No choice

adviser

Household debt in Canada is bigger than the economy. I showed you the chart a couple of days ago. We have a 170% average debt-to-income ratio, while the Yanks are at just 130%. The majority of people buying million-dollar houses in Toronto clock in at 450% or greater.

People have no self-discipline. They can’t stop borrowing and spending. “This market is absolutely insane,” a realtor in the 905 above Toronto told me yesterday. “It’s like nobody cares what they shell out. I’ve never seen anything like it.”

Nobody has. Uncharted. And as prices rise listings sink, making the circle tighter. It’s human nature – when values inflate people fear selling and moving and buying again, so they don’t. When markets decline sellers rush to lock in gains before they erode, and listings jump. It can make market fluctuations fast, extreme, shocking.

So in Vancouver last month sales sank by 24% and prices toppled 17%. The average house, in other words, got $294,000 cheaper in a little over four weeks. The immediate catalyst was the Chinese Dude tax, but that was just the push. It wasn’t the cause. And so we got front pages that look like this:

globe-modified

Canadians in general can’t quite absorb the fact they’ve caused this unhealthiness with their own debt obesity. Instead they seek others to blame. The mansion-buying Chinese student with no income is an excellent example. It makes a great headline. The geezers and xenophobes at Timmies cluck over it. The NDP salivates. It’s just so perfect.

But underneath that are the true reasons residential real estate is troubled. And troubles may soon come to the centre of human achievment, the GTA.

This week well-connected and long-time Bay Street economist Benny Tal postulated that the Ontario Libs are contemplating slapping a Chinese Dudes tax on Toronto. In fact, he said, the government “will have little choice but to do the same.” The reason, he argues, is that by restricting foreign demand in one market, it simply augments in another. Already 416 and 905 are suffering from the same paucity of listings that caused Van prices to shoot outrageously higher at the end of the summer. It’s why multiple offers came in last week on a little, old $1.4 million house in Oakville riddled with knob-and-tube wiring, ending in a deal for $1.65 million.

Of course, we know what happened in YVR when a tax was imposed affecting just 9% of the market (the official count of foreign-financed trades). It started to roll over.

VAN4 modified

Is this what awaits the Toronto market if Ontario follows BC’s lead? Remember – a few months ago Ottawa set up a housing task force to deal with runaway prices and fading affordability. On it sit reps of the BC and Ontario governments, as well as officials from Vancouver and Toronto. Just weeks later the Chinese Dudes tax was imposed – clearly intended to shock the market, and obviously finding favour from the T2 cabal. In short, there’s now pressure from the feds on Queen’s Park to follow Victoria. The induced correction is upon us. Mr. Tal may be the unofficial clarion. Pay attention.

Changes may also be coming, he suggests, to raise down payments plus make banks foot their own mortgage insurance (instead of taxpayers), raising home loan rates. And all of this is intended, “to save Canadians from themselves.”

Like that’s going to happen.

166 comments ↓

#1 Nodebt on 09.20.16 at 6:51 pm

That’s why I choose my freedom first!!

#2 pathcontrolmonk on 09.20.16 at 6:53 pm

Meanwhile, entitled immigrants from autocratic countries sue the BC govt for being unsympathetic to their plight. Good luck with that!

http://www.cbc.ca/news/canada/british-columbia/class-action-lawsuit-launched-against-b-c-foreign-buyers-property-tax-1.3769751

#3 Love My Kia on 09.20.16 at 6:59 pm

Better a foreign buyer tax to bring markets down than interest rates, rates wont be going up anytime soon according to Poloz,

http://www.cbc.ca/news/business/poloz-low-interest-rates-1.3770695

#4 Steve on 09.20.16 at 7:01 pm

Those students are not “incomeless” they operate as proxies for foreign investors

#5 Goldie on 09.20.16 at 7:05 pm

Reflecting on yesterday’s blog post:
I was lying in bed and listening to local Vancouver radio station CKNW this morning and the newscaster was reporting about how Trudeau had made one of his happy little rainbows and unicorns speeches to the UN, and how apparently there was some sort of reference to divisive politics south of the border at one point in the speech, which the announcer interpreted as bring aimed at Trump. But what was hilarious about the story was the over exaggerated, almost theatrical in its delivery, venom and hatred in the annoucer’s voice when he said “Donald Trump”. I broke out laughing at this poor “triggered” liberal.

#6 WallOfWorry on 09.20.16 at 7:10 pm

While it is clear that debt levels have increased it is less clear how that debt is being serviced. But it is. If you look at StatsCan the rate of bankruptcies and insolvencies has not increased over the last seven years. So….perhaps if interest rates increase we could see a crisis event. However, we all know that while many have predicted a slow and steady rise in interest rates, it has never materialized. You are now hearing how the 2% GDP growth rate is the new 4% growth rate. Bottom line is that there are other macro factors that would suggest that the Canadian real estate market could continue unabated for much longer than this blog wants to believe.

#7 rainclouds on 09.20.16 at 7:10 pm

According to this sales dude. houses in Van/ Burnaby have well over 6 months of inventory based on current sales volume. ” buyers market” if you were insane enough to think listing won’t continue to climb and sales
Die on the vine.

Condos are still selling…….for now.

http://vancitycondoguide.com/mid-september-market-update/

#8 [email protected] on 09.20.16 at 7:10 pm

the Lord Jesus has influence on stock prices

http://www.theglobeandmail.com/globe-investor/investment-ideas/return-of-stock-market-volatility-is-there-a-cause-for-concern/article31955022/

#9 pathcontrolmonk on 09.20.16 at 7:11 pm

Correction: the entitled immigrant is in fact a foreign citizen without even permanent residency.

I called this before, but she is just the first in line of many who are going to be screaming “unfair” when they see their RE investments lose money.

#10 Dave on 09.20.16 at 7:11 pm

Vancouver calls for crackdown on money laundering:

http://bc.ctvnews.ca/vancouver-rally-calls-for-crackdown-on-housing-crisis-money-laundering-1.3077118

#11 Dave on 09.20.16 at 7:13 pm

A Vancouver-based lawyer is calling on the federal government to launch an inquiry in the Vancouver housing market, saying the issue of money laundering needs to be fully explored.

http://globalnews.ca/news/2947062/vancouver-based-lawyer-wants-inquiry-into-real-estate-money-laundering/

#12 Victoria Real Estate Update on 09.20.16 at 7:14 pm

For the longest time the minimum down payment in Canada was 10%. Moving it from 5% back to 10% would only be removing some of the stimulus that has been applied to the Canadian housing market, inflating our massive housing bubble.

House humpers would refer to the removal of stimulus as “tightening”.

Clearly the reckless use of CMHC and Genworth have been Canada’s economic action plan for at least a decade and a half.

Canada’s housing bubble will deflate. All housing bubbles do. Ask the Japanese, Irish, Greeks… Most Canadians know something about the US housing meltdown, but they’re told it’s different here.

Canada’s major housing market correction (crash?) will teach several generations an important and costly lesson – that there’s always risk associated with buying a house in any country, city, neighbourhood, steeet…

It isn’t different in Canada.

#13 MSN-Free Zone on 09.20.16 at 7:22 pm

“…Canadians in general can’t quite absorb the fact that they’ve caused this unhealthiness with their own debt obesity…….”
________________________

Or, by another perspective, perhaps debt-addicted Canadians have been subconsciously relishing (or pickled) in the fact that, by burdening themselves with a debt-to-income ratio approaching 170%, they have successfully handcuffed Poloz into providing them with seemingly cheap money forever.

#14 Smartalox on 09.20.16 at 7:23 pm

If Canada is going to start allowing China to extradite their ex-pats that may or may not have absconded to Vancouver with ill-gotten loot, HAM may truly be a thing of the past:

http://www.theglobeandmail.com/news/politics/ottawa-china-to-negotiate-extradition-treaty/article31961475/

The Liberal government never publicly mentioned that Daniel Jean, the Prime Minister’s national security adviser, met over the extradition treaty on Sept. 12 with Wang Yongqing, secretary-general of the Central Political and Legal Affairs Commission of the Communist Party. The treaty would allow both Canada and China to share the financial assets that suspected Chinese fugitives have brought to Canada.

Also:

http://www.theglobeandmail.com/news/world/seven-things-to-know-about-chinas-overseas-anti-corruption-campaign/article31971698/

Using code names such as Fox Hunt and Skynet, China has been urging its trade partners to extradite officials it believes are guilty of economic crimes.

As The Globe and Mail revealed Tuesday, Canada and China are formally in discussions to complete an extradition treaty that would make Canada a signatory, joining Australia, France and other democracies. Compliance will likely have benefits: bolstering trade and furthering diplomacy.

Here are seven things to know about Fox Hunt.

1) Canada has been identified as a major sanctuary for China’s top 100 economic fugitives

According to a report last year in the International Business Times, Canada has 26, second only to the United States, which has 40. New Zealand, which is third with 11, is also looking at signing up.

#15 Sebee on 09.20.16 at 7:24 pm

In short, there’s now pressure from the feds on Queen’s Park to follow Victoria. 

Did you mean Vancouver Garth?

No, Victoria. Where the Legislature is. — Garth

#16 WalMark of Sadkatoon on 09.20.16 at 7:33 pm

“This market is absolutely insane,” a realtor in the 905 above Toronto told me yesterday. “It’s like nobody cares what they shell out. I’ve never seen anything like it.”

YYZ RE prices have been going up for years. The place is a cesspool of overleveraged moisters enabled by cheap credit and their boomer parents.

#17 The Wet Coast on 09.20.16 at 7:37 pm

Of course, we know what happened in YVR when a tax was imposed affecting just 9% of the market (the official count of foreign-financed trades). It started to roll over

Official count over what 6 weeks? Its a special talent to draw a trend line through a single data point. Its always been 9%, yea right.

#18 mike jones on 09.20.16 at 7:37 pm

In 2 years I will have two rental properties in Hamilton paid off. they are currently appraised at 450K each. I have no plans to sell..and I don’t want to buy anymore.

should I yank out a whole lot of equity and put it in bank stocks to create tax deductible interest on the income?

#19 mike jones on 09.20.16 at 7:38 pm

what’s the address of the property in Oakville that sold for 1.65mil with the knob and tube?

#20 Rexx Rock on 09.20.16 at 7:42 pm

Time to pack up and leave this insane country.Where crappy houses in crime infested neighbourhoods go for 1.5 million.Canada is a war and welfare state.Where debt is great and saving and frugality is demonized.The new socialist Canada.

#21 Cory on 09.20.16 at 7:44 pm

The real estate market would be completely different if the banks had to shoulder the risk instead of taxpayers. No need to raise down payments or do anything else if they did that.

Anyway, I am going with Lewenza? (was it he who thinks the Fed will raise tomorrow?) I think they will do it tomorrow too. The stars couldn’t be better aligned and there will always be an “event” so there seem to be few “events” these days except for the US election and they’ve been jawboning long enough. If I am wrong then I guess I’ll be fired too.

I am also calling Trump to win like it or not. People are too restless around the world it seems for the status quo and, right or wrong, agree or disagree, people want “change”. The latest NYC bombings will probably fuel it even more.

#22 Nodebt on 09.20.16 at 7:47 pm

#18-mike Jones
Are you serious dude?

#23 For those about to flop... on 09.20.16 at 7:47 pm

I hope the Feds shock us tomorrow and move the rates.

More likely to see some movement in Wayne Newton’s face…

M42BC

#24 Tom on 09.20.16 at 7:48 pm

Re
” Meanwhile, entitled immigrants from autocratic countries sue the BC govt for being unsympathetic to their plight. Good luck with that!”

Hey, Trudeau is doubling the number of visa offices in China. So much for looking out for the interests of Canadians

#25 Jarred on 09.20.16 at 7:52 pm

Remind me, why are we encouraging people from China to come here and buy houses?

#26 SoggyShorts on 09.20.16 at 7:52 pm

#19 mike jones on 09.20.16 at 7:38 pm
In 2 years I will have two rental properties in Hamilton paid off. they are currently appraised at 450K each. I have no plans to sell..and I don’t want to buy anymore.

should I yank out a whole lot of equity and put it in bank stocks to create tax deductible interest on the income?
—————————————————————

Are those rentals paying you 2,250 a month each?
900K invested could be giving you 54K a year, and you wouldn’t have to fix that leaky roof, property taxes, deal with renters etc.

#27 Ace Goodheart on 09.20.16 at 7:59 pm

Prediction: Ontario Libs have a look at a “foreign buyer’s tax” on homes here, decide that the situation here is “not the same as that which existed in BC” and decline to tax foreign buyers.

T2 further tightens mortgages.

Finance minister decides not to let banks insure their own risk.

Toronto’s RE market wobbles higher (we have about 500K left to go before we exit the “Goldilocks zone” of affordability to the middle class).

Let’s see if I’m right……

#28 Frank on 09.20.16 at 8:09 pm

Garth, how do you reconcile that you’ve been warning about debt for years and down playing foreign investment and today the boss of the BoC says debt is safe because we’re lower for longer and foreign taxes are having a negative effect? It’s the opposite of what you’ve predicted.

I’m fine with that because he didn’t say it. — Garth

#29 Scott in Gibsons on 09.20.16 at 8:13 pm

It would be interesting to see a chart of Canadian household debt vs interest rates. Has the cost of servicing debt changed much?

#30 Long Branch Apprentice on 09.20.16 at 8:21 pm

I knew it!

Just around the time my drunken great uncle will pass away, leaving me a small fortune, qualifying for a mortgage will be made more difficult. Gone are the days of using the 2G’s you made at your Buck and Doe for a down payment on a nice lead-lined, asbestos-bound knob and tube bung.

It’s not his fault, but I hope Millennials lay the blame at the feet of JT and his Butts-run cabinet.

Who else is getting up to take a piss and check on the BoJ’s announcement at 2h30am? Smokey, will you be able to read at that time?

Ain’t nothing gonna change til the Prole change his mind. Or rather when he is told to change his mind.

#31 charles on 09.20.16 at 8:22 pm

Presidential candidates are said to be feverishly prepping for nest weeks debate.
Social media reports that Monica Lewinsky has acknowledged the mysterious delivery of a stylish blue dress and front row tickets for the Monday night event.

#32 Marcus on 09.20.16 at 8:22 pm

I suspect that Hillary has a cerebellar tumor in the hind brain. Hillary’s eyes go in different directions multiple times during today’s speech. Freeze it at 1:09 for an obvious example. https://www.youtube.com/watch?v=x72oBpk9WPI

#33 mike jones on 09.20.16 at 8:23 pm

#22 Nodebt on 09.20.16 at 7:47 pm

Yes very serious. Hamilton has a lot of catching up to do.

2.5 storey duplexes near gage park were at $275K in 2013 and would rent for $1900 total. Now they are at $425K and rent for $2400 total. Property tax roughly $3500 . also with tenants who’ll never want to leave

#34 gut check on 09.20.16 at 8:24 pm

@ SMOKING MAN

I just saw the email! WOO-HOO!
You’re the best!
I replied there too.

#35 gut check on 09.20.16 at 8:25 pm

@ #23 For those about to flop… on 09.20.16 at 7:47 pm
I hope the Feds shock us tomorrow and move the rates.
___________________________________

me too!

#36 Tom on 09.20.16 at 8:32 pm

GTA home price bubble extends further:

http://kitchener.ctvnews.ca/cambridge-properties-attract-toronto-home-buyers-1.3076968#_gus&_gucid=&_gup=twitter&_gsc=aR0miTW

#37 april on 09.20.16 at 8:34 pm

A chinese student is suing Vancouver for the foreign tax. What chance does she have of winning?

I heard it’s a class-action suit. — Garth

#38 mike jones on 09.20.16 at 8:38 pm

#26 SoggyShorts on 09.20.16 at 7:52 pm

thanks for the math.

no not quite. i’m getting $2000 each property. i’m a softie landlord that doesn’t raise the rent. same tenants from the start. kind hearted people that look after the place and are just making ends meet.

if rates remain the same i’d like to hang on to the properties for the appreciation. I don’t want to kill the chicken laying the golden eggs.

#39 When Will They Raise Rates? on 09.20.16 at 8:39 pm

The 13 week US Treasury Bill is telegraphing no rate hike tomorrow. Book it.

#40 North Burnaby on 09.20.16 at 8:40 pm

Nobody is selling their homes here in YVR, $3’ce why the sales figures dropped

#41 WUL on 09.20.16 at 8:48 pm

If Queen’s Park imposes a tax on real estate purchases by dudes from elsewhere, it will augur splendour on Calgary real estate. Such a tax will never be implemented in Alberta. The same can be said for a property transfer tax. Sales tax is anathema in AB as well. And, mansions are on sale.

#42 For those about to flop... on 09.20.16 at 8:48 pm

I think Tom Clark took it too easy on Bono the other day during their interview.

If I had been given the chance, I would have asked hard hitting questions like…” If your so smart,traveling around the world telling governments how they should spend their money, then how is it you still haven’t found what you are looking for”?…

M42BC

#43 Smoking Man on 09.20.16 at 8:50 pm

#1 Nodebt on 09.20.16 at 6:51 pm
That’s why I choose my freedom first!!
…………………..
Awsome, 7 worlds and I see an entire chapter. Well, done Nodedt

#34 gut check on 09.20.16 at 8:24 pm
@ SMOKING MAN
I just saw the email! WOO-HOO!
You’re the best!
I replied there too.

Least I could do. The only reason I got to the end of the book is because of your inspiration. I owe you huge.

#30 Long Branch Apprentice on 09.20.16 at 8:21 pm
Who else is getting up to take a piss and check on the BoJ’s announcement at 2h30am? Smokey, will you be able to read at that time?
………………….

Not a Chance. You coming with me to the forks on Saturday. I terrified to go myself.

#44 BS on 09.20.16 at 8:53 pm

#6 WallOfWorry on 09.20.16 at 7:10 pm
While it is clear that debt levels have increased it is less clear how that debt is being serviced. But it is…

Much of that debt is being serviced with more debt like HELOCs. The bank machine runs out of cash when prices stop rising. We do not need interest rates to rise for the indebted to not be able to make their payment. They just need to run out of HELOC room which happens very quickly when prices flatten and then decline.

#45 Toronto1 on 09.20.16 at 8:53 pm

Its the debt!!! We have already hit a debt wall, there is a limit to how credit can be expanded as well as a limit on credit worthy people ( unless we start lending to dogs)

Everyone talks about servicing debt but with that comes huge evonomic issues, weve pulled forward demand and have only RE to show for it. Big issues lie ahead in our economy- structural. Servicing debt does not create gdp credits or jobs.

Ontario will have its tax too, same story as BC, banks come out endorsing it, idea gets traction and govt acts to support banks, realky starting to wonder how politically connected our banks are to politics. Govt never met a tax it didnt like

#46 Mark on 09.20.16 at 8:55 pm

Sounds like Mr. Tal needs to learn what the sales mix is. Once he understands, it will be much easier to realize that, based on the data, that the GTA situation is well under control and that the region soon will be desperate for foreign capital to prevent a freefall.

As far as Canada’s debt, the implosion of such is highly deflationary. Given that they couldn’t even induce any inflation after a 30% CAD$ depreciation against our largest trading partner, and such vigorous debt expansion, the BoC is going to have an epic uphill battle fighting deflation. Canada is just really that productive!

#47 april on 09.20.16 at 8:55 pm

According to Auzzie Durock, Vancouver housing sales are down “70% in a matter of weeks”, since the new Foreign Tax.

#48 BS on 09.20.16 at 8:59 pm

#27 Ace Goodheart on 09.20.16 at 7:59 pm
Prediction: Ontario Libs have a look at a “foreign buyer’s tax” on homes here, decide that the situation here is “not the same as that which existed in BC” and decline to tax foreign buyers.

Prediction: Ontario Libs have a look at a “foreign buyer’s tax” on homes in Ontario, they add up the billions in tax revenue the new tax can bring in (all paid by non voters) then implements the 15% tax in Spring 2017. This one is a done deal.

#49 Mark on 09.20.16 at 9:28 pm

“In 2 years I will have two rental properties in Hamilton paid off. they are currently appraised at 450K each. I have no plans to sell..and I don’t want to buy anymore.”

If that’s the entirety of your assets, you should probably sell one of them and balance our your portfolio per the sort of balance advocated by Garth here.

$450k can easily become $250k given how overvalued Canadian RE is.

#50 mark on 09.20.16 at 9:35 pm

Next stop Victoria!

#51 Jimbo on 09.20.16 at 9:35 pm

Public perception regarding the volume of foreign ownership is out of sync with reality in Vancouver. Once the foreigner tax was introduced people hit the panic button.

Ask your average Joe in Toronto and real estate is rock solid and can only go up. To add to the aforementioned, the perception of high foreign ownership is alive and well in TO and this perception is one of the driving forces behind increasing prices.

I can’t see why adding a foreigner tax in Toronto wouldn’t have the same effect as it did in the past month in Vancouver. This would have a profound outcome on the view that foreigners are going to continue to drive prices upward.

Or

I could be wrong and Toronto is just a magical city where miracles can happen.

#52 Wog on 09.20.16 at 9:38 pm

The Vancouver correction won’t last long as people like Poloz continue to reassure Canadians that ultra-low interest rates are the new norm. Watch prices trend upward again in the next few months.
Toronto will be the same story.

CBC – (today)

In remarks prepared for a speech on Tuesday to economists and people in finance in Quebec, Stephen Poloz said that low interest rates can generally mean higher prices for stocks and bonds, and lead to higher values for real estate.

“I realize this may be cold comfort to those people who have to adjust retirement plans to a lower-for-longer world,” Poloz said. “But the difficult reality is that savers must adjust their plans.”

TD economist predicts 2019 for our next rate hike.

Rates are low because the economy is sick. Figure that out. — Garth

#53 WestCoaster on 09.20.16 at 9:44 pm

“The immediate catalyst was the Chinese Dude tax, but that was just the push. It wasn’t the cause. And so we got front pages that look like this:” Garth.

Still in deNile – eh?!

Sales were crashing before the tax was a glint in Christy’s eye. — Garth

#54 Lead Paint on 09.20.16 at 9:45 pm

#14 Smartalox on 09.20.16 at 7:23 pm

Thanks for the excellent post, it’s this type of diamond in the rough that keeps me reading the comments section.

#55 Smoking Man on 09.20.16 at 9:47 pm

Finaly got my invite from https://gab.ai
@SmokingMan

Bye bye Twitter. You open the door to competition. Should not have started censoring the voices from the Right. I only have one share left. Can’t wait for the annual general meeting. Jack I got me some questions, like why has the board of directors not fired you yet.

#56 Lead Paint on 09.20.16 at 9:47 pm

#32 Marcus on 09.20.16 at 8:22 pm

She is reading a TelePrompTer. You should be worried about your weak, gullible brain.

#57 bigtowne on 09.20.16 at 9:47 pm

It is a wake-up call to Canadians when the Asian folks are targeted with a foreign owner’s tax on residences in Van for no good reason except they are genuinely good and decent and law abiding humble people. It really makes us look bad in the China neck of the woods hands down. I worked for mainland Chinese in Van back when Nixon was impeached in the 70’s. It was hard work but they were not racist to me and at that time it was tough to get a job.

The Chinese save every renminbi possible which facilitates their buying homes in Canada. In China the consumer theme and credit binge is not embraced as a normal lifestyle or way of life that we feel entitled to in Canada. So your Canadian will bury himself in debt up to his eyeballs and your Chinese will starve and save over 50% of his earnings.

#58 Bank of Millenial on 09.20.16 at 9:48 pm

#46 Mark,

“that the GTA situation is well under control”…”the region soon will be desperate for foreign capital to prevent a freefall.”

Mark – your arguments a sentence apart are not internally cogent.

I believe (the same as garth) a deleveraging is inevitable based upon existing future liabilities and macro-economic cycle. The extent of harm to daily business and prudent consumers ideally will be limited by actions orchestrated by the BoC and government.

#59 ADee on 09.20.16 at 9:48 pm

Garth
A few days ago you posted that RBC brokerages (RBCDS?) had a savings vehicle at 1.2% that was necessarily insured under the $1M that brokers are required to provide.

Can you provide proof of that with symbol or reference name for that?

The only thing my broker at RBCDS knows about is paying 0.85% – which is what other similar accounts (eg NBC Cashperformer) are paying.

Thanks.

Ask him about his money market fund. (And isn’t is pathetic when you worry that much about forty basis points?) — Garth

#60 Randy on 09.20.16 at 9:49 pm

http://www.otterwoodcapital.com/blog/bis-warns-high-debt-poses-risk-to-canadas-banking-system/

Put your cash into your brokerage account

#61 Robert on 09.20.16 at 9:51 pm

The 15% YVR foreign owner tax was meant to be and is essentially a token gesture. The effect has been to spread the housing bubble over alternate destinations within BC and other destinations. Having ended the “musical chairs” in Vancouver, the speccers are crying foul because their greater fools are re-targeting more vulnerable game. Unless CMHC, the chartered banks are reined in and Revenue Canada, FINTRAC and the RCMP get off their collective behinds to throttle this gas bag, it’s just a lot of hand waving and press releases. The circus moves on.

#62 Smoking Man on 09.20.16 at 9:51 pm

Just got an email from one of my insiders. Said Harpo was at Baheamn Grove this year.

Garth you ever been?

#63 Souvereigninternational on 09.20.16 at 10:10 pm

Read this contrary view on tomorrow’s fed decision:

http://www.salientpartners.com/epsilon-theory/essence-of-decision/

#64 Franco on 09.20.16 at 10:13 pm

Garth, you keep me coming back.

#65 macroman on 09.20.16 at 10:16 pm

Those looking for an interest rate surprise tomorrow should look to the downside, not a raise.

A cut before a raise due to financial crisis caused by Deutsche Bank and/or Hillary withdrawing due to health issues.

Tomorrow the FED will stand pat but after that, a cut and further foray into negative territory as 2008 gets a do over.

Hey! Found your meds! — Garth

#66 Maj on 09.20.16 at 10:30 pm

“Instead they seek others to blame. The mansion-buying Chinese student with no income is an excellent example. It makes a great headline.”

If a Chinese student with no income buys my car for $5k more than it’s market value, it doesn’t affect the prices of other cars of the same make/model in my area; however, if a Chinese student pays $100k over the market value for my house, every house in my neighbourhood is immediately assumed to be worth at least $100k more, and priced accordingly by real estate agents and sellers (and buyers get FOMO).

Suggesting only Chinese buyers overpay is simplistic and ignorant. — Garth

#67 Smoking Man on 09.20.16 at 10:41 pm

65 macro man on 09.20.16 at 10:16 pm
Those looking for an interest rate surprise tomorrow should look to the downside, not a raise.

A cut before a raise due to the financial crisis caused by Deutsche Bank and/or Hillary withdrawing due to health issues.

Tomorrow the FED will stand pat but after that, a cut and further foray into negative territory as 2008 gets a do-over.

Hey! Found your meds! — Garth
………………….

What’s wrong with meds!….Nictonites love salt. It’s like heroin to a human. Tose in a few hits of Jack Danials. and an olive. The universe is yours.

Look have I have fixed the grammar in the original post. I’m a Writer now.
I’m either showing up at forks on Saturday hammered, or with bodyguards. What if lesbians learned to ride Harleys, And they know I’m making an appearance. They have issues with my constant attacking of Wynne. They set up an Am-Bush. I’m doomed. Coming late afternoon.

Dr. Smoking Man.
Ph.D. Herdonomics.

#68 Island Bank Dude on 09.20.16 at 10:57 pm

“Much of that debt is being serviced with more debt like HELOCs. The bank machine runs out of cash when prices stop rising. We do not need interest rates to rise for the indebted to not be able to make their payment. They just need to run out of HELOC room which happens very quickly when prices flatten and then decline.”

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

True, but it’s actually much more aggressive than that; the bank doesn’t just refuse to up your HELOC, they actually have the audacity to demand that you to pay some of it off. Why? The value of the underlying asset is impaired. It’s just accounting weinie stuff, but the bank would have to take a write-down if doesn’t pass the write-down over to you. Somewhere, somebody has to be the sin-eater.

So guess who’s eating the write down?? Yep. You are. Which works for me, because I then get to keep my dividend stream intact. Sorry guys, but keep your HELOCS covered so I can keep getting my fat tax advantaged dividends paid.

#69 incomeless student on 09.20.16 at 11:00 pm

What’s your opinion on the incomeless student owning a home?

Assuming they are either citizens or residents (i.e. Canadian), does it matter to you?

Is this just a form of “Bank of Mom”… even if this “mom” is a parent earning income in China and gifting it to their kid?

I’m curious – you’ve never stated if this is a problem or not. A Canadian is a Canadian, after all?

#70 Smoking Man on 09.20.16 at 11:12 pm

DELETED 5

#71 Maj on 09.20.16 at 11:13 pm

#66 Maj on 09.20.16 at 10:30 pm

Suggesting only Chinese buyers overpay is simplistic and ignorant. — Garth

Garth, I wasn’t suggesting that only Chinese buyers overpay. Any buyer can affect the market if they overpay. I think it’s ignorant to suggest that a Chinese student with no income buying millions of dollars in real estate doesn’t take some blame. It’s more than just a headline. It’s part of the problem. Every buyer affects the market price–in real estate, at least.

#72 GR on 09.20.16 at 11:41 pm

Even if we take the conservative 9% foreign purchases, everyone needs to remember it only took 8% of marginal sellers in the US to cause a national 32% decline in prices.

So yes, the 9% – if you believe that low figure – can drive a market up….and down.

As for the feds meeting with TO and Vancouver and the provinces, they have finished their deliberations. Expect a report likely out by the end of the month. But the report will be separate from the national housing strategy the feds are working on – https://www.letstalkhousing.ca

So it makes sense to speculate that you may have some TO and Vancouver specific recommendations coming.

#73 Smoking Man on 09.20.16 at 11:43 pm

#70 Smoking Man on 09.20.16 at 11:12 pm
DELETED 5

The subplot….damn

Buds on, Pink Floyd tonight, back yard JD.

Killing Ankylosing Spondylitis, Heart attacks. and a general feeling that you took the wrong fork in the road.

Or perhaps I didn’t.

Only God knows, we know Gog is still trying to figure it out with his 12 commandments.

Me I’m pain-free tonight.

Nothing else matters..

#74 Mark on 09.20.16 at 11:45 pm

“True, but it’s actually much more aggressive than that; the bank doesn’t just refuse to up your HELOC, they actually have the audacity to demand that you to pay some of it off. “

In the practical sense, the banks really don’t want people to ever pay off their debt. The number of HELOCs that will actually be called in Canada’s housing collapse will be a number that approaches zero. However, interest rates on HELOCs and mortgage credit generally will likely rise, and continue to rise quite significantly as housing-backed borrowers are viewed as significantly more risky.

As spreads rise on these products, they’ll increasingly be impossible for most, unless they have significant inversely correlated income sources, to actually pay off. Hence, people will look at their statements 10-15 years from now, owe similar amounts of principal, and have nothing to show for their 10-15 years of payments.

Realtors and other owners snicker that ‘renters are just paying the landlord’s mortgage’. The Realtors and owners are about to get a lesson in what that feels like, if they borrowed, and face renewal at significantly higher risk premia on account of stagnating/falling housing prices and a rotation away from RE-backed lending in the credit markets.


Why? The value of the underlying asset is impaired. It’s just accounting weinie stuff, but the bank would have to take a write-down if doesn’t pass the write-down over to you. Somewhere, somebody has to be the sin-eater.
So guess who’s eating the write down?? Yep. You are. Which works for me, because I then get to keep my dividend stream intact. Sorry guys, but keep your HELOCS covered so I can keep getting my fat tax advantaged dividends paid.”

40% of the debt in the Canadian banking system is fully adjustable rate, mostly at the bank’s discretion (ie: linked to “Prime”). The other 60% mostly has a term to maturity of 5 years or less. So, unlike the US banking system which had most of its assets locked up in long-term investments for which rates were contractually fixed during the 2008/2009 crisis, the Canadian banks have the ability to rapidly adjust interest rates and risk premia to reflect current market conditions.

Hence, they are basically crash-proof *unless* there is a meaningful question of confidence in the CMHC’s legal obligation to pay CMHC subprime mortgage insurance claims.

#75 masterofthetelecaster on 09.20.16 at 11:57 pm

I have a buddy that says his local portfolio manager charges him 1% per year. He is in mutual so can I assume he is paying fee’s to the mutual funds as well?
He says he basically makes no returns. I am thinking he must be ignorant as to what fee’s he is actually paying.

#76 Victor V on 09.21.16 at 12:03 am

Canadian mortgage investment corporation suspends dividend after review reveals loan portfolio irregularities

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/personal-finance/mortgages-real-estate/canadian-mortgage-investment-corporation-suspends-dividend-says-former-ceo-withheld-info-from-board&pubdate=2016-09-20

#77 ANON on 09.21.16 at 12:38 am

Very tense post.
Meanwhile, everything is becoming unglued as haruspex results emerge from the land of the rising sun. Fed’s performing their hepatoscopy next.

#78 BillyBob on 09.21.16 at 12:40 am

#57 bigtowne on 09.20.16 at 9:47 pm

The Chinese save every renminbi possible which facilitates their buying homes in Canada. In China the consumer theme and credit binge is not embraced as a normal lifestyle or way of life that we feel entitled to in Canada. So your Canadian will bury himself in debt up to his eyeballs and your Chinese will starve and save over 50% of his earnings.

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

Absolutely incorrect characterization. Perhaps it was accurate 30 years ago. But today China’s debt – both private and government is MASSIVE.

And it isn’t just the amount of debt, it’s the sheer rate that it’s grown.

“Between 2007 and 2013, household debt [in China] grew by over 330% – the highest in the world”.

Source: Al Jazeera “The End of China Inc?”

http://www.aljazeera.com/programmes/101east/2016/09/china-economy-160913081105227.html

There’s a ton of information out there that contradicts your statement.

“China’s private debt load has grown so large it is now second only to that of Ireland’s back in 2008, according to Credit Suisse analyst Andrew Garthwaite and his team.”

Source: Business Insider UK

http://uk.businessinsider.com/china-debt-is-worse-than-everybody-except-pre-crisis-ireland-2016-5

So much for being good savers. Like the rest of the world, they have embraced debt big-time.

It’s coming to light now just how much of YVR’s inflation has been with borrowed money – abetted by the major banks having far more lax standards for non-citizens. While the money seized at the airport might sound like a lot, it’s a pittance compared to what the banks have loaned out.

#79 Chaddywack on 09.21.16 at 12:43 am

My opinion is that lawsuit is without merit. Provinces have jurisdiction over property ownership rules. On top of that, non residents are treated differently with other taxes. Finally, they are referring to treaties that govern commercial transactions. Though sadly many people see residential property as a commercial transaction these days.

I agree though the student suing is rather self entitled.

#80 Freedom First on 09.21.16 at 12:51 am

And all of this is intended, “to save Canadians from themselves.” -Garth

Yes. Intended. The road to hell is paved with good intentions.

Most unfortunately, can’t save anyone who doesn’t think they need to be saved from themselves. And therein lies the problem.

I have learned through the years I have been trying to help people, that the majority of people are not teachable. What they do over and over again is what they want to do. They shun knowledge or advice. They absolutely hold on to their distorted way of thinking, even after a regular series of very bad consequences due to their ongoing poor choices.

Hence the debt levels of Canadians. Which is only one example of numerous examples.

That being said, I am heartened by the small number of people who do change, and save themselves. Financial Freedom is possible for everyone. For myself, I love having Freedom in every area of my life. Life should be a pleasure, not a burden. Your choice.

#81 FREEMAN on 09.21.16 at 1:39 am

170% average debt-to-income ratio.
Is that a Canadian record?
Or was it higher in the 1980’s boom?

#82 TheSpangler on 09.21.16 at 2:02 am

The principal residence exemption is something that needs to be looked at going forward. Since a) this transaction is not reported and your tax return and b) is tax-free, makes is a prime target to tinker with evading taxes.

All real estate sales should be reported on tax returns, much like how all investment income is (T3, T5s, T5008, T5013, etc). Random sampling of principal residence transactions should be tested to make sure the qualify. With all the T1135 changes lately, why not make changes to PR tax reporting?

#83 Self Directed on 09.21.16 at 2:20 am

Janet, if you’re listening, just hike the rates tomorrow 0.25%. Nothing bad will happen, and before the day is done, everyone will be back following the media on Trump. You can do it, Janet. Push the button… it’s good for America.

#84 Karma on 09.21.16 at 2:37 am

http://www.bloomberg.com/news/articles/2016-09-21/boj-shifts-policy-framework-to-targeting-japan-s-yield-curve

#85 Karma on 09.21.16 at 2:41 am

Watching CTV News Vancouver at 11:30pm. Seen two different debt counselling advertisements (one with John Shorthouse pumping for Sands & Associates). Sad state of affairs.

Also, there was an Airbnb advertisement, which is targeting helping people pay mortgages…

Saddddd…

#86 NEVER GIVE UP on 09.21.16 at 3:09 am

#57 bigtowne on 09.20.16 at 9:47 pm
——————————————
Sorry, extremely uninformed.

#87 NEVER GIVE UP on 09.21.16 at 3:14 am

#25 Jarred on 09.20.16 at 7:52 pm
Remind me, why are we encouraging people from China to come here and buy houses?
———————————————————-
Because our governments benefit from crazy revenues due to Property transfer taxes. These taxes are compensating for the losses in revenue from our over regulated industries and resource extraction.
NIMBY’s don’t like loud sounds and trucks so BC is a gentle place, free from dirty enterprises. But we still dont want to wait 2 years for an operation. So Government says hey lets milk this cash cow until the suckers catch on!
When was the last time you saw a factory built in BC?

#88 AfterTheHouseSold on 09.21.16 at 4:34 am

I’m sure it has nothing to do with securing the union vote in next years provincial election.
From Brad Duguid, Ontario’s Minister of Economic Development and Growth:

“This government is the biggest champion of the auto sector that the province has probably ever had, and we’ve made it very clear that these are the kind of projects that we would partner on as we have in the past and we expect to in the future”, Duguid said in an interview.

http://business.financialpost.com/news/transportation/gm-labour-deal-could-shift-buick-envision-production-from-china-to-canada-expert-predicts

#89 Sam Nable on 09.21.16 at 4:57 am

The Wacko Moroneau-Juice Box Justin-Space Cadet Wynne-Creepy Poloz-Nutso Notley Cabal have all caused the economy to crash, all for their own reasons, but taken together its looking like a disaster for Canadians.

Moroneau announced that the Trudeau Liberal Plan will devastate the economy for years to come. Poloz says that under current conditions emergency rates will stay in place.

The rising US dollar will kill the Loon. Groceries will skyrocket. Seniors will eat pets. T Ball Trudeau and his sycophants are spending millions of photographers to follow them around the world. Sorry Kids, but that was a two minute read of the newspapers today. Its worse than you think.

But if your able to get here, don’t worry, we’ll give you a government backed liar loan that makes what Canadians face during a mortgage application look like a scam, which it is.

No problem, free money is available to newcomers and prices will continue to skyrocket, cause if it doesn’t work out after buying the sixth property you just pull up stakes and leave the country without having used your real name in the first place.

#90 nubbers on 09.21.16 at 5:13 am

pathcontrolmonk @2
Meanwhile, entitled immigrants from autocratic countries sue the BC govt for being unsympathetic to their plight. Good luck with that!

http://www.cbc.ca/news/canada/british-columbia/class-action-lawsuit-launched-against-b-c-foreign-buyers-property-tax-1.3769751

So, a young Chinese graduate wants to settle down in the country where she went to university, and she buys a house. Then some politicians, pandering to the xenophobic elements, spring a foreign buyer tax on her after she has committed to the purchase by paying a large non-refundable deposit. Essentially, she and others are forced to either lose their deposit or go well over their planned budget.

However you look at it, that is actually very unfair, and by the sounds of it, possibly illegal too. You criticise this girl for being ‘entitled’ and coming from an autocratic country. I don’t see any hint of entitlement about her attitude, and her country of origin is irrelevant.

Well, I am rooting for this girl’s class action. Clearly the foreign buyer tax was poorly implemented and rather dubious too, in the context of a country that needs to trade globally. If you want an example of what xenophobia brings in, just keep an eye on news from the UK for the next few years.

In any case, surely she has proved herself worthy of being Canadian by buying an overpriced property just after the very peak of the market.

#91 Sentiment bad to worse? on 09.21.16 at 5:15 am

The last few months of Comments have been in general very negative in terms of YVR RE (and the economy) having shifted from Denial to Anger, blaming foreigners and not the locals.

Today Garth warns 416/905 RE of a repeat in what happened to YVR RE with a Crash Tax…oddly, few Deniers.

StatsCan Daily Indicators depressing beyond words. Anything positive is debt fueled by Cdns. living beyond their means or due to prices dropping.

Hope July 2016 GDP report next week (Sep 30) will be positive (Jul jobs was -31,000 and Aug jobs was +26,000, the latter almost all created by the Public Service…split the difference and hope for 0%?).

Cdn. Corp. earnings -3.4% in 2016 2nd Qtr…oh well, hope springs eternal.

The above cannot end well…some good economic news would be appreciated.

bsant54

#92 poochedistan on 09.21.16 at 5:17 am

“GTA willhave no choice but to tighten”… go for it, it’ll be funny….watch skippystan and kiwistan xplode…and the antipodean legislature will allow it..true they will…scared of the dsib’s crapping out

#93 Sam Nable on 09.21.16 at 5:26 am

Add this to the reasons why the Loon will tank after the US election

http://www.bangkokpost.com/business/finance/1091149/us-elections-to-strengthen-dollar

Its looking like a disaster for Canada when the double whammy of a Trudeau Liberal led recession meets up with the US dynamo

#94 Ace Goodheart on 09.21.16 at 7:00 am

There actually already is a foreign buyer’s tax on real estate anywhere in Canada. A foreigner who owns real estate in Canada has to file an income tax return each year and can be subject to tax on the property in question, even if they have not sold it yet. Stories of Revenue Canada putting liens on foreign owned property for tax arrears, even though the owner has never lived or worked in Canada, are legion and are actually quite true (happens all the time).

#95 Wrk.dover on 09.21.16 at 7:02 am

Wow! I just read it in Garth’s comment to #52. My pre-coffee morning tea poured out of my nostrils, I blasted the screen with my at ready can of bear spray, but it still says it, in Garth’s italics. Quote. ” the economy is sick ”

What a difference a simple slip of the key board makes.

Next, will he say the thing he was calling a recovery when the leaves were appearing on trees earlier this year was only spring time, not a recovery at all.

Welcome to the club Garth. Johnny Six Pack is in pain in spite of the gains in Marie Antoinette’s portfolio this year.

The context was, rates are low because the economy’s sick – which means those who believe housing prices will continue to bloat are as silly as folks who snot tea onto their laptops. — Garth

#96 Zen Headspace on 09.21.16 at 7:05 am

What a horrible statistic, that the average Canadian’s debt to income ratio is 170%. So sad and pathetic.

What type of human beings can live in good conscience knowing that all of their money belongs to someone else?

Where did we go wrong? Did nobody listen to their mothers about saving for a rainy day? Seriously.

People are in big trouble. Forget about interest rates. When the job losses start mounting and the unexpected expenses start popping up, that’s when the real effects of unfettered debt will manifest.

It will be ugly.

Time to smarten up and get a grip. We have become a nation of spoiled, entitled, undisciplined stupid-spenders.

https://www.youtube.com/watch?v=zY9es8R4PD4

#97 Zen Headspace on 09.21.16 at 7:17 am

#80 Freedom First

“I have learned through the years I have been trying to help people, that the majority of people are not teachable. What they do over and over again is what they want to do. They shun knowledge or advice. They absolutely hold on to their distorted way of thinking, even after a regular series of very bad consequences due to their ongoing poor choices.”
——————————————————————-

Freedom First know his stuff. Very enlightened.

“Whenever we seek to avoid the responsibility for our own behavior, we do so by attempting to give that responsibility to some other individual or organization or entity. But this means we then give away our power to that entity.”

“Delaying gratification is a process of scheduling the pain and pleasure of life in such a way as to enhance the pleasure of life in such a way as to enhance the pleasure by meeting and experiencing the pain first and getting it over with. It is the only decent way to live.”

“Human beings are poor examiners, subject to superstition, bias, prejudice, and a PROFOUND tendency to see what they want to see rather than what is really there.”

― M. Scott Peck, The Road Less Traveled: A New Psychology of Love, Traditional Values, and Spiritual Growth

#98 Victor V on 09.21.16 at 7:19 am

http://www.theglobeandmail.com/news/national/vancouver-real-estate-developer-seeks-to-set-record-straight/article31980747

A Vancouver real estate developer and speculator featured in a recent Globe and Mail investigation is pledging to pay his fair share of taxes and work with the Canada Revenue Agency to make sure his books are in order.

Kenny Gu sat down with The Globe for an exclusive interview because he said he wanted to clear his name after allegations of possible fraud and tax evasion in connection with flips of residential properties. “I want to show you I am a good guy. I am not that kind of guy,” Mr. Gu said. “My family is here. My children are here. They will live in this country forever. For a long time. So, I don’t want them to see or to look at me as if I break the law or don’t want to pay the taxes to the country.”

#99 B_Mo on 09.21.16 at 7:53 am

I don’t post much, but was thinking that it’d be nice to have “thumbs up” and “thumbs down” voting buttons on each comment! Could get the blood boiling!

#100 Stoopid Idiot on 09.21.16 at 8:20 am

https://www.armstrongeconomics.com/international-news/north_america/canadas-household-debt-exceeds-total-gdp-for-first-time/

#101 Rock Beats Paper on 09.21.16 at 8:34 am

Rates are low because the economy is sick. Figure that out. — Garth

Rates are low in all Western Countries. However, they are pretty high in Russia and Brazil. There is more to rates than “economy is sick”….Some economies are strong, like Germany, even as rates go negative.

#102 Pop the Bubbly on 09.21.16 at 8:43 am

‘Doesn’t take a weatherman to see which way the wind blows…’

#103 w on 09.21.16 at 8:48 am

#95 I think the big spenders think they will pay it all down in a dollar thirty on the dollar, dollars. Too risky a strategy for me, but enough of them doing it could cause that scenario I suppose.

Imagine running up big debt in Carter years and paying it down in Clinton years. That one worked for me even with double digit interest. That is what they hope to repeat, though with out interest in the calculation.

Gonna be different this time though, because hand work is obsolete. I paid back my debt actually turning a simple resource into a much value added commodity, to the benefit of the community in total. ( “sure you did senile old man”, a doubting millenial will chortle)

#104 Mark M. on 09.21.16 at 8:58 am

I’m so giddy, today’s the big day. How much do the blog dogs see Yellen hiking?

Remember they wanted FOUR hikes just 9 months ago for the year and with only two opportunities after today to hike I say she goes ahead and raises 50-basis points.

The US is BOOMING!

#105 suburban coyote and pup on 09.21.16 at 9:07 am

I am holding my breath that no tax is implemented in 416/905 before I complete my real estate transaction…a 15% tax would imho freeze up the market here (which is of course ridiculous as stated by Garth and many other dogs).

Meanwhile, I continue to field calls from vultching re agent types wanting to schill my lot for me. When I ask how many infill severed lots they have sold in their career the silence is deafening “well we can present the offer”. Unbelievable… they can’t even give a fair market valuation as they don’t even seem to have any basic knowledge of the process/costs of land severance, builder margins, comparables and price support in my neighbourhood. Yet they feel they are worth 2.5 commission.

Sorry for off thread rant Garth.

Onf51

#106 AfterTheHouseSold on 09.21.16 at 9:09 am

#97 Zen Headspace
M. Scott Peck, The Road Less Traveled: A New Psychology of Love, Traditional Values, and Spiritual Growth.

‘The Road Less Traveled’ has been a companion of mine for well over 35 years and is one of the few books to survive the mother-of-all-purges when we sold in 2012.

It reminds me to check my life road map, so prior to heading out to Florida last winter I was determined to bring it along, and of course, drove off without it.

While at a flea market I came across a vendor selling books. There were hundreds upon hundreds of books lining bookcases, in no particular order. A single book was laying on top of one of those bookcases. It was ‘The Road Less Traveled’. I acknowledged the moment with gratitude and bought it.

#107 WallOfWorry on 09.21.16 at 9:20 am

I find it fascinating that the narrative about the Fed raising interest rates seems to have more to do about the credibility of the Fed than it does about sound economic analysis? Trillions of dollars later with a bloated balance sheet, and with growth still at anemic levels (< 2%) and the Fed feel cornered to raise rates!

What is it that we say around here….this will not end well?

http://www.cnbc.com/2016/09/21/economist-larry-summers-just-went-on-an-epic-twitter-rant-over-the-fed-and-rates.html

#108 TrucMuce on 09.21.16 at 9:40 am

Good post.

The government is dropping hints that although they won’t push rates up for a long long time, policies are coming. I really hope they implement those policies fast, because Poloz was clear yesterday:

– don’t quit your jobs, work longer (bad for kids)
– don’t except your safe bonds to give you enough income
– overnight rate won’t go above 0.65% (did I hear this correctly?)

#109 Canadian Moose on 09.21.16 at 9:40 am

Massive household debt, Feds need to step in to cool the housing markets in Toronto, interests rates at an all time low, divorce rates at an all time high. Orange is the color in Alberta and its not because of the fall colors. Meh!

Thank God I am a moose. Much easier life.

#110 Smoking Man on 09.21.16 at 9:49 am

DELETED

#111 Zen Headspace on 09.21.16 at 9:51 am

#99 B_Mo
———————————————————————-

Thumbs Down |
|
V

#112 Jack Bloom on 09.21.16 at 10:14 am

Nubbers 90, you forget that a government has the power to legislate. Provinces are entitled to rescind contracts for any reason. There was an interesting heads up on all that in a paper designed by the Ontario Liberals as to why they can cancel all the power contracts before the next election, and they probably will if the polls cont Niue to show they’ll lose by a landslide if the election were held today. These foreign nationals are crazy with the idea that they have some kind of ethnic protection because they’ve been coddled in so many other ways. The BC Libs are not so stupid that the question of legality did’nt come up before the tax was applied. They’re on rock solid ground with the law of the land and the ethnics want to turn it into a race baiting excercise because that tactic has worked before on other issues.

#113 Smartalox on 09.21.16 at 10:25 am

@VictorV #98:

That article sounds like a PR press release, intended to generate some kind of public sympathy for the developer, most likely in light of my earlier posts, or this one:

http://www.theglobeandmail.com/news/politics/chinese-agents-enter-canada-on-tourist-visas-to-coerce-return-of-fugitive-expats/article31981251/?service=mobile

#114 Smartalox on 09.21.16 at 10:28 am

For Janet and the Fed team today:

Overture! Curtain! Lights!
This is it! The night of nights!
Who knows what heights we’ll hit,
On with the show, this is it!

#115 #96 Zen Headspace...What? on 09.21.16 at 10:35 am

As for your YouTube reference, I do not understand it and here is why…scroll to 2:09 mark:

https://www.youtube.com/watch?annotation_id=annotation_4112614029&feature=iv&index=8&list=PLs4hTtftqnlAkiQNdWn6bbKUr-P1wuSm0&src_vid=5M1ZKPCLb4I&v=Zu5Oo23G67w

bsant54

#116 TurnerNation on 09.21.16 at 10:44 am

No rate hike maybe a cut. Gotta keep the masses pacified until the next actor (president) is appointed.

Dollarama stock breaking out will we see $110?

#117 Iconoclast on 09.21.16 at 10:48 am

> The treaty would allow both Canada and China to share
> the financial assets that suspected Chinese fugitives
> have brought to Canada.

This gives the host country a financial incentive to arrest people and seize assets… very clever.

Next they should hire some local PIs and offer anonymous
incentives to anyone who gives them leads as to who to look at.
The money mules, the real estate agents, the bankers, the straw
buyers and their ilk all know which transactions were dodgy and
many might be willing to point fingers for cash rewards.

Get the names then look into their pasts in China to see where all the money came from. Issue warrants where appropriate, and voila.

#118 Rebs on 09.21.16 at 10:58 am

I realize that our country’s economy is all interrelated, but I would love to have some posts which speak to other markets (Montreal/Quebec?) or anything else really.

I was never interest in Vancouver and hearing about it all the time makes me even less interested.

#119 CHERRY BLOSSOM on 09.21.16 at 11:01 am

With Canadians so indebted they will have to stop buying ‘things’ this will bring retail to its knees… Ha Ha Ha.

No foreign buyers tax. Just forbid it.

#120 Jim Stojsin on 09.21.16 at 11:31 am

1.5 Hours to GO.
Come On Yellen Spike it.

Long USDCAD P&L sitting at 1.77m Lets get it up to 3m this afternoon.

#121 maxx on 09.21.16 at 11:38 am

#2 pathcontrolmonk on 09.20.16 at 6:53 pm

“Meanwhile, entitled immigrants from autocratic countries sue the BC govt for being unsympathetic to their plight. Good luck with that!

http://www.cbc.ca/news/canada/british-columbia/class-action-lawsuit-launched-against-b-c-foreign-buyers-property-tax-1.3769751

Oh, Puhleeeease!! Canada may do precisely as it sees right and just for the well-being of all of its citizens and is by no means the only country where this is practiced. More buyers across the board ensure smoother and more solid influx of tax revenue as well as re-related spending.
Raise the tax incrementally higher if the intended effect is not forthcoming.
Quickly, with alacrity and utter impunity.

#122 Noel on 09.21.16 at 11:41 am

Benny Tal is one of the best economists in the country, and has been outspoken in his belief that the Canadian housing market is balanced, and is not a bubble. I’ve seen him speak several times on the topic. I’m surprised you referenced him Garth.

http://www.canadianbusiness.com/economy/how-vancouvers-runaway-real-estate-became-a-national-problem/

“Tal has put more effort into studying Canada’s housing market than many of his counterparts on Bay Street. In recent years he has explained thoughtfully why Canada’s real-estate boom is different than what occurred in the United States in the years ahead of the financial crisis. Anyone who took his advice and ignored the boomlet in bets on a Great North housing bust is better off for listening. Canadian real-estate prices are being driven by local conditions, making a national calamity of the type that afflicted the U.S. highly unlikely.”

http://www.moneysense.ca/spend/real-estate/canadian-real-estate-market-outlook-2016/

“I was in New York and investors were convinced we are the poster child of a housing bubble.” He argues this belief will turn into reality without information. “This requires accurate data”—data that must become a priority for the government to collect, says Tal.

But does that mean we’re on the verge of a bursting bubble? No, says Tal. “The fundamentals just don’t support this.”

#123 For those about to flop... on 09.21.16 at 11:46 am

21.16 at 10:28 am
For Janet and the Fed team today:

Overture! Curtain! Lights!
This is it! The night of nights!
Who knows what heights we’ll hit,
On with the show, this is it!

/-/////////////////////////

Hey Smartie ,we have a late entry in Fed poetry contest.

Rates have been too low for too damn long.
Everyone I know says you guys are doing it wrong.
Put the rates up ,you know it’s right.
Open your eyes and see the light.

M42BC

#124 zentao on 09.21.16 at 11:59 am

Crowdfunding for house flipping…what could possibly go wrong?

http://www.bloomberg.com/news/articles/2016-09-21/it-took-only-12-hours-to-crowdfund-1-million-for-house-flipping

There are Richmond Hill homes on a couple sites.

#125 Damifino on 09.21.16 at 12:23 pm

#118 Rebs

“I was never interest in Vancouver and hearing about it all the time makes me even less interested.”
——————————————

I know what you mean. I’m sick of Vancouver-centric blather and I’ve lived here all my life.

But its only that we’re so extremely off the chart.

I like to think we’re providing a service to the rest of Canada by representing the absolute practical limit of financial stupidity, irrational exuberance and head-buried-in-the-sandedness.

How bad can it get for you elsewhere in Canada? I couldn’t say exactly, but at least you can look at Vancouver and be thankful things wont come to that. They can’t. We are the sole proprietors of rock bottom.

#126 Where's The Money Guido? on 09.21.16 at 12:30 pm

Here we go:
http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/personal-finance/mortgages-real-estate/canadian-mortgage-investment-corporation-suspends-dividend-says-former-ceo-withheld-info-from-board&pubdate=2016-09-20
P.E.I. court system most efficient in Canada
Senator says delays in other provinces result in cases getting thrown out….http://www.cbc.ca/news/canada/prince-edward-island/pei-courts-1.3719179
The richer the province, the slower the criminal justice system, report finds
http://www.cbc.ca/news/politics/macdonald-laurier-institute-justice-study-1.3770937

#127 bdwy sktrn on 09.21.16 at 12:36 pm

#104 Mark M. on 09.21.16 at 8:58 am
I’m so giddy, today’s the big day. How much do the blog dogs see Yellen hiking?

Remember they wanted FOUR hikes just 9 months ago for the year…
————————
don’t hear much talk for a quad-hike in 2017

#128 Ace Goodheart on 09.21.16 at 12:40 pm

Right now as we all read this very interesting blog, mortgages across BC are starting to pop and bubble and occasionally burst, particularly in Vancouver.

Folks who bought a Vancouver detached house in May, June, July or Aug of 2016 just lost about $300,000 – $400,000 off their equity (ie, their entire down payment and possibly a little more). Some of these newly minted home owners may already be under water, with many more to follow in the coming months.

Big 5 Chartered’s are going to have this show up in their financial statements on earnings reporting time.

Alberta has already had one sweep through of mortgage defaults, getting ready for another one, bigger this time.

All this points to a buying opportunity in waiting for Canadian Chartered Bank stocks, which are going to take a major hit once everyone figures out how bad the damage is.

Save some cash and be ready to buy in January of 2018, that is when things likely will be at their worst and lowest. Usually it takes a little more than a year for the clothing to make its way through the wash and out to the line to be hung out to dry. It’s a slow process…..

#129 Self Directed on 09.21.16 at 12:43 pm

#85 Karma on 09.21.16 at 2:41 am

Watching CTV News Vancouver at 11:30pm. Seen two different debt counselling advertisements (one with John Shorthouse pumping for Sands & Associates). Sad state of affairs.

Also, there was an Airbnb advertisement, which is targeting helping people pay mortgages…

Saddddd…
—————————-

Yes indeed. Airbnb…the message is… yeah good for you, if you own a home. Bad for your typical renter.

This is a typical night watching TV on the west coast:

Supernatural British Columbia: Gov’t sponsored ad promoting Tourism on it own people in september after we have all returned to the office.

BC Liberal’s: Christy pumping out her message about jobs and keeping taxes low… 8 months early.

Pipeline propaganda: They’ve been running these ads for years now.

Capital Loans: “Could you use $600,000.00?” Um yeah, we all can.

Rolex watch: Oh sure. I’ll take 2 please!

Lotto commercial: “It could happen to you”…. but it won’t.

Get debt off your back: “Debt following you around?” I guess I didn’t need $600,000.00 after all.

Back to work, slaves!!

#130 Sheane Wallace on 09.21.16 at 1:03 pm

#122 Noel

What would you expect him to say (Benny Tal)? The truth or the political correct ‘opinion’?

He is Canadian economist, after all.

Fundamentals? What fundamentals?
1. I quoted people with 50 k income purchasing crappy semi in Brampton/Mississauga for 650 k,

2. The backing by CMHC will actually make things much worse. Our economy has become house of cards with nothing but housing as ‘fundamentals’.

3. The fact that people have no relevant information makes things worse.

As for shorting, as government is spreading the risk away from the banks, I would short the whole economy or whatever is left of it.

We just choose to jump from a higher flow of the building and now quickly approaching the ground with ever increasing speed, but hey, we have not crashed yet, it must be different here!
Gravity works exactly the same everywhere.

As for the idiot at BOC, I am kind of intellectually insulted to have such d..b s..t a..lle in charge of our monetary policy.

#131 Sheane Wallace on 09.21.16 at 1:05 pm

As for the idiot at BOC, I am kind of intellectually insulted to have such d..b s..t a..lle in charge of our monetary policy.

————-

and your NON-retirement.

#132 Sheane Wallace on 09.21.16 at 1:12 pm

#108 TrucMuce on 09.21.16 at 9:40 am
Good post.

The government is dropping hints that although they won’t push rates up for a long long time, policies are coming. I really hope they implement those policies fast, because Poloz was clear yesterday:

– don’t quit your jobs, work longer (bad for kids)
– don’t except your safe bonds to give you enough income
– overnight rate won’t go above 0.65% (did I hear this correctly?)

———————–
Exactly, you heard the guy on HIS/not Canada’s monetary policies.

It blows my mind how CAD is not at 35 cents US yet.
US Fed at least is pretending intend to hike

#133 For those about to flop... on 09.21.16 at 1:37 pm

I was surprised to see George H W Bush intends to vote for Hillary and not the Republican Donny Rump.

Not too sure how many marbles he has left upstairs.

Bush Snr that is ,not Trump

Trump lost all his marbles playing Billionaire labyrinth…

M42BC

#134 pBrasseur on 09.21.16 at 1:45 pm

Not to worry about anything, we have SelfiMan

http://storage.journaldemontreal.com/v1/dynamic_resize/sws_path/jdx-prod-images/0510a949-15a4-48d9-af4e-3df100f296a5_JDX-NO-RATIO_WEB.jpg?quality=80&version=1&size=968x

#135 Zen Headspace on 09.21.16 at 1:49 pm

#121 maxx

Oh, Puhleeeease!!
————————————————————–

http://www.honekut.com/HonEkutCom_Audio/SoundBites/HowardStern/Puhleeze.wav

#136 Zen Headspace on 09.21.16 at 1:56 pm

#118 Rebs

“…I would love to have some posts which speak to other markets (Montreal/Quebec?)…”
——————————————————————

Nothing else to really talk about. Montreal? Quebec? Ha!

“As Canada grapples with the impact of foreign investors in the country’s two hottest real estate markets, Canada Mortgage and Housing Corp. says international purchasers have very little impact on housing prices in Canada’s second largest city – Montreal.”

“According to the report released Wednesday, about one per cent of condominiums in the greater Montreal area were owned by people whose primary residence is outside of Canada.”

http://www.theglobeandmail.com/real-estate/the-market/montreal-not-feeling-effects-of-foreign-investors-in-real-estate-market/article30900216/

#137 TurnerNation on 09.21.16 at 2:04 pm

Fire the guest bloggers!! :-)

#138 Barry in Pickering on 09.21.16 at 2:04 pm

http://www.greaterfool.ca/2016/09/03/fed-up/

Doug: (Sep. 3, 2016) “I predict that the Fed raises in September, and here’s why.”
===============

Good call Doug!

#139 maxx on 09.21.16 at 2:09 pm

RE #2

It’s high time Canada traded in its diapers for grown-up britches and began tossing these time and money-wasting brain-dead cases into the stratosphere.
The value of living one’s life in this amazing country, surrounded by its beauty, peace, fairness and outstanding citizenry is inestimable and speaks for itself.
Want into Canadian re? No problem. Pay up.
A sliding scale of super-taxation ought to be implemented immediately, with more valuable properties commanding higher land transfer duties as well as municipal tax. Enormously higher.

#140 mike from mtl on 09.21.16 at 2:21 pm

#118 Rebs on 09.21.16 at 10:58 am
I realize that our country’s economy is all interrelated, but I would love to have some posts which speak to other markets (Montreal/Quebec?) or anything else really.
======================================

MTL makes even less sense, average is 450-550k which on the surface seems like a bargain. HOWEVER the taxes are very high compared to the RoC for something on the island expect at least 7k per year. Our economy is terrible and wages are low for most.

Prices have basically flatlined and but sit on the market for 6 months to 1 year.

Also the big thing recently that 6.x something increase on average for assessments. Why? because taxes..

Loads of folks do the amateur landlord thing with crappy 70 year old duplexes and MDUs with equally crappy tenants as their financial planning.

So yes at first glance Montreal seems cheap and somewhat it is but there’s reasons! Hogtown might be overpriced however you have an actual economy to back it up.

#141 common sense on 09.21.16 at 2:24 pm

No rate hike?

Again, totally shocking…

Donald wins and he will take the big hit to start in the hole just like Barack did when he took office.

What a world. What a world.

#142 Where's The Money Guido? on 09.21.16 at 2:41 pm

Re: #97 Zen Headspace
M. Scott Peck, The Road Less Traveled: A New Psychology of Love, Traditional Values, and Spiritual Growth.

Zen-Thank you for this, it’s been an inspiration for the 100 pages I’ve read. TY,TY.
I wish I had read this 25 years ago when it was released, I’m sure I’d be miles ahead on the spiritual growth curve.
My whole life seems to spill out on those pages.
I’d implore everyone on this blog to at least read pages 11-50. I’m sure you’ll be hooked by then. This is the type of drug I’ve been looking for my whole life!
I’m sure even Nectonites can find truth in there, so Smokey have a read if you haven’t already.

#143 notMe on 09.21.16 at 2:55 pm

anyone who still chases this carrot is the greatest fool

U.S. Federal Reserve keeps key rate unchanged, but signals hike coming by year end
http://business.financialpost.com/news/economy/u-s-federal-reserve-keeps-key-rate-unchanged-but-hints-of-coming-hike

#144 tkid on 09.21.16 at 3:00 pm

The FED has waffled yet again on a rate hike. I agree, Garth, that GDP in the US is up and there are plenty of reasons to hike, but FED seems to come up with yet more ‘not this time, next time’ excuses.

They’re like a best friend who keeps cancelling on a planned outing. In the end you go without them and ‘oh sure’ them when they start talking about the next outing.

The only way the FED will raise rates in the future is if the bond market does it for them.

#145 MF on 09.21.16 at 3:08 pm

So no rate hike.

Mark M: 1
The American: 0

I think it’s pretty clear these guys are clueless.

MF

#146 SWL on 09.21.16 at 3:19 pm

They didn’t raise rates simply because they can’t

Not surprising to anyone who dare to take an honest look at the situation

The Federal Reserve is one of the biggest crimes against humanity in our modern world

#147 robert james on 09.21.16 at 3:20 pm

#98 Victor V .. Maybe Gu thinks it might be a good idea to start paying taxes and being a good citizen and hope the H*ll he does not get sent back to China with all the extradition talk lately or some of these Chinese agents get a hold of him… They can have him for all I care.. http://www.theglobeandmail.com/news/politics/chinese-agents-enter-canada-on-tourist-visas-to-coerce-return-of-fugitive-expats/article31981251/

#148 jess on 09.21.16 at 3:45 pm

Senator Nick Xenophon is pushing for a crackdown on money laundering in gambling venues after a Chinese-Australian businessman allegedly washed $850 million through Melbourne’s Crown Casino.

Read more: http://www.afr.com/news/nick-xenophon-seeks-crackdown-after-850m-laundering-spree-20160918-grit1k#ixzz4KvBbnzFE
Follow us: @FinancialReview on Twitter | financialreview on Facebook

#149 jess on 09.21.16 at 3:58 pm

…”His wife, Hongjie Ma, recently applied to the Victorian Supreme Court to lift a restraining order on a multimillion dollar property in Fremont, California but was unsuccessful, as the court agreed that the purchase could have been made with laundered funds.

The house was seized along with three other properties in 2013 as part of the investigation into what has been described by law enforcement as “astronomical” levels of gambling by Mr Jin.

#150 Rexx Rock on 09.21.16 at 4:12 pm

Like I said a million times before buy NUGT and JNUG in am and sell at the end of the day for easy money!!!On fed day its always the same.

#151 NoName on 09.21.16 at 4:32 pm

#133 For those about to flop… on 09.21.16 at 1:37 pm

I was surprised to see George H W Bush intends to vote for Hillary and not the Republican Donny Rump.

—-

Trupm is uber like disruption to current state of politic, if he elected for better or worse B’s knows ” Jbe stands no chance ever.

One thing that Trupm created that many failed to take sirieusly and harvest votes on is steadily grooving “angry cake eater” voter.

dont know accurate is that 2 3rd of americans think that market is riged, combined with record profits and cash holdings for big companies, small to mid size business stabbed with very little cash, regulation, red tape and lobbying are doing serious damage to small and inovative companies own by “cake eater”.

I dont know how true this statment is, but to me sound an about right, probability that “big” bussines will survive and be profitable in next 10 yrs in 90s was only 50%, now is around 80% if not more.

Big companies are ready or preparing to fight, as some guy sad they are digging deeper and wider moats.

went bit on a tanget here…

#152 Low Rates For Life on 09.21.16 at 4:41 pm

Everyone waiting for the rates to increase look at the history of trader rate projections with the actual rate announcements – everyone seems to believe in January that rates will be up throughout the year and as they get closer to the Fed meeting dates, the percentage predicting an increase gets smaller each time.

So everyone can be confident rates will go up next year because its easy to believe that – then as we get closer to the 2017 fed meeting dates, the inevitable excuses come up and the downgrading of a chance of an increase.

2015 was the same as 2016 which will be the same as 2017…and so on

If the economy has truly recovered, with below 5% unemployment and inflationary increases elsewhere, then there is no excuse not to increase. Yet, we get an excuse and warning each and every time. Just put a traffic cone up to present instead of Yellen at each fed meeting – it will have the same effect and effectiveness.

Just like debt, people think you should slow down but then you just ignore it after you realize the traffic cone cannot do anything.

We have had 8 years of warnings of a rate increase….with a measly .25% increase a year ago. Imagine if they keep the trend of a .25% increase every year.

Well, all this renters will have lost out as the amount of equity you could have put into a house coupled with the appreciation will dwarf balanced portfolios which have been stagnant since 2014.

Keep hoping for those mythical rate increases…

The correlation between house prices and rates is complete. The real estate market has peaked, whatever course rates follow. — Garth

#153 Westvan on 09.21.16 at 5:11 pm

US FED should read the boy who cried wolf , what kind of credibility do they have now ? They r trying to not suprise the market but the longer they wait the worse the suprise will be if they ever and I mean EVER increase rates. There is a structural problem with the economy, cheap debt is not working anymore infact it’s just making things worse. Pull off the bandaid already !! Let’s get on with it

#154 Mark on 09.21.16 at 5:11 pm

“Well, all this renters will have lost out as the amount of equity you could have put into a house coupled with the appreciation will dwarf balanced portfolios which have been stagnant since 2014.”

There’s been no appreciation in Canadian housing since the apex in 2013. And balanced portfolios have done 6-8% since. At P/E = 35, the imputed annual return on Canadian housing is approximately 3%. So the Canadian renter is actually ahead approximately 9-15% over the past 3 years compared to a Canadian owner.

This trend is likely to continue going forward, and if the 1990s repeat themselves, the renter who invests his down-payments funds in plain old XIU without leverage will likely have enough in his account to buy the house from the landlord, in cash, within the next decade. Meanwhile the landlord will have gone a decade with nothing to show for it except an increasingly older and more worn out house.

#155 Rates Low for Life on 09.21.16 at 5:34 pm

The correlation between house prices and rates is complete. The real estate market has peaked, whatever course rates follow. — Garth
——————-

On Vancouver Island, that is not the case. The spillover from the Mainland of those cashing out and those fleeing higher prices has fuelled a 20% or more increase in prices in the last year, with no sign of stopping, and prices going even higher following the foreign buyers tax.

VREU is out to lunch as even teranet shows a 12% increase this year in prices for Victoria with sales near all time highs, and building permits at all time highs.

And if foreign investment seeks another place to park, well, that landing zone will see price increases. Ontario comes to mind. We saw how just 10% foreign buyers coupled with FOMO in Vancouver can push prices up significantly. The herd mentality is not restricted to Vancouver.

So while Vancouver’s death bell has rung, there are other places that can still see a run up in prices as they are deemed ‘affordable.’ Even more affordable in a climate of lost credibility for the feds.

#156 common sense on 09.21.16 at 5:56 pm

#138 Barry

Lay off Doug please.

At least he had the cohones to take an unpopular stand against a FED that is 100% scared to death of making a horrible situation even worse….

Rate hike 2036.

#157 Smoking Man on 09.21.16 at 5:56 pm

Say What!!!!! Janet.

Guess she’s not worried about equity or fixed income. Who would have known? Comical

“We routinely monitor asset valuations, while nobody can know for sure what type of valuation represents a bubble, that’s only something one can tell in hindsight, we are monitoring these measures of valuation and commercial real estate valuations are high.”

#158 Barry in Pickering on 09.21.16 at 6:02 pm

))) The correlation between house prices and rates is complete

No.
“62% of the time, increasing mortgage rates corresponded with higher pricing.”

There are many studies and links with similar results, all with detailed data, feel free to bash them all.

https://www.integratedmortgageplanners.com/blog/mortgage-market-updates/do-higher-interest-rates-cause-lower-house-prices/

#159 Jerry on 09.21.16 at 8:04 pm

Garth – the only person whose remarks are scrutinised more intensely than Ms. Yellen is you. Therefore, when you alter the 60/40 mantra which you have maintained since forever to “at least 50%, or better still, about 60%” it is a sea change.

What explains it?

The post discusses portfolios for retirees. Some of the old fossils need work. — Garth

#160 Tony on 09.21.16 at 8:36 pm

Very, very few Chinese buy houses in Toronto per se they buy in Unionville, Markham, Richmond Hill and Stouffville. The tax would have to be aimed at the GTA not Toronto to be effective.

#161 Tony on 09.21.16 at 8:43 pm

Re: #155 Rates Low for Life on 09.21.16 at 5:34 pm

You’ve got the cart before the horse. The spillover effect will drop the outlying regions 20 percent not appreciate them 20 percent. That’s the spillover effect. By the way the spillover effect from Vancouver should hit the GTA around Christmas this year.

#162 Tony on 09.21.16 at 9:09 pm

Re: #18 mike jones on 09.20.16 at 7:37 pm

Here’s some free advice that’ll save you a couple of hundred thousand dollars… can’t see the forest for the trees etc. etc. DUH!! The spillover effect from Vancouver will crush the GTA including Hamilton. SELL EVERYTHING!!

#163 Low Rates for Life on 09.21.16 at 11:22 pm

“Well, all this renters will have lost out as the amount of equity you could have put into a house coupled with the appreciation will dwarf balanced portfolios which have been stagnant since 2014.”

There’s been no appreciation in Canadian housing since the apex in 2013. And balanced portfolios have done 6-8% since. At P/E = 35, the imputed annual return on Canadian housing is approximately 3%. So the Canadian renter is actually ahead approximately 9-15% over the past 3 years compared to a Canadian owner.

This trend is likely to continue going forward, and if the 1990s repeat themselves, the renter who invests his down-payments funds in plain old XIU without leverage will likely have enough in his account to buy the house from the landlord, in cash, within the next decade. Meanwhile the landlord will have gone a decade with nothing to show for it except an increasingly older and more worn out house.

——-

Ah, good one Mark – I like your creative math. Be sure to tell the Vancouver owners and TO owners that there has been no appreciation. And be sure to tell those Vancouver ones cashing out and driving up Vancouver Island prices that their houses did not appreciate.

#164 Jake on 09.22.16 at 8:17 am

The immediate catalyst was the Chinese Dude tax, but that was just the push. It wasn’t the cause.

Ha-ha… you are still at it, you little cosmopolitan pro-yellow clown.

People, don ‘t go by what this goofball is saying, read some real information for a change. Here is what financial post has to say on that:

“August sales in the GVA fell 26 per cent from last year while detached-home sales plummeted 45 per cent. Before the tax, prices had escalated 30 per cent over last year. During one four-week period, foreign buyers represented 10 per cent of transactions in the GVA, for a total value of $1 billion.

Foreign, especially Chinese, buying is often motivated by finding a safe place to hedge against geopolitical risk. Political tension in China has elevated that perceived risk, resulting in capital flight.”

Chinese caused the RE market to explode, not the locals. You have to be blind not to see that.

#165 Cone of Silence on 09.22.16 at 1:22 pm

What is the correct debt to income calculation? The website I found say “Your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income.”. Is this correct or is it calculated using your gross annual income and the total of all of your outstanding debts?

#166 Where's The Money Guido? on 09.22.16 at 2:01 pm

Re:
#136 Zen Headspace on 09.21.16 at 1:56 pm
#118 Rebs

“…I would love to have some posts which speak to other markets (Montreal/Quebec?)…”
——————————————————————

Nothing else to really talk about. Montreal? Quebec? Ha!

Ever wonder why Quebec has such a great deal in Canada?
I would like to mention the OWNERS of Canada, headquartered in Quebec, Canada, the Paul Desmarais family and Power Financial Corp.
André, Paul Sr.’s son is married to former Canadian Prime Minister Jean Chrétien’s daughter, France (funny how Paul Sr. is pulling strings in Canada while living there).
Whatever happened to Paul Martin’s tanker that was found filled to the brim with coke just offshore of eastern Canuckistan> Swept under the table with no one charged because the tanker had an international flag (lol).
Canada did NOT go into the Iraq war because their French subsidiary had $5 billion in contracts in Iraq.
From Wikipedia:
Politics
The Desmarais family enjoys connections to politicians worldwide. Critics charge that the family’s political connections provide it with unfair advantages in business.[15]
According to a profile in The Australian, “Desmarais grew to command the intersection of Canadian business and politics through close relations with four prime ministers.”[16] Desmarais was an advisor to Prime Minister Pierre Elliott Trudeau.[16] Brian Mulroney worked as a labour lawyer for Desmarais before entering politics, and Desmarais named his then-employee Paul Martin as president of Canada Steamship Lines Inc. (Power Corp.’s Great Lakes shipping subsidiary) in 1974 (Desmarais sold the company to Martin in 1981.)[16] Prime Minister Jean Chretien was related to Desmarais by marriage; Chretien’s daughter France is married to Desmarais’s son Andre.[16] Both Mulroney and Trudeau served on advisory boards for Power Corp. after leaving office.
https://en.wikipedia.org/wiki/Paul_Desmarais

The US is the same with the Clintons and Bush families all tied to drug importation, Bush Sr. when in the CIA and Clinton when governor of Arkansas (Mena Arkansas airstrip used for coke landings from Columbia-read about Gary Webb). That is why the Monica Lewinsky scandal came out to deflect from the exposure of this scandal (http://www.idfiles.com/menacoverup.htm), http://www.whatreallyhappened.com/RANCHO/POLITICS/MENA/crimes_of_mena.html.
Former LA Police Officer Mike Ruppert Confronts CIA Director John Deutch on Drug Trafficking, https://www.youtube.com/watch?v=UT5MY3C86bk
By the way both Webb and Ruppert committed suicide by self inflicted gunshots WOUNDS!!!! Emphasis on wounds…..
Vote accordingly if you believe your vote matters in this corrupt landscape.
Canada is bought and sold by these people. You’re mistaken if you think we live in a fair and free country. Business-Drugs-Politics-Power all inextricably tied together, all in “la familia”.