Different here

moose

Just in time for oil to slump below $45 and the Canadian dollarette to drop back into the 75-cent zone, taking Bay Street with it, comes the latest news from the epicentre of our real estate malaise. This will be of particular interest to (a) those with giant dollops of equity in their homes who wish to get some out and diversify and (b) anyone who bought a Van property in the last year with less than 20% down.

We already know at least two of the major banks have pared back on mortgage lending in delusional YVR – and that was even before the Chinese Crash Tax was hastily applied by a desperate premier. Since then the average price of detached homes changing hands declined by $294,000 (about 17% in a single month. Ouch.) and so far September’s been just as intense (sales in Vancouver West down 51%, Vancouver East -80%, Richmond -67%, Burnaby -69%, according to this site).

So if you were an appraiser working in Vancouver, what would you do? How do you put a value on an asset that’s shedding almost $10,000 a day?

The answer: Like horny porcupines. Carefully. The experience in August shocked many, even though sales volumes for detached houses had been cascading lower for a couple of months right across the region. As you might expect, mortgage brokers are now seeing appraisals turn up on their desks a lot lower than a month ago, less than sellers expected, and even below what recent buyers agreed to pay. Whoops.

Particularly vulnerable regions, according to Canadian Mortgage Trends: the North Shore and the Westside.

Also apparently in peril is the ability to tap into 80% of your home equity in order to refinance or set up an investment line of credit. While it’s still possible to do that (as far as federal rules go), lenders are getting squeamish about handing over 80% of the equity built up in a property in the middle of a storm that could end up blowing a good chunk of it away. The advice: “If you need to tap your equity (refinance) to the tune of 80% loan-to-value, or get an 80% LTV credit line for future borrowing needs, you should be filling out your application as you read this.”

Meanwhile the National Bank’s Stefane Marion told an industry conference in New York (of all places) this week, that Vancouver houses will shed “at least” 10% of their value in the current correction. That was a little amusing after last month’s 17% reduction, but I guess it’s the sentiment that counts. “There is downside to single family homes in Vancouver,” the analyst said, calling it “a healthy correction.”

What could turn it into an unhealthy one?

Maybe stiffer rates – although the bond market is probably a couple of months away from forcing five-year mortgages much higher (after the US presidential slugfest). A survey out this week found that over 700,000 debt-snorfling Canadians would fold like cheap suits if the cost of their loans increased by a lousy quarter point. A million people would wail and suffer if rates edged up by a full point. So just add that to all of the astonishing facts that bubble up here on how screwed most people are.

More of a threat to real estate is the overall economy, and jobs.

While more jobs were created in August after a big slide in July, things are actually getting worse. The unemployment rate has increased to 7% (it’s below 5% in the US, although measured differently), the number of hours worked has decreased, and over the past year the country’s created three times as many part-time jobs as full-time positions, with a big increase coming among government workers. Thank you T2 & Rachel.

Meanwhile housing and real estate continue to climb in terms of their share of the GDP, while manufacturing and energy fade. Just what we need. More realtors and fewer lathe operators. Says Bank of America Merrill Lynch economist Emanuella Enenajor: “We are rotating in the wrong direction, we are getting a mix of growth that’s not very healthy or sustainable.” The reference here is to our mountain of household debt, upon which this housing fantasy has been well rotated.

Meanwhile the Royal Bank’s economics guys are calling it “inexplicable” that the country’s export numbers suck as badly as they do when our dollar has plunged from par a few scant years ago to less than 76 pennies today. By the way, 300 more office workers were punted on Monday in Calgary at one of the country’s major energy producers.

In short, there used to be three great real estate markets in Canada. Then there were two. Now there’s one.

Still think it’s different here?

219 comments ↓

#1 Tiger on 09.14.16 at 7:33 pm

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#2 Jimmy on 09.14.16 at 7:36 pm

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#3 inflate - inflate on 09.14.16 at 7:38 pm

It’s not different here, nor is it in Ozzy land or other world class cities….

#4 Colostomybag on 09.14.16 at 7:40 pm

Last!

#5 Bat Flipper on 09.14.16 at 7:47 pm

Still think that there was no HAM influencing the market? Even if there was next to no foreign investment, the thought of foreigners driving up the market has caused sheeple to jump at buying a house today boasting prices up to the multi millions.

That is exactly the argument made here repeatedly. This insanity was caused by locals afraid of a yellow shadow. — Garth

#6 Cto on 09.14.16 at 7:47 pm

There was three, then 2, and guess who’s next? I can smell a correction coming, I can just smell it…

#7 BailinginBC on 09.14.16 at 7:50 pm

I see there are no comments yet – I’m sincerely hoping that it isn’t because the comments section is done. I have read every single post at the here at GF after finding it about eight days after it’s inception and many, many of the comments from the peanut gallery. At one stage when I had the luxury of time, I would comment on occasion. Please don’t end the comment section. We squabble here like siblings but the blog dogs are a (disfunctional) family. I even have a soft spot for the “firsters”

#8 TS on 09.14.16 at 7:51 pm

Hard to believe that so many Canadians would be done in by monthly increase of $50.

That’s like 5 hours bagging groceries if you get a part time job.

or 20 minutes of your amazon wife working the corner.

#9 Jungle on 09.14.16 at 7:51 pm

Plan for an upcoming slow down that could impact Canadians for 5-15 years of low or no growth. We could even have a recession once this bubble pops.

Best thing to do:
Pay your debt asap
Keep employed through this upcoming storm
Live frugally
Save an invest while we ride this out

#10 Sean on 09.14.16 at 7:51 pm

I keep coming back to the logic… you don’t need to wait on fundamentals to pop a bubble. It’s a bubble! It’s irrational! It is not based on fundamentals!

All you need is a loss of confidence.. and that, I believe, is what we have here folks.

#11 Different here? on 09.14.16 at 7:51 pm

Nope. Same story as yesterday.

#12 Bobby on 09.14.16 at 7:52 pm

Vancouver introduced Vacancy tax ! What a “huge” impact!
Just to remind people, even if prices in Vancouver dropped at detached segment (above 2M), under 1 million, and specially in suburbs where sheeple can afford, the market is still good, healthy demand, working people from Vancouver are still squeezed to suburbs, forced to pay 500k for crappy townhouses. Schools closing in Vancouver, due to lack of kids, and on the other hands, schools are overcrowded in suburbs, where sheeple with kids can afford to live.

#13 RentYVR on 09.14.16 at 7:54 pm

People here still seem to think it’s different. Ironically, the real estate bulls in YVR now cling to the market ‘fundamentals’ which they of course ignored on the way up to save them on the way down. Won’t happen. As with oil, when and asset becomes commodoitized it hardly ever stays where the ‘fundamentals’ say it should. The reversion back to the mean will be painful here.

#14 Joe2.0 on 09.14.16 at 7:56 pm

Any bets on a rate decrease?

#15 Dave on 09.14.16 at 7:56 pm

Who said there was no Chinese influence the Canadian housing market?

http://www.theglobeandmail.com/report-on-business/industry-news/the-law-page/canadian-banks-helping-clients-bend-rules-to-move-money-out-of-china/article26246404/

Surprised we hear about this in the Globe before hearing anything about this in Garths’s blog.

It was displayed here prominantly last month. Where do you think the Globe got it? — Garth

#16 Westvan on 09.14.16 at 7:59 pm

Love Ross Kay and the way he tries to hold back a ride of false numbers and stats. The MSM gobbles up anything bcrea and puts it on the front page. They really make the market here and have so for the duration of this bubble.
How do prices come down from here when 40-60k people move into van every year. Rental vacancies are non-existent. Prices r sticky and these ones r gona be like tar! Especially when you want what your neighbour sold for in march. My point being the real numbers don’t matter need what Ross Kay puts out on front page of the sun. Cheers.

#17 hope & ruin on 09.14.16 at 8:00 pm

More realtors and fewer lathe operators. Says Bank of America Merrill Lynch economist Emanuella Enenajor: “We are rotating in the wrong direction….
——–
I see what you did there.

The last thing anyone needs is more realtors unless it’s Phil Dunphy.

#18 Nodebt on 09.14.16 at 8:03 pm

#5- hey Garth nice response isn’t that being a tad….

#19 WalMark of Sadkatoon on 09.14.16 at 8:05 pm

Just in time for oil to slump below $45 and the Canadian dollarette to drop back into the 75-cent zone

And manufacturing and exports are STILL in the toilet.

Worthless currency

Terrible economy

Great government handouts

All under T2’s watch. As I called it. Best is yet to come! Lol

#20 ILoveCharts on 09.14.16 at 8:06 pm

I’ve been quiet for a while. I bought a house so I didn’t need to follow the day to day as much – I’m in it for the long haul now. Damn, I am happy I didn’t buy in Vancouver immediately before the 15% tax though. There is still good value to be found if you look carefully.

#21 WalMark of Sadkatoon on 09.14.16 at 8:08 pm

#10 Sean on 09.14.16 at 7:51 pm

Bingo. This guy gets it

#22 Westvan on 09.14.16 at 8:08 pm

Globalization and free trade are coming out of vogue in academic circles won’t be preached in the future. It has destroyed the middle class and government finances. Someone Should tell justin and his idiot brother to just leave china alone. Our lathe operators make products that last more than 5 min out of the box.

#23 Victoria Real Estate Update on 09.14.16 at 8:10 pm

The National Bank is predicting a housing price decline in Vancouver that is smaller than the amount prices have already fallen.

Bankers, realtors and other house humpers are so funny.

That the Teranet-National Bank home price index basically agrees with the results of the realtors’ Frankenumber home price index makes it about as credible as the Frankenumber.

Both bankers and realtors have a vested interest in keeping house prices high in Canada.

Americans trust the Case-Shiller index which comes from a source that doesn’t have a vested interest in keeping house prices high in the States.

As Garth said, it’s the negative sentiment (from the house-humping National Bank) that counts.

It’s already too late for some Vancouverites to get out. Prices have already fallen and Canadian 5-year fixed mortgage rates haven’t even begun to move higher yet.

Sales of detached houses have tanked since April in Victoria.

Recent buyers in a lot of BC are so screwed.

The bubble will deflate and it won’t be pretty.

#24 Self Directed on 09.14.16 at 8:12 pm

This is the type of post I love to read!

Garth, keep us updated on Canadian Oil, the Dollarette, exports, jobs, Deficit spending, GDP, interest rates, the bond market, etc… it is all relevant to the average Canadian household. Many just don’t know it. The only thing that matters to most is Jan 1st @ http://www.bcassessment.ca/, and seeing a 6 figure increase to their property.

Also, Fortis BC set to increase natural gas rates 80% . Yet another cost increase going unnoticed by many…. http://www.cbc.ca/news/canada/british-columbia/fortisbc-natural-gas-price-hike-1.3760756

The Lower Mainland is not such a fun place anymore. Yes, it has the lowest provincial tax in the country, but when you factor in all the other costs and frustrations, we will definitely see more people leaving.

#25 Hotdogs from Heaven on 09.14.16 at 8:15 pm

That TransUnion study of how screwed some 1 million people would be by a 1% increase in interest rates is worrying as hell.

My condo’s monthly maintenance fees went up by $90 just this past spring due to a 31% increase in energy costs thanks to Kathleen Wynn in Ontario. That’s almost double of the $50 monthly hit that is mentioned by Transunion and in today’s blog.

The increases are not just coming in the future, they are here now. And there is absolutely no way in hell that inflation in Ontario is running under 2% no matter what Stats Canada says.

#26 will on 09.14.16 at 8:16 pm

I think keep the comments open maybe a couple of times a month and/or on days when stuff happens like market corrections, interest rates change. Just the big stuff.

#27 young & foolish on 09.14.16 at 8:17 pm

People are still migrating to large cities/regions for employment opportunities. If you own rentals, and they are yielding a good return, you can ride out our slow growth economy. When people stop buying, they rent.

As for growth through diversification, consider what’s happening around the increasingly integrated economies of the world … all reporting huge debts and slow growth. Where are you going to go?

Give us examples of rental properties in large cities with an acceptable cap rate. — Garth

#28 WallOfWorry on 09.14.16 at 8:17 pm

No significant real estate correction until interest rates increase. According to Financial Post, the price of a house continues to increase? Personally, couldn’t care less. However, what will be more interesting is the pace at which the fed raise rates. There is no reason why they shouldn’t next week, but odds are they will pass until after US election. Who wants to bet that they don’t in December either? That is the real story…the US with < 2% GDP growth and $20 Trillion in debt reflects the greater global economic reality. Maybe I am a doomer the exact same way that Garth is a doomer on the real estate market?

http://business.financialpost.com/personal-finance/mortgages-real-estate/what-correction-vancouver-and-toronto-lead-gains-as-canadian-home-prices-rise-in-august

#29 Victor V on 09.14.16 at 8:18 pm

50 TMX Group employees ‘marched out the door’ in first steps of integration initiative: reports

http://business.financialpost.com/news/fp-street/50-tmx-group-employees-marched-out-the-door-in-first-steps-of-integration-initiative-reports

#30 Smartalox on 09.14.16 at 8:19 pm

Glad to see the comments section given a stay of execution!

So in light of the gathering storm, I’d like to know more about the process of getting CMHC to pay out if an insured party defaults on their mortgage.

CMHC only covers the bank for the difference between the outstanding principal (the value of the loan) minus any equity recovered from liquidation of the assets, right? The bank forecloses, sells the property for what it can get, and CMHC pays the difference between what the property sold for and the amount that had to be paid back.

CMHC won’t cover things like the outstanding interest on the mortgage – i.e.: the bank’s profit margin, right? over a 30-year tem, the interest paid on a large mortgage can easily equal the original cost of the house.

If that’s the case, I see the banks doing a lot of ‘blend and extend’, bleeding interest payments out of mortgage holders, instead of forcing sales through foreclosures.

I’d expect that if home values really start crashing, the CMHC would implement ‘deductibles’ on payouts to the banks, forcing banks to lose a portion of the principal, in addition to foregoing the interest.

What happens if a homeowner, faced with owing more to the bank than they can sell their home for, sells for ridiculously cheap, and declares bankruptcy? And then flees the country?

Does CMHC pay out only in the event of foreclosure? Or is the bank’s application for relief under the CMHC policy independent of foreclosure?

And will each claim made to CMHC have to be evaluated separately? That could time up a lot of capital, for a very long time.

#31 TRT on 09.14.16 at 8:20 pm

I’ll have some fun with stats too.

Richmond BC average sales price has rocketed higher by 32% this month alone (Sept 1-13).

Hope that’s covered on this blog in exactly 4 weeks. Or we can continue to bend the truth here.

Zolo.ca

#32 Mishuko on 09.14.16 at 8:22 pm

https://m.facebook.com/story.php?story_fbid=1213470158716150&substory_index=0&id=458510164212157

Try this in the securities industry… lol even with a guaranteed -6% gain!

#33 robert james on 09.14.16 at 8:22 pm

http://www.news1130.com/2016/09/14/nine-students-own-57m-worth-of-vancouver-property/

#34 Self Directed on 09.14.16 at 8:23 pm

Hey #23 Victoria Real Estate Update, what is up with the City approving new micro units? Does anyone really believe building 250 Sq. Ft. boxes with a window for fire code, is a good way to make the housing market more affordable for those less privileged?

http://globalnews.ca/news/2939066/new-250-square-foot-micro-suites-coming-to-victoria/

Bunch of idiots on council… what a stupid idea!

The best way to address affordability is to let the market self-correct. But I guess there are those that believe “Housing always goes up”… even city council.

#35 Bank Fraud in Canada on 09.14.16 at 8:24 pm

I’m am contemplating sending this link to the Chinese government in an attempt to bring this Canadian fraud a little closer to the scrutiny of the Chinese gov.
What a truly shameful/criminal country Canada has become.

http://www.theglobeandmail.com/report-on-business/industry-news/the-law-page/canadian-banks-helping-clients-bend-rules-to-move-money-out-of-china/article26246404/

#36 The Spectre on 09.14.16 at 8:25 pm

manufacturing and energy fade

Wasn’t this the left’s plan?

Seriously, look at all those premiers, what a joke!

PM Wall: the only that can save us.

#37 Brian Ripley on 09.14.16 at 8:27 pm

“Meanwhile the Royal Bank’s economics guys are calling it “inexplicable” that the country’s export numbers suck as badly as they do when our dollar has plunged from par a few scant years ago to less than 76 pennies today.”

I updated my Household Debt Chart yesterday:
http://www.chpc.biz/household-debt.html

I also overlay the GDP, Foreign Direct Investment and Balance of Trade data as well on the chart.

I think the answer to the “inexplicable” reality is that Capital goes to where yields are consistent (relative low risk & high yield)… and that shows up on the chart in the FDI IN & OUT plot. Last year the OUT spiked above the nearly 20 year trend.

For example, did I not see something in my Twitter feed today about Ford deciding to build all its small cars in Mexico?

So a weak CAD is not really helping when capital can flow to lower labour cost jurisdictions especially if they provide other “incentives” like less regulatory restrictions.

I am not arguing for less regulation or lower labour costs for Canada’ I’m just saying that capital moves to where it wants to despite our efforts.

We are going to have to increase our productivity so that we need fewer people in this country “working” to produce results that will satisfy more of us.

Software is eating the world. We are going to have to reinvent what work and what a national economy looks like.

#38 Maj on 09.14.16 at 8:27 pm

Breaking news story…Fintrac, the federal anti-money laundering watchdog, found significant deficiencies at nearly 500 real estate firms:

http://www.therecord.com/news-story/6858153-fintrac-found-significant-deficiencies-at-nearly-500-real-estate-firms-data/

#39 Self Directed on 09.14.16 at 8:28 pm

#20 ILoveCharts, you bought a house at peak market?

Thanks for letting us know… won’t be trusting anymore of your charts.

#40 WallOfWorry on 09.14.16 at 8:32 pm

#27….how can you be so sure? This blog has been saying that for the past 6+ years? Are interest rates going to increase on a slow and steady pace over the next 24 months? I don’t think so….

#41 Victor V on 09.14.16 at 8:34 pm

http://www.macleans.ca/economy/economicanalysis/why-canadas-economy-cant-pick-up-speed/

The onset of the Great Recession more or less coincided with the peak in the working age population. The initial central banks response to the short-term shock helped economies rebound from the financial crisis. But then the structure slowdown from the aging workforce started to set in. And so for the last five years the Bank of Canada has effectively used low interest rates to make up for the effects of Canada’s aging workforce, by encouraging people and businesses to borrow and spend.

However, in Canada, only households took the Bank of Canada up on that offer, pushing debt levels to extremes seen in the U.S. just prior to that country’s housing crash.

The debt-fuelled frenzy for real estate has lead to the biggest property bubble this country has ever experienced.

And it’s left Canada with an economy that is more dependent on heavily-indebted households than at any time in decades.

#42 j0n on 09.14.16 at 8:37 pm

Any advice on a good low-fee RRSP (or other self directed options) that I can transfer to from the X-Life RRSP plans that seem to be taking high management fees?

#43 Quebec is Great on 09.14.16 at 8:37 pm

Small Business is flourishing except for:
1. Small businesses that require employees other than owner.
2. Small Businesses selling goods to U.S. buyers (ie. Ebay) Shipping costs and heavy handed customs have killed that market in a big way.
3. Small Businesses that compete against big box stores.
4. Small Businesses that sell non-essentials to Canadian Households (most people are broke).

There were a lot of housewives, retirees and grandmas bringing in a couple hundred bucks a month using Ebay 10 yrs ago Even now CDN sellers to US buyers are uncompetitive … pretty much need USD/CAD at 1.6 or higher to overcome insane shipping and customs fees not to mention CRA’s push to tax those miniscule amounts.

Falling revenues, increasing regulation (ie. Vehicle registration, tax benefit decreases), increasing expenses (rent, utilities) …. IMO dead small business is no surprise, what did anyone else expect?

There are many exceptions, but I suspect at least 50% of small businesses are not very profitable yet employ significant amounts of people. You could change this overnight by cutting shipping costs by 30 to 50% and stop customs crap on low cost items. CBSA I respect you but honestly the small stuff is job creation bilge st the direct expense of independent business.

Sorry, /rant

#44 Smoking Man on 09.14.16 at 8:42 pm

Darn

Little frightened to type something on here today.

500 comments yesterday day, don’t know how Garth finds the time to do all of this and his day job.

Thanks to all SM fans for the support yesterday, hatters going to hate, I don’t mind it one bit. You can’t bend what you can’t offend.

But to stay on point. Poloz can not afford to keep rates where they are, he’s got to chop. The Fed is full of hot air, he can’t keep waiting for them to spike and do the heavy lifting. We need the dollar below 60.

As far as GTA and real estate goes. I’m going with what I always go with. Supply Vs Demand. Until something happens to kill demand or spike supply it’s party time on….

#45 For those about to flop... on 09.14.16 at 8:44 pm

After yesterday’s mini meltdown by the boss I picked him up in my 27year old campervan and took him to see Donald Trumps Doctor.

I gave him 5 minutes to write a note on Garth’s health while I sat in the van.

He declared Garth Turner is the fittest man to ever run the Greaterfool blog…

M42BC

#46 Self Directed on 09.14.16 at 8:46 pm

#12 Bobby, you got it man. And it’s our own darn fault for running out to the sticks driving up those prices, also.

You forgot to mention longer commutes… ain’t no amount of public transit that can fix the drive in from Chilliwack. God help us all!

I’ve thought about moving to Chilliwack… not so sure anymore….

Chilliwack parents upset about homeless camp near school
http://www.chilliwacktimes.com/news/393468511.html

Chilliwack enrolment up as kids go back to overfull schools
http://www.chilliwacktimes.com/news/391941141.html

#47 Lead Paint on 09.14.16 at 8:56 pm

#37 Brian Ripley on 09.14.16 at 8:27 pm

Nice chart! Where do you get your data?

And I agree with all your comments, the nature of work and employment will have to change as AI replaces more and more workers.

#48 JSS on 09.14.16 at 9:00 pm

What’s wrong with more government jobs?

#49 Silver on 09.14.16 at 9:00 pm

Snowflakes starting to meet reality…
Even being special does not insulate you…

YVR and the Outlands are in very heavy denial.

doing a proto-type build… needs ISO international certification work…
… big damage going on in the heavy industry shops here.
there will be very long term extreme damage from this real estate malodorous investment swindle that will be difficult to repair.

Silver

#50 Self Directed on 09.14.16 at 9:04 pm

#16 Westvan, I agree. But that can quickly change.

Coquitlam “Selling to Listing Price ratio” is now 98%
https://www.zolo.ca/coquitlam-real-estate/trends

I don’t trust “Avg. Days on Market” at 23 because I’m watching listings come down and go back up. I know of 2 very greedy sellers with days on market under 20 days, but they have been trying to sell since March-April. I’ve even seen one price INCREASE after trying a lower price. They just can’t let go of those March prices brought on by multiple bids, with wild over asking offers and zero subjects. Those days are long gone… and soon they will be chasing the market down.

#51 45north on 09.14.16 at 9:07 pm

So if you were an appraiser working in Vancouver, what would you do? How do you put a value on an asset that’s shedding almost $10,000 a day?

I suppose if it were the bank paying me I’d take the official BC Assessment July 1 then subtract $300,000 for July, $300,000 for August and $300,000 for September. So on October 1, the asset is worth the official assessment minus $1.2 million.

In short, there used to be three great real estate markets in Canada. Then there were two. Now there’s one.

let me guess: Calgary, Vancouver and Toronto. Suppose the government wants to cushion the shock so it wants to make sure mortgage money is available in Calgary and Vancouver. It’s only available in the case of a sale! If the seller doesn’t sell, the buyer doesn’t buy and there’s no mortgage.

#52 Kelsey on 09.14.16 at 9:08 pm

#41

As a result of the Great Recession central bankers have tried to pull forward consumption from the future which does not exist due to:

1) An aging population

2) Increased propensity to consume technology/experiences not counted by traditional ‘GDP’ definitions

With increasingly absurd and aggressive policies (QE, ZIRP/NIRP, buying ETFs, etc.) they have effectively punished savers and put pensions into even greater un-funded positions, but for now the asset bubbles have fooled those near retirement into believing they are okay because their house and portfolio are worth a bazillion dollars. Returns are headed to zero outside of continued multiple expansion, which is basically the definition of a bubble (it turns out bubbles don’t just happen to tulips and Canadian real estate).

Now most ordinary folk are house poor or can’t generate retirement income from their savings.

Outside of blowing asset bubbles the central bankers in their ivory towers can’t figure out why they can’t stoke inflation or growth, and why a populist like Trump is gaining momentum. We need to return to a truly free market that doesn’t involve a committee of elite idiots controlling the most fundamental price in the economy (money).

#53 Self Directed on 09.14.16 at 9:09 pm

#48 JSS on 09.14.16 at 9:00 pm
What’s wrong with more government jobs?
————
All I know is they don’t contribute to a local economy, rather they drive up taxes instead.
I think Garth touched on this already way back, but can’t remember when.

#54 young & foolish on 09.14.16 at 9:09 pm

“Software is eating the world. We are going to have to reinvent what work and what a national economy looks like.”

I agree … and those GDP figures are out of whack as well since they don’t adequately measure new working conditions.

As for reasonable cap rates in large cities, I realise that rising prices have created trapped equity in a lot of older buildings. But the steady and rising rents form a good return on what must have once been modest investments. Why sell now?

#55 Victor V on 09.14.16 at 9:15 pm

Seattle housing market white hot with Chinese demand as Vancouver’s market freezes

http://vancouversun.com/business/real-estate/seattle-gaining-on-vancouver-with-chinese-buyers

Figures prepared for Postmedia by Juwai.com, a popular website in China that connects investors with international home sellers and real estate agents, shows buying inquiries for Vancouver property from investors in Mainland China dropped 81 per cent in August after B.C.’s government introduced a Metro Vancouver offshore investor tax. Meanwhile, buying inquiries for Seattle homes on Juwai.com surged by 143 per cent in August, compared to August 2015.

Realtors in Seattle and Vancouver said the data suggests growing nervousness among Chinese investors over increasing regulation of Metro Vancouver’s market. As a result, Seattle, with a similar quality of life, better wages, and homes generally at least 50 per cent cheaper, is overtaking Vancouver as a preferred destination for Mainland China buyers.

“The shift to other cities has actually been going on for months, with buyer demand momentum shifting to other cities with similar appeal but lower entry prices,” said Dave Platter of Juwai.com. “Right now, Seattle is the No. 1 city in North America for Chinese buyer inquiries, even displacing Los Angeles.”

#56 Ph.Dirt on 09.14.16 at 9:22 pm

Too bad we can’t invest in universities! Enrolment continues to grow along with fees.
And once the sheepskin holding Rams and ewes graduate they flock to the cities where the “skilled” “jobs” are suppose to be located. Disappointment sets in, so mom and dad dig into their house credit and buy them a condo in town over asking so that they can get a fair shake in life. I think I’m on to something, start a university.

#57 Andrew Woburn on 09.14.16 at 9:28 pm

How does a top hedge fund manager think the economy really works?

“This simple but not simplistic [30-minute] video by Ray Dalio, Founder of Bridgewater Associates, shows the basic driving forces behind the economy, and explains why economic cycles occur by breaking down concepts such as credit, interest rates, leveraging and deleveraging.”

http://www.economicprinciples.org/

#58 Major Correction on 09.14.16 at 9:28 pm

a correction of that magnitude, $294,000 k, is obviously a buying opportunity, is everyone shell shocked?

#59 WallOfWorry on 09.14.16 at 9:28 pm

Has this blog been drinking with Smoking Man tonight? The comments are truly delusional…Garth included? Are you sincerely trying to suggest that Vancouver real estate is shedding $10 K a day? That one is almost as good as the Fed was going to raise rates 4 times this year? There is no doubt that Alberta has experienced a slowing market, and Vancouver has given back some of the extraordinary gains, but let’s see where the market is in 6 months when interest rates are still at these lower levels. If interest rates start to rise in a more steady fashion we will see the stock market contract at the same pace as the real estate market, as the bond market implodes. There is a much bigger picture here…..

#60 AB Boxster on 09.14.16 at 9:30 pm

Just finished a book called ‘The Mandibles’ by Lionel Shriver.

Work of fiction, but it describes the effects on society and real families should a currency war take place, as it does in this book.

It explores how China and the rest of the world create a new ‘reserve currency’ as they eventually deem the US dollar worthless. And once the US declares all its debts to be zero, and makes it illegal for all US companies to use the newly created currency, the impact on day to day life is startling.

Frankly, the zombie apocalypse is more appealing than the scenario in the book. At least on has a fighting chance against a zombie.

#61 BobC on 09.14.16 at 9:34 pm

Any truth to this? Time to buy in Toronto?

“Sotheby’s said it expects Toronto’s luxury market to take the lead among Canada’s cities, outpacing Montreal, which probably will become a target for investors from Europe, China and the Middle East.”

http://www.bloomberg.com/news/articles/2016-09-14/luxury-home-sales-in-vancouver-plunge-on-foreign-buyer-surcharge

Go ahead and get something above $4 million. Tell us how it works out. — Garth

#62 gumboot princess on 09.14.16 at 9:36 pm

Two indicators come to mind. My daughter’s office laid off 30 people today (thankfully not her, but my heart goes out to all). Second, Dollarama stock is over $100 at an all-time high.

#63 Brian Ripley on 09.14.16 at 9:36 pm

#47 Lead Paint

The chart FDI-IN-OUT (at @37 above) data comes from StatsCan.

On my Yield Curve chart: http://www.chpc.biz/yield-curve.html

…. the 10’s minus 2’s spread is only 44 beeps from inversion and my understanding is that inversion does not always have to occur before a recession hits… with all the sentiment change going on, perhaps we are sliding into recession now along with the seasonal forces upon us.

Cheers BR

#64 Toronto1 on 09.14.16 at 9:37 pm

Van city will make history when it plops. Its classic. Market goes parabolic due to greed, misallocation of capital, some HAM. Govt tries to cool it to late as always, market dumps, the whispers grow to words soon outright panic and hysteria( same as on way up). Banks and credit unions get spooked, try to limit down their exposure to risk and loss. Soon the herd mentality changes and its like a someone turned down the lights

#65 Mark on 09.14.16 at 9:39 pm

Appraisals were always ‘educated guesses’ at best, and always subject to a significant amount of uncertainty. That is why the Bank Act sets forth a minimum 20% downpayment for a “prime” loan — to protect the banks against uncertainty in the appraisal process, and to protect the banks against losses that can occur in the natural process of buying and selling a property.

In practice, banks have chosen to set the prime versus subprime delineation point much higher than the Bank Act sets forth as a minimum. Hence, the banks require CMHC subprime mortgage insurance against loans with as high as a 50% down-payment at the time of issuance. Buying it with their own money if they can’t directly force the borrower.

As volatility increases, so does risk premia. With Vancouver/Toronto RE now in explicit free-fall (sales mix adjustments, as predicted, have now completely run their course), pretty much everyone will get scared and demand more compensation for risk. This means higher interest rates on housing loans, even if the BoC stays “on hold” or lowers at the next meeting.

“Software is eating the world. We are going to have to reinvent what work and what a national economy looks like.”

I haven’t heard of people losing their jobs to software in any significant numbers (and if anything, software has enabled entire new industries to spring up into significant prominence). The big problem is with the trend towards outsourcing/offshoring, and the lack of replacement industry for those affected.

I quoted a great article I found on MSN yesterday (though its hard to see in the 500+ comments received). It laid a lot of the blame on the banks and the CMHC for incenting over-investment in housing and real estate, to the detriment of the rest of the economy. Canada could have a competitive IT sector and a competitive high-value manufacturing sector, amongst other sectors, if capital was available. But basically almost every available dime of capital in the economy has been sucked out of it and dumped into RE. There was even a guy a week ago who did some research into the happenings in Saskatchewan (oh what a boring province!) who found that the government there had put nearly 100% of immigrant investors’ funds into RE investment with government guarantees! When you have such anti-non-RE business policy pursued by government, of course most non-RE business and employment will suffer accordingly.

#66 Setting the Record Steaight on 09.14.16 at 9:47 pm

Energy East

Sask and Alberta should secede. They have been played.

#67 Mark on 09.14.16 at 9:48 pm

“So a weak CAD is not really helping when capital can flow to lower labour cost jurisdictions especially if they provide other “incentives” like less regulatory restrictions.”

The problem with the CAD$ is that basically most economists (those with brains, of course) can see that a CAD$ moonshot is in the not-so-distant future. When the debt bubble implodes, and people go into hyper-austerity mode in order to keep themselves solvent. Especially as house prices continue to drop, and the next round of spread increases kick in.

Manufacturers and investors need to plan for the longer-term. And with the over-abundance of investment in Canada’s export sector, particularly in the energy industry, there’s little reason to pile on even more deflationary investment. The market will not reward such.

I spend a lot of time in the oilpatch, and I think lots of Albertans have this mindset that as soon as oil gets back to $60, it’ll be back to business as usual. Its hard to look them straight in the face and tell them that if oil gets back to $60-$70, the CAD$ will probably be flirting with par again, and realized prices at the wellhead, in CAD$, won’t actually be much higher than the minimally profitable prices they’re currently receiving.

But at least in the short term, currency depreciation has helped the oilsands engage in a far more orderly restructuring than if the prices were 20% lower. And once the industry gets lean in the next couple of years, shareholder returns should be fairly decent as most cashflows will be paid to the owners, rather than re-invested. Give it another good 10-15 years before there’s another major investment cycle in the oilsands, IMHO, and the pipeline capacity issue will need to be resolved with actual in-ground infrastructure before there’s major new investment commitment in upstream.

#68 Cory on 09.14.16 at 9:49 pm

#27 young & foolish on 09.14.16 at 8:17 pm
People are still migrating to large cities/regions for employment opportunities. If you own rentals, and they are yielding a good return, you can ride out our slow growth economy. When people stop buying, they rent.

As for growth through diversification, consider what’s happening around the increasingly integrated economies of the world … all reporting huge debts and slow growth. Where are you going to go?
—————-
Give us examples of rental properties in large cities with an acceptable cap rate. — Garth

Believe it or not cap rates in Cowtown are still in the dirt. Sellers and landlords can’t understand why people aren’t stampeding to their doors with money in hand.

This will be a long process of deflation.

I wonder if T2 will feel any heat from within the party? sure he’s “popular” and has no opposition to really worry about right now but I still wonder.

#69 Post on 09.14.16 at 9:50 pm

Also according to the realtor’s site that Garth highlighted tonight, inventory is still low and unchanged, prices haven’t dropped much yet and he’s still seeing multiple offers.

#70 Nodebt on 09.14.16 at 9:52 pm

Hello all u wise blog dogs! I want to buy another rental property with 3 suites, where is a good city with great cap rate? Thx u

#71 bubu on 09.14.16 at 9:55 pm

until interest rate will go up 2% nothing happens…. sales went down in Calgary last year but not the prices….same in Edmonton… on top of that, now everything is 10% more expensive than last year…

#72 april on 09.14.16 at 9:58 pm

#28 – WallOfWorry. So many deniers.

#73 Shawn on 09.14.16 at 10:00 pm

Do you think Ontario will introduce some sort foreign tax or vacancy tax in order to slow the acceleration of home prices?

It’s even getting crazy in Niagara. Homes are going for above asking and selling in days.

#74 Franklin T. on 09.14.16 at 10:04 pm

As a Chartered Surveyor (AACI) my job isn’t to speculate on the future value of the market.

Saudi oil takes out Canadian oil with the help of a treasonous PM but leaves tough men in the Us franking business alone.

Bernake suggests negative rates are not off the table

Fintrac says money laundering foreigners have corrupted more than 500 Canadian real estate companies

Banks conclude that Canada’s real estate is still cheap based on falling loon and that means Canadians can’t compete against foreign currencies due to Liberal low dollar policy.

Bernanke has zero to do with setting rates, and is well past his best-before date. FINTRAC has said nothing of the sort – just that lots of realtors are sloppy with the supremely useless documentation now required for all domestic real estate trades. And no bank has published that opinion. Stop making stuff up. — Garth

#75 juno on 09.14.16 at 10:07 pm

Yes it is different this time.

They US crash was epic …. We are going to be ….

wait for it!…..LEGENDARY!!!

#76 Porsche on 09.14.16 at 10:09 pm

Well I’m up in the Suncor pit on short contract. I know your just a number but there’s more people on Project building it then in Operations maintaining it.

Having dinner tonight at the 24×7 smorg (so easy to gain weight, up here, especially for a single guy not used to eating so good) talking to some long timers… good stories.

At the CNRL site a year ago a girl was driving one of those mammoth 400 ton heavy haulers and ran over a pick up truck. She didn’t even see it… thought she had run over a rock and reported it. She totally crushed this pickup truck killing the driver. These things carry 1,600 barrels of oil in one load, costs $45,000 a tire, can do 55 km an hour but take 1,200 yards to stop.

#77 Ace Goodheart on 09.14.16 at 10:09 pm

The BC government put a 15% foreign buyer’s tax on housing and is now adding another 2% empty residence tax. What is that, people?

It’s a trade barrier. It’s a protective measure to safeguard local residents from currency devaluation.

Actually, our dollar is down 25%, but I guess 17% is a start.

Mexico did the same thing when its currency collapsed (foreigners cannot own property in Mexico directly)

#78 xman on 09.14.16 at 10:16 pm

DELETED

#79 the other white meat(pork) on 09.14.16 at 10:17 pm

What happens if a homeowner, faced with owing more to the bank than they can sell their home for, sells for ridiculously cheap, and declares bankruptcy? And then flees the country?

No need to flee the country as the debts become part of the bankruptcy estate. Throw in any unpaid taxes, credit card bills and other miscellaneous debt, stir and apply for discharge a few months later.

#80 Andrew Woburn on 09.14.16 at 10:24 pm

270 Karma on 09.13.16 at 10:52 pm
Special attention needs to be paid to the “after adjusting for inflation” because your whole point is that inflation is gone, but ignore that these numbers are adjusted for inflation.
==================

Actually I was attempting to take an ironic poke at doomsters who believe that economic history has ended and nothing will ever change again. I don’t know if there is an emoticon for irony, but if there is, I should have used it.

Yes, inflation is still happening and will quicken as parts of the economy continue to grow even if other parts are languishing.

However if I failed to communicate the ironical intent, then your response was valid, thoughtful and civilized.

#81 Mount Pleasant Vulture on 09.14.16 at 10:24 pm

Hey Garth. Great post! Here in Mt. Pleasant (Vancouver West Side), we are watching homes sit for months (right on our street).

Today Mayor Robertson announced his plan to tax empty homes at 2%, which doesn’t sound like much u til you realize homes are in the 2-3 $Million range. If you’re paying $40K/yr on an empty property, you soon decide to put someone in it. More importantly, since most of the action I’m seeing here is locals, is the idea that this will be one more thing to impact this market.

Still renting and invested, and can not complain as we watch the slide.

#82 Andrew Woburn on 09.14.16 at 10:26 pm

If you are still baffled by negative interest rates, this is a pretty good summary.

http://www.theglobeandmail.com/globe-investor/investor-education/demystifying-negative-interest-rates/article31765019/

#83 Renter's Revenge! on 09.14.16 at 10:27 pm

#48 JSS on 09.14.16 at 9:00 pm
What’s wrong with more government jobs?

Most people who work for the government don’t sell what they produce (they’re paid through taxes instead), so there’s no market signal to indicate whether they’re doing useful work or not.

#84 xman on 09.14.16 at 10:28 pm

Hello Garth, jus waana get ur take on marijuanaa becoming legal and any investment stratagies. soon we can buy stocks or etfs associated with weed. I wonder about all the lives previously ruined by simple possession charges. oh well I guess it doesn’t matter there is money to be made.
livin wild -Canada style
Bob Marley wouldnt like it, ur not allowed to play his music no more-go to ur room.

#85 young & foolish on 09.14.16 at 10:33 pm

“Hello all u wise blog dogs! I want to buy another rental property with 3 suites, where is a good city with great cap rate?”

You are too late … don’t do it now!

#86 dogman01 on 09.14.16 at 10:37 pm

Go Globalism…

http://www.ctvnews.ca/business/scotiabank-defends-practices-to-verify-incomes-before-granting-mortgages-1.3072674

Now would you not just lie and would it not be easy. Like at the US border…no officer I have never smoked , inhaled or been to a rock concert.

http://www.ctvnews.ca/business/vancouver-s-empty-homes-tax-to-be-self-declared-up-to-2-per-cent-of-value-1.3072137

#87 Joe2.0 on 09.14.16 at 10:38 pm

#35
Bank Fraud.
That about sums things up.

#88 Investx on 09.14.16 at 10:42 pm

You spent a whole post last week explaining how it’s different here with our banking system.

That is not what Ryan wrote about. Pay more attention. — Garth

#89 dogman01 on 09.14.16 at 10:50 pm

http://www.straight.com/blogra/780156/hillary-clinton-reported-dead

What do you think Smoking Man….another gaffe like reporting Building 7 fell before it did.

Sorry Garth….

#90 NoName on 09.14.16 at 10:52 pm

and people wonder why Trupm might win. and its ot april 1st.


Analysts at Bank of America have reportedly suggested there is a 20 to 50 per cent chance our world is a Matrix-style virtual reality and everything we experience is just a simulation.
The report, which was issued to clients, also implies even if our world was an illusion, we would never know about it.
Bank of America Merrill Lynch backed up the claims by citing comments from leading philosophers, scientists and other thinkers.

http://www.independent.co.uk/life-style/gadgets-and-tech/news/bank-of-america-the-matrix-50-per-cent-virtual-reality-elon-musk-nick-bostrom-a7287471.html

BofA
is sharing with city group #5 spot on a bailout list. i dont mind out of the box thinking, but it is a time for that analyst and bank go back in a box and re think all this. Keep in mind that bofa have large presence in a states where marijuana legal or decriminalized… IT IS TRUE

#91 Mr. Wrong on 09.14.16 at 10:56 pm

So wise old intelligent Garth… where will the loon fly to? will oil ever get over 60$ again?

#92 Brazil ex-pat on 09.14.16 at 11:06 pm

DELETED

#93 scott on 09.14.16 at 11:20 pm

How about a blog night of how our city’s are being run and how they are going to cope with what’s coming. I know taxes have nowhere to go but up. It just seems the Provincial Governments have let them go insane.

#94 Damifino on 09.14.16 at 11:24 pm

#80 Mount Pleasant Vulture

“If you’re paying $40K/yr on an empty property, you soon decide to put someone in it.”
———————————–

But the reason you’re not already renting it is because you expect to flip it fairly soon anyway. Being forced to rent it out wont change that.

Who wants to settle into a place that could be on the market in less than a year?

Open houses… uncertainties… disengaged landlord…
No thanks. Good quality, purpose-built rentals under professional management is what’s needed.

#95 Mark on 09.14.16 at 11:34 pm

“What happens if a homeowner, faced with owing more to the bank than they can sell their home for, sells for ridiculously cheap, and declares bankruptcy? And then flees the country? “

They’d run into a bit of a problem in the lawyer’s office actually ‘selling’ the property. As the proceeds of the sale would be insufficient to discharge the security interest (mortgage) granted against the property.

Of course, yes, there can be a deficiency. The deficient debtor would have to negotiate with the bank to allow the sale and repay the deficiency. Or default on the obligation and the property would be sold by the bank through the normal processes of foreclosure (ie: power of sale, order absolute, etc., whatever the case may be).

I expect, just like occurred in the USA, that the CMHC (ultimately the entity that gets to deal with the mess — I expect the CMHC will concoct a scheme with the banks where the CMHC will get title to defaulted properties, rather than allowing the banks to fire sale them and collect the insurance proceeds on the fire sale deficiency amount!) will probably at some point come up with a cash incentive for people to leave their underwater homes in good condition. Rather than trashing them. The US banks that did this in their RE collapse seemed to have much better outcomes on such properties than those who foreclosed and took possession “the nasty way”.

Personally I don’t expect mass foreclosures, but certainly there will be some “landlord families” (yes, the ones in GTA/GVR who have been pac-manning properties over the years on credit) that pack up whatever they can into a shipping container and ex-patriate themselves. Anecdotally there is already a problem at the major ports with expensive autos, cash, and other personal chattels being exported to Asia by the foreign national sellers of Vancouver properties into the bubble. So the government may very well need to crack down more on personal exports, especially as high-end autos such as Range Rovers and Mercedes are used as a sort of substitute for cash.

#96 Smoking Man on 09.14.16 at 11:34 pm

Zero guy just came out with a story that there is 33 trillion laundered chinese dollars heading for Toronto real estate. Bull shit is my call.

But it’s what the herd believes is what counts..

CTV covered it a bit…. If this story goes main stream. 1.5 million dollar bungees in long Branch this Spring.

#97 45north on 09.14.16 at 11:40 pm

Cory: I wonder if T2 will feel any heat from within the party? sure he’s “popular” and has no opposition to really worry about right now but I still wonder.

maybe not yet: 17 Liberal MPs in BC

https://en.wikipedia.org/wiki/Results_of_the_Canadian_federal_election,_2015

Vancouver is highly represented, including minister of defence

http://globalnews.ca/news/2281127/federal-election-2015-live-real-time-results/

Calgary not so much: only 4 Liberal MPs in Alberta but 2 are in Calgary

Liberals totally depend on Ontario: 80 Liberal MPs from Ontario! With the exception of 2 seats, all of Toronto is Liberal including John McKay and Bill Morneau. Toronto real estate is still strong so it’s not a problem. Yet.

#98 Questions on 09.14.16 at 11:48 pm

Haha! “Like horny porcupines. Carefully.”

@ smoking man. Usdcad. Fun times.

#99 conan on 09.14.16 at 11:50 pm

RE: #37 Brian Ripley on 09.14.16 at 8:27 pm

Many economists have zero clue. Our exports are not going to increase while oil is in the gutter.

The second and third world now have production capabilities and the main hold on them is the cost of transportation of goods.

Low oil is very rock and roll for them.

https://www.youtube.com/watch?v=1D1E6b_Y3jU

#100 Andrew Woburn on 09.14.16 at 11:54 pm

As Alice would say, curiouser and curiouser.

A US drywall manufacturer is using the provisions of NAFTA to get Canada to cnarge a substantial anti-dumping penalty on any drywall imported into Canada from the US. The direct beneficiary is this manufacturer’s western Canadian subsidiary. The losers are its US competitors who don’t have Canadian operations and also Canadians who will now have to pay more to build a house.

Didn’t know that NAFTA had anti-dumping rules. Me neither. Can someone page Brian Mulroney and ask WTF?

“Nanaimo contractors feel drywall tariff pinch”

http://www.nanaimobulletin.com/news/392646851.html

#101 Ponzius Pilatus on 09.14.16 at 11:57 pm

DELETED

#102 Ponzius Pilatus on 09.15.16 at 12:02 am

Garth,
Here’s the challenge.
Take a break.
Put your 2 Golden Boys in charge for a week.

#103 BS on 09.15.16 at 12:30 am

Since then the average price of detached homes changing hands declined by $294,000 (about 17% in a single month. Ouch.) and so far September’s been just as intense (sales in Vancouver West down 51%, Vancouver East -80%, Richmond -67%, Burnaby -69%, according to this site).

You have to laugh at those who said only a couple of months ago the SFH prices could never go down. Too limited supply. They are now no bid. Sales down 80% on Vancouver SFH. LOL.

Prices of East Van crack shacks will be down by 50% in Spring and 70% within 2 years. That is with no interest rate increase. I bet you can get at least 30% off peak right now with a few stink bids.

#104 BS on 09.15.16 at 12:35 am

#20 ILoveCharts on 09.14.16 at 8:06 pm
I’ve been quiet for a while. I bought a house so I didn’t need to follow the day to day as much – I’m in it for the long haul now.

Long haul is an understatement. I bet you will not get your money back for at least 25 years. Maybe never. Japan looks that way 25 years after their housing bust.

#105 NorthOf49 on 09.15.16 at 12:53 am

56% of Canadians Over 50 Don’t Have a Retirement Savings Plan

More than half (56 per cent) of Canadian pre-retirees aged 50 or older don’t have a retirement savings plan, according to research commissioned by the Ontario Securities Commission.

http://www.benefitscanada.com/news/56-of-canadians-over-50-dont-have-a-retirement-savings-plan-survey-87362

I betcha most of the 56% are counting on selling their primary residence to fund their retirement.

#106 Fish on 09.15.16 at 1:11 am

Soon realitors will be open for business 7 days
Out of the week, I think,they are just not hungry enough yet

#107 Metaxa on 09.15.16 at 1:34 am

# 84 young and foolish quotes and writes:

“Hello all u wise blog dogs! I want to buy another rental property with 3 suites, where is a good city with great cap rate?”

You are too late … don’t do it now!

Depends on where you are.
I have written before about my sons buying a front to back duplex a couple of years ago and being cash flow positive from day one, living mortgage payment free.

Now a friend of theirs has done similar. All these kids are under 30 btw. Newly married they bought a side by side duplex making sure the area was zoned to allow a basement suite under owner occupied.
Put $50,000 down on a $375k home, borrowed the +/- $40k suite build from her parents ( with a notary signed repayment document, its a real loan) and rented the other side to a family. Suite will bring in $900-1,000 per.
They will end up paying in and around $400\500 per for their housing close to shopping, schools and in a decent area of town.
She is in healthcare, he is a biologist with a long tenure at his company (long for a 30 yo anyway).

So, it can be done if you want to do it.

#108 Karma on 09.15.16 at 1:37 am

USA! USA!!

http://www.bloomberg.com/news/articles/2016-09-14/three-reasons-why-u-s-productivity-may-be-on-the-verge-of-taking-off?utm_content=business&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social&cmpid%3D=socialflow-twitter-business

#109 Tony on 09.15.16 at 1:39 am

Just like season 1 episode 11 of the Twilight Zone. And When The Sky Was Opened. In this case the three cities are represented by the 3 astronauts or China, Canada and Australia are represented by the 3 astronauts. We know how that episode ended.

http://www.tv.com/shows/the-twilight-zone/and-when-the-sky-was-opened-12595/recap/

#110 Future Expatriate on 09.15.16 at 1:39 am

Of course it’s different. Everything happens there 5-8 years behind the US. Liberal head of state, real estate crashes, economic collapses.

You think it’s bad now? Wait until you get YOUR Trump.

#111 Rexx Rock on 09.15.16 at 1:40 am

Canada is toast.If your young and a professional move to the U.S.This country is run by a bunch of idiots who have no clue to run a country and couldn’t run a lemonaide stand.Canada could be the next Venezuela,I’m being serious.Our country is flat broke with oil that is at $44 a barrel with one customer.God help us,housing is so unaffordable and now a 75 cent dollar.People need to stop drinking the kool aid and wake up!!

#112 When Will They Raise Rates? on 09.15.16 at 1:40 am

Excellent post today Garth!

#113 No Bid on 09.15.16 at 1:45 am

https://www.zolo.ca/west-vancouver-real-estate/trends

#114 Wealth Distribution the Issue on 09.15.16 at 2:06 am

For the past 40 years the bottom 80% of Canadians have seen near 0 REAL growth in wages.

In the past year, adjusting for inflation, wage growth was negative in all provinces for the exception of PEI, near 0, and Quebec. BC may be creating jobs but wage growth in the past year there has been -2.7%.

Uneven Wealth Distribution is the core issue in Canada and here is what happens when it is uneven and benefits only the elite:

-80 or so Canadians have as much wealth and income as 11 million bottom earning Canadians, talk about concentration of wealth.
-2016 Canadian CEO salaries are about 145 times that of the average Canadian wage earner. That ratio was 20 to 1 in the 1960s.
-Canadians are assuming unprecedented mortgage debt levels and investing in Ponzi scheme RE markets in the hope of acquiring substantive wealth quickly.
-Canadians are assuming unprecedented consumer debt levels to maintain a living standard they cannot afford.

The rich keep getting richer in part because of the tax burden shifted from the wealthy to the lower and middle class. In 1949 there were 17 tax brackets ranging from 15% to 84% MTR, in 1971 the range was from 0% to 80% MTR, in 1994 the range was 26.35% to 46.4% MTR with in essence, 3 tax brackets.

The latter is a result of 1972 tax reforms shifting the tax burden from the wealthy to the lower and middle class and is ongoing (MTR range in 1972: 21.68% to 59.93%). You can see how laughable/benign T2s tax the rich platform is vs. historical fact.

Oddly enough, the early 70s is when real wage growth ceased to grow for 80% of Canadians and began to increase rapidly, by comparison, for 20% of Canadians

Canada is slowly becoming a 2 class system, the filthy stinking rich and poor.

How you fix this is beyond me but suffice to say, a huge problem that will sink the Canadian economy in a severe job loss recession…yet we remain complacent about this issue.

Many of you will read this and dislike the historical data intensely; however, they are fact and not fiction.

#115 Karma on 09.15.16 at 2:12 am

#45 For those about to flop… on 09.14.16 at 8:44 pm
“After yesterday’s mini meltdown by the boss I picked him up in my 27year old campervan and took him to see Donald Trumps Doctor.

I gave him 5 minutes to write a note on Garth’s health while I sat in the van.

He declared Garth Turner is the fittest man to ever run the Greaterfool blog…

M42BC”

———————————-

[Thumb Up!]

#116 #44 Smoking Man, disagree on Supply/Demand on 09.15.16 at 2:15 am

You say RE value in 416 will remain buoyant because of your supply/demand argument. I believe you are half correct.

People were making the same supply/demand argument in YVR RE, up until recently.

What differentiates those 2 markets now is sentiment.

Garth has written about this more than once and I have posted about this as well numerous times.

Historically, all job sucking recessions were half economy and half psychology…so half of a market is based on sentiment, not just supply/demand.

Once sentiment turns negative in 416 RE, you can throw the supply/demand argument out the door…this has already happened in YVR RE.

#117 NEVER GIVE UP on 09.15.16 at 2:24 am

#43 Quebec is Great on 09.14.16 at 8:37 pm
Small Business is flourishing except for:
————————————————–
Our Government is nothing short of HOSTILE to small business.

They hate having to collect taxes from so many places when they can get it all in large doses from Big Corps., their friends who don’t want any competition.

Micro Business in this country has been effectively legislated out of business to the point whereby most readers of this blog don’t even know what a micro business is.

There are tens of thousands of people who are not able to bring themselves to a 9 to 5 day job as a result of mental illness, depression and other health issues.

If one want to work say for example selling umbrellas at a subway station when it rains providing a very useful service to society, That person will have their stock confiscated by police.

My children tried to sell glow sticks and those flashing led light toys at the Vancouver fireworks festival. They were photographed by city workers and threatened with bylaw fines and scared away.

No wonder the downtown east side is so destitute. Any spark of raw commerce is crushed in favor of tax paying storefronts that none of these people can afford to start with.

Around the world in poor countries a person can always work on the street. Here you have to accept a welfare cheque.

Government legislates people out of work. As for the NIMBYs You have to excuse the poor for trying to survive. It is too bad they spoil your view.

http://www.chicagotribune.com/business/ct-british-phone-booths-new-uses-20160816-story.html

#118 Corban on 09.15.16 at 2:32 am

Are you deleting the “First” posts? I think that’s taking candy away from babies. Tough love Mr Turner!

#119 #31 TRT and Zolo.ca on 09.15.16 at 2:40 am

Yes, now you can have fun with stats using Zolo.ca data. But they have changed their tune recently and numerically.

A couple of months ago I downloaded their historical average prices and unit sales figures into an Excel spreadsheet. I would dutifully update it daily.

Well guess what?

Since gaining notoriety about the average price drop on their web site I noticed, that every day, average price (3/6/12 mo ago) for each category (detached, townhome and condo) was slowly but surely being CHANGED with large enough changes to readjust, for example, the average detached price drop to about 7% (before that it was much higher, approaching double that)…oddly enough, in line with what CREA reckons prices will drop in YVR RE by the end of 2016…which is fantasy land as Garth points out today.

I emailed Zolo.ca about this change of heart at least a couple of times and received emails saying they would look into it. Yet I continue to see average prices changing almost daily from the past to decrease price losses…oh, and no response from Zolo.ca as of yet.

If you want to know how Burnaby is doing, go to the ever sarcastic and ravel rousing: @timberjrackie. You will have to scroll down many, many times to see actual MLS postings showing recent list price reductions in early Sep.

The most recent noteworthy today:

3285 Dickinson Crescent, West Van, Sep 14 list price of $7.49 MM = a $300K price reduction.

2220 Paulus Crescent, Burnaby Montecito, Sep 13 list price of $1.8 MM = a $100K price reduction.

3779 Dundas Street, Burnaby, Vancouver Heights, Sep 14 list price of $1.85 MM = a $100K price reduction.

4927 Rumble Street, Burnaby, Metrotown, Sep 13 list price of $2.48 MM = a $200K price reduction.

For further amusement of ACTUAL MLS source price reductions, scroll way down to the Sep 4 or so (scroll a lot), list price reductions on 100s of GVRD properties, including townhomes and condos.

BTW, RonChipman.net has yet to show, since July 1, a list vs. sell price differential that is positive (i.e., sell prices all below list). The differential is getting larger, day by day.

No stats, just real time numbers. No manipulating them…well, unless your Zolo.ca.

#120 Recent US Election numbers worth noting... on 09.15.16 at 3:08 am

RealClearPolitics Sep 2 Electoral College, No Toss Ups was:

Hillary: 340
Civilization had a good run, Trump: 198

Today:

Hillary: 293
Civilization had a good run, Trump: 245

Maybe YVR and 416 RE will get that Smoking Man Supply/Demand boost from south of the border after all…

#121 Freedom First on 09.15.16 at 3:29 am

Yes. The majority always thinks it’s different here in their RE market, as well as in all hard and paper assets, both locally and globally. All of the time every time. Recent and past history proves that to be the truth.

People line up for high prices and sell at low prices. It’s like a contagion.

For myself, there is something both elation inducing and sad provoking in both buying and selling any asset. As I know my gain is other’s losses. I have always thought for myself, and buy things when they are a “Deal”, and I love “Deals”. And I am not greedy either. Selling a house, or any other asset, when the price is way over what I would pay, I can let it go strictly by what the numbers say. I am a numbers and value man. No exception. My cash, cash flow, number of assets, income streams, and net worth must be increasing at all times.

Been on my own since 17, with 0$ and only my clothes to my name, and by this Freedom First thinking, my lifestyle and standard of living has been increasing dramatically ever since I hit 25. I knew it was all up to me. I am a man.

Today, I am a Boomer, and extremely optimistic about the future. We all age, but it is now clear to me and the people who know me, I am aging with such grace, that it is not rare that people tell me I look like a movie star.

Thank God I am a humble man.

#122 james on 09.15.16 at 3:44 am

” “Right now, Seattle is the No. 1 city in North America for Chinese buyer inquiries, even displacing Los Angeles.””

That’s nice.

We have 1.2 months of inventory right now. The Chinese can take as much interest as they want, but there is no supply to buy.

#123 betamax on 09.15.16 at 4:13 am

#55 “Seattle…is overtaking Vancouver as a preferred destination for Mainland China buyers.”

Wait till they find out how difficult it is to become a US citizen vs. Canadian. I know lots of Chinese people who would rather have moved to the US but came to Canada instead because of lax immigration laws here. That’s never going to change.

#124 betamax on 09.15.16 at 4:21 am

Garth: “the average price of detached homes changing hands declined by $294,000 (about 17% in one month)”

The sales mix changed. I believe that your initial call is still correct: it will be a slow melt. Prices aren’t and likely won’t fall precipitously.

#125 juno on 09.15.16 at 4:33 am

76 Ace Goodheart on 09.14.16 at 10:09 pm

The BC government put a 15% foreign buyer’s tax on housing and is now adding another 2% empty residence tax. What is that, people?
————-
Just when did real estate become a commodity. People land isn’t a trade barrier. Its an invasion, look what happened to the native Indians.

Its like saying “not selling your daughter to the highest bidder is a trade barrier”

#126 Ace Goodheart on 09.15.16 at 6:51 am

#124 Juno:

It’s a barrier to foreign capital entering BC.

The idea is, foreign money is worth more than Canadian money, so add a tax to “even things up”.

Like I said, even with the tax, foreign money is still worth more.

They are protecting local ability to purchase real estate.

Yes they could protect your daughter too I guess, if they were still selling young women for marriage (a barbaric custom that was outlawed hundreds of years ago).

They actually DO still sell real estate to the highest bidder (but now foreigners have to pay a 15% tax).

#127 drydock on 09.15.16 at 7:07 am

Very mystical.
Trump 2016 an anarchist explanation.

https://pepethefrogfaith.wordpress.com/

#128 Zen Headspace on 09.15.16 at 7:09 am

#41 Victor V

http://www.macleans.ca/economy/economicanalysis/why-canadas-economy-cant-pick-up-speed/

The onset of the Great Recession more or less coincided with the peak in the working age population.
——————————————————————-

FINALLY! An intelligent article from a Canadian source that recognizes that demographics is the problem. Face it, the people who drove this historic economy for the last 75 years are either dead, dying, about to be dying, retired, about to retire, or still working but don’t need to spend anything because they have everything they want and/or need.

The rest of the population are either unemployed, underemployed, or employed but indebted up to their eyeballs.

So, the inherent demand in the system is down and getting lower. This will continue until the upper middle aged boomers, the old farts, the ancient dribblers, and those knocking on heaven’s door are flushed out of the system.

We cannot get back on track – that is, rebuild real demand for stuff – until at least the next generation arrives, grows ups, gets jobs, and needs stuff.

So, be prepared for negative growth (oxymoron?), stagnation, deflation, and economic doldrums until at least 2035.

Read Harry S. Dent. He may be a whack-job, but that Macleans article linked above is pretty much plagiarized from everything he’s ever said.

http://www.businessinsider.com/harry-dent-demographic-cliff-2013-12

http://michaelsnyder.mensnewsdaily.com/2014/05/if-economic-cycle-theorists-are-correct-2015-to-2020-will-be-pure-hell-for-the-united-states/

Demographics = Population Statistics.
Population Statistics = The Economy.
Where the population is headed is where the economy is headed.

Get ready to hunker down and hang in there.

#129 Alrighty on 09.15.16 at 7:16 am

Here comes the boom. Vancouver is about to get ROCKED HARD!!! The shed of wealth is going to be enormous and people who have been living off their line of credits are going to be hurt badly. I know a lot of people who have treated their house like a piggy bank. With interest rates so low, they simply keep borrowing against their house. Here, I’ll give you an example:

My friends Ryan and Melinda bought a house back in 2011 in Coquitlam. They are in their late 20’s. Ryan is an engineer and Melinda is a teacher. They make okay money, but they spend a LOT and have big student loan debt still. They paid something like $500k for their house back in 2011 and they put only 5% down. Now today it is (or was) worth about $850,000 or so they tell me. We were talking about real estate and they casually brought up that they refinanced a few months back and took out 80% of their appraisal. They bragged about how their house was appraised at $850,000 and they were able to get a HELOC/mortgage when they refinanced for $680,000. They took out the $200,000 or so and put it into investments. But after a month or so, they decided it would be better off if they used it to fix up the house and buy new cars instead of getting car loans (because, as they put it… car loans are 5% and this is only 3%). So they bought new cars, and put about $100k into their house fully finishing the entire basement, updating a washroom and kitchen and fixing the outside of the house up. Then of course they needed new furniture for all the areas. Anyways…. as they tell me this, they basically say (jokingly) that all the money is gone, vanished, and they laugh about how easy it was to blow $200,000. So now these idiots are carrying a $680,000 mortgage on a house that is probably soon going to be worth less than that, and if interest rates go up they will be fresh out of luck. Sure, you could argue that investing the money in their home increased its value, and investing money in vehicles (while terrible investment) is at least better than gambling it all away, but this is just a typical example of people using the false equity that has built up in Vancouver to finance their lives. If Vancouver prices crash 50%, their house will only be worth maybe $500,000 (assuming the modifications they did to it add $75k, and that’s a BIG IF) and yet they will owe $680,000.

Glad I am not them!!!

#130 CJBob on 09.15.16 at 7:58 am

#53 Self Directed on 09.14.16 at 9:09 pm
What’s wrong with more government jobs?
————
All I know is they don’t contribute to a local economy, rather they drive up taxes instead.
_____________________
Really. So the guy picking up my garbage, the local police and fire, daycare working taking care of kids so others can work don’t contribute to society? They don’t pay taxes and spend money in the local community?

I understand there are SOME government jobs and agencies that should be eliminated and many that could be more efficient, but I like to walk into a restaurant and know that there has been a health inspection in the past year.

Less government and lowers taxes are great talking points but people also want the services and social safety net provided by government.

#131 fancy_pants on 09.15.16 at 8:05 am

Venezuela – A Dozen Eggs Cost $150

http://www.zerohedge.com/news/2016-09-14/venezuelas-death-spiral-dozen-eggs-cost-150-hyperinflation-horrors-hit-socialist-uto

…not so long ago many people heralded Venezuela as Latin America’s successful utopian Socialist experiment…

…”the International Monetary Fund predicts that inflation in Venezuela will hit 720% this year.”

“Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them.”

The worst is yet to come. It is not different here. Certain models create predictable results.

#132 pBrasseur on 09.15.16 at 8:14 am

Telling that RBC finds what’s happening «inexplicable» when so many of us here get it perfectly.

It’s simple, the economy can’t pick up the slack , not event with a crushed CAD$, because our productivity sucks. That fact has been hidden and made worse for years by a cyclical resource boom and a race to indebtedness by both governments and households. The public sector is still growing, so is household debt, yet the economy is stagnating at best. That should tell you something about the future of this country…

#133 maxx on 09.15.16 at 8:15 am

“A million people would wail and suffer if rates edged up by a full point.”

I think that this estimate might possibly be on the low side.
I’m the main shopper for the family and source goods from every type of store. Since the GFC, I’ve seen a HUGE increase in the number of people buying from charity shops, searching for loss leaders and gobbling up reduced items, including fresh produce.
Many, if not most, are middle-class people with late-model cars (some of them luxury) and great clothing. They may not all be forced to shop second hand, however they do seem determined to stretch their dollarettes. Many look for practical items and others for treasure. I know people who extol the virtues of charity shops today who wouldn’t have been caught in them not so long ago.
Second-hand shopping has gone mainstream and won’t be disappearing anytime soon.
Yesterday’s catch: an armload of 17 art books (one of which was priced at 32.95 US) for a dollar each. Did the math and saved close to 175 Dollarettes – not even grossed up for earned income to buy them – on a single purchase. Sweet for us, but not so much for retailers.
IMHO, GFC fallout is here to stay….for years.
Unless and until the elephant is pushed off of interest rates and people of all investment stripes begin to earn (yes, earn) more on their savings, the economy will not improve and prices on all goods and services will continue to melt. Even the wealthy are affected by this mindset. Perhaps they are even more skittish than those without savings due to their greater awareness of all things fiscal.
So, tax influx to government slows down, sales slow right down, desire to buy slows down, faith in government evaporates and insecurity concerning the economy continues to crystallize.
I’m not saying that interest income is the only fulcrum that will help get the economy off of the ground, but, given that the 99% live more in the real economy than in the investment version, I believe that this is a large part of where economic recovery would root and take hold.
Otherwise, available jobs and job quality will continue to deteriorate.
As the clock continues to tick, more consumers are becoming aware of alternative buying sources and new buying habits become reinforced – perhaps for good.
All parts of the economy are important and essential.
IMHO.

#134 suburban coyote and pup on 09.15.16 at 8:31 am

#57 Andrew Woburn, very good video I am going to have my 14 son watch this.

#135 Jeff on 09.15.16 at 8:35 am

It’s vey disengenuous to say home prices in Vancouver are falling, if you look at the benchmark home prices (which compares like homes to like homes) condos are increasing, attached are in creasing and detached are flat.

Why you see the big drop is because the luxury end is dead and brining down the entire average. But a 1 million home in June is still a 1 million home today. It might not be in 3 months, but saying its losing 10k/day is factually wrong.

#136 maxx on 09.15.16 at 8:46 am

“Meanwhile the Royal Bank’s economics guys are calling it “inexplicable” that the country’s export numbers suck as badly as they do when our dollar has plunged from par a few scant years ago to less than 76 pennies today.”

Jaysus…it’s their JOB to “explique” it.
What they’re really saying is that they are unable to divine why effete cb policy “tools” aren’t working.

#137 maxx on 09.15.16 at 8:49 am

#6 Cto on 09.14.16 at 7:47 pm

“There was three, then 2, and guess who’s next? I can smell a correction coming, I can just smell it…”

So can sellers.

#138 Alex B on 09.15.16 at 9:03 am

I don’t really understand what dropping sales numbers has to do with prices? What I can see from the stats of Vancouver Real Estate Board is that the sales are down and prices are up. Less inventory = higher price…

#139 Dups on 09.15.16 at 9:14 am

Did anyone notice that Bayer purchased Monsanto for 66 billion $? Does anyone have any idea what this might mean for the food people eat? Overpopulation and garbage food to feed all is not a good picture…

#140 F.dover on 09.15.16 at 9:17 am

So, the miners pay no or only token royalties, they only pay property tax on above ground infrastructure and Poloz and Morneau laud a dollarette to boost commodity exports, so the free lunch for these industries is more so free, at the expense of imports costing consumers more.

Low or negative financing allows Bayer to buy Monsanto, Agrium to buy Potash, and so on. ( which is so much more necessary than seniors living on the interest that their savings now don’t garner because why ? )

Meanwhile we are to save for a future of depleted DB’s, gutted currency values and therefore all bets are in holding corporate stocks full of Financial engineering trickery.

It is a one trick pony, and I think we need a team of clydesdales to carry the weight of all of the citizenry counting on nothing at all but…..mf-ing stocks.

We can’t go back to a time when wealth was created by individuals with tangible assets and time/labour input, when the population lives in cities indebted for life can we.

Yes your post is different than before, because you aren’t cheer leading the rosy future so much, as you too now see a multi layered collapse lead by the real estate FOMO bank of mom kick started fake value stupidity.

More or less you called it though Garth, real estate debt is the straw that broke the ponies back, killed the consumer and ended happy days for the thinking man.
(unless he thinks stocks are infallible, audited by honesty and fair in all intent)

#141 Bytor the Snow Dog on 09.15.16 at 9:18 am

@127 Zen Headspace

Of course demographics are part of the problem but what are possible resolutions? It is my understanding that there are more Millennials than Boomers, so theoretically demand will spike again once the Mills reach full employment.

Possible issues:

1) It has been stated here and elsewhere that Canada has the most highly educated yet unemployed work force in the world. If you could give Boomers “incentive” to retire (carrot or stick I don’t care), thus freeing up those jobs for Millennials that could solve part of the problem. If….

2) Corporations and governments actually fill those jobs at the same compensation rates as today. But then…

3)Millennials just don’t have the same consumer mindset that Boomers do. They care more about sustainability and the environment and thus tend to purchase less consumer products then we do. Except for smart phones, of course. Can’t live without those.

In other words, even if we could “recharge” the old economic model, structurally it has changed due to demographics.

This post doesn’t even address the further structural changes that will come with robotics and AI.

#142 };-) aka Devil's Advocate on 09.15.16 at 9:20 am

All “corrections” are healthy as they are cleansing.

RBC says “economy will rebound, housing is strong“. Why would anybody take advice from a bank?!

Banks are not your friend, they have a hidden agenda… profits through repeatedly fleecing the Shepple.

“I fear banking institutions more a threat to our civil liberties than standing armies” Thomas Jefferson

SHIFT happens, learn to ride the tide.

};-)

#143 CV5 on 09.15.16 at 9:34 am

Welp. Our fears, suspicions and allegations are true after all.
Thank you Globe and Mail for yet another excellent effort.

http://www.theglobeandmail.com/real-estate/vancouver/out-of-the-shadows/article31802994/

#144 };-) aka Devil's Advocate on 09.15.16 at 9:38 am

#115 #44 Smoking Man, disagree on Supply/Demand on 09.15.16 at 2:15 am

You say RE value in 416 will remain buoyant because of your supply/demand argument. I believe you are half correct.

People were making the same supply/demand argument in YVR RE, up until recently.

What differentiates those 2 markets now is sentiment.

Garth has written about this more than once and I have posted about this as well numerous times.

Historically, all job sucking recessions were half economy and half psychology…so half of a market is based on sentiment, not just supply/demand.

Once sentiment turns negative in 416 RE, you can throw the supply/demand argument out the door…this has already happened in YVR RE.

That is not a argument against a supply & demand explanation.

The psychology hypothesis you put forth IS an aspect of the demand or supply side of the equation not an rival of supply/demand.

Supply and demand are opposite sides of the same equation, always seeking equilibrium… balancing the books so to speak. Psychology is an influencer that will increase or decrease one or the other depending on what the masses anticipate.

You can NEVER “throw the Supply/Demand argument out the door”.

SHIFT happens, learn to ride the tide.

};-)

#145 westcdn on 09.15.16 at 9:45 am

I am late to the party again. I know the comments section absorbs a lot of your time. The important thing about democracy was that it was intended to give everyone a chance to speak. It is sad when it is abused.

At the end of the day, I respect Garth (although I disagree at times) and I will try to keep my ego offline.
I think it is important that thoughts be shared but respect GT’s time. Time is too short to be building walls so as far as I am concerned, use the brain that you were given to help rather than gain. It is your choice.

#146 };-) aka Devil's Advocate on 09.15.16 at 9:47 am

#81 Andrew Woburn on 09.14.16 at 10:26 pm

I’d say negative interest rates are here now given the charges on my bank summary and the lack of interest earned.

Will banks ever start paying people interest on their mortgage instead of charging it? I can see it happening. Banks are NOT your friend. Banks are what’s wrong with the economy. Banks caused this economic Ponzi scheme. And yes I do believe they would go so far as to pay you interest for taking out a mortgage but with a sinister clause for reset that they can sink that hook into you good and deep, raise the rate on you that you are destine to live a life of servitude.

“I fear banking institutions more a threat to our civil liberties than standing armies” – Thomas Jefferson

#147 Greaterfool Dead on 09.15.16 at 9:48 am

Give us examples of rental properties in large cities with an acceptable cap rate. — Garth
======================================
Garth, do you think that #27 understands what cap rate means?

#148 };-) aka Devil's Advocate on 09.15.16 at 9:51 am

I HATE banks!

If you saw the goings on behind the scenes as I have you would know what a sinister player the banks are. They are gaining more and more control over you and all that matters to you.

#149 Greaterfool Dead on 09.15.16 at 9:57 am

Check this out, “Incredible Turn Key Condo Investment Opportunity”. Anybody feels like going in to raise hell, or leave it for dumb-ass immigrant and amateur investor?
http://urlcondominium.com/

#150 For those about to flop... on 09.15.16 at 10:26 am

As I head out the door to bash away on my tools for another day I have a favour to ask one of you guys with some spare time.

I have another few questions that I am hoping someone will put in survey format for the guys on the blog to answer.

With the bloom seemingly rotting from the Vancouver real estate rose I am curious if the people who said they were going to vulch will do so or do they now realize how serious things could get?

Here are my questions

* Do you see yourself buying any real estate in the next 5 years Y/N

*Do you see yourself living in the same city as you currently do in the next 5 years. Y/N

*If you had to move to another province or territory which one would you choose?

If someone could help me out with this and post it tonight I would be grateful as I am wondering if sentiment has changed or are people still believing what they are being fed.

Thanks ,Flopper…

M42BC

#151 WalMark of Sadkatoon on 09.15.16 at 10:38 am

all u posters are so uptight

flow w the go man, flow w the go

#152 Ole Doberman on 09.15.16 at 10:39 am

Looks like it’s not different in Swisserland either:

https://www.armstrongeconomics.com/markets-by-sector/real_estate/swiss-real-estate-turning-down/

#153 Penny Henny on 09.15.16 at 10:46 am

#72 Shawn on 09.14.16 at 10:00 pm
Do you think Ontario will introduce some sort foreign tax or vacancy tax in order to slow the acceleration of home prices?

It’s even getting crazy in Niagara. Homes are going for above asking and selling in days.
——————————————————-
I admit I am partially to blame. Niagara region prices up 20% YOY.

#154 Hobbes on 09.15.16 at 10:49 am

Hi Garth,

In your ideal asset mix, you suggest holding US and International equities, do you recommend a currency hedged or unhedged exposure to these markets?

Thanks,

K

#155 Canadian Moose on 09.15.16 at 10:50 am

Wtf…..its hard to move around without someone taking a picture of me and the Mrs and now I am Garths website blog post. Roinks…..

Funny story here in Alberta. Our nanny state government cancelled the vehicle registrations notices you get in the mail. Fine with that. Easy to remedy on a calendar. However as per human phsycology, many ended up driving with out of date regs and consequently tickets when targeted by the police. Canadian Moose, yours truly was one of them and was ticketed $233 for it. No warning just straight heres the yellow piece of paper. Now pay up! Angry at myself but understood my obligation and responsibility to manage that.

So now a few moons later our Orange Crush govt in AB has decided to hire a US based robocall company to help our dumb driver population cuz to many people are too f……kn lazy to manage their bills and make note when there vehicle registration comes due. These are the same people that found the time to exercise their right to complain. Bloody nanny state.

http://calgary.ctvnews.ca/province-hires-u-s-company-to-robocall-albertans-regarding-vehicle-registration-notices-1.3072594

Bottome line is we need to get our collective shit together and take responsibiltiy for ourselves. And No more pics of me Garth. I am pissed. Damn lazy moose!

#156 Sheane Wallace on 09.15.16 at 10:54 am

As I stated before: idiocy in action:

https://ca.finance.yahoo.com/news/canada-household-debt-income-ratio-124042747.html

we are drowning deeper and deeper in debt and as due to that house prices/spending increases we suddenly get richer?

And as everything is getting expensive, labour outlook is completely destroyed.

Wow! Let’s get some more debt then!

There is no better way to drive the country into economic wasteland.

And JT (with an IQ of 5th grader) and the other idiots at BOC, CMHC etc are ‘monitoring the situation.

$ 29 billions in new loans for a quarter for Christ’s sake!

120 billions in a year, and growing! Private debt only.

#157 Shanghai Sharon on 09.15.16 at 10:56 am

DELETED

#158 Zen Headspace on 09.15.16 at 11:00 am

#135 Bytor the Snow Dog

“This post doesn’t even address the further structural changes that will come with robotics and AI.”
——————————————————————-
Hey man, I ain’t no genius!

I have no idea how to fix the economy.

I simply contend that things will get a lot worse before they get better, primarily due to demographics.
The unprecedented growth we experienced throughout the 20th century is a result of numerous factors (population growth, immigration, technological innovation, industrial innovation, mass media, etc., etc.), all of which led to exponential demand growth and the dawning of a consumer based economy. For the first time in history, a marketing and advertising industry was born, and over time people were brainwashed into becoming consumer-zombies. We spent decades filling our wants and needs with homes, cars, TVs, washers, dryers, toasters, kettles, vacuum cleaners, telephones, radios, broadloom, swimming pools, sofas, lazy-boy recliners, bicycles, clothing, Barbie dolls, G.I. Joes, sporting goods, jewelry, gizmos and gadgets. The war was over, people screwed more, millions of babies were born, millions of refugees flooded into North America. We needed apartments, houses, schools, infrastructure, transportation. Millions of people were needed to do those jobs and build those things. Demand grew inherently. It was a demographic and technological and media bonanza of a lifetime.
This has eroded, and continues to erode.
It may come back some day due to unforeseen circumstances. In the meantime, demand will continue to wane.
Robotics and AI will make things even worse. As the need for actual human beings lessens, so will their fortunes.

#159 Penny Henny on 09.15.16 at 11:01 am

Garth I thought you would stop publishing useless posts?

#120 Freedom First on 09.15.16 at 3:29 am
Yes. The majority always thinks it’s different here in their RE market, as well as in all hard and paper assets, both locally and globally. All of the time every time. Recent and past history proves that to be the truth.

People line up for high prices and sell at low prices. It’s like a contagion.

For myself, there is something both elation inducing and sad provoking in both buying and selling any asset. As I know my gain is other’s losses. I have always thought for myself, and buy things when they are a “Deal”, and I love “Deals”. And I am not greedy either. Selling a house, or any other asset, when the price is way over what I would pay, I can let it go strictly by what the numbers say. I am a numbers and value man. No exception. My cash, cash flow, number of assets, income streams, and net worth must be increasing at all times.

Been on my own since 17, with 0$ and only my clothes to my name, and by this Freedom First thinking, my lifestyle and standard of living has been increasing dramatically ever since I hit 25. I knew it was all up to me. I am a man.

Today, I am a Boomer, and extremely optimistic about the future. We all age, but it is now clear to me and the people who know me, I am aging with such grace, that it is not rare that people tell me I look like a movie star.

Thank God I am a humble man.

#160 };-) aka Devil's Advocate) aka Devil's Advocate on 09.15.16 at 11:07 am

Nine students own $57M worth of Vancouver property

#161 Renter's Revenge! on 09.15.16 at 11:09 am

#129 CJBob on 09.15.16 at 7:58 am
#53 Self Directed on 09.14.16 at 9:09 pm
What’s wrong with more government jobs?
————
All I know is they don’t contribute to a local economy, rather they drive up taxes instead.
_____________________
Really. So the guy picking up my garbage, the local police and fire, daycare working taking care of kids so others can work don’t contribute to society? They don’t pay taxes and spend money in the local community?

I understand there are SOME government jobs and agencies that should be eliminated and many that could be more efficient, but I like to walk into a restaurant and know that there has been a health inspection in the past year.

Less government and lowers taxes are great talking points but people also want the services and social safety net provided by government.

————————————————————–

Of course, but imagine if all government workers had to sell their products and services on the open market like everyone else.

People like health inspectors and police would still get paid well but the useless bureaucrats would have a had time finding takers for their paper-pushing services.

This is why people resent paying taxes, because the system doesn’t discriminate between productive and non-productive workers.

#162 Rifles on 09.15.16 at 11:14 am

Amen Garth. A moment of silence seems appropriate at this point.

#163 TurnerNation on 09.15.16 at 11:18 am

What no chatter over t-t-terrorists, surely, who will barge into our bedrooms and Take Away Our Freedoms?
All I see is fear over Bankers and rates. Pass the fluoride..

#164 WalMark of Sadkatoon on 09.15.16 at 11:19 am

…took out 80% of their appraisal

This can’t be correct. A bank will let you take out a portion of your equity not appraisal

BS

#165 Marie on 09.15.16 at 11:19 am

#57, hey Andrew, thanks for posting the link to Ray Dalio’s very informative video
http://www.economicprinciples.org/

#166 LL on 09.15.16 at 11:20 am

#14 – Joe2.0 on 09.14.16 at 7:56 pm

Any bets on a rate decrease?

I bet!

#167 MoneyMyHoney on 09.15.16 at 11:21 am

“Maybe stiffer rates – although the bond market is probably a couple of months away from forcing five-year mortgages much higher (after the US presidential slugfest)”

Is it possible given this news: http://www.theglobeandmail.com/report-on-business/economy/us-retail-sales-fall-more-than-expected-on-weak-autos/article31893114/

#168 closetwitz on 09.15.16 at 11:23 am

Gartho,

Very disappointed about your decision to start censoring the comments section. There were some interesting gems in the mixed in with the manure.

Remember, truth is the first casualty in war…..don’t let the blog become your own personal battle…let free speech reign over us.

#169 Sean on 09.15.16 at 11:37 am

http://business.financialpost.com/news/economy/canadas-household-debt-is-now-bigger-than-its-gdp-for-the-first-time

This is the scariest number yet, right? When household debt passes GDP???

Even the US in 2008 had a GDP of 14.5+ trillion and they started dropping when household debt hit 13.8 trillion.

This is just madness.

#170 };-) aka Devil's Advocate) aka Devil's Advocate on 09.15.16 at 11:50 am

I remember, when attending my last year of school in Vancouver, a foreign student of asian decent asked me to proof read her economics assignment. After having done so I asked her where what she was planning on doing and where she which companies she was seeking employment. Her response was that she wouldn’t consider staying in Canada and working as we “pay too much income tax here” !

Now I understand and agree that educating foreign students is one of the very best ways to foster good foreign relations as those students return home with, generally, a more fond attitude toward Canada, BUT…

I know we too invaded this land and took it from the indigenous people. I don’t think, were those indigenous people able to turn back the hands of time they would have let history unfold quite as it did. Nor will we be quite so ready to accept that which is becoming a tsunami of another race poised to take over our country. It will happen one way or another, I accept that. It would be nice if it happened in a more collaborative way than it appears to be unfolding at this time.

When the 15% foreign property purchase tax came into effect I was aghast. Now in retrospect this, typically free enterprise right wing, REALTOR® has a different perspective.

Despite all the naysayers of H.A.M. I know it exists and that it is not beneficial to our constitution. There is no net gain only cost. The incentive to invest in our real estate is a consequence of our economic policies which need to be changed in order to preserve our heritage.

I welcome immigration and an assimilation that enhances our culture respecting that of others and collaborating to make this an even greater nation than it already is. Unfortunately I don’t see enough of that happening as we prostitute ourselves for mere economic gain that too often results in loss.

#171 Sheane Wallace on 09.15.16 at 11:56 am

#135 Bytor the Snow Dog

“This post doesn’t even address the further structural changes that will come with robotics and AI.”
—————————-

My 5 cents on this, as somebody who is familiar with the matter/AI :

AI is a revolution with unparalleled dynamics and future impact that with the current state of societal structure/capitalism will absolutely devastate the work force, in the next 5-10 years it is highly likely that 50-60 % of the private sector jobs will be completely eliminated.

Combine that with the current debt levels and the coming trans Pacific/Atlantic… agreements and you will see completely different world in the coming years.

Bottom line: many relatively poor countries today could actually become much better to live in compared to expensive ‘developed’ countries.

the very meaning of ‘developed’ countries will be completely redefined in the years to come.

‘Detroit’ won’t be only ghetto around, with our policies and efficiency we are probably looking to move from 15 -20 place in the world economy index to 40-50,

#172 Briana on 09.15.16 at 12:01 pm

I said it before and I’ll say it again….I’m in complete agreement with Garth. He’s a genius.

The BLIP before the DIP. Get out while you can people.

#173 Doghouse Dweller on 09.15.16 at 12:06 pm

Canada’s household debt is now bigger than its GDP, for the first time

http://business.financialpost.com/news/economy/canadas-household-debt-is-now-bigger-than-its-gdp-for-the-first-time

Edge of the abyss calculation
Example
———–
Recurring monthly debt: $ 3345
Gross monthly income: $ 2000

Debt to income ratio: 167%

http://www.bankrate.com/calculators/mortgages/ratio-debt-calculator.aspx#ixzz4KL2PkQTf

Where is the extra $1345 a month supposed to come from ? Is This debt exponential on the Line O Credit , until a deluge of bankruptcies drowns the nation ?

#174 Toronto_CA on 09.15.16 at 12:27 pm

This is exactly what we’ve been saying happens:

http://www.theglobeandmail.com/real-estate/vancouver/out-of-the-shadows/article31802994/

But doesn’t show up in reported stats as a “foreign buyer” and why the official numbers suck.

The story of one speculator. Wow. Run for cover. — Garth

#175 Bytor the Snow Dog on 09.15.16 at 12:32 pm

#150 WalMark of Sadkatoon on 09.15.16 at 10:38 am
all u posters are so uptight

flow w the go man, flow w the go

Can’t. Don’t know where the bully/no bully line is.

#156 Zen Headspace on 09.15.16 at 11:00 am

Hey man, I ain’t no genius!

I have no idea how to fix the economy.

I simply contend that things will get a lot worse before they get better, primarily due to demographics.

I agree. Just throwin’ stuff out there. However, I do think we have to seriously think about some type of Guaranteed Income scheme.

#176 NoName on 09.15.16 at 12:37 pm

@FF

at my old job, there was a hard cover art of deal book in a desk that i spent most of my time at. it had companys stamp management recommend read.
i gues no manager red it during my employment there, or i would be promoted instead of being demoted and repremended regularly, but disciplinary “actions” probably got something to do with my sense of humor and social skills, or lack thereof…
now that i think of it, all those years all books that i read there but not that one, i wonder who took it.

no word of the lie here!

#177 tim gruber on 09.15.16 at 12:40 pm

Canadian key household debt ratio hits record high

Household debt climbs to $1.68 for every $1 of disposable income, StatsCan says

The figures show that in the April-June quarter, Canadians’ total household credit market debt — which includes consumer credit, and mortgage and non-mortgage loans — rose by two per cent, while disposable income increased by a weaker-than-normal 0.5 per cent

http://www.cbc.ca/news/business/debt-income-ratio-record-1.3763343

#178 NEVER GIVE UP on 09.15.16 at 12:46 pm

#120 Freedom First on 09.15.16 at 3:29 am
We all age, but it is now clear to me and the people who know me, I am aging with such grace, that it is not rare that people tell me I look like a movie star.

Thank God I am a humble man.
————————————————————-
If you think your Humble….MY humility rivals that of even the Greatest of the Saints!!!!

#179 chopstix on 09.15.16 at 12:49 pm

but no, speculators aren’t doing anything to drive up Van’s RE prices….but wow, look at this: 57 ‘incomeless students’ own $57 million in property.
http://www.theglobeandmail.com/news/british-columbia/incomeless-students-spent-57-million-on-vancouver-homes-in-past-two-years/article31892652/

or how money laundering is now a fact in Canada.
http://www.theglobeandmail.com/report-on-business/canada-given-lukewarm-grade-on-anti-money-laundering-efforts/article31892936/

garth, while many of us agree that house horny canucks and stupidly low interest rates are also behind the RE nuttiness, you should readdress this and at least show a more balanced outlook…that 5-10% figure the shameful BC lib ‘leaders’ touted out (actually higher in richmond: 18%) of all real estate transactions only done by offshore is being wiped away, thanks to the good investigative reporting of kathy tomlinson, ndp david eby, ian young, and sam cooper, among others.

You are obsessed. Just like the Globe. The finest in yellow journalism these day. — Garth

#180 not so fast there on 09.15.16 at 12:57 pm

#149 For those about to flop
“I have another few questions that I am hoping someone will put in survey format for the guys on the blog to answer.”

Which part of yesterdays post (Bullies) did you not understand??? Garth moderates on average 200 posts per day, an enormous time consuming workload!
Now you want to add even more to that workload by running yet another one of your surveys???

Here’s an idea, how about providing an email address so that those so inclined to answer said survey can send their answers directly to you. Ditto for all your ‘blog buddies’.

You are one of the worst offenders on here with your multiple posts. Yesterdays post was about trying to reestablish some decorum and cut down on Garth’s workload. Please try to be part of the solution instead of the problem.

#181 Ole Doberman on 09.15.16 at 12:59 pm

Well it’s about confidence more than anything and Canadian sentiment is finally changing:

http://www.bnn.ca/canadians-increasingly-unwilling-to-buy-homes-amid-fears-that-the-bubble-might-just-burst-survey-1.567429

#182 Ponzius Pilatus on 09.15.16 at 1:01 pm

#167
“closetwitz”
——————–
Garth, you gotta admire the creativity of some of the posters.
The truth is in the handle.
That’s why this is my favorite blog.

#183 TurnerNation on 09.15.16 at 1:09 pm

No Gartho this year, they can’t let him be right on trend:

http://www.postcity.com/Eat-Shop-Do/Shop/September-2016/Real-Estate-Roundtable-Our-fall-roundtable-predicts-a-tamer-but-still-robust-market/

#184 Brazil ex-pat on 09.15.16 at 1:14 pm

DELETED

#185 Brazil ex-pat on 09.15.16 at 1:15 pm

DELETED

#186 Brazil ex-pat on 09.15.16 at 1:17 pm

DELETED

#187 Tudval on 09.15.16 at 1:23 pm

Gloating about the government destroying the real estate market in Vancouver (“yey, we were right!”) is like cheering that Americans won more gold medals in Rio than the Russians. Sure, one team gets all the TUEs, the other all the suspensions. Heavy manipulations by the government makes analysis irrelevant – I guess I said that before. Anybody cares to guess what the Einsteins holding power over our lives will do next?

#188 jess on 09.15.16 at 1:25 pm

“How can you fight corruption if you don’t even dare to disclose your personal assets?” the group’s founder, legal advocate and activist Xu Zhiyong, wrote last spring.

Leaked Records Reveal Offshore Holdings of China’s Elite
https://www.icij.org/offshore/leaked-records-reveal-offshore-holdings-chinas-elite#

“The growing onshore and offshore wealth of China’s elites “may not be strictly illegal,” but it is often tied to “conflict of interest and covert use of government power,” said Minxin Pei, a political scientist at Claremont McKenna College in California. “If there is real transparency, then the Chinese people will have a much better idea of how corrupt the system is [and] how much wealth has been amassed by government officials through illegal means.”
=========

Chinese authorities moved aggressively to block online access to news reports exposing the secrecy-cloaked offshore holdings of China’s political and financial elites. Censorship of the latest investigation, which draws on previously secret records of nearly 22,000 clients with addresses in mainland China and Hong Kong, was unusual in its broad international scope. In addition to ICIJ’s own website, Chinese authorities blocked the sites of ICIJ publishing partners including Spain’s El País, Le Monde, Süddeutsche Zeitung in Germany, the Canadian Broadcasting Corp., and the U.K. and U.S. editions of The Guardian, according to reports from news organizations and analytics by GreatFire.org.
https://www.icij.org/blog/2013/04/release-offshore-records-draws-worldwide-response

Files shed light on nearly 22,000 tax haven clients from Hong Kong and mainland China

#189 Victor V on 09.15.16 at 1:36 pm

Canada’s household debt is now bigger than its GDP, for the first time

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/news/economy/canadas-household-debt-is-now-bigger-than-its-gdp-for-the-first-time&pubdate=2016-09-15

#190 Doghouse Dweller on 09.15.16 at 1:38 pm

#57 Andrew Woburn
Links like that make the comments section worthwhile, thanks.
He said something interesting, “What most people thought was money was actually credit “.

They have had rates at zirp and nirp for 8 years. Looks like they broke the lever on that central bank.

#191 Victor V on 09.15.16 at 1:45 pm

Canada’s real estate sector at high risk of money laundering, report warns

https://www.thestar.com/business/2016/09/15/canadas-real-estate-sector-at-high-risk-of-money-laundering-report-warns.html

OTTAWA—An in-depth review of Canada’s anti-money laundering efforts has uncovered serious concerns that organized crime is using the country’s hot real estate sector to illegally funnel cash.

The report from the Paris-based Financial Action Task Force makes special note of real estate as an area of the economy with a high risk of illicit activity, one of a few weak spots in what the report calls a comprehensive federal regime to combat money laundering and terrorist financing.

The charitable and life insurance industries are also identified in the report as sectors at risk of providing financial help to terrorists and criminals.

Of particular concern are real estate schemes in which a foreign or domestic criminal provides cash to a local buyer, or more sophisticated schemes where loans and mortgages are combined with lawyers’ trust accounts to move money around quietly.

#192 cramar on 09.15.16 at 1:49 pm

A couple of days ago on Global TV news, they were reporting on secret hydro increases coming in Ontario. After Wynne announced some rebate relief for rural customers, it was leaked that electricity costs will rise dramatically for those in rural areas and drop for big urban areas. Since there is only one big urban area (GTA), this is only going to reinforce the housing market there.

If you are mortgaged to the hilt in the GTA, your rates will drop to help out. Since most voters live in the cities, the cynic in me thinks that Wynne is trying to benefit at the next election. She knows that the high cost of hydro will kill the provincial liberals.

Throw rural Ontarians under the bus so that those in the GTA can party on!

#193 robert james on 09.15.16 at 1:53 pm

Well,,this is a fine kettel of fish. http://www.castanet.net/news/Canada/175959/Crime-cash-in-real-estate

#194 TurnerNation on 09.15.16 at 1:57 pm

On the wire..H appointment to Collier’s BofD. RE madness.

It was in reaction to H Nation I created this blog name.

#195 Bytor the Snow Dog on 09.15.16 at 2:18 pm

Let’s lighten this place up a little bit.

A guy sits at a bar in a skyscraper restaurant high above the city. He slams a shot of tequila, goes over to the window and jumps out.

The guy sitting next to him can’t believe what he just saw. He’s more surprised when, 10 minutes later, the same guy walks back into the bar and sits down next to him.

The astonished onlooker asks, “How did you do that? I just saw you jump out the window, and we’re hundreds of feet above the ground!”

The jumper responds by slurring, “Well, I don’t get it either. I slam a shot of tequila, and when I jump out the window, the tequila makes me slow down right before I hit the ground. Watch.” He takes a shot, goes to the window and jumps out.

The other guy runs to the window and watches as the guy falls to just above the sidewalk, slows down and lands softly on his feet. A few minutes later, the jumper walks back into the bar.

The other guy has to try it, too, so he orders a shot of tequila. He slams it and jumps out the window. As he reaches the bottom, he doesn’t slow down at all. SPLAT!

The first guy orders another shot of tequila. The bartender shakes his head. “You really are an asshole when you’re drunk, Superman.”

#196 Smoking Man on 09.15.16 at 2:32 pm

#97 Questions on 09.14.16 at 11:48 pm
Haha! “Like horny porcupines. Carefully.”

@ smoking man. Usdcad. Fun times.
…………………

Indeed

Contracts 850 P&L 2,020,214

#197 Bytor the Snow Dog on 09.15.16 at 2:32 pm

I’m friends with 25 letters of the alphabet.

.

.

.

I don’t know Y.

Is this a test of my waning tolerance? — Garth

#198 jess on 09.15.16 at 2:41 pm

this might speak to the bully pen

Investigations into our data-fuelled society
“Anonymising data”
What does it mean to live in a world currently suffering from an extreme case of Obsessive Collection Disorder?
individual data traces to create a profile.
https://myshadow.org/can-data-be-anonymised

What is an information bubble and why are they a dangerous? ..
….”One may accordingly consider opinion bubbles, political bubbles, bubbles of social capital, bullying bubbles, polarization bubbles, science bubbles etc.,” Professor and head of centre Vincent F. Hendricks explains.
http://humanities.ku.dk/news/2015/the_carlsberg_foundation_funds_centre_for_information_and_bubble_studies/

basket of deplorables?
The Daily Stormer orchestrates what it calls the “Troll Army”, which is involved in Internet trolling of figures with whom Anglin disagrees politically.

https://en.wikipedia.org/wiki/The_Daily_Stormer
The Daily Stormer is to provide “a means to propagandize people …

The Southern Poverty Law Center (SPLC) stated that The Daily Stormer owed its success to the online imageboard 4chan becoming popular among racists, as both websites use similar memes and rhetorical styles.[6] One meme the website has used is to overlay photographs of Taylor Swift with anti-Semitic quotations, including those by Hitler.[9] The website puts triple parentheses around the names of Jews, a far-right meme created by fellow website The Right Stuff.[10] Jacob Siegel of The Daily Beast wrote that the website was growing in popularity amongst a younger audience due to its use of humor, and was attracting activists of other anti-political correctness ideologies—such as Gamergaters, men’s rights activists and opponents of Social Justice Warriors—who would not usually identify with fascism.[3] The SPLC has also documented Anglin’s involvement in and encouragement of culture jamming by making hyperbolic statements in fake online accounts as women and minorities. He has also said that “ridiculous” statements such as “gas the kikes”, if repeated in media coverage, can work to desensitize the public to the Holocaust.[9] In late 2015, during protests chiefly by African Americans at the University of Missouri, Anglin began a hoax of a campus Ku Klux Klan rally and claimed victory when the rumor spread.[9]
https://www.splcenter.org/

#199 Bottoms_Up on 09.15.16 at 2:42 pm

#192 cramar on 09.15.16 at 1:49 pm
————————-
GTA is surrounded by a huge body of water, buffering temperatures. Giving a home owner a break on an already fairly low hydro bill (10% break on an average monthly of $150 is only $15).

One cannot argue that $15/mo is going to goose house prices???

#200 Yellow journalism on 09.15.16 at 2:50 pm

Just like the Globe. The finest in yellow journalism these day. — Garth

What is yellow journalism?

Seriously? — Garth

#201 TnT on 09.15.16 at 2:58 pm

#180 not so fast there on 09.15.16 at 12:57 pm

Agree – I really enjoy the comments section today

#57 Andrew Woburn on 09.14.16 at 9:28 pm

Thanks for sharing – great video

#202 Where the crash on 09.15.16 at 2:59 pm

Canadian house prices still rising, but at slowest annual pace since January 2015

http://flip.it/Nnm7B

Y?

#203 X on 09.15.16 at 3:00 pm

Wasn’t Bill Morneau supposed to announce something regarding mortgage lending or the RE markets around September…..

Can we not ban foreign money but perhaps change rules to strengthen lending/lenders and such.

#204 nubbers on 09.15.16 at 3:15 pm

#1 Tiger on 09.14.16 at 7:33 pm
DELETED

#2 Jimmy on 09.14.16 at 7:36 pm
DELETED

Looks like I can still be first to say ‘YESSSS!!!!’

#128 Alrighty on 09.15.16 at 7:16 am

My friends Ryan and Melinda bought a house back in 2011 in Coquitlam.

HELOC

Glad I am not them!!!

This got me wondering. In the US property crash, it seems to me those who HELOCed themselves to the hilt and then walked away or went bankrupt were, perversely, the eventual winners.

How is this going to work out in practice in Canada? Can people in such a position go bankrupt and escape 10s or 100s of thousands of -ve equity?

#205 Ace Goodheart on 09.15.16 at 3:39 pm

RE: negative government bond yields: I have yet to see anyone actually give a correct explanation for this.

Look here: http://www.fin.gov.on.ca/en/budget/ontariobudgets/2015/ch5.html

Most of Ontario government debt is in something called a “syndicated bond”.

What is a syndicated bond?

http://blogs.reuters.com/felix-salmon/2010/03/31/whats-a-syndicated-bond/

They sell them to banks, who guarantee to purchase them, no matter whether anyone actually wants them, or not.

What happens if banks can’t sell all of these syndicated government bonds?

They keep them. They are a tax deduction and also, the bank is borrowing the money for the purchase of the bonds anyway, from the Central Bank, which also in that situation, has a negative yield interest rate which is lower than the yield on the bonds.

So what happens? Banks ends up making money on the spread and achieving a tax deduction at the same time.

Government gets the debt financing it needs to function.

And currency is devalued (albeit, on a delayed basis).

The problem comes if at any time it becomes necessary for the Central bank to raise interest rates (like, for example, if interest rates around the world are raised, and capital starts to flow out of the low-interest rate country).

In that situation, the distressed country raises interest rates and prints money. This has happened in Mexico, Italy, Chile, Greece to name a few.

Greece currently has been basically “sewered” by the above situation, because it is not in charge of the printing presses (it uses the Euro, which it cannot print). So instead they just borrow and refinance in a sort of “debt spiral” where they face ever increasing rates as their debt comes due and creditors lose confidence in their ability to pay.

#206 Nemesis on 09.15.16 at 4:01 pm

“Seriously?” – HonGT

#YellowJournalism… #SureAin’tWhatItUsedToBe,Or… #NoCleavageForTheCadres…

[CNN] – Banned on Chinese TV: ‘Western lifestyles,’ cleavage and time travel

Hong Kong (CNN) – New guidelines issued by China’s top media regulator have prohibited TV shows that promote “Western lifestyles,” adding to a long list of banned items.

According to the state-run Xinhua news agency, shows should refrain from content that expresses “overt admiration for Western lifestyles,” jokes about Chinese traditions or defiles “classic materials.”

“They should also avoid putting stars, billionaires or internet celebrities on pedestals; or sensationalizing private affairs, relationships or family disputes,” Xinhua said.

Here’s what else is on China’s blacklist…

http://www.cnn.com/2016/08/31/asia/china-banned-on-tv-censorship/

#207 Noel on 09.15.16 at 4:28 pm

Meanwhile the Royal Bank’s economics guys are calling it “inexplicable” that the country’s export numbers suck as badly as they do when our dollar has plunged from par a few scant years ago to less than 76 pennies today.
___________________

They never were the brightest bunch. Its weak US demand. There, no longer inexplicable.

#208 Price Correction Around the Corner :( on 09.15.16 at 4:33 pm

VREU,

Victoria is up 12% according to Teranet data. So those graphs showing declining sales are kind of moot now no?

Remember how you did not want to hear about the domino impact of foreign capital throughout BC.

I would say that price increases have demonstrated that Vancouverites have been pushed out/cashed out and bought up properties on the Island and Interior. I suspect Kelowna’s data will show the same increase.

If it continues, who knows?

#209 Raincouver on 09.15.16 at 4:46 pm

http://vancouversun.com/business/real-estate/seattle-gaining-on-vancouver-with-chinese-buyers

#210 cramar on 09.15.16 at 5:06 pm

#199 Bottoms_Up on 09.15.16 at 2:42 pm
#192 cramar on 09.15.16 at 1:49 pm
————————-
GTA is surrounded by a huge body of water, buffering temperatures. Giving a home owner a break on an already fairly low hydro bill (10% break on an average monthly of $150 is only $15).

One cannot argue that $15/mo is going to goose house prices???

———————-

It’s more about perception, instead of reality. Not goose prices, but reinforce the perception that most of one’s income can go to the mortgage since incidental expenses like utilities are cheap.

BTW, $150 is not low by my standards. My hydro bills have averaged $52 summer and winter. Gotta love Essex Powerlines Corp.

#211 Mark on 09.15.16 at 5:26 pm

Upon reflection last night of my comments earlier concerning export controls on chattels and currency, I’d like to withdraw my comments and apologize. When foreign nationals invest their funds in Canada, they are entitled to do with their property as they please. If it involves converting it to Range Rovers and shipping said Range Rovers outside of Canada, that is their right and we as Canadians should not envy their success.

My comments were originally intended to be directed towards certain Canadians who may attempt to export property overseas to evade their creditors as the housing downturn accelerates and their housing goes into significant negative equity. Its a tricky problem, but upon further reflection, my “proposal” for export controls would have severely negative consequences across the board not only for Canadians, but also for Canada’s perception worldwide as a place to invest.

Please forgive me.

#212 Mark on 09.15.16 at 5:27 pm

“should not envy their success”

Bleh, bad day. We as Canadians should not be jealous of their success is what I meant to write.

#213 Freedom First on 09.15.16 at 5:43 pm

#158 Penny Henny

Yes. PH. Keep in mind, a # of the posts written under my handle are by members of the Freedom First fan club. To the tune of 0 to 70% on a daily basis.

However, this post you are alluding to, is indeed written by the real Freedom First. Congratulations.

That being said, PH, only a real man could possibly grasp the true meaning of my post. However, for any man striving to live a Freedom First real man lifestyle, I would consider my post to be pure gold.

#214 Steven H on 09.15.16 at 8:29 pm

#170 };-) aka Devil’s Advocate) aka Devil’s Advocate on 09.15.16 at 11:50 am
I remember, when attending my last year of school in Vancouver, a foreign student of asian decent asked me to proof read her economics assignment. After having done so I asked her where what she was planning on doing and where she which companies she was seeking employment. Her response was that she wouldn’t consider staying in Canada and working as we “pay too much income tax here” !

Now I understand and agree that educating foreign students is one of the very best ways to foster good foreign relations as those students return home with, generally, a more fond attitude toward Canada, BUT…
———————————————–

Years ago, I worked with a consultant who was based in Seattle Washington but doing work in Vancouver BC for a company I worked for at the time.
His first comment to me after we met was “how can you Canadians live with these high taxes?” In the US of A, our tax rates are half that of yours. There is no way I could live and work here.”

The more things change, the more things remain the same.

#215 zimmy on 09.15.16 at 9:29 pm

Garth here’s the situation
The wife a and I have a 650 k home not house in Brampton.
300 k in RRSP’s and TFSA’s
blue collar job’s in TO 125k between and sick of the drive 410, 401, 427.
The opportunity.
House in Etobicoke should be able to buy before the mls liars get a hold of it for around 825 K + 75K to fix it up.
Your thoughts would be appreciated.

long-time reader first-time poster
Jim
almost forgot age 55

#216 zimmy on 09.15.16 at 9:32 pm

and no debt

#217 Where's The Money Guido? on 09.16.16 at 12:17 pm

Re: #5 Bat Flipper on 09.14.16 at 7:47 pm
Still think that there was no HAM influencing the market? Even if there was next to no foreign investment, the thought of foreigners driving up the market has caused sheeple to jump at buying a house today boasting prices up to the multi millions.

That is exactly the argument made here repeatedly. This insanity was caused by locals afraid of a yellow shadow. — Garth

I beg to differ…This yellow shadow is alive and defrauding Canadians.
Incomeless students spent $57-million on Vancouver homes in past two years:http://www.theglobeandmail.com/news/british-columbia/

Couple claim they were told to fake assets to buy Richmond home: http://www.theprovince.com/business/mortgages/couple+claim+they+were+told+fake+assets+richmond+home/12196782/story.html

#218 cmj on 09.16.16 at 2:52 pm

oops! 12 commandments

#219 Anon on 09.16.16 at 4:23 pm

Garth, you have talked in the past about being tax smart and learning the proper ways to save money via tax avoidance. What is your perspective on ETFs which are swap based, so that there are no dividends to be taxed but only capital gains? For example do you think these types of ETFs are risky or of quality? Like me, I’m sure there are others who need to invest in a margin account and are tax conscious (because we’ve maxed out the various registered accounts)?