release/empsit.t15.htm

Labor Force Participation Rate in U.S.
http://www.bls.gov/news.release/empsit.t08.htm

#73 Context on 08.13.16 at 8:32 pm

#65 Tony: – Cottage country north, east, and west is running on fumes by the thousands. They are being rented out and can document one small area with 500 properties for rent. Ryan is looking for his trigger, but what he fails to comprehend is history has no pattern for this bubble because its formulation is unique and in Toronto the housing pattern has changed. Something like a new virus that has no cure.

#74 Mark on 08.13.16 at 8:35 pm

“You’re not gaining any traction with this ridiculous assertion. To paraphrase David Cameron: For heaven’s sake man, give it up!”

Ridiculous assertion, hardly. Its an assertion derived through analysis of the statistical and anecdotal evidence available. Its an assertion which fits well with the macro trends seen in Canada in the post-2013 peak era. Its an assertion through which many other occurrences, such as the lack of inflation in Canada can be properly explained.

What isn’t explainable is why the RE sell side continues to obfuscate the facts. Why they try to obscure as much information as possible from the public to hide the dramatic shift to the sales mix. Why inventory is actually falling in places like Vancouver/Toronto which runs contrary to all economic theory accompanying rising prices. Even CMHC subprime credit is falling, which is basically an impossibility in a rising house price environment. Nearly all statistical measures, except the non-sales-mix adjusted transactional averages spewed by the Realtors are pointing to stagnation and falling prices over the past 3 years in most of Canada’s major cities.

Then there’s Ross Kay, who, completely independent of my research (mostly macro based, mildly proprietary), came to nearly the same conclusions. He’s willing to talk about it publicly as well on Howestreet/TalkDigitalNetwork. Go listen to his comments if Mark has worn out his welcome in your mind.

#75 estrella on 08.13.16 at 8:38 pm

Welcome back Ryan, as a blog dog I officially award you the Chihuahua medal of bravery. Not everyone can enter the den one frightful night, brave the pit bulls and then
return with a good post. All the best as you feel out all the crazies here. “Most” blog dogs are all bark, no bite.

#76 jess on 08.13.16 at 8:42 pm

Hey Ryan, Donald Trump is your catalyst, that prick(‘s our bubble)!

and apparently he only has 1.28m in the kitty

#77 Linda on 08.13.16 at 8:46 pm

Question for Ryan – what are the signs of a recession? High or rising unemployment (yes); contraction in the economy (yes); central bank ‘adjusting’ interest rates to counteract the economic slowdown (check); less demand for goods & services (hello, trade deficit – month 24 or thereabouts as per recent chart on this blog) check. So, are we not already in a recession, even though it has not necessarily been ‘officially’ declared? If so, when can we expect this housing correction to occur?

#78 Karl hungus on 08.13.16 at 8:54 pm

The fact that you think there is a “canadian” real estate market shows me everything i need to know. There is no such thing, and speculating on it means nothing. Rising interest rates could have a huge impact on Vancouver and Toronto, but nothing in Edmonton or Regina.

#79 Tom from Mississauga on 08.13.16 at 9:00 pm

So are 5 to 10% of SELLERS in YVR also foreigners? Can we get them too?

BTW, I bought some more shares of ZSP after reading your last post Ryan.

#80 Stevladimir Harputin on 08.13.16 at 9:08 pm

“I learned that asset bubbles need a spark or more accurately a prick. With this new knowledge I’ve come to the conclusion that our housing bubble will also need that prick to set it off…”

But you all voted me out last year, Ryan.

No prick for you.

Now do you see why I had to get rid of that useless disobedient chihuahua, Garth Turner?

Friends, let me be clear: With my firm hand off our economic tiller, we are all doomed.

Remember, and be grateful for what you had and threw away.

#81 Smoking Man on 08.13.16 at 9:11 pm

#53 Context on 08.13.16 at 6:55 pm
Ryan what do you anticipate for real estate in cottage country north of Toronto?.
…….

Why are you asking him, he admitted he doesn’t know shit about real estate. I’m insulted. Who on hear had been calling the market correctly for the last 8 years on here…

Plus what a vague question. Are we talking Lake Joe, Simco… Huge difference, one Lake has low life’s the other movie stars and banksters.

#82 Moses71 on 08.13.16 at 9:11 pm

Unsure why it would be a bad thing if we had less consumer spending? Shouldn’t our 168% consumer debt load be lowered, right?
And if the housing market rebalances itself, always a good thing, too, ultimately. Just the nonfinancially intuitive ones who leapt in of late with lower equity will fall the hardest. Collateral damage. the bank of mom will have to rescue them…again.

#83 Toronto1 on 08.13.16 at 9:14 pm

The issue i see whith housing in the financing part of the equation. The access and willingness of lenders to lay out capital. Thats the key to watch in my mind. At some point the populace will hit a debt wall. There are only so many people that have the financial means to service a mortgage. I fathom where pretty close to that limit now with debt at 168%. At some point that has to be paid down.

Im my scenerio i see a minor recession on deck 6-12 months out, thats when all those jobless that showed up in the last two months job numbers run out of EI. They will be forced to sell, some credit unions will take heavy impearments causing bailouts drom the big 5. A 10% drop in prices will lead to 30% loss thats just how margin works.

My tinfoil hat tells me banks and fed govt are exremely jittery about the actual numbers there talking down the market( housing) getting a little tighter with credit, enforcing the ratios more etc… If not for the subprime lending market the RE market would already be puttering and stalling out.

#84 Rate normalization on 08.13.16 at 9:19 pm

#12 Ryan Lewenza

Rate normalization “Wouldn’t rate normalization bankrupt all western economies”

No! This is hyperbole and not well supported by facts.

====

Are we looking at the same data?
What I am looking at does not look like a hyperbole at all:

http://www.tradingeconomics.com/country-list/government-debt-to-gdp

#85 Brazil ex-pat on 08.13.16 at 9:38 pm

Bullish on global equities?

As bank after bank go to negative interest rates and Govt after Govt are having their heads handed to them by the pissed off un-employed private sector people…..

Good luck with that….

#86 WalMark of Sadkatoon on 08.13.16 at 9:39 pm

You’re not gaining any traction with this ridiculous assertion. To paraphrase David Cameron: For heaven’s sake man, give it up!

That’s why Ryan doesn’t respond to his posts. Can’t comment on stupid stuff

#87 salonist on 08.13.16 at 9:49 pm

food and walmart

in around 2000,senior realized big problems, wally world selling food stuffs.

senior, a bright boy, hired…a highly skilled defence to stave of Walmart, market share.

the decimal point moved at your expense.

wally world has decided to go for the jugular

http://www.ctvnews.ca/business/inside-walmart-s-food-lab-for-developing-new-items-1.3026497

#88 Freedom First on 08.13.16 at 9:51 pm

I never had kids and I live alone, but many many men I have known have not been so fortunate. Tough lesson. Odds are 50/50. Too high risk for me. I am okay with that. I am blessed.

#89 Annek on 08.13.16 at 9:56 pm

Good post today, regardless of what others say.
Intersting observation on my way to work yesterday:
I drive up Bayview Avenue (Toronto) from 401 north up to Steeles. The drive is a out 5 km. I saw about 12 “for sale ” signs on Bayview with just only 2 sold. ( many were townhouses)
Last time I saw so many ” for sale” signs in a short distance was in 2008.
This could mean a number of things:
A) Prices are too high? This is a high end location.
B) Speculators are cashing in?
C) the market is changing? ( could it be so? )
D) just a coincidence that there were so many for sale.
Right now there is a mindset in the general public is that you cannot lose with housing. As long as people believe that , the market will continue to rise. People want a house to live in, and if it’s ” better paying a mortgage than throwing away your money on rent” and you cannot lose because houses go up and up. Only when this herd mentality changes, then there will be a correction.
However, I do not know how many speculators are out there.
If these guys are having a long time selling their homes, and have to reduce prices to retrieve their money, this may create a domino effect.

#90 mark on 08.13.16 at 10:00 pm

Forgive me for not believing realtors’ early market commentary in Vancouver. Children tend to lie to get what they want.

After all, mommy just took away their primary FOMO toy and put it in the top closet where they can’t reach it.

#91 Context on 08.13.16 at 10:03 pm

Ryan says he knows more about the stock market and will anticipate his essay. When I was making trades had to write pro in the corner of the order or such would have been illegal.

#92 Setting the Record Straight on 08.13.16 at 10:06 pm

@57
“Some party hack decreed that the people
had lost the government’s confidence
and could only regain it with redoubled effort.
If that is the case, would it not be simpler,
If the government simply dissolved the people
And elected another?”

#93 salonist on 08.13.16 at 10:13 pm

lake jo
40′ high indoor swings facing a glass expanse.
private islands, largesse accommodation
pittsburgh
mellon family
opulence abounds
it’s not about money, but how you make your money

#94 Bytor the Snow Dog on 08.13.16 at 10:21 pm

Ryan- that’s better. You managed to work a couple of jokes into this post. In the future feel free to use gems like this:

I was offered sex with a 21 year old girl today. In exchange, I was supposed to advertise some kind of bathroom cleaner. Of course I declined, because I am a person with high moral standards and strong willpower. Just as strong as Ajax, the super strong bathroom cleaner. Now available with scented lemon or vanilla.

Or this:

RIP boiling water

You will be mist.

Or how about this:

Last night I found out that my wife has conditional gender dysphoria.

She said that she needed to be Frank with me.

I got a million of ’em!

#95 Smoking Man on 08.13.16 at 10:30 pm

Uncle Ryan, Uncle Jack is in the room.

I was outside looking at the stars under this thick cloud cover. I hit me, man, I wondered what the worst characteristic a human can have. In your trade, I’m thinking attribution.

Fk the fear or fitting in. Let’s go with the fear of judgment as a prison.

Can you imagine going through life, adjusting your behavior to please, to not piss anyone off anyone because you look at yourself as unworthy, a piece of shit that bobs apples for A’s.

That never happened to me. I hate everyone equally. Including you Ryan. You are a peace of shit for no good reason other than it’s in my head at the moment.

#96 45north on 08.13.16 at 10:51 pm

Ryan Lewenza: As discussed at the outset, I believe a catalyst is likely necessary to precipitate change and cool down this overheated market.

well if you count Tuesday as a catalyst then I agree. The stability you see is an illusion. Vancouver houses are selling at a ratio of 20 times income. 20 times! There are no fundamentals! Ross Kay says that Vancouver prices have already started to decline. Here’s his interview starting at the 22 minute mark:

https://www.youtube.com/watch?v=OdfFACK47Xo

Boom!: Naturally financing un-qualified buyers through various fraudulent schemes worked well in the U.S. until it suddenly didn’t.

the key word being suddenly which not only means quickly but also unexpectedly

Three other posters made essentially the same point:
Victoria Real Estate Update
Paulo
Original Dave

and Mark

Tony: The same thing will happen in Canada Vancouver down 70 percent, Toronto down 60 percent and cottage country excluding Port Perry should fall around 10 to 15 percent.

pretty funny! here’s the reply by Context: Cottage country north, east, and west is running on fumes by the thousands. Ryan is looking for a trigger, but what he fails to comprehend is history has no pattern for this bubble because its formulation is unique and in Toronto the housing pattern has changed. Something like a new virus that has no cure.

are you kidding me? Toronto drops by 60% and cottage country drops by 10%! Let’s talk Port Perry. It’s largely supported by the GM Oshawa Plant. Nice little 30 minute ride with no traffic. The best that can be expected is that employment at the GM Plant will remain the same.

If Toronto drops by 60%, houses in Port Perry will be essentially unsellable ( no bid )

#97 Freedom First on 08.13.16 at 10:55 pm

#80 Smoking Man on 08.13.16 at 9:11 pm

#53 Context on 08.13.16 at 6:55 pm
Ryan what do you anticipate for real estate in cottage country north of Toronto?.
…….

Why are you asking him, he admitted he doesn’t know shit about real estate. I’m insulted. Who on hear had been calling the market correctly for the last 8 years on here…

Plus what a vague question. Are we talking Lake Joe, Simco… Huge difference, one Lake has low life’s the other movie stars and banksters.

FF007

You are right to ream on this guy. He’s not like you and I…men with space ships inside of us.

I asked you before if you could hook me up with one of a white asian girls because I don’t know how many more times I can handle my cousin Charlene…she’s a real brute. I just finished up and was able to get back to the blog…which is where I belong.

#98 ROCK BEATS PAPER on 08.13.16 at 10:57 pm

Except for Vancouver, it is not clear that we are in a bubble. If we are in a bubble, then your history will inform you that it is not a correction that follows, rather a bust. Vancouver has a prick, so we can expect a bust. GTA may just be expensive and due for a correction, not unlike the medium stock price in the US.

#99 Sheane Wallace on 08.13.16 at 11:01 pm

Dear Ryan,

There are two reasons for the Canadian housing bubble:

1. The idiots at the help of BOC who think that they have the right to determine the price of money aka interest on behalf of the markets.

2. The idiots at CMHC who ‘insure’ the ultra-subprime-loans we enjoy today.

Without government agencies active market manipulation this bubble would not exist.

It absolutely does not matter from now on when/how/ the bubble is going to blow up/deflate,

the facts that the economy is screwed, the currency will be destroyed and kids will have no jobs are here to stay, for a veeeery long time.

#100 Sheane Wallace on 08.13.16 at 11:09 pm

Nothing goes straight up forever.
————————-
Our stupidity apparently is exception from that rule.
as well as the ridiculously s..tty weather, for example the f…ng humidity we enjoy this week.

another reason I guess to justify higher house prices.

#101 Self Directed on 08.13.16 at 11:10 pm

#24 LP on 08.13.16 at 5:03 pm

#21 Freedom First on 08.13.16 at 4:51 pm
…………………………………………………………
Yes. Worried about Flop. Hopefully, he is still healthy, working, married, and in good humour. All in all, he is a friendly dude, if somewhat misguided. Given time, I am sure I can fix that.
…………………………………………………………
Flopper announced on here a week or so ago that he was leaving to go camping. Stop worrying; unless he comes to his senses while away, he’ll be back as soon as in range.
——————-
Holy crap, am I reading this correctly? We got a poster worried about another poster and a third poster consoles with a post. And I thought the blog was pathetic!

The comments here is like Cheers, except nobody knows your name (not your real name anyway). I’m laughing at you guys. Lives need getting. Girlfriends await proposals. Wives need diddling.

#102 No Mercy on 08.13.16 at 11:11 pm

Ryan,

Stick to the markets.

No need to get into Garth’s topic.

Man up and be your own man. Garth’s topics have been rehashed here plenty of times.

Looking forward for your next blog.

Maybe about why the markets have risen this summer. Where are the bears? On vacations maybe?

What to expect until end of year?

When should someone take some profit and/or re-balance.

Chop, Chop Ryan

#103 Wicked as it seems on 08.13.16 at 11:13 pm

Hey Ryan
The world of medical marijuana (aph, mt, Cgc) has been on a +150% tear the last couple of months….seeing as the present government will be bringing in legislation in 2017 for legalisation, do I….sell the ranch and go all in, stick with my juicy 3k shares, or get out and go into Seagrams.

#104 Sheane Wallace on 08.13.16 at 11:16 pm

watch this….

http://www.autotrader.ca/newsfeatures/20160810/sewage-truck-poo-splosion-in-rush-hour-traffic/?utm_source=Yahoo&utm_medium=Display&utm_content=Billboard-NF-Poosplosion-New_Cars-Aug10&utm_campaign=CA-DSP-DT-EN-HIGHREACH#3rrg0UrDeIhsUgWt.97

When our thingy hits the fan the smell will be unbearable and long lasting…

#105 JO on 08.13.16 at 11:21 pm

The BofC like all central banks merely follows the longer term bond yields with a lag of 3-6 months. Check for yourself. So based on the yield action of last few months and an already weak economy being artificially inflated by the real estate bubble that is going to stalk out, you can forecast the most probable path is for at least one and maybe 2 rate cuts over the next 6 months. They will lower short term rates to prevent the yield curve from inverting and signalling recession
The BofC does not control rates. It influences short term rates by providing or withdrawing short term overnight money banks use
The primary driver of GDP and hence income has been and continues to be the out of control debt bubble
This is the other reason these central banksters lower rates – to try to keep enough suckers borrowing more and more to keep the illusion going

They are preparing to flood Canada with massive numbers of foreigners mostly from China which should start late 2017 with the opening of at least 5 new offices

For locals we will see the impending global sovereign debt crisis hit here within 5 yrrs

The current historical low yields on government bonds will go lower but then suddenly after Europe and Japan are taken out the loss of confidence will drive Canadian bond yields dramatically higher with the economy steadily collapsing and govt going crazy with taxes

We will see a correction in nominal terms of maybe 10-15 % but odds favour the nominal prices rising after 2018 but inflation adjusted values steadily collapsing into tend early 2030s. So you TO house might be worth 2m in 2030 but it won’t matter as your groceries will be 5-600 per week and your property taxes 20-25 k / yr and wages not much higher than today for most

JO

#106 Lieberal Party Headquarters on 08.13.16 at 11:27 pm

This just in………..
The Canadian Housing Market will balance itself.

#107 Mark M. on 08.13.16 at 11:37 pm

#35 AK – “Once the election is out of the way, The Fed will put the pedal to the metal.”

Why would they do this, to cool off an economy growing at 1%?

No rate hikes this year or next. The Fed’s next move is a cut. The explanations provided on this forum should be epic.

#108 Poloz on 08.13.16 at 11:40 pm

First, is a rise in Canadian interest rates which I believe is a late-2017 and possibly 2018 story.

Wow. You believe. We all believe in something. Good for you.

#109 Freedom First on 08.13.16 at 11:44 pm

#94 Smoking Man on 08.13.16 at 10:30 pm

I hate everyone equally. Including you Ryan. You are a peace of shit for no good reason other than it’s in my head at the moment.

FF007

You are my hero. This is why I am drawn to you so much…we’re like two peas in a pod. You are the best!

#110 Sheane Wallace on 08.13.16 at 11:51 pm

thousand bucks for a short story outlining the explosion of the poop truck in parallel to the our housing market?

From the collection of crap (read ultra-subprime loans), fermentation in the hot whether (read market), build up of toxic gasses and pressure up to the imminent explosion with poop literally flying in all directions?

I really hope for the bosses of BOC and CMHC to be in similar situation as the drivers of the bus and the white car on the left with their windows opened!

#111 Ronh on 08.14.16 at 12:13 am

So, you predict real estate will correct. I predict the doomers will be right.

#112 stage1dave on 08.14.16 at 12:43 am

Hey Ryan, I’m beginning to wonder if the Canadian RE market needs an actual “catalyst”; in the sense of rising interest rates, natural (or engineered) catastrophes and/or financial disasters; etc?

Driving around my current hometown today with the wife hittin’ a few garage sales and dropping off some flowers at her relatives’ gravesites (which isn’t nearly as depressing as it sounds, btw) and saw 5 “house for sale-by owner” signs…all home-made, or from the bloody Dollar Store. All nice, clean, well manicured working mans’ bungalows, bilevels, or 4 level splits. No dumps…

WTF? None of these 5 signs were here on monday, not one.

It’s worth mentioning this city has the highest proportion of retired gov’t workers per capita living here in the province of AB, so it’s practically “recession proof”. Restaurants are full and the retail is good.

My point is enuff “chicken littles” and a general culture of impending doom (real or imagined) might in itself cause an initial rush to the exits, before the stampede.

Interestingly, did not see one “ComFree” sign…hmmm…absolutely tons of stuff for rent as well, same Dollar Store sign thingie. Vacancy rate pushing double digits, after 5 years of 2-3%.

Meanwhile in Edmonton (where most of my work is) a couple customers who are licensed RE agents have bailed on paintin’ their HD’s this year, citing poor recent paycheques this summer.

This is going to be an interesting fall/winter…my current lease on this hovel expires in Oct, and I’m wondering what the discount to re-up will be this year? Last year it was almost $200/mt.

#113 Minsky Moment on 08.14.16 at 12:47 am

Ryan, Ryan, Ryan…that was facile to say the least (HPI increases rapidly, debt load increases rapidly…with 70% of the debt load in mortgages…imagine that revelation).

Your boss has been hinting we are in recession already and I agree. 2016 cumulative GDP is -0.2% or -0.48% annualized and cumulative job creation thus far is a paltry 13,200 jobs with over 109,400 full time jobs lost in June and July alone, replaced in part with what your boss calls “McJobs” – part time, no benefits, low pay. The 13,200 also includes “self-employed” job creation and we all know what that means; thus, we have had negative job creation in 2016.

More posts of speculators bailing and selling now in the past few weeks in YVR and 416 RE markets, unheard of up until recently. They and there acolyte GDP Sectors are all that is sustaining GDP growth in Canada – YVR RE is already in deep trouble per Garth’s Misery and recent posts. Some unbiased RE analysts show that Feb. 2016 was the peak and prices have already dropped by 10% since then. This supports the observations of posters to this blog about the speculator “bailing” having begun already.

Add continued job losses which will create cash flow problems for the banks on mortgage payments, to say the least.

September/October GDP/Job data will be ugly if full time job losses continue on the scale of June and July.

That Minsky Moment is upon us. Avail yourself to reporting on this.

#114 PDX Canuck on 08.14.16 at 12:52 am

Ryan – oil prices are not going to $60 in 2017 or 2018. That is wishful, Alberta oil money talking. Maybe $50…$60 by 2020.

This was an extraordinary commodity boom – the bust will be extraordinary, as well.

I also don’t see a 15% rise in the CDN $. The CDN $ in the mid-70’s is the new normal, especially if the Canadian CB is slower to raise interest rates than the US Fed.

A recession, with accelerated job losses, and the inability of homeowners to service debts at 170% of annual income, is what finally pricks the RE bubble in YVR and YYZ.

#115 millenial82 on 08.14.16 at 12:56 am

Welcome to the official peanut gallery Ryan. Garth gives his share of jabs back to the gang to keep in shape but there’s no fixing stupid as they say. I look forward to reading your expert opinion and insight on the market, epic deal for us for sure! I’d also like to predict an apology from Smoking Man after his embarrassing rant (post JD shots). Clearly he was too wasted to recognize you possess a respectable trait in his eyes, the way of the “gambler” when you stated you make occasional calls on your stocks/etfs. So, what kind of return do you earn on your personal portfolio?

#116 For those about to flop... on 08.14.16 at 1:00 am

Well,I just got back from Olympic Peninsula and upon catching up on my homework I see I ruffled a few feathers.

Ryan, I wrote that “Lewenza” post to see if you were going to comment.You commented later to some other posters so I thought you were like Billybob and hated Australians and were ignoring me.(Which you should probably do).I thought someone might chirp me for being too hard on you, but surprisingly a handful of people commented and saw the joke was in good fun.

The next time Ross Kay, Mark and myself go camping out Abbotsford and need a forth guy for Axe Darts your the guy I am going to nominate.I am not a big fan of Axe Darts as I don’t like to vandalize trees,but anytime I get to swing an axe in Mark’s vicinity…I’m there.

People say all the time that the comment section is junk,but I read it for all the different perspectives,which is why I am glad Doug and yourself are giving up some time to write a post on Saturdays.

On your first post Ryan you bunted,this post you swung more freely and Doug was the beneficiary of you drawing the short straw.Im sure you are both good guys as the only rabble the boss hangs around is on this blog.

What happened on the camping trip my 3 blog buddies asked?

Second morning, my wife decided it would be a good idea to walk off the tailgate of my campervan with two coffee cups and miss the steps,landing in a crumpled heap on a gravel pad.

She is on crutches, the coffee however was delightful.

We started to drive back to Vancouver and I told her I was not ready to go back on the blog ,so I went to a store and bought her a pair of crutches,a cane and some ice packs and promised I would drive her everywhere.It worked, to my surprise she agreed.

As I drove around the peninsula,one thing that stuck out was we must have seen nearly three hundred Trump signs and only one Hillary sign.I found this to be unreasonably disproportionate ,so when a lady at a campsite came over and told me there was going to be a meteor shower tonight and I quipped” Hopefully it hits Donald Trump” and she laughed I decided to ask her what her thoughts on this were.

Her answer was” There were a lot of disappointed Bernie fans in this area who have decided to switch over to the other side.”

Surely, there has to be a bigger gap between putting an X on a ballot and putting a sign on your lawn?

On a scenic note,there are a lot of beautiful peaks on the Olympic peninsula but my favourite peak is still Marks 2013 Vancouver housing peak.I could look at that big pile of rubble for hours….sunset is particularly stunning.

Anyway, I see Garth used some of my photos I sent him just before leaving so I better sign off and find him some fresh meat before he rescinds my lifetime membership on this b-grade blog…

Peace,Flopper
M42BC

#117 Mr. Smoking Man, Mr. Herdonomics on 08.14.16 at 1:05 am

For someone that habitually slams University and School as being the hotbed of left wing and of out of touch thinking that has poisoned the minds of our youth, ad nauseum, you habitually use “Dr.” and “Ph.D.” in your post signature to indicate higher learning or some sort of supremacy in experience for what you say.

You cannot have it both ways.

Use “Mr.” instead.

#118 Ponzius Pilatus on 08.14.16 at 1:08 am

Ryan,
With due respect, but you’re just one of many boring FAs out there.
Garth has my vote because he makes me laugh.

#119 will on 08.14.16 at 1:10 am

Boring post. Tell me sumthin I don’t know.

#120 Ponzius Pilatus on 08.14.16 at 1:26 am

Ryan,
What puzzles me is:
You are in charge of an investment portfolio of more than 400 mill, and you are advising pathetic readers and posters who live in their mother’s basement.
Charity?

#121 Ponzius Pilatus on 08.14.16 at 1:32 am

Ryan,
The catalyst will be a Black Swan event.
Probably a major bank collapse.
Like in 2008.
But this time, the Feds wii be out of bullets.
The can has been kicked one too many times.
The abyss is looking back.

#122 Brian on 08.14.16 at 1:44 am

What about the supply side of the equation? Population is growing rapidly in the GTA and land is scarce due to government restrictions on development (places to grow act). Many of the immigrants are more affluent and want detached houses and land. Isn’t this a huge reason prices are rising in the GTA? The ontario government has announced even further land use restrictions so won’t this just push prices even higher for detached homes?

#123 Mark on 08.14.16 at 2:37 am

“The fact that you think there is a “canadian” real estate market shows me everything i need to know. There is no such thing, and speculating on it means nothing. “

Canada is bound together with common monetary policy, common financial institutions (to an extent seen almost nowhere else in the world). A common federal government subprime mortgage insurer (the CMHC). And an economy which has various schemes (sometimes called “equalization” in the narrowest sense, but also manifested through labour mobility as seen in the Newfoundland to Alberta temporary migration) to balance income throughout the nation.

Hence, there is a national RE market, as the financing and income present in the market to drive RE pricing is highly correlated.

So what explains why Toronto/Vancouver is more expensive, while the other cities have been in quite visible stagnation for the past 3+ years? The “speculator families” as I described (ie: the famous “Khalid” I like to quote often), heavily of certain enterprising ethnicities disadvantaged in the labour market. And the significant sales mix shift which has manifested itself in a far more severe way in Toronto/Vancouver due to the wide disparity between the cheapest and the most expensive properties.

In places like Regina, Saskatoon, Winnipeg, and even Calgary/Edmonton to a lesser extent, the sales mix simply can’t shift as much because the housing units in those cities are overwhelmingly SFH. Thus you see prices that are explicitly, even without adjustments for the sales mix, falling in those cities. That’s not for lack of correlation, but merely on account of the method of sampling used of the market.

#124 BS on 08.14.16 at 2:52 am

As discussed at the outset, I believe a catalyst is likely necessary to precipitate change and cool down this overheated market. I see three potential factors that could achieve this. First, is a rise in Canadian interest rates which I believe is a late-2017 and possibly 2018 story. Second, is a severe recession which we do not foresee occurring over the next 12-24 months. Or lastly, some type of regulatory or government change like the new 15% tax on foreign purchases.

Good thing there has not been “some type of regulatory or government change like the new 15% tax on foreign purchases”. Otherwise we could all just agree the crash has started.

I think it is safe to say the “catalyst required to precipitate change” is already in the history books.

It seems realtors are not worried about the new tax.

“It’s one of the most shocking events that’s ever arrived in our industry,” said Brent Eilers, a longtime West Vancouver Realtor with Re/Max.

Geeze, “ever” is a long time. That goes past the 2008 financial crisis and even 1981 when prices corrected 50% in Vancouver.

But, so far it appears to have had no impact on sales. Other than they are down by 95% year over year so far and down by well over 90% of historical averages in August. That shouldn’t have any impact on prices going forward.

The average number of August sales in West Van is about 60. Last year there were 80 sales for the month. So far this month, there have been two.

I think the only thing left to do is figure out which of those two buyers will be crowned the greatest fool.

http://www.nsnews.com/news/north-shore-realtors-predict-property-market-cool-down-1.2321851#sthash.9133Fumu.dpuf

#125 Blog Dog #1 on 08.14.16 at 3:15 am

Hey Ryan perhaps it’s time to talk to Grath about disabling comments here. They add nothing and simply waste your time.

Alternative is to start publishing on a place like Medium, where the comments are fewer and more thought out

Rob

#126 Souvereigninternational on 08.14.16 at 3:40 am

Re.: The prick that bursts the bubble

Typically in these situations the catalyst is not obvious until well into the process. It is just as likely that the prick has already happened, and we are just oblivious to that small snowball rolling down the mountain. It will most likely in my view be external (to Canada) and shake up the foundation of our worldwide monetary system. I don’t think the central banks will raise the rates on their own as they pushed themselves into the corner of 0 or negative rates policy and the only way out is guarded by Iron Mike. Even if they had a plan they would get punched in the mouth. I forsee a souvereign bond crisis as the confidence collapses, which will in turn affect the mortgage rates. But that will probably come after severe real unemployment and wage stagnation had already done it’s job on real estate market. What I actually expect is a confluence of prices.
Now the good news – there will be volatility (yes it can be good) particularly extreme in oil and energy sector. So Ryan’s prediction of higher oil by 2017-18 may come true. The flight to safety and real assets will include most productive sectors of the stock markets. After some volatility there will be rise in quality stocks broadly, but the precious metals will be where tremendous gains will be made. Which brings me to TSX with its upside as MARK already has mentioned. There will be a flight to TSX and Canada with exception of RE sector +. It will create demand for C $ bringing it above par with US $ maybe well above as the petro dollar will finally suffer. So for those Canadians still left with jobs or well off with financial assets the times might not be to bad. For most your welfare / unemployment check will buy you more as the strong dollar will create price deflation.

Now, Re.: Mark’s assertion that Canadian RE has been stagnating for 3 years:

There may be some truth to it if we consider values outside of c$ and move to a basket that includes US $ and Gold/PMs. MARK maybe you can show us the graph?

Redirect. : Shorting RE affected bubble bursting stocks:

While predicting not just WHAT but also WHEN increases the risk curve exponentially, I wold love to get tempted by picking from a well thought out list. ANY IDEAS?

Re.: RE in Cottage areas:

Will be the first on the chopping block and decimated especially the middle and lower range of the market. Everyone will sell everything to avoid losing their primary residence. It will become that hand with gangrene. Additionally has anyone been to Wasaga on the weekends lately? As Garth would say – crickets. Kids and many older folks too these days prefer to pack their bags and hit the real beaches and all inclusives of the Carribean for similar or smaller price and effort.

God point #82 Toronto1

#127 Jacky Boy on 08.14.16 at 4:50 am

Well Ryan….we wouldn’t be in this pickle if Bernake hadn’t invented ’emergency rates’ in the first place. It was a boon to politicians who saw the zirp as an endless playground from which to mine golden sand and placate their supporters with never never money. Rates will never ‘normalize now that governments can’t afford to repay even a quarter point increase….it would break the budgets of every level of government…so lets face facts…rates will never rise again.

But…governments like the wing nut Maynard Keynes can’t do sums very well….and as we all know Keynes Economic models falls apart at year 50…. an induced 2% inflation becomes an inflation problem of enormous proportions when 2 times 50 becomes 100%. Don’t forget that when Maynard originally presented his work he was laughed out of the room.

Fortunaltley for nutbars like Keynsian Believers….who are usually the beneficiaries of such crack economic science…they are collecting fat government/union pensions on a beach in the sun long before their policies ever ‘hit the fan’.

The hyperinflation in real estate is directly attributable to ZIRP….but there have been unintended consequences…personal debt and foreign inflows…..and $8 cauliflower. We can say ‘cauliflower’ in a public setting…but never ‘foreign investor’ for fear of being call ‘racist’. Unless there’s a new category for the politically correct goons to harp over…..like us ‘Vege-phobics’.

So….the solution is to treat all money equally and treat foreign money as if it were earned in Canada and taxed accordingly upon entry….really level the playing field for all.

#128 Mark on 08.14.16 at 4:55 am

“black is white , war is peace. mark is jealous and bitter”

Hardly. And I’m making crazy returns this year in my portfolios on account of the rotation away from housing as a speculative asset class.

The big question for Vancouver RE speculators is how bad they’ll feel when their assets continue to stagnate/go down, while the rest of the economy powers forward. RE moving from 20X average personal income to a more historically normal 3X average personal income is a long, long ways down, even if Vancouver does experience some well-deserved wage inflation in the not-so-distant future.

#129 Bytor the Snow Dog on 08.14.16 at 7:37 am

124 Blog Dog whines:

“Hey Ryan perhaps it’s time to talk to Grath (lol) about disabling comments here. They add nothing and simply waste your time”.

Says a guy commenting in the comments section.

Garth knows that however insipid some of the comments may be that there is value added to the blog.

I predict comments will stay.

#130 Mythical Immigration and Supply Side on 08.14.16 at 7:52 am

Immigration affecting the supply side is a myth.

Already disproven by Hilliard MacBeth’s research published in “When The Bubble Bursts: Surviving the Canadian Real Estate Crash.”

The USA, per capita, has more immigration than Canada; however, the 2008 RE crash happened…where were the immigrants then to rescue that market?

Let that guide you and Mr. Herdonomics on the mythical immigrants to come fueling RE sales and price increases further.

Besides, all RE crashes are due to job loss recessions.

Worry less about minutiae such as land usage restrictions…we may well be in a job loss recession already (June/July full time job losses = 109,400 and in part replaced by Garth’s McJobs).

#131 maxx on 08.14.16 at 8:05 am

#5 Rate normalization on 08.13.16 at 3:28 pm

“Wouldn’t normalization of rates bankrupt all Western economies, all drowning in unprecedented debt?”

Excellent question. It absolutely depends on the rate, or speed at which it is implemented.

Something that seems to completely elude leaders of global economies. Normalizing interest rates would restore economic balance, redistribute wealth and spark a return to confidence, but it needs to be done slowly and consistently. This is one problem that won’t be solved quickly – too much damage has already been done. No miracle cure.

But wait – there is this matter of saving exalted cb face. Will our leaders draw courage and face the problem head-on or simply maintain the mask more and more are increasingly seeing through?

#132 The Observer on 08.14.16 at 8:15 am

” early data shows that between 5% and 10% of Vancouver home purchases come from foreign buyers. These numbers are in-line with Garth’s estimates and like him we recognize that these numbers represent a small minority, thus not having a huge impact on our overall housing market.”

I’m sorry, but this statement brings credibility of this blog down to zero

#133 maxx on 08.14.16 at 8:43 am

#6 Catalyst on 08.13.16 at 3:31 pm

““A catalyst is likely necessary…”

Funny you mention this…

A Stunning Admission From Deutsche Bank Why A Shock Is Needed To Collapse The Market, And Force A Real Panic

http://www.zerohedge.com/news/2016-08-13/stunning-admission-deutsche-bank-why-shock-needed-collapse-market-and-force-real-pan

Yup.
The yield train has seduced far too many and/or been rammed down people’s throats by necessity, if not desperation.
Bank and insurance company balance sheets are madly skewed, if not distorted by risk asset investment. Buying annuities is no longer the sensible option it once was.
Questions are, has this train got any stops on its itinerary, or more importantly brakes? Is it on the right track? I’d hate to think of an oncoming ex cb shock….

Perhaps that’s just what is needed.

#134 Ryan Lewenza on 08.14.16 at 8:57 am

Context “Ryan what do you expect to happen to cottage country north of Toronto?”

I would expect this also to be hit during the correction. But I would view it as a buying opportunity. I’m hoping one day to buy a cottage for me and my family but can wait for that inevitable pullback. I can just rent till then. But it should recover as supply for cottages on beautiful Ontario lakes is limited. – Ryan L

#135 AK on 08.14.16 at 9:11 am

#106 Mark M. on 08.13.16 at 11:37 pm

“No rate hikes this year or next. The Fed’s next move is a cut. The explanations provided on this forum should be epic.”
——————————————————-
Fair enough. We will see what happens.

1% GDP is the past. Will not be the same after the election. The market is a good indicator of that.

#136 Ryan Lewenza on 08.14.16 at 9:18 am

Linda “What are the signs of a recession?”

Finally a reasonable question. I agree Canadian economic data has been soft of late and something we are monitoring. But I tend to focus on the US economy as let’s face it, our economy is driven by our neighbour to the south. And there we do not see a recession. Some good indicators I track for this are initial jobless claims (at near record lows), the stock market (at record highs), the yield curve (flattening but nowhere need inverted which is seen during recessions), US auto sales (at peak of 17 mln) and the conference board leading indicator which remains elevated. So from my perspective I see a slow but improving US economy. – Ryan L

#137 Sheane Wallace on 08.14.16 at 9:33 am

Priced as a shack in mouldy Van city, would cost 5 times more in To:

https://ca.finance.yahoo.com/photos/comedian-richard-pryor-s-home-listed-for-3m-1470849972-slideshow/comedian-richard-pryor-s-home-listed-for-3m-photo-1470850864260.html

#138 Victor V on 08.14.16 at 9:36 am

https://www.thestar.com/business/2016/08/13/urbancorp-buyers-watch-as-their-new-home-dreams-get-sold-off.html

Kristina and Eric Achilles had bought condos off plans before. So when they read a few negative reports online about home builder Urbancorp, they weren’t deterred from depositing $60,000 on a new, pre-construction semi three years ago.

The house would give them the space they needed for their growing sons at a price they could afford, she said.

“I knew $600,000 for a home of my size and a modern design was a pretty good deal. I didn’t expect it to be of super high quality,” said Kristina.

“Did I think they would take my money, and I would never get the house? No, I didn’t think there was any foreseeing that.”

She is among hundreds of disappointed home buyers stuck in limbo since Urbancorp revealed in April it was undergoing restructuring proceedings, including the proposed sale of some of its assets, under the Bankruptcy and Insolvency Act.

#139 Freedom First on 08.14.16 at 9:38 am

#100 Self Directed on 08.13.16 at 11:10 pm

#24 LP on 08.13.16 at 5:03 pm

#21 Freedom First on 08.13.16 at 4:51 pm
…………………………………………………………
Yes. Worried about Flop. Hopefully, he is still healthy, working, married, and in good humour. All in all, he is a friendly dude, if somewhat misguided. Given time, I am sure I can fix that.
…………………………………………………………
Flopper announced on here a week or so ago that he was leaving to go camping. Stop worrying; unless he comes to his senses while away, he’ll be back as soon as in range.
——————-
Holy crap, am I reading this correctly? We got a poster worried about another poster and a third poster consoles with a post. And I thought the blog was pathetic!

The comments here is like Cheers, except nobody knows your name (not your real name anyway). I’m laughing at you guys. Lives need getting. Girlfriends await proposals. Wives need diddling.

FF007

As part of the “in” crowd, I suspect more than a little bit of jealousy from you. Women are not to be trusted, yet the anonymous men on this blog are safe, they can’t hurt me like a woman will.

#140 Context on 08.14.16 at 10:26 am

Does the City of Toronto have a secret? My eye caught a great deal on a penthouse condo which is not old but the owner in 2015 renovated it with the highest levels of updates including crystal chandeliers and changed all the windows and sliding doors for high energy efficient double glazed product. The list is long as had the exterior walls fully insulated too. Question: The owner made a comment about his low monthly taxes of $147 per month. Has anyone ever heard of a Trust that was left to benefit the condo ownership of a certain building by picking up a percentage of the annual taxation?

#141 Ray Skunk on 08.14.16 at 10:33 am

#138 – I refuse to give that shitrag The Star one of my mouse clicks, but your excerpt pretty much tells the story.

Let me rewrite it succinctly:

“We heard the homebuilder was in financial trouble, but we’re greedy and this was a total bargain so we went for it anyway. Naturally we’ve now lost out – so we go whining to the press hoping people will feel sorry for us.”

Typical Star readers really – pretend to be in favour of progressive equality yet all they care about is dollars for themselves (very reflective of the Ontario government the Star shills for, no?), and always looking to blame others when it doesn’t go their way.

#142 rainclouds on 08.14.16 at 10:33 am

#129 Mythical “The USA, per capita, has more immigration than Canada; however, the 2008 RE crash happened…where were the immigrants then to rescue that market?”

Incorrect……Higher Per Capita immigration VS USA has been in Canada for several decades.

But I do agree the ballooning house prices in Van are hubris driven. A Ponzie, as defined by (expectation of increasing value without fundamental underpinning to justify said increases.)

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

#143 the Jaguar on 08.14.16 at 10:35 am

Mr. Lewenza:

When you say it is generally acknowledged that foreign purchasers account for roughly 5-10% of Vancouver purchases it doesn’t account for the ‘foreign capital’ that comes from other countries like China and into the hands of new residents of Canada. Yes, I realize (as Garth likes to remind us) that these people would not fall into the first category as they have been granted residency status in Canada, however the large amount of cash they have in their birth countries finds its way to Vancouver through various methods and their real estate interests in the lower mainland have impacted the price upsurge. The Vancouver police and RCMP are cooperating with the Chinese government to uncover the source of some of these funds. It is way more than the so-called maximum 50,000 wire transfer allowed. The statistics should be qualified for a) foreign buyers, b) foreign buyers granted permanent residency, but not yet citizens of Canada, and c) citizens of Canada. If a family obtains permanent residency but the husband continues to live and work in China and sent money to the wife and child in Canada is that not ‘money from foreign sources’ and should it not be taken into account in some way in those statistics?

#144 Smoking Man on 08.14.16 at 11:00 am

Hungover as shit then I see this.

Race war is on, #Milwaukee

Cultural Marxism shows it’s ugly face again.. Trump will win in a landslide. 100%!! rebalance your portfolios.

People lying to each other around water coolers at the office counting down the days to November 18th. Fear of being fired for not dropping to there kissing and kissing queen Hillarys ring.

To be a good loyal subject you must abide by the code.
• Straight white males are evil garbage.
• The woman never lies.
• Climate Change is real, pony up your wallet.

That’s the thing that gets lefties off, getting you to go against your own common sense, logic and buy into ridiculous concepts and an insane ideology.

#145 Spectacle on 08.14.16 at 11:27 am

Regarding:
Panini on 08.13.16 at 7:24 pm
Mr. (Real Estate) Market is driven by fear and greed. Fear and greed of the herd………and we are currently going through a greed cycle…….. Ryan hit the nail on its head. A catalyst is needed.

********************comment************

Real estate in Steveston BC , ( south Richmond) just peaked, and has taken a combined price correction & unit sales decline! Telling in itself..

#146 mathman on 08.14.16 at 11:28 am

#138 – unfourtunate but if people don’t read the fine print then I have no sympathy. Kinda like the people “winning” the bidding war because they waved all conditions then finding knob and tube, a leaky roof and a family of raccoons in the attic.

Re: Cottage country – lest we forget the early and mid 90’s, where you could not give away a cottage. When liquidity drys up, and your desparate to keep your home, you take whatever the bid is. I lowballed a couple on a place in the early 90’s, after telling me where to stick it their realtor with his tail between his legs called me to ask if I was still interested 6 months after i made my offer. Cottage country will get blown out of the water. In fact I’m seeing this already – take a drive up 48 or anywhere in the Kawarthas and count the for sale signs for me. The drop in cottage country will be a multiple of the drop in the gta.

#147 not 1st on 08.14.16 at 11:30 am

#88 Freedom First on 08.13.16 at 9:51 pm

—–

You do realize that your life expectancy is about a decade lower than the rest of us. People with nobody to care for or care about but themselves dont live very long. Hope you are working that bucket list.

#148 mathman on 08.14.16 at 11:31 am

another point on cottage country – take out the old money and the major muskoka lakes, the rest has been bought on lines of credit. The cottage, the boat, the toys all of it bought from the equity in ones GTA abode.

I see it on my lake, all the “new neighbours” work average to maybe $120k/yr jobs, their house in Markham, Mississauga or any other lifeless suburb has gone up 300-400k, and they blow it all on the cottage, boat, inflatibles, snowmobiles etc. this is a recipe for disaster

#149 not 1st on 08.14.16 at 11:39 am

I always find that FA give a strange round about analysis of the economy through rates or the fed or yada yada.

The elephant in the room is china. No recovery for a place like canada comes until they ramp up again. US and Europe can stimulate themselves with monetary shenanigans and get by.

Even then many are saying China is Japan 2.0. In 1990 tons of Japanese cash came abroad here looking for yield and we all know how that ended up. Same thing is happening now with China.

#150 Fustercluck on 08.14.16 at 11:43 am

Ryan – I’m sure you’re a nice guy and thank you for the contribution. But in the same breath you say an unforeseen catalyst is needed while stamping an artificial date on it. Pure speculation and poorly presented. Reminds me of any run of the mill financial newsletter with a bias.

Time to move on. Content is not your caliber and tarnishing your work.

#151 Context on 08.14.16 at 11:45 am

I will not give the location because Ryan might live nearby. There is a VIP pumping afoot by a builder now giving free parking, 2 years of secret incentives, free assignments, and amazing low $200’s 3 bedroom with less than a 3 bedroom price. So thus those that bought a contract earlier have now been screwed. Now an update on the penthouse which I liked as found the details on another site. This owner in 2015 living in this newer building spent over $200,000 on updates and has dropped the price once again. Its in a park like setting, North York, one bus goes to the subway, and its selling for under $500,000. The balcony wraps around the corner for an additional 500 sq. ft. and the main part is big enough for a dinning room suite. Ryan is waiting for the catalyst but his model is completely out of date built upon a false premise.

#152 TRT on 08.14.16 at 11:52 am

Only propaganda blogs censor or delete comments.

Bravo.

Your anti-immigrant rants are tedious and ugly. I will delete as many as you spew. — Garth

#153 Freedom First on 08.14.16 at 11:54 am

#147 not 1st on 08.14.16 at 11:30 am

#88 Freedom First on 08.13.16 at 9:51 pm

—–

You do realize that your life expectancy is about a decade lower than the rest of us. People with nobody to care for or care about but themselves dont live very long. Hope you are working that bucket list.

FF007

As a yiddish zen master, I do not worry about eternity because I have almost ascended to a Buddha like state. I am a god with no need for deep emotional ties with creatures that give me no real benefit. I will live forever.

#154 WallOfWorry on 08.14.16 at 12:15 pm

Ray,

Couldn’t agree more that it will take interest rate hikes or a recession to drive a meaningful correction in our real estate market. Unfortunately, it is more likely that we will see a rate cut before a hike. Additionally, if you look at the macro-economic environment, the race for the bottom in currencies is going to drive a commodity spike (called inflation) so we will see relative economic growth before any fear of recession. Thus, the only real driver for a Canadian real estate correction would be more volatility at the global level. Thus, I suspect Garth and I are in polar opposite ends of the spectrum on this one…as Canadians will continue to ride the real estate bubble for as long as the global economic conditions permit.

#155 Smoking Man on 08.14.16 at 12:21 pm

#117 Mr. Smoking Man, Mr. Herdonomics on 08.14.16 at 1:05 am
For someone that habitually slams University and School as being the hotbed of left wing and of out of touch thinking that has poisoned the minds of our youth, ad nauseum, you habitually use “Dr.” and “Ph.D.” in your post signature to indicate higher learning or some sort of supremacy in experience for what you say.

You cannot have it both ways.

Use “Mr.” instead.
…….

I spent many years going door to door selling windows and doors. Talked to tens of thousands of people. Took there money and they loved me for it.

I earned that designation and I will use it whenever I damn well please.

Dr Smoking Man
PhD Herdonomics.

#156 Context on 08.14.16 at 12:30 pm

Ryan’s real estate model for a catalyst to kick start a crash is composed of three essential factors in his own words. He fails to realize that the City of Toronto in the 1980’s is not the City of 2016. Nor is the bubble of the 1980’s the bubble of 2016. These differences must be analyzed and weighted. The model to be made can contain his essential factors, but its imperative to enlarge the sample because this bubble floats in uncharted waters – so make it into a dozen factors and weight each one. The three that he chose are suspect being produced out of thin air and are too political; just look at Harper threatening Stats Canada to create reality for him so he could con the public into believing his fairytale of economic recovery for the vote. This PM lied to you. One new factor for example that needs to be analyzed is the traditional ownership of real estate in cottage country to the north, east, and west of Toronto. Why is most of it being rented out in huge numbers and how does this relate to home ownership in Toronto? I have many, but where have the lines of people gone buying out a pre-sale condo project in a matter of hours? ALL SOLD OUT.

#157 fancy_pants on 08.14.16 at 12:31 pm

Which do you predict – Severe inflation or higher rates?

#158 crowdedelevatorfartz on 08.14.16 at 12:31 pm

@#152 TRT

Then start your own blog.

Or are you worried no one will visit ?

#159 WalMark of Sadkatoon on 08.14.16 at 12:32 pm

Poor mark the Rodney dangerfield of this blog. get no respect. Can’t find job. Gold investments worthless. Sad

#160 Smoking Man on 08.14.16 at 12:32 pm

#115 millenial82 on 08.14.16 at 12:56 am
Welcome to the official peanut gallery Ryan. Garth gives his share of jabs back to the gang to keep in shape but there’s no fixing stupid as they say. I look forward to reading your expert opinion and insight on the market, epic deal for us for sure! I’d also like to predict an apology from Smoking Man after his embarrassing rant (post JD shots). Clearly he was too wasted to recognize you possess a respectable trait in his eyes, the way of the “gambler” when you stated you make occasional calls on your stocks/etfs. So, what kind of return do you earn on.
…….

You pathetic suck up. Are all millials like you?

Back in the day when Men were men. Making fun of each other was a great bonding richual amongst real men.

He got it, but it went over your mind fkd liberalism programming.

#161 WallOfWorry on 08.14.16 at 12:39 pm

#157…Fancy Pants…Which do you predict – Severe inflation or higher rates?

No brainer….severe inflation first.

#162 Brazil ex-pat on 08.14.16 at 12:50 pm

Now Germany has negative interest rates….good thing this will never ever ever happen in Canada !!

http://www.telegraph.co.uk/business/2016/08/12/german-savers-hit-by-negative-interest-rates/

#163 When Will They Raise Rates? on 08.14.16 at 12:52 pm

Tough crowd!

I’m hesitant to beat up on the new guys who have graciously donated their time to turn this awesome blog into a 7 day operation; However, I would like to point out that there is a potential 4th catalyst that could precipitate the bursting of the bubble: Ridiculous debt levels combined with ridiculous prices. At some point, houses become so over valued and the pool of potential buyers becomes so over indebted, that either people will refuse to buy, or banks will simply not take on the risk. (we’re talking about average prices well over the CMHC threshold of $1 million)

Vancouver was already approaching these levels, while the GTA market still has room to appreciate as long as rates remain this low.

#164 TurnerNation on 08.14.16 at 1:08 pm

yest. #126 Context thanks for info. I only know downtown TO area.
Anyone buying a kando now will be trapped into every increasing taxes, condo fees, closing costs/two land transfer taxes. Sure they can rent it out but at what cost. There is only fat left on this bone (no contention).

If interest rate rises many will be pulled further underwater. Actual condo price is immaterial now, the devil is in the details as always.

My rental Kando (owned by a REIT) is about 15 years old now; full rebuild of all levels of underground parking required due to leakage.
Elevators and A/C breakdowns lately. Hallways were reno’d.
Sure glad I’m not an owner. Tons of new builds I could rent in here on the King St. W. party strip.

#165 TurnerNation on 08.14.16 at 1:09 pm

Only in Caledon! Wanted: Redecks. Follow the trail of Bud Light cans.

http://www.cp24.com/news/1-5m-worth-of-antlers-stolen-from-taxidermy-shop-in-caledon-1.3028192

CALEDON, Ont. — Ontario Provincial Police are looking for suspects after $1.5 million worth of moose, elk and stag antlers were stolen from a taxidermy shop in Caledon, Ontario.

#166 When Will They Raise Rates? on 08.14.16 at 1:09 pm

Additionally, what effect will the bursting of the Vancouver bubble have on the GTA market?

An argument can be made that when the Vancouver bubble bursts it could change speculator sentiment in Toronto, as it will have been spectacularly demonstrated that prices don’t always keep going up…

Anecdotally, I have a friend in Markham already preparing to put her house on the market out of fear of what is now transpiring in Vancouver. She is (or was until now) firmly in the “houses always go up” camp.

#167 WallOfWorry on 08.14.16 at 1:12 pm

#163….Tough Crowd,

Not sure that would precipitate a meaningful correction? Wouldn’t those circumstances simply provide a ceiling? With interest rates probably going lower, and perhaps the worst of the oil decline behind us, increased wages/employment with lower interest rates increases the affordability of the real estate market.

#168 JZ Bloggins on 08.14.16 at 1:15 pm

Hi Garth,

I love reading your blog for the hilarious prose mixed with informative commentary. While your partners may be excellent fund managers, blog writers they are not. Reading this is as bout as much fun as reading a fund prospectus.

#169 NoName on 08.14.16 at 1:20 pm

#115 millenial82 on 08.14.16 at 12:56 am

selling occasional calls on your stocks/etfs is not gambling, it more locking up gain for some period of time, and if call don’t get exercised, bob is you uncle.

#170 Phil Indablanque on 08.14.16 at 1:30 pm

#148 Mathman

I think your neighbours will eventually have a cash flow crisis of epic proportion and that will be the end of ski tubes and ski doos.

#171 JSS on 08.14.16 at 1:30 pm

Rude crowd on here
Lots of d-bags here.

#172 Context on 08.14.16 at 1:33 pm

#163 :- Toronto is already there as the buyers are all tapped out. There are those that want leafy, and others wanting traditional housing are going into the suburbs or to east Toronto buying the junk. Fatal errors as never do something for the wrong reasons. One must first locate the area of choice; then the neighborhood; and walk it looking for goods and services, schools, public transportation, housing types, and then the research begins on the computer. The key is to have patience, but at this stage of the bubble buy nothing and stay rented.

#173 Still Employed in AB on 08.14.16 at 1:52 pm

Hi Ryan, you should do an Alberta deathwatch post. I see 2017 being a rough ride. We have some large construction projects will be completed through 2016 and 2017. I’m not sure where these thousands of people will find jobs afterwards. We would have needed higher oil prices yesterday for anyone to announce any new projects for 2017. Also our immigration out of the province has been saved by a few poor souls moving here…eventually those people will stop moving here because we don’t have any good jobs and then we will really see how bad things are.

#174 Context on 08.14.16 at 1:53 pm

For those that own a unit in condo city, so what could go wrong? I know you love the convenience of the public transportation, shopping, the grocery store around the corner, the park across the road, the Irish Pub nearby, and the romantic view at night of the city skyline best of all. The new project across the road is getting higher and higher so now your view has been blocked. Your dream condo was just lost a huge bunch of dollars as who will buy it now with a blocked out view?

#175 Smoking Man on 08.14.16 at 2:15 pm

Damn you humans are really putting me on the spot.
Stop messing with Kenche technology, your race is not allowed past the moons orbit..

We are under orders to destroy your Galaxie the second you build a plasma flier.

https://youtu.be/7Jf3tEB0QuU

#176 Catalyst on 08.14.16 at 2:40 pm

“The elites are not the problem, the people are the problem.”

German President, Joachim Gauck, August, 2016.

There you go: this is the catalyst of the future.

#177 Smoking Man on 08.14.16 at 2:53 pm

Right now in real time free energy being delivered to POTUS in Washington DC.

These human are playing with fire.

http://www.keshefoundation.org

#178 Entrepreneur on 08.14.16 at 2:56 pm

The money game or should I say the debt game and how long will it last? T2 (dubbed “pretty boy”) loves deficits so what is the problem, right.

This debt game has being going on too long and I believe the only correction will come from mother earth, a earthquake? Hardly any birds flying around, they know before us, right.

I agree with #127 Jacky Boy “…the solution is to treat all money equally and treat foreign money as if earned in Canada and taxed accordingly upon entry…really level the playing field for all”…if only our leaders would act accordingly but in the meantime I will sell my house for a million dollars, not only that, we should all sell our houses starting at a million dollars. Forget the Canadians; they don’t need homes; they don’t need jobs.

#179 Smoking Man on 08.14.16 at 3:15 pm

Keep your cameras handy, I’ve rounded up Ashman. Barrington And Reverend Jeremiah Chew.

Look for fast moving Orange plasma fliers over lake Ontario making a bee line for DC. To stop this free energy madness.

And if you see a bald guy wearing this tee shirt in DC.. Stay away.. He’s trying to save your pathetic spices.

I’ll be signing autographs later tonight at Senica Niagara Casino.

The tee shirt looks like this….

http://Www.dyslexicsmokingman.blogspot.com

#180 Tudval on 08.14.16 at 6:26 pm

#1. Everybody’s trying to guess what the percentage of foreign buyers is, but nobody seems to care about the percentage of foreign sellers. If it’s 10% and 10%, we don’t have a problem. If it’s 10% and 0%, then we have a problem which is of our own making. Why are Canadians selling but none of the foreigners. I suspect that is the case and it merits some analysis. If Canadians (Vancourerites) don’t like their own city, then so be it.

#2. We all know there will be a downturn at some point. It’s how the markets work. Since I don’t believe anybody can foresee changes occurring more than 1 year into the future, if you don’t see a downturn in the next few moths, as far as I’m concerned, you’re a bull.

#3. The interest rate/ house prices chart does not seem to show as much correlation when looked at in detail. Looking closer you can easily see that every turn higher in the rates correlate with an increase in prices. You’d have to conclude that the move up in rates would need to be sustained for more than 1 year before any correction in house prices would show up.

#4 To my knowledge nobody has satisfactorily explained what the implications of negative rates in much of the (free) world are. Are those currencies failing? Does it mean the end of ‘money working for you ‘ paradigm and will it be followed by some kind of social and economic (r)evolution? Since we are not in that situation and we might be able to avoid it, will said changes elude us and will we be living in some kind of bubble in North America while the rest of the world is drifting in other direction? Will then rising interest rates in N.A. be a NET positive for all asset classes?

#181 Pulp Faction on 08.14.16 at 8:52 pm

“I also see a correction looming on the horizon, but believe a catalyst (e.g., higher interest rates, recession) is needed to spark the inevitable correction.”

I’m with you, Lew !

The insanity that created this bubble, will only be affected by a catastrophic-style event that changes people’s thinking. People will dearly hold onto their beliefs otherwise, as they have been proven to do through out the ages. People do not easily change their minds and they believe in things that do not exist, with their whole heart. This is an emotional bubble, only a change in emotion will make any difference.

#182 HouseBuster on 08.14.16 at 10:31 pm

So you’re saying at catalyst is needed to bring down prices? And not until 2018?

Aren’t they already dropping?

Better do some more ANALysis.

#183 tccontrarian on 08.15.16 at 12:28 am

TIME – enough of it, is sufficient for any trend to reverse – from an extreme (bullish or bearish). No catalyst necessary.

#184 Patricia Mills on 08.15.16 at 8:10 am

DELETED

#185 The Benny Tal / CIBC Report on 08.15.16 at 2:53 pm

http://www.bnn.ca/toronto-housing-starting-to-see-some-cracks-cibc-economist-1.546673

With little room for new supply of low-rise housing, Mr. Tal and Ms. Judge suggest that financial regulators instead continue to target demand by tightening mortgage lending standards even further. They propose increasing the qualifying rate for borrowers who take on five-year, fixed-rate mortgages. Ottawa should also raise the minimum down payment on insured mortgages between $500,000 and $1-million above the current 10 per cent. Furthermore, regulators should keep a closer eye on the private mortgage industry that targets subprime borrowers, which the economists say has increased its share of the mortgage market to 6 per cent.

They also argue that Toronto should be active about stemming the tide of foreign money into the region’s housing market, which they estimate accounts for as much as 15 per cent of home sales, including locals who get money from family members abroad to buy homes. The CIBC economists propose a “flipping tax” on foreigners looking to speculate on GTA home prices, a tax on empty units and higher land transfer taxes for more expensive properties. Governments could also enact rules limiting international buyers to purchasing only newly built homes, similar to Australia.

#186 Tudval on 08.15.16 at 5:08 pm

#185 These ‘experts’ cannot put together two ideas without contradicting themselves. The biggest contradiction of all is they all ask for government intervention! What, are they really business people – I though they were supposed to hate government meddling into free markets.

But there are many others also. He wants people to change their mentality from owning to renting?? Renting from who? Somebody needs to own that piece of property. And they want to put obstacles for foreign buyers who are either 1. People who want to move here (and we encourage immigration, no?) or2. Investors who will rent out these properties (what he said we need more of).

Of course if a mentality has to change it’s that where everybody wants, no – feels entitled to have – a 5000 sq ft lot around their ground level accommodation. MAny cities have gone through the process and are now on the other side (which we cannot see, it seems): They should want (and builders should provide) 2-3-4 bedrooms apartments in buildings that are designed with families in mind. But I would agree – what is being built today are monstruosities: 30 storeys, small, no place for children to play etc.. We have a crisis of intelligence and planning, if anything. We cannot take any more of our agricultural land to provide more and more millions of people with their ‘dream house’. Dream of something else!

#187 The real misleaders on 08.15.16 at 7:22 pm

Wikileak’s Assange exclusive interview about the secretly negotiated TTP.

https://youtu.be/xBeQvpFTvqU

#188 TCContrarian on 08.15.16 at 8:10 pm

DELETED (Not a gold blog)

#189 TCContrarian on 08.15.16 at 9:21 pm

#188 TCContrarian on 08.15.16 at 8:10 pm

DELETED (Not a gold blog)
***********************************************

LOL

Hey I did state I was (only) 25% precious metals! So, you could have deleted 25% of my post… :-)

GT doesn’t like it when ‘bullion-lickers’ fight back! OK…understood. It’s YOUR blog and you can change the rules any time you want.

No problem.

No rule change. It’s never been a gold blog. Never will be. Find something else to talk about. Dogs and bikes are fine. — Garth

#190 TCContrarian on 08.16.16 at 2:08 pm

No rule change. It’s never been a gold blog. Never will be. Find something else to talk about. Dogs and bikes are fine. — Garth

• Abusive, obscene or disrespectful commenters will not be published, and are subject to banning from this forum.

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

I thought this was a financial blog, with an emphasis on RE. Just because my personal investment style doesn’t match yours exactly, that’s shouldn’t be a reason to ridicule (ie. bullion-lickers).
A while back (4-6 weeks), I included a quote from Alan Greenspan regarding his views on gold (written prior to his becoming Fed Reserve Chairman – and this never appeared here.
Seems that there is a systematic censoring of an alternative viewpoint – even when held by an ex-Central Banker!

Perplexing…

The web is full of bullion-licking, hard assets, doomer, hate-fiat, gold-pumping sites. Go moan there. — Garth