‘Problematic conditions’

dog-field-modified

What are the odds markets give that Canadian interest rates could be cut next year? Right now, about 25%. And the odds they might increase? 0%.

Don’t mistake this for good news. It isn’t. The States is poised (according to Fed officials) for a rate increase in six weeks, then two more in 2017. If our central bank doesn’t follow suit, or drops its key rate a quarter point to just 0.25%, then you can count on three things. (a) Lots of inflation and $8 cauliflower. (b) A dollar worth something with a ‘6’ in front of it. (c) Cheaper houses.

The last point may be a surprise. After all, house prices and mortgage rates are negatively correlated. People can’t really afford real estate today because central banks have driven rates into the ditch. But there comes a point (we’re there) at which rates don’t matter anymore because debt and borrowing capacity have maxed out. Veteran analyst Will Dunning made that point clearly in the weighty report I referenced yesterday. If the Bank of Canada cuts again, we’re all in the soup.

And, dammit, looks like that could happen.

First, there’s a good chance Wild Bill overreached. At least that’s an opinion gaining ground in the last few days among realtors (natch) and mortgage brokers (of course), and also a growing number of economists. By forcing all moisters to take a stress test based on a 4.64% rate, while contract rates are half that, Morneau is drastically reducing the amount they qualify to borrow, or throwing up to 20% of them out of the market entirely. Additionally, no more mortgage insurance for commission guys, self-employed dudes, landlords or people wanting 30-year amortizations. Plus now you must prove tax-free status on the sale of your home, and lenders will soon have to finance a portion of loan losses.

Maybe all those are good things, long overdue, and correct a spate of boners that should never have happened, but it’s a helluva lot to throw at a market at once. Especially (as we showed here yesterday) one that was already starting to roll over, like Vancouver. If Dunning’s right, most secondary markets which were relatively balanced (Halifax, Montreal, Winnipeg or Saskabush) will slide into decline. YVR, of course, is pooched. In six months we might have only one bubbly little gasbag left, if at all.

The big problem is that our eight-year infatuation with house porn, the W network, Brad Lamb, Bob Rennie and the former underwear models who host Property Brothers, has resulted in an unhealthy hunk of the entire economy being dependent on real estate. More than manufacturing. More than oil and gas. All based on a national hormonal imbalance.

This week Bloomberg asked prominent economists to come up with the scariest charts they could think of. Below is the contribution of TD’s Brian DePratto, illustrating exactly the point this pathetic blag has been making for years. We have a condo economy.

Real estate share of output near record high

real-estate-output-modified

Click to enlarge

“Canadians seem to love housing, with real estate near its highest-ever share of the economy (although the history is quite short),” he says. “With new measures to cool the housing market in play, it can be scary to think what might happen if Canada were to lose this driver of growth.”

So, Morneau’s measures are estimated to reduce housing activity over the next 12 months by 20%, cost 50,000 construction jobs and – if prices decline by 10% or 15% – reduce Canadian personal net worth by billions. The impact on consumer spending would be measureable, since we have $1.3 trillion in mortgage debt and the ‘wealth effect’ of rising real estate would be kaput. If the meme changes from ‘buy now or be forever priced out’ to ‘houses are toxic,’ then we’ll have a recession on our hands.

Will Wild Bill talk about this Tuesday afternoon when he stands in the House of Commons, winks at the pages, and delivers his economic statement?

Nah, don’t count on it. The consequences of his October 3rd manifesto are as yet unknown, except in Vancouver where it’s turned a correction into a rout. Months will be needed to ascertain how deeply his actions have carved into market activity, how buyers and sellers will react, how swiftly prices moderate, and the toll this suite of reforms will have on the overall economy. Meanwhile the US recovery will continue, monetary policy there normalize, and the gulf between our two countries widen. If you don’t have a nice little pile of US-denominated assets in your portfolio, fix that.

So, in conclusion, lighten up on moose, beaver and maple. Be twice as invested in US and international assets. Keep 20% of so of your liquid net worth in greenbacks. Go short on your bonds but avoid bonding with your shorts. Don’t run to cash, since our dollar’s wobbly and inflation accelerating. Seek balance, as more volatility seems certain. And if you’ve made a fat capital gain on your house, take it.

Remember what the CMHC dudes said this week: “We now see strong evidence of problematic conditions overall nationally. Home prices have risen ahead of economic fundamentals such as personal disposable income and population growth, resulting in overvaluation in many Canadian housing markets.”

No kidding. And not for long.

195 comments ↓

#1 Doug t on 10.27.16 at 6:15 pm

Millenials are going to find out that there is a limit on spending and that debt must be paid. And they also are going to find out what it’s like to live in a recession – this should be fun

RATM

#2 pathcontrolmonk on 10.27.16 at 6:17 pm

I am confused Garth, you seem surprised that Canada is headed towards a ‘China Syndrome’ (no pun intended). Is this a trick?

#3 Paul on 10.27.16 at 6:18 pm

http://www.castanet.net/edition/news-story-179293-1-.htm#179293

scroll down to story

The 15% foreign investment tax is going to make people richer in Kelowna.

#4 Millenial on 10.27.16 at 6:21 pm

The Federal Reserve’s Labor Market Conditions Index (LMCI) is designed to give a broader view of jobs-market momentum. It is “a dynamic factor model that incorporates data from 19 labor market indicators (e.g., wages, unemployment rates, layoffs, business surveys, etc.).” Couple of years ago Janet Yellen said it was her preferred job market indicator.

Look where it’s at now: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/10/26/20161026_recess1.jpg

Yet they’re going to raise rates in 6 weeks? I’m not saying they won’t, they might do it just to maintain credibility. But things don’t look good, and i’m doubtful there’ll be two additional rate hikes in 2017. I think it’s more likely there will be a rate cut in the US in 2017.

#5 Wow on 10.27.16 at 6:27 pm

It was good for you not to quote Steve Saretsky or Dave Madani.

#6 RYAN PURDY on 10.27.16 at 6:31 pm

Owning these preferred shares makes me feel like i’m the bagholder. I find it harder and harder to justify having 17-20% of my portfolio in Canadian equity when we’re just a small piece of the global pie. Over weighting my US holdings has been rewarding. Not as much with the International. but those preferred are such a sore spot.

The blog has been real doom and gloom lately. Garth we’re less than 60 days from Christmas give me some happy news!

#7 Ultro on 10.27.16 at 6:32 pm

We came to the edge! No more marble countertops.

#8 Steve-oh on 10.27.16 at 6:38 pm

I’d say first but that would be obscene.
I almost feel bad for the greater fools that “won” a bidding war in Vancouver lately…

#9 Context on 10.27.16 at 6:39 pm

Its official as the leading authority in Europe is saying the FED will be raising rates in December by 25 basis points and will be increasing the rents on his rental properties to match inflation. Mr. Rowan Atkinson aka Mr. Bean agrees with this assessment in principal and the greater fools in Toronto are in for a surprise yet to come as the condos will go down first.

#10 Arfmooocat on 10.27.16 at 6:43 pm

no more mortgage insurance for commission guys, self-employed dudes

That’s big because the Canadian economy has become contract, short term, project work

#11 Axehead on 10.27.16 at 6:47 pm

Here in cowland, it appears that houses just keep on selling (just not as fast). But I am noticing lots more for sale signs than normal.

#12 Victoria Real Estate Update on 10.27.16 at 6:49 pm

SALES TANK ACROSS GREATER VICTORIA

Victoria’s dramatic sales slowdown continued in September as sales of detached homes fell 49.2% below the level reached in April.

Last year’s April to September sales decline was only 22.8%

The last time we saw a decline in sales (April to September) anywhere close to 49% was in 2010. Prices across Greater Victoria fell significantly after that.

THE MARKET CORRECTION PROCESS BEGAN IN SPRING

First sales fall significantly (this has already happened), then prices fall.

A DEEP CORRECTION (CRASH?) ON THE WAY FOR VICTORIA

As the extreme mortgage chart shows (see Garth Oct. 24), Victoria’s housing market has been as bubbly as Toronto’s or Vancouver’s over the last 3 years.

Not all housing markets in the US were extremely overvalued before that country’s correction took place. The big picture with the US meltdown is that the bubbly markets underwent major corrections while other markets experienced something far less extreme.

The same can be said about other countries, such as Ireland, Greece, Spain, etc.

It will be no different in Canada. Victoria is one of Canada’s most overvalued markets and it’s housing market will go through a major correction.

MORE AND MORE HOUSES SITTING ON THE MARKET UNLOVED

Expect this situation to worsen.

#13 Hotdogs from Heaven on 10.27.16 at 6:51 pm

So does anyone out there no any decent royalty trusts or high yield ETFs that are U.S. based and pay their dividends in greenbacks?

#14 acdel on 10.27.16 at 6:54 pm

Garth, I do not get your wild obsession with the U.S. rate while not “ONCE” mentioning how terrible there economy really is. What is it that all of you pumpers do not see that the U.S. is 20 trillion in debt, 100 million plus on food stamps, another who knows are under employed, etc.

We have an environmental foolish government in Canada, youngster that is so naive!

American’s raise the rate, I dare you to, let’s see where you really stand in the world economy, what a farce, step up or get out, enough with this fluff!!! Good night all!

Canadian real-estate will go; who knows, all it takes is another so called expert to call the shot. Buy, if it is your future home for years to come; flippers, you deserve what is coming to you, I hope all you just get creamed AHoles!

#15 Kuato Lives on 10.27.16 at 6:55 pm

Free Mars.

#16 MF on 10.27.16 at 6:56 pm

So let’s get this straight:

A rate cut would cause higher inflation, reduce our purchasing power (make us poorer), and throw more fire on our already overheated housing market…yet our central bank is considering doing just that?

How incompetent are these central banks?

Oh yeah these economists read some failed theory and are determined to follow it right off the cliff.

Pathetic.

MF

#17 JRH on 10.27.16 at 6:59 pm

Edmonton Costco stores are very busy, but for how long ?

#18 I'm stupid on 10.27.16 at 7:04 pm

Interesting read for anyone who’s interested.

http://michaelmoore.com/trumpwillwin/

#19 Ronaldo on 10.27.16 at 7:05 pm

According to this article in Castanet, the Asians are now invading Kelowna real estate market. Maybe DA can confirm this. Apparently, along with low ROI, the 15% tax on foreigners has caused them to look northward.

http://www.castanet.net/news/Kelowna/179293/Asian-investment-growing

#20 Keith on 10.27.16 at 7:08 pm

Using a non – zero graph to make the data slope more steeply?
Garth, don’t get sucked into these cheap mathematical tricks.

TD Bank graph. Tell them. — Garth

#21 Max on 10.27.16 at 7:13 pm

How bad does it have to be for this to happen:

“Abandoned dog waits for owners on dirty mattress next to trash after family moves out”

http://globalnews.ca/news/3029079/abandoned-dog-waits-for-owners-on-dirty-mattress-next-to-trash-after-family-moves-out/?utm_source=Article&utm_medium=MostPopular&utm_campaign=2014

#22 Ronaldo on 10.27.16 at 7:14 pm

Sorry #3 Paul, I was reading from bottom up and I see that you have already posted the article re: Asians buying up Kelowna. Sold my place in Vernon end of August. On the market for a year. Set my price high and held it there and sold for pretty close to asking to a couple from the lower mainland. Not just Asian money moving north according to my realtor. A lot of people from lower mainland cashing in and retiring up there. Does not surprise me given that the prices are still basically below the high of 2008.

#23 Realtors and Mortgage Brokers in an all out PANIC! on 10.27.16 at 7:22 pm

What’s the problem realtors? what about you mortgage brokers? The RE market is soooooo strong and everyone wants to buy here? The fact is Canada is in a housing Ponzi scheme created by people like you. Wild bill is off to a good start but he has to get Mortgage brokers to share the risk . E-mail wild Bill and T2 and even that CONservative wolf in Liberal clothing WYNNE. Let them know that Canadians shouldn’t be taking the risk via CMHC on Mortgages and that they should operate in the free and open markets.

mailto:[email protected]
mailto:[email protected]
mailto:[email protected]

#24 A Heavy Hand not Unusual on 10.27.16 at 7:24 pm

MST seems onerous but we have had a heavery Government hand before:

-5 year fixed-rate mortgages more than 15% for about 2 years, from the fall of 1980 to the fall of 1982, peaking at 21.46% in the second half of 1981. This to stem runaway inflation and to cool the 416 RE market then.

Now, 56% of Canadians are $200 or less per month away from budget Armageddon [35% technically insolvent].

Encouraging additional Canadians to enter into similar financial oblivion because of house lust would be irresponsible.

MST discourages those 56%/35% numbers from becoming larger.

This has been an unprecedented asset bubble. If a job loss recession or the like economic shock happens, the result may well be unprecedented as well.

Better to put the brakes on now than when it is too late.

bsant

#25 MSM-Free Zone on 10.27.16 at 7:25 pm

The CMHC statements in the last paragraph are insultingly laughable.

Like the kid who’s been knocking over dishes in a china shop while stuffing his face from the candy jar, “Mom, honest, it’s not my fault! It was somebody else, not me!”

#26 Fiendish Thingy on 10.27.16 at 7:25 pm

God/Goddess/Higher Power of your choice Bless Wild Bill!

Overreach? IMO, he didn’t go far enough- should have shut down CHMC completely.

There will be pain ahead, some of it caused by lusty moisters, some of it by the reckless policies of the Harper administration. Bill’s plan will prevent a US style cratering of Canada’s RE market that might have been delayed a bit, but was inevitable.

Bill Morneau is the Sully Sullenberger of Canada’s economy.

#27 bsallergy on 10.27.16 at 7:26 pm

It’s about time.

#28 Julie K. on 10.27.16 at 7:28 pm

“What should be done with Politicians that sign away your countries rights and freedoms and our childrens future?

Soldiers fight and die for the country but what do politicians do?

What should be done with them?

It would be great to get some sensible responses.”

Credit: Dave, October 22, 2016, Wolfstreet.com, commenting on Don Quijones post title “Tiny Region of Wallonia inSmall Country of BelgiumTrips up Global Corporatocracy”

~~~~~~~~

#29 the other white meat (pork) on 10.27.16 at 7:31 pm

You’ve always said that real estate is local, this turn of events is proving the truth of that statement. Some parts of Vancouver seem to be doing ok and others not so much. If market sentiment isn’t broken there could be increased pressure on lower priced real estate like condos or houses out in the valley. I’d rather be stabbed in the eye than live out there, but to each his own.

The little rancher in Norgate I wrote about a few weeks ago is still on the market at 1.7, a ridiculous amount of money for a post war bungalow built on a drained swamp. Blog dog Frank posted info yesterday that indicated Dunbar is just fine. Maybe Frank is an agent but his comments have been reasonable and intelligent so shouldn’t be discounted out of hand. This isn’t the place that house humpers turn to for positive reinforcement about their decision to buy.

It is very early in the game to make an accurate forecast as to how things will play out. Only a few sources know how many speculators are involved, but I think we will all find out shortly. I must confess that I’m enjoying this immensely after years of listening to brag and insolence from these newly minted HELOC millionaires.

#30 Mr. Frugal on 10.27.16 at 7:33 pm

Gonna buy more U.S. equities after Trump gets elected and the S&P 500 goes on sale. Go Trump!!!

#31 Ronaldo on 10.27.16 at 7:41 pm

”And if you’ve made a fat capital gain on your house, take it.”
————————————————————

I have, and now fully invested and growing. Happy to be “home free”.

#32 A Yank in BC on 10.27.16 at 7:43 pm

It sure as heck looks like the U.S. bond market is pricing in a Dec increase. Treasuries have generally been heading south since July, and are now starting to accelerate in that same direction.

#33 Joe2.0 on 10.27.16 at 7:43 pm

Banks will milk the cash out of everyone and then increase rates.
Just like always.
History repeats itself.
Shame on us

#34 Self Employed Dude on 10.27.16 at 7:45 pm

As a member of the collective of Self Employed Dudes, i’m really getting tired of being pissed on by the Canadian gov. Although I am not moist enough to do something stupid like be effected by the MST. And not currently in the housing market (just building Capitol and reinvesting in my business). I do find it tiring the constant attacks the Canadian gov puts forth on my people.

I run a successful business. I employee roughly 25 Canadians and pay them well. I feed the gov plenty of money every year in taxes, yet they continue to piss on me for being self employed. Perhaps they have never heard of not biting the hand that feeds them?

My wife who is also self employed recently went through the nightmare that is ‘unemloyment insurance for self employed individuals’ while on maternity leave. Let me tell you, that program is some sexist self employment hating BS. Every step along the way is an extra jab.
1) regularly employed individuals who apply must have worked roughly 6-7 weeks before being allowed to apply. Self Employed on the other hand must have 32 weeks. Why? Because F the self employed.
2) self employed mother’s must fill out bi weekly reports while on maternity leave. While regularly employed do not. Why? Because F the self employed.
3) you must wait 52 weeks after applying to the program to apply for benefits. Harper originally said 6 months in this platform for prime minister, but changed it to 12 later. Why? Because F self employed women who want to have a baby. Now you might think hey, wait a minute that makes sense. But what you should know is that once you apply, you pay premiums for life. You aren’t scamming the system by applying once you realize you have a moister jr on the way. The system is scamming you.

#35 bb on 10.27.16 at 7:46 pm

Looks like the CAD wants to break out just by looking at the chart.

RE isn’t liquid. But its a versatile investment.

When people cant afford houses and no financing is available, they rent. This will give homeowners the opportunity to rent out their basements/condo at “landlords’ market” price. Renters will subsidize landlords’ mortgage.

For single guys/gals who are homeowners, they can always date and have a partner live with them. partner pays rent. Renter subsidizes landlord (BF/GF’s) mortgage.

For condo owners, they can always list on airbnb. Tourists pay less for condo rent vs hotel rooms. Renter subsidizes landlords’ mortgage.

2017 is 2 months away. That means another 58,000 families coming here as newcomers. Add that to the demand for rental places. BTW, 5,800 of them have cash to bid up your house.

#36 Low Rates are not the Answer on 10.27.16 at 7:47 pm

40% of Canadian manufacturing jobs have been lost since 1987 [largest part of that drop coinciding with NAFTA, 1995].

A $0.646 dollar stalled the loss in jobs [2002].

When the dollar increased to $0.719 in 2003, manufacturing jobs began to disappear and quickly.

Probably why Harper “goosed” RE to offset those job losses by not bringing in Morneau measures or the like.

RE labor has no foreign competitors, it is not like you can airlift a cheaper home from the US and plant it in your YVR lot.

One of the fundamental problems we have is lower productivity in our labor force relative to other industrialized countries.

Labor productivity in Canada grew by 1.4 per cent annually over the 1980-2011 period, while it grew at a much faster 2.2 per cent in the U.S.

A low dollar masks the problem by making our goods cheaper to buy but in reality, “kicks the can down the road” when it comes to solving labor productivity in the long run.

Poloz has to stop trying to beat a dead horse. Our lower dollar since 2013 has done nothing for the economy. Why he persists on a low rate policy boggles my mind, with no economic successes to show in the past 3 years.

Give it up already Poloz. I would fire him if after 3 years he has nothing to show for his efforts.

And T2 et al, after legalizing 420 [personal note], have to address the Canadian productivity problem.

Let rates rise.

bsant

#37 Calgarian with lots of free time on 10.27.16 at 7:47 pm

Hi Garth!
Two quick questions.

1. Can you elaborate on what you mean by go short on bonds. I have 20% to 25% Canadian Bonds (etf) in my portfolio.

2. Would it be wise to sell some of my Canadian (TSE) ETFs and by similar ETFs in American dollars (NYSE).? I think I can do that within questrade.

Thanks

#38 Holbourne Crescent Real Estate Update on 10.27.16 at 7:50 pm

All eight houses are still here. I just went outside and looked.

#39 mike from mtl on 10.27.16 at 7:50 pm

RE: #13 Hotdogs from Heaven on 10.27.16 at 6:51 pm
So does anyone out there no any decent royalty trusts or high yield ETFs that are U.S. based and pay their dividends in greenbacks?
=====================================

Just buy US listed ETFs directly on their appropriate exchange. At least my brokerage I can exchange USD trades directly so long as there’s USD cash in the account. Otherwise a few per cent will be added to the CAD-USD exchange.

The foreign withholding tax (i think 15%) will be an issue depending on how you do so.

#40 Corey Lewindouchebag on 10.27.16 at 7:53 pm

Mr. Trump can fix your real estate. He is a real estate expert. He fired me but I still love him more than my wife and kids.

#41 Bram on 10.27.16 at 7:58 pm

Garth,

Allow me to counter that panic with some clear-headed observations:

1) That graph starts at 12% not 0%, and shows a 3 pt increase from its low. Sure, significant increase, but it doesn’t warrant the drama: the graph looks scarier than it is.

2) Why is everyone thinking a low loonie is bad? A cheap loonie is our friend to get the economy going again. A high loonie would be disastrous.

3) House prices going down does not mean construction will go down with the same rate. E.g. cheaper land could help, not hurt builders. Also, cheaper houses doesn’t mean homeowners can stop maintenance. If anything, maintenance of your house becomes more important, as you can no longer sell ruins in this market. Again, good for the construction sector.

#42 Trojan House on 10.27.16 at 8:00 pm

Not sure why they want to always punish self-employed, commission dudes and landlords. I was a commission dude a few years back. Damn near had to give my left nut to get a mortgage. Ahhhh, the good ole days – when it was easy to get a mortgage!

#43 common sense on 10.27.16 at 8:01 pm

#16 MF

I agree but what other option do they really have.

As for the FED, let’s see…

#44 zee on 10.27.16 at 8:01 pm

Garth,

You have quantified that the mortgage changes means price decline of approx. 5-10% in the gta, that’s nothing. Will take price back just a few months.

So why do you keep saying these are big changes.

#45 Esoteric Note... on 10.27.16 at 8:02 pm

As a former dog owner, I JUST LOVE THAT HALLOWEEN DOG PICTURE…too funny, Blair Witch, meet Pug.

Borrowed it for a post on my Facebook page, hope you don’t mind Garth.

bsant

#46 Nemesis on 10.27.16 at 8:04 pm

#BonusBonusMischief… #TheEmperorIsFar… #AndTheMountainsAreTall,Or… #Who’sWooingWho,Mr.Woo?…

[VanSun] – New Trudeau Senate appointee Yuen Pau Woo has both his fans … and detractors in B.C.

…“This would make sense if it was the Chinese government that appointed him to the Canadian Senate, because he’s he’s certainly very focused on looking out for Chinese interests,” said New Democratic Party MP Nathan Cullen, the MP for Skeena-Bulkley Valley.

“I’m looking out for British Columbia and Canadian interests, and I don’t understand this prime minister’s obsession with China’s priorities to the detriment of our own.

“We have a prime minister who is pretending to listen to First Nations and environmental concerns, but really his strongest motivation is a trade deal with China and moving Canadian raw resources to China as quickly as possible.”…

http://vancouversun.com/news/local-news/trudeau-fills-b-c-senate-appointment-with-yuen-pao-woo

#[email protected]”RedChamber”…

https://youtu.be/Xn28l1nuQnU

#47 Quebec is Great on 10.27.16 at 8:10 pm

#4, #14, #16

It’s all Relative

Interest rate increases/decreases are based on where economy of the country is projected to be in the future.

Of all top G7 countries, you would have a difficult time arguing that any country on the list is in a better future economic position (short and mid term range) than the US. This is certainly the case between US and Canada.

So many blog dogs ranting about the US lol… do you really understand how astonishingly bad Canada’s economic future is?

From a RELATIVE standpoint, US is better positioned than Europe, Russia, Japan, Australia, China .. and is there anyone else?

US is going to raise rates, Chinas economy will continue to leak, Australia will suffer its own housing collapse and experience lackluster exports unless metals and commodities jump – which it won’t.

Russia needs OPEC to stick or it will continue floundering, and Japan is experiencing an existentialist currency bomb that Canada may be about 20 years away from experiencing itself.

Canadas export market as a whole got nuked when oilsands pushed CAD $ strength. (remember all the industries heading to US and Mexico because they couldn’t make a profit with the high CAD?)

Now that Oil is topping out below $55/bbl and the great Canadian Economy save .. the Oilsands is floundering, Canada has nothing to fall back on. Now stockpile the soon to be unemployed construction/renovation workers, mortgage brokers and realtors. (isn’t there something like 100,000 realtors in Canada right now?) and you have a recipe for true disaster. (need I mention that many Canadians are already living paycheck to paycheck?)

If you want industry to come back to Canada, they have to be profitable and that means costs have to be lower than in the US despite:
1. Higher minimum wage
2. WSIB fees – what is it – something like 10% of WSIB fees get paid out and the rest go into gov’t coffers.
3. High rents / mortgages
4. Insane customs red tape and fees

this is a high bar to surmount without a drastically reduced Canadian dollar value (compared to US, Mexico, etc.)

I could be wrong, but that is my take on all of it. I’m happy to hear if others disagree and no offense intended to anyone.

#48 Sugarlips on 10.27.16 at 8:15 pm

Garth should those that can’t shake the property addiction at least be looking to buy US houses in cash for yield in places like Phoenix Az for a tenth of 604 homes?

#49 Context on 10.27.16 at 8:19 pm

Let me tell you what really happened during the last bubble bust. There was fraud discovered everywhere that even those connected with the Real Estate business never knew about as it caught all by surprise. The courts were backed up for years with complex deception and many lawsuits and tons of money was lost. The biggest problem was lending on bogus appraisal reports because many were on the take. This next bubble will become a circus with no end in sight.

#50 Pete on 10.27.16 at 8:20 pm

“First, there’s a good chance Wild Bill overreached”

Do you think he overreached? I would like to see him push for a more free and open market type of lending and away from CMHC which grossly distorts rick and the housing market.

#51 traderJim on 10.27.16 at 8:20 pm

It’s kind of baffling (and worrying) that there is all this hysteria over the Fed perhaps raising rates BY ONE QUARTER OF ONE PERCENT.

Seriously? I was around in the early 80’s when (Fed) rates when to 18%. IIRC they were being bumped up a full point at a time.

In 1994 (?) rates went to 9% and man did TSHTF.

I suspect the Fed’s move will be ‘one and done’, or maybe ‘two and see you’. So, up a whole half a point.

The fact that this is even a topic of conversation should worry everyone.

If the economy is so fragile and debt laden that a half point increase in rates is problematic…welllll something is very, very wrong.

Clearly, if rates go up to 4% or 5% then the country and many of its inhabitants will go bankrupt, so that’s never going to happen. Well, not in my lifetime anyway.

We are Japan folks, get used to it. Low growth, massive debt, low rates for ever after.

That is, until the whole sham collapses and we start over. But since I probably only have 25 years or so to live, I doubt I will see that.

#52 Gh on 10.27.16 at 8:22 pm

Garth, please Stop with the cauliflower retails comments as if it has something to do with the general economy or government policy. I am a produce buyer and the high cost/retail was due to a severe frost in Arizona that killed most the crop. The high cost/retail was felt in Canada and the states (as we have a USA chain as well). Stop using this argument as it is false.

#53 common sense on 10.27.16 at 8:23 pm

#46 Quebec

Bingo!

Welcome all Canadians to the decade of pain until this all washes out…

#54 Boombust on 10.27.16 at 8:24 pm

#5…WOW

I’d rather see Garth quote a guy like Steve Saretsky anytime over the fictitious piles of poop spewed out by the likes of Cameron Muir!

#55 Understood by few on 10.27.16 at 8:25 pm

Very wrote: “MORE AND MORE HOUSES SITTING ON THE MARKET UNLOVED”

Yeah, that’s why Victoria is at all time low inventory levels. It’s record low. Your prediction of prices falling by September was wrong and October is shaping up to be a big month for sales despite new mortgage rules. Sales to new list is in the 80s. Still a crazy seller’s market.

Keep kicking that can. One day you’ll be right.

#56 Doghouse Dweller on 10.27.16 at 8:31 pm

#13 Hotdogs from Heaven

Try etfdb.com.Screen for the dividends and characteristics your looking for ~

http://etfdb.com/screener/#assetClass=Equity&dividend-yield=5.01…&tableTab=dividends

High yield = High risk

#57 Hotdogs from Heaven on 10.27.16 at 8:32 pm

#13 Hotdogs from Heaven on 10.27.16 at 6:51 pm
So does anyone out there KNOW any decent royalty trusts or high yield ETFs that are U.S. based and pay their dividends in greenbacks?

Sorry for the previous typo.

#58 AfterTheHouseSold on 10.27.16 at 8:32 pm

#6 RYAN PURDY
“This blog has been real doom and gloom lately. … give me some happy news!”

Ryan, you must be new. We don’t do ‘happy’. Until you have plumbed the depths of the first ‘Misery Week’, you haven’t experienced ‘doom and gloom’.

#59 Jungle on 10.27.16 at 8:40 pm

@ RYAN PURDY

Canadian equity by way of TSX Comp is up 16.78% YTD
I would not consider preferred shares proper Canadian equity, dispite what garth suggests holding them is more risk than what it’s worth. They have underperformed badly most recently. When BOC drops interest rates (again), these will get hammered (again)

Make sure you come here on Saturday. — Garth

#60 Wrk.dover on 10.27.16 at 8:40 pm

What does it mean when financial blog sites become doomsday prophets?

Party like it’s 1999 I guess.

That is still illegal though.

#61 Rexx Rock on 10.27.16 at 8:41 pm

Canada will be just like Japan is now.Its not pretty,no growth and huge debt.Our currency will devalue and inflation will kill the middle class.People will refuse to pay for certain foods or consumer products that deem to expensive.Canadians will finally live within their means because of lack of money and credit.Depression and crime will skyrocket.

#62 Smoking Man on 10.27.16 at 8:44 pm

Everyone is doomed. One day you will die.

Till then. Have fun.

#63 Tina Frankenberg on 10.27.16 at 8:49 pm

Is this a gloomer website? Toronto real estate will never collapse in value.

Canada ranks as the second best country globally. Our economy is the largest in the world, larger than the American economy.

We have a Prime Minister who respects the right of women, and he isn’t afraid to be a feminist.

Why should we obey feminism? Feminism is really the principle of our own development and the path to our happiness and fulfillment in Canada. We serve ourselves when we serve Feminism.

Feminism is synonymous with spiritual ideals: love, truth, justice, beauty. Toronto is a beautiful city because we respect women, and we believe women when they speak their tragedies of a victim in a rape culture.

Toronto is the best city in the world for me. I am proud to live in a country where we respect the rights of women.

I do not mind paying an extra hundred thousand to purchase a home in Toronto. Toronto is my home. Toronto is one of the safest and economically powerful city in the world.

House prices will increase in value because our city is great.

Why would I want to live in a city like Kuala Lumpur or Mecca where sexism and rape culture prevail?

Toronto is my home, but I will not mind lecturing the King of Saudi Arabia that oppressing women in his country is sexist and barbaric against women. The King of Saudi Arabia should follow our Canadian leader to run his country.

Canada will forever remain the greatest country in the world because we respect human rights and women.

It is the reason why our real estate is in demand. Toronto is the best city in the world, and it will be the greatest city in the world for eternity.

#64 Brian Ripley on 10.27.16 at 8:55 pm

I just came from getting my flu shot at SaveOn Foods and overheard at the long lineup at the express checkout that was not so express… “Do they have any self checkout lanes here?”

One more item to add to the growing list of higher productivity rates, fewer jobs and weaker employment earnings for the people who have to live in the “affordable” suburbs and commute to their urban core service jobs… this… Uber Freight:

http://www.chpc.biz/history-readings/dont-fight-forces-use-them

See the short youtube on the Uber Freight startup at the bottom of the page of the post link above.

Huge exponential gains in AI are occurring now.

As society transforms and old employment niches disappear, the debt side of the household balance sheet for consumption of depreciating assets will not look nearly as appealing as debt used for investment of production activities.

#65 Off With Their Heads! on 10.27.16 at 9:00 pm

All the little entitled Millenials will soon experience the “poor effect.” And those in their dark rimmed designer glasses, looking out from under a heavy set of bangs gripping their non fat soy lattes will realize they were never rich at all. And when they glance down at their huge mortgage balance, from their tiny little condo window overlooking the Gardner Expressway, they will wonder, how did this all go so wrong? They will cry, “someone told us houses always go up, that’s why I paid more in the bidding war.” They will ask “but what about the ceaser stone countertops and stainless steel appliances that I overpaid for too?”

They will be confused, they will cry and they will learn a very valuable lesson, life is not fair, not everyone is a winner and participation badges weren’t a sign of awesome achievement.

Boo hoo.

#66 Parkville Prankster on 10.27.16 at 9:01 pm

@13 – I’ve always had good luck with US prefs in a little sweetheart ETF they like to call PFF:US. 5.98 % yield, but no Canadian tax credit, so keep it in your RRSP to avoid the withholding tax if you plan to hang onto it for a bit.

#67 Doghouse Dweller on 10.27.16 at 9:02 pm

#36 Calgarian with lots of free time

He means buy short term bonds. The longer the the duration of a bond the more the price declines when interest rates rise. US 10 yr up 3% today !
Lots of free time ? Go to the library and get The Money Road and After the Crash by GT.

#68 Off With Their Heads! Part 2 on 10.27.16 at 9:03 pm

Tina, it’s time to go back on your meds, my dear.

#69 Mark on 10.27.16 at 9:05 pm

“A rate cut would cause higher inflation, reduce our purchasing power (make us poorer), and throw more fire on our already overheated housing market…yet our central bank is considering doing just that?”

A rate cut would be in response to the deflation that is accelerating in the Canadian economy. With the currency soon to follow much higher. House prices are based on physical supply versus demand, and demand is falling while supply is exploding. Has nothing to do with interest rates at this point.

If anything, the BoC is probably behind the curve in cutting rates given how much the economy has decelerated and is on the verge of decelerating given the amount of Canada’s GDP that is in the RE sector. There simply isn’t much of anything to take the place of the RE sector. Even if, for instance, the gold sector explodes upwards in Canada as I’ve been predicting, only an extremely small cross-section of Canadians would ever realistically be participants (as workers, investors, etc.). What else is there really?

#70 Tony on 10.27.16 at 9:17 pm

Re: #3 Paul on 10.27.16 at 6:18 pm

It will make them all poor. It’s called the spillover effect. Granted the Canadian millennials are completely clueless so what in the past took a day or so may take about 6 months before we see serious prices declines in Kelowna.

#71 toronto1 on 10.27.16 at 9:20 pm

Only time will tell if “wild Bill” over reached, i dont think so but hindsight is 20/20. We heard the same cries from pundits when the Conservatives dismantled the income trust scheme (end of the world, no one will invest etc…) same when they cut the 0 down/ 40year then the 35 year mortgage etc.. that was the end of the world as well etc..

If anything, they waited too long, without economic growth, real true growth in good jobs and wages RE prices are not sustainable. With so many people dropping 50-60-70% of after tax money on mortgages or lines of credit or credit card debt, as soon as the economy takes a dip (not even a recession but a minor dip 3-6-9 months long) its catastrophic. Small business drive the economy but with no after tax money left to spend the economy goes into recession and it becomes a self fulfilling endless loop with no recovery.

just look at the retail landscape, brand name retail stores closing left and right, restaurants for sale left and right. With the high amount of current debt load, going bankrupt is going to be the only option for a lot of Canadians weather they realize it yet or not.

the gut feeling i have is that the Fed govt a long with the big banks have run risk models based on modest variables and are scared sleepless of what those models have shown. All you have to do is read between the lines- BoC revising their already rock bottom growth estimates down– FT jobs disappearing at a rate that unheard off outside of recessionary times with new job growth all in the self employed/pt variety etc..

#72 Elizabeth O'Brien on 10.27.16 at 9:20 pm

A lower Canadian dollar will never happen ever again. A 60 per cent Canadian dollar is a myth.

Canada is one of the greatest economic powerhouses in the world.

Toronto is home to the largest banks and financial industries in North America. Home prices are not going to go down NEVER!

More women in Toronto earn enough money to buy a house without any help from a man, thank you.

I’m going to keep saying loud and clearly that I am a feminist until it the comments section is eradicated of veiled misogyny when bloggers allude that lower house prices are good for single men.

#73 Smoking Man on 10.27.16 at 9:23 pm

Tina Frankenberg

Ha, you just made my day.

#74 South Etobicoke Trump Campaign Central on 10.27.16 at 9:31 pm

Anyone setting up their portfolios to take advantage of a Hillary win? Any tips?

Also obligatory:

https://www.ready.gov/nuclear-blast

#75 Tony on 10.27.16 at 9:33 pm

Re: #54 Understood by few on 10.27.16 at 8:25 pm

Give it time, presently the Canadian Millennials can’t see the forest for the trees. Prices will nosedive in Victoria just give it time. It’s called the spillover effect from Vancouver. Strange how an American Millennial would instantly figure it out yet it takes a Canadian an inordinate amount of time.

#76 Mark on 10.27.16 at 9:34 pm

“Yeah, that’s why Victoria is at all time low inventory levels. It’s record low. “

“Inventory” is low because sellers are in disbelief at how much prices have dropped. Only delusional Realtors believe the ‘headlines’ these days, and even in private, to their clients, based on comps, the Realtors know prices haven’t gone anywhere in over 3 years.

All that’s left at this point is the panic and the foreclosures to bring more supply to market. Because higher prices sure aren’t happening, especially with credit tightening up so much.

#77 Scott on 10.27.16 at 9:45 pm

Tina #62. Are you kidding me? That’s pretty impressive economics putting our economy larger than the U.S. I didn’t know that.

#78 dosouth on 10.27.16 at 9:46 pm

Good to see that something is out of reach of these “moisters”. Time to earn and learn about savings and hard work vs. I just think I should have “________________”

#79 Smoking Man on 10.27.16 at 9:53 pm

I just saw a clip of these young kids toss pumpkin seeds then turning their back on T2.

Keep you promises they rage.

I’ve warned you blog dogs about how teachers are messing up kids minds. Chapter 10 in my book for more details and a full explanation from Shlong Zumanga.

These super entitled little brats will never cut a two by four. Weld something. Write a fiction novel.

They are going to sit on their ass demanding you pay for it. Super Progressives as I call them.

If you have any amount of real wealth ask Garth how to get it out, or hedge it away from this mad country and keep it safe.

Real Estate in 416 has two more good years, then the fat lady takes center stage.

Saw it in a dream.

#80 N on 10.27.16 at 9:54 pm

#62 Tina Frankenberg – it (Toronto) will be the greatest city in the world for eternity.

There will be no world in eternity – just heaven. Eternity is not “forever and ever”… it’s a state where time will cease to exist. And we’ll be with Jesus.

#81 Smoking Man on 10.27.16 at 9:57 pm

#71 Elizabeth O’Brien on 10.27.16 at 9:20 pm
A lower Canadian dollar will never happen ever again. A 60 per cent Canadian dollar is a myth.

Canada is one of the greatest economic powerhouses in the world.

Toronto is home to the largest banks and financial industries in North America. Home prices are not going to go down NEVER!

More women in Toronto earn enough money to buy a house without any help from a man, thank you.

I’m going to keep saying loud and clearly that I am a feminist until it the comments section is eradicated of veiled misogyny when bloggers allude that lower house prices are good for single men.
….

Go girl…..

I have so much to teach and so little time left.

#82 calgaryPhantom on 10.27.16 at 10:01 pm

@#71 Elizabeth O’Brien
——————–
Sure, women in toronto can buy a house without any help from man.

But, they should make sure the specs are exactly as below.

Bedrooms : 0
Bathrooms : 0
Livingroom :0
Kitchen : 1
Basement :0
Garage :0

#83 Arfmooocat on 10.27.16 at 10:06 pm

#62 Tina Frankenberg

What a crock of shit

Our stupid housing market has nothing to do with the best country to live in, great PM, great economy, blah blah blah

It’s all because people wanted to jump on the housing train to make a buck or a couple 100 thousand of them.

It was the easiest money maker in the world, nothing even came close to it which charged and energized the mania even more.

When the train stops and the ride is over it ain’t so shit hot any more

#84 jane24 on 10.27.16 at 10:19 pm

A lighter comment guys as this column needs it.

I am renovating my hovel in Italy and trying to keep costs down. I explained this to the builders and asked for a laminated kitchen counter. Their response was that if I really needed cheap then to go marble as this is the cheapest counter they could provide. Loads cheaper than laminate apparently as dug up locally but did I realise that visitors would comment on the cheap marble!

Made me laugh.

#85 WalMark of sadkatoon on 10.27.16 at 10:20 pm

If our central bank doesn’t follow suit, or drops its key rate a quarter point to just 0.25%, then you can count on three things. (a) Lots of inflation and $8 cauliflower. (b) A dollar worth something with a ‘6’ in front of it.

Don’t tell delusional marko or he’s gonna lose his sheet

#86 Bytor the Snow Dog on 10.27.16 at 10:24 pm

It sucks when your posts don’t even merit a DELETED.

#87 Ret on 10.27.16 at 10:24 pm

#46

#1 Not just minimum wage is higher, all wages are higher as they compete with public sector wages which are the highest in North America. To all the teacher haters who want teachers to work for 50K, that’s the caretaker’s wage in Ontario. Cops and firefighters, 100K+. Why go to work in a factory when you can drive a city truck around Hamilton all day and make 60K a year?
#5 Higher costs for internet, phone, water sewage.
#6 Gridlocked transit/trucking routes
#7 Hydro rates. Thanks Kathleen.
#8 Federal CPP increases in contributions for new enhanced pension plan
#9 Poor productivity. Family Day in February? How smart was that?

Who would ever set up an operation in Canada without millions of dollars in bribe money from federal, provincial and municipal governments?

#88 Smoking Man on 10.27.16 at 10:28 pm

DELETED

#89 Bytor the Snow Dog on 10.27.16 at 10:28 pm

Tina Frankenberg = Sarcasm.

Maybe. I hope.

#90 Freeman on 10.27.16 at 10:38 pm

For all of you ‘GOLD BUGS’ out there who keep talking about how we need to buy gold because the economy is collapsing; Look at this 15 year chart of Gold:

http://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=15&mn=0&dy=0&id=p95696037966

Notice how it peaked around 2012 and has been on the down-trend ever since ?

Now look at the 15 chart of Caterpillar, a company that is global and reflects the health of the global growth: http://stockcharts.com/h-sc/ui?s=CAT&p=D&yr=15&mn=0&dy=0&id=p95696037966

Notice how it too has peaked around 2012, a re-bound to the same peak in 2014, but overall seems to now be on the downward slope of things?

Put those 2 charts together and they seem to be pointing to the fact that inflation is behind us, and that deflation (and falling Gold prices) is ahead of us.

Guess what also falls in price when the global economy falls into a nasty DEPRESSION? House prices usually crater by 50% to 90% in a depression, over a period from 15 to 30 years. Just look at Japan as an example of that. Canada is going to be following that example, we are the 2nd Japan.

Sell now, avoid the rush.

#91 NoName on 10.27.16 at 10:41 pm

#73 South Etobicoke Trump Campaign Central on 10.27.16 at 9:31 pm

its 3min to 12 for some time now, its not fallout that will get you, it all those other thing that you don’t think of.

If you are so scared of big kaboom i suggest for you to move to saharan libya, only “safe” place in my opinion hardly any rain precipitation and deep underground aquifer. also bring some sunscreen, with minimum 50 spf.

because people that make kaboombustic statmens like you just did, con will never have chance here in canada, we will be stuck with wind/trudo typo laders for ever…

raed

Speaking to a media conference in Munich, Merkel said: “I’m of the opinion that algorithms must be made more transparent, so that one can inform oneself as an interested citizen about questions like ‘what influences my behaviour on the internet and that of others?’.

https://www.theguardian.com/world/2016/oct/27/angela-merkel-internet-search-engines-are-distorting-our-perception

#92 Smoking Man on 10.27.16 at 10:45 pm

Regardless of the outcome Nov 8th

MSM is toast. Thank you, god trump.

One step in the direction for justice, for 3000 beautiful people, and their family that died on Sept 11, 2001,

Step in the right direction.

#93 meslippery on 10.27.16 at 10:50 pm

#20 Keith

From 1997 to 2016 the graph does not go
below 12 percent.
We all know below is 10 9 8 and so on.
Whats your point?

#94 Smoking Man on 10.27.16 at 10:51 pm

To a 15-year-old in our schools

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

I got your back.

#95 daveyb on 10.27.16 at 10:53 pm

South etobicoke for life!!!

#96 Smoking Man on 10.27.16 at 10:59 pm

Best song in the world to be looking out at lake Ontario in October from Long branch.

Shine on, Sid

https://www.youtube.com/watch?v=1N8BYNMMjqU

#97 Unumizer on 10.27.16 at 11:02 pm

What I haven’t seen is a chart of how many of the recent purchasers have borrowed their “max”. I have 2 millennial that work for me that recently bought homes and spent well under what they were pre-approved for. If this is normal the new stress test will have limited effect. The realtors panic but maybe the buyers are OK with this.

#98 Shane on 10.27.16 at 11:03 pm

If the loonie crashes, foreign money will buy all our prized real estate. That is a fact.

Why are we always confusing the public ? One day our grandchildren will curse their grandparents.

#99 Smoking Man on 10.27.16 at 11:08 pm

DELETED

#100 Shane on 10.27.16 at 11:09 pm

A 60 something dollar will magically result in zero inflation.

Stats are rigged these days.

#101 Steve on 10.27.16 at 11:10 pm

No more insurance for landlords? Can you explain. I was on CMHC site today and it still says we can have a 85% loan on a rental property (of more than 6 units). What do you mean by no more insurance for landlords?

#102 GreaterFool D. on 10.27.16 at 11:10 pm

Tina and Lisa – Feminist jokes!
Q. What did the feminist woman get her family for Christmas?
A. A bigger litter box and a brand new scratching post.

Q. What do feminists and Duracell have in common?
A They go on and on and on and on and…

Q. How to make a feminist dislike you:
A. Have a penis.

Q. How can you tell you are in a feminist bookshop?
A. There is no humour section.

Q. Why did the man cross the road?
A. To rape the women on the other side, according to Feminists.

My girlfriend is mentally retarded.
Or if you want to be politically correct, a feminist.

Q. What do feminists hate more than a sexist joke?
A. Having it explained to them by a man.

If a tree falls in a forest and no one is around to hear it, would the feminists blame the men for it?

Q. If two feminists get drunk and hook up,
were they both raped?

Q. How do you satisfy a feminist?
A. By telling her that you can’t.

#103 Smoking Man on 10.27.16 at 11:11 pm

BEING CRAZY SO UNDERRATED.

https://www.youtube.com/watch?v=DLOth-BuCNY

#104 Wow on 10.27.16 at 11:12 pm

#53 Boombust

You’re from Castlegar right?

#105 Pete on 10.27.16 at 11:12 pm

#62 Tina Frankenberg “Feminism is really the principle of our own development and the path to our happiness and fulfillment in Canada.”
You couldn’t be more wrong. Read Henry Makow’s book CRUEL HOAX.
Also, if you believe that you live in a “rape culture” try talking to some old women who lived through the end of WW2 in Poland or other Eastern Bloc countries.

#106 Annek on 10.27.16 at 11:16 pm

The housing market is also driven by the confidence that people have in their home purchases increasing in value .
In my office , full of millennials, they all pat themselves on the back congratulating themselves on their recent home purchases. Over priced, but that does not bother them as real estate goes up and up ,according to them.
Good investment, they say. These people are professionals and government employees , so perhaps they can afford million dollar houses in the GTA.
They all have stories of how much their homes have increased.
So, my question is, with this mindset, will prices really go down?
We all discuss the logic of high debts , affordability etc causing prices to drop.
But if rates do not drop, these people will live in their happy dream world and maybe they will continue to drive the market up.
They don’t read your blog. When I have mentioned Garth Turner, they say ” oh, no, you don’t read that stuff.
I am afraid they will keep the market up and maintain the false economy.
Even, some have family in Vancouver, and brag about their houses increasing all the time.
I visit many homes around the GTA and see so many huge homes everywhere. All at least 5000 square feet.
Many boomers living in them
What is going to happen to these huge homes. So many of them. Two seniors living in a 5,000 square foot house and cannot to upstairs to sleep or downstairs to do Landry.
Yes, I am jealous because we bought a modest house when we could afforded much, much more. But we did invest in other things. But ,I feel we would have been so rich if we went with the pack

#107 conan on 10.27.16 at 11:20 pm

Garth: I have a blag.
Conan: You mean blog, right?

Pathetic blag……. is that the new term? Are you taking us into the 21 century with this?

#108 Jay_Huhman on 10.27.16 at 11:43 pm

#14 ACDel – No, there are not 100 million Americans receiving SNAP benefits. There are 43 million as of July 2016, down 2 million from July 2015. See http://www.fns.usda.gov/sites/default/files/pd/29SNAPcurrPP.pdf.

#109 Love My Kia on 10.27.16 at 11:50 pm

“First, there’s a good chance Wild Bill overreached”

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

Um, what happened to unabashed free market capitalism? Wild Bill should be your best friend these days.

Anyone who thinks he went to far is a hypocrite, he opens the gate slightly to free enterprise and now they want government protection? I want nothing to do with bailing out anyone who lives in a home larger than mine.

As far as doomsday scenario of the fed raising rates, it will be miniscule to save face, the USA economy sucks too.

#110 Karma on 10.28.16 at 12:18 am

“#152 Wow on 10.27.16 at 2:33 am
The person whom you’ve been so fond of quoting lately is Steve Saretsky. Let’s look a little closer at this prognosticator, market observer and economist extraordinaire.

Mid twenties. He’s been selling real estate for 2 years. Before that he painted houses and worked at a golf course. He attended a high school (not sure if he graduated). He took a couple of business courses at Selkirk college – that would be that little community college in the booming metropolis of Castelgar, BC. And he took one real estate course.

Who you trying to kid?”

“#154 Wow on 10.27.16 at 2:49 am
Oh yea, Steve Saretsky has worked for Sutton for 9 months. He no longer works for Re-max. That’s his third real estate firm in his illustriously long career of 2 years.

He has zero listings. As has been using his web page vancitycondoguide.com as a way to market himself. It hasn’t been at all successful yet.”

……………………………

Ad hominem (Latin for “to the man” or “to the person”[1]), short for argumentum ad hominem, is a logical fallacy in which an argument is rebutted by attacking the character, motive, or other attribute of the person making the argument, or persons associated with the argument, rather than attacking the substance of the argument itself.[2]

Fallacious ad hominem reasoning is normally categorized as an informal fallacy,[3][4][5] more precisely as a genetic fallacy, a subcategory of fallacies of irrelevance.

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

#111 South Etobicoke Trump Campaign Central on 10.28.16 at 12:36 am

@90 NoName

You think my fears are irrational?

Just recently, Hillary’s campaign has begun disseminating pro-war propaganda disguised under progressive catchphrases used in her campaign. It’s trending on Twitter at this time, look up the hashtag #DraftOurDaughters

Here’s a few examples:

https://twitter.com/hashtag/draftourdaughters?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Ehashtag

They’re priming women for warfare against Putin. Under a Hillary administration, presumably, recruiting is going to be far below what is required in a shooting war with a major power, so the Clintin administration will have to recruit young women for front line combat.

Well, they did all vote for Clinton, so this may end up being poetic justice. There are consequences that may touch you very directly.

Truly frightening.

#112 Karma on 10.28.16 at 12:40 am

#169 Contacted Zolo Karma, to no avail on 10.27.16 at “8:35 am
Contacted Zolo.ca many times in the past couple of months, they do respond saying they are looking into it but that is all I every got from them.

For example, on numerous occasions found them changing Avg. Prices from 6, 9 and 12 months ago to increase current Avg. Selling Price, not once, but many times. Response per the above. Took screen shots just to be sure it was not my eyes.

There latest trick is to post “Reduced” property listing in the latter pages of a search. For example, search for Burnaby listings and in latter of 43 some odd listing pages, you will find those properties.”

Thanks. I haven’t looked nearly as attentively as you have. Just played around with prices recently and haven’t checked back since. I did notice that their disclaimer at the bottom says that only “Firm” transactions are reported, so it excludes about 30% of transactions that may have happened in that time frame because of a late reporting by the realtor. Perhaps, it gets updated retroactively as those lingering transactions get reported…

I’ll look into the “reduced” prices. I haven’t noticed that many, perhaps because they are at the end of the list.

Cheers.

#113 Quebec is Great on 10.28.16 at 12:40 am

#86 Ret..
yes, I was a bit short on my list there, thank you. All these issues must be addressed IMO before we see a significant positive on the needle for successful international businesses to start/grow in Canada.

I discovered a couple days ago (maybe here, can’t remember) that the Retail Council of Canada is largely responsible for the excessive customs red-tape/fees on small value items crossing the border. just an fyi that groups like this donate to campaigns to further their interests. From what I can tell, this council is largely responsible for killing off mom and pop ebay exporters.. (maybe not big money but in the past helped pay bills for those struggling).

anyway, all good – I suspect most of the unnecessary red tape will fall away if things get bad enough. My hope is those wielding the power to do so can recognize the high level of impact such seemingly small rules can have on a populous.

#114 Karma on 10.28.16 at 12:46 am

This is surprising… Nissan to make new investment in Sunderland.

https://www.theguardian.com/business/2016/oct/27/nissan-to-make-new-qashqai-and-x-trail-models-in-britain

#115 Ronaldo on 10.28.16 at 1:25 am

#89 Freeman on 10.27.16 at 10:38 pm

”For all of you ‘GOLD BUGS’ out there who keep talking about how we need to buy gold because the economy is collapsing; Look at this 15 year chart of Gold:

http://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=15&mn=0&dy=0&id=p95696037966

Notice how it peaked around 2012 and has been on the down-trend ever since ?”
————————————————————
If your talking in U.S. dollars, gold is down 33% from its high of Sept. 5/11 but in CDN dollars its only down 9.5%. (gold right now is $1700 cad) Up 317% in CAD and 352% in USD since the beginning of 2000. The TSX for example is up 48% since it hit 10,000 for the first time in March of 2000. Which has done better?

#116 Karma on 10.28.16 at 1:31 am

#224 Econsensus on 10.27.16 at 4:26 pm
“Karma, as of the 4:20 pm EST, the poll been shared over 13,000 times and has over 110,000 comments. If you would spend some time and reference the info of the commentators, you would see they are from all over the US and from all walks of life. There is no restriction on comments.. White, Black, Hispanic, Democrat, Republican, Independent, whatever, whoever can comment. Herdonomics 101.
Landslide is an understatement.. It’s a Trump Avalanche.”

Sure, it’s a landslide in this network of people who are likely all Republicans and are friends with Republicans, and shared it with other Republicans, who shared it with other Republicans. It literally means nothing in the broad scheme of things, aside that people from Republicans are active on social media.

And yes, I’m well aware that there are Black and Latino Republicans. It’s not news. Doesn’t mean the majority of them are Republicans though.

The sample size is skewed hard one way. When that happens, it’s not reliable as a predictor of a true outcome.

#117 Karma on 10.28.16 at 1:42 am

#18 I’m stupid on 10.27.16 at 7:04 pm
“Interesting read for anyone who’s interested.

http://michaelmoore.com/trumpwillwin/
—————————————
Interesting indeed, particularly when he says:

“Never in my life have I wanted to be proven wrong more than I do right now.”

#118 Don Regan on 10.28.16 at 2:18 am

Interesting price drop at, 475 East 46th Av, Vancouver East Side 33×121 ft lot and house. Org price $2,498,888
now down to $1,669,000 a reduction of $829,888.
Imagine if you had bought close to that, in the last 6 months.

#119 DON on 10.28.16 at 2:49 am

#54 Understood by few on 10.27.16 at 8:25 pm
Very wrote: “MORE AND MORE HOUSES SITTING ON THE MARKET UNLOVED”

Yeah, that’s why Victoria is at all time low inventory levels. It’s record low. Your prediction of prices falling by September was wrong and October is shaping up to be a big month for sales despite new mortgage rules. Sales to new list is in the 80s. Still a crazy seller’s market.

Keep kicking that can. One day you’ll be right.
********

The empty house down the road from me took the for sale sign down “the property sisters”. No sold sign. Took off the market. Re list and try to trick people, almost like trying to breath life back into the market.

When Victoria Real estate is right (sooner or later) unless you believe in magic…then you will be wrong and will have been wrong all along. Victoria has some tech – never see them hiring – the only ones hiring are public sector to replace retirees, and that has slowed down.

As Van slows…so does the migration to the island and interior of BC. Renters will be king, owners will need any cash they can get, young renters will move home or kids will stay home a little longer (lack of jobs). Does no one remember the 80’s in BC, the forest and mining tanked…Alberta Oil funk, economic cycles etc…….anyone? Turning a blind eye to history (and human nature) is a big risk.

The following is a list of factors expected to lift the economy is the next year.
*
*
*
*

#120 DON on 10.28.16 at 3:04 am

#71 Elizabeth O’Brien on 10.27.16 at 9:20 pm
A lower Canadian dollar will never happen ever again. A 60 per cent Canadian dollar is a myth.

Canada is one of the greatest economic powerhouses in the world.

Toronto is home to the largest banks and financial industries in North America. Home prices are not going to go down NEVER!

More women in Toronto earn enough money to buy a house without any help from a man, thank you.

I’m going to keep saying loud and clearly that I am a feminist until it the comments section is eradicated of veiled misogyny when bloggers allude that lower house prices are good for single men.
***********************

Yikes!

Elizabeth, my wife is a feminist, so are my sisters so was my mother and grandmother. Strong women, no one pulls the wool over their eyes. Makes my life a whole lot easier being in a partnership, equal say on everything. Cost benefit analysis on all financial decisions. She’s the accountant, I’m the researcher. She makes it happen.

In the case of the current housing market it is also good to be a realists for your own financial and emotional well being. If you haven’t seen this before and how it will eventually play out – you may want to find out and mitigate any potential risk. Don’t believe anyone but yourself.

#121 Huge exponential gains in AI on 10.28.16 at 5:03 am

I have calmly observed the promise of IT transforming Canada since the 80s with firms such as General Electric and later on, observing as an Academic teaching in that field.

The idea was business investment in software and other technologies was considered key to cutting costs and boosting employee productivity.

These jobs would offset lost manfuacturing jobs.

Well and to put it simply, it has not happened.

Canada spends 58% per worker on IT as the US does.

This has translated into a productivity earnings gap in the neighborhood of $7,000/person – and that from many years ago, it has gotten worse since then.

Canadian companies are averse to conducting R&D in technologies that boost wealth and productivity preferring to pass the buck to Academia and/or Government, then blaming then when they fall behind, which they have done for the past 30 years.

AI, just another pie in the sky notion that will see little or no investment by Canadian companies.

As long as rates stay low, companies can hide behind a cheap dollar to sell their wares.

Better to raise rates and let Canadian Zombie firms suffer/go out of business and allow competitive Canadian firms to prosper.

bsant

#122 drydock on 10.28.16 at 5:26 am

6 RYAN PURDY on 10.27.16 at 6:31 pm

The blog has been real doom and gloom lately. Garth we’re less than 60 days from Christmas give me some happy news!

………………………………………………………………..

Ryan , Ryan , Ryan.
You’ve haplessly stumbled into the wrong place.
We’re a Negan and Lucille sort of fun loving group.
Watch the season premier of The Walking Dead.
And
Read
The
Following.
………………………………………………………..

61 Smoking Man on 10.27.16 at 8:44 pm

Everyone is doomed. One day you will die.

Till then. Have fun.
…………………………………………………………………

67 Off With Their Heads! Part 2 on 10.27.16 at 9:03 pm

Tina, it’s time to go back on your meds, my dear.
…………………………………………………………………..

100 GreaterFool D. on 10.27.16 at 11:10 pm

Tina and Lisa – Feminist jokes!
Q. What did the feminist woman get her family for Christmas?
A. A bigger litter box and a brand new scratching post.

Q. What do feminists and Duracell have in common?
A They go on and on and on and on and…

Q. How to make a feminist dislike you:
A. Have a penis.

Q. How can you tell you are in a feminist bookshop?
A. There is no humour section.

Q. Why did the man cross the road?
A. To rape the women on the other side, according to Feminists.

My girlfriend is mentally retarded.
Or if you want to be politically correct, a feminist.

Q. What do feminists hate more than a sexist joke?
A. Having it explained to them by a man.

If a tree falls in a forest and no one is around to hear it, would the feminists blame the men for it?

Q. If two feminists get drunk and hook up,
were they both raped?

Q. How do you satisfy a feminist?
A. By telling her that you can’t.
……………………………………………………………….

We’re not 4Chan Ryan.
But we try.
Have a nice day.

#123 keith on 10.28.16 at 6:33 am

My point is that the situation defined by the graph is that in 20 years, the share of the economy taken by real estate increased from about 12.8% to 14.75%. Consider this alternative headline. “Real estate’s share of Canada’s economy increased by less than two percentage points in a nineteen year period,” an equally accurate and misleading statement.

To put it another way, the share of the economy that real estate represents went up by 15% in a nineteen year period. By using a non – zero y axis, the 15% increase turns into a visual ski hill on the graph. It overdramatizes the reality of the situation, was my point.

http://gizmodo.com/how-to-lie-with-data-visualization-1563576606

But it got your attention. — Garth

#124 Frankie B on 10.28.16 at 7:39 am

Flu shot- Ripley? Are you nuts? You like the thimerisol? 50% mercury- one of the most toxic substances know to man and you mainline it into your bloodstream?? Wow.
Garth- TYPO!!
“Keep 20% of so of your liquid net worth in greenbacks.”
or so

#125 pBrasseur on 10.28.16 at 7:41 am

We have a condo economy. Garth

I think that’s exactly right and that chart was the perfect choice to demonstrate what is wrong with the Canadian economy.

It is bad because it is unsustainable, residential real estate is an expense not a productive investment and wealth (normally) needs to be created elsewhere to pay for it. Of course that bit has be delayed and replaced by massive indebtedness and diversion of otherwise productive capital.

What that chart shows is a very large time bomb. We know for sure it’s going to explode, we just don’t know if it’s going to be a big flash or a slow motion train wreck.

Shopping malls are still full in Canada but to paraphrase my favorite show «winter is coming» and that’s no joke.

#126 crowdedelevatorfartz on 10.28.16 at 8:10 am

@#14 acdel
“100 million plus on food stamps…”
*******************************************
A bit of an exagerration?

Out of a population of 325 million I find it somewhat hard to believe that nearly one in three US citizens are on food stamps.
And judging from the amount of morbidly obese US citizens there are…….food stamps might not be such a bad thing

She made it up. Relax. Trump supporter. — Garth

#127 crowdedelevatorfartz on 10.28.16 at 8:15 am

@#38 Corey
“He fired me but I still love him more than my wife and kids.”
*******************************************

I hate to break it to you but judging from past history.
If Trump was your boss you should get a paternity test done on the kids

#128 crowdedelevatorfartz on 10.28.16 at 8:24 am

@#62 Tina Frankenberg

Respectfully,
I think you should ask the good Doctor Frankenstein to tighten the bolts on your neck .
You’re not thinking clearly

#129 crowdedelevatorfartz on 10.28.16 at 8:27 am

@#64 Off with their heads
“life is not fair, not everyone is a winner and participation badges weren’t a sign of awesome achievement…..”
*******************************************

Great line.
Im stealing it for an arguement in the not too distant future.

#130 crowdedelevatorfartz on 10.28.16 at 8:36 am

@#71 Elizabeth O’Tool aka Tina Frankenberg
“I’m going to keep saying loud and clearly that I am a feminist until it the comments section is eradicated of veiled misogyny when bloggers allude that lower house prices are good for single men.
********************************************

AHAHAHAHAHAHAHAHAHAHAHA.

Hop down off that Unicorn , give your get a shake and go back to your padded cell.
You’ll be waiting a long long time before the misogynists are gone from this site.

Note to self.

An escaped mental patient from the misandrist ward of the local asylum should not be permitted access to the internet OR a keyboard.

#131 fixie guy on 10.28.16 at 8:44 am

“.. it can be scary to think what might happen if Canada were to lose this driver of growth”

Not as scary as what will happen by continuing this artificial and unsustainable ConServative stimulus. At least one generation is already going to bear the brunt of Harper’s twisting of the Canadian economy. Nearly a decade of Canadian investment opportunity funneled to realtors and banks; bravo party of fiscal responsibility.

#132 pBrasseur on 10.28.16 at 9:07 am

“100 million plus on food stamps…”

I believe it’s a stretch obtained by counting everyone that benefited from some kind of government aid.

In Canada that would amount to close to 100% of the population…

#133 Yanniel on 10.28.16 at 9:27 am

Question Garth, please.

“Keep 20% of so of your liquid net worth in greenbacks.”
Wouldn’t it have the same effect to buy American equities through a non-hedged ETFS in Canadian dollars? If the Lonnie falls, that ETFS would get a boost.

Thanks.

#134 chopstix on 10.28.16 at 9:33 am

RE: “”You’ve always said that real estate is local, this turn of events is proving the truth of that statement. Some parts of Vancouver seem to be doing ok and others not so much. If market sentiment isn’t broken there could be increased pressure on lower priced real estate like condos or houses out in the valley. I’d rather be stabbed in the eye than live out there, but to each his own.

The little rancher in Norgate I wrote about a few weeks ago is still on the market at 1.7, a ridiculous amount of money for a post war bungalow built on a drained swamp. Blog dog Frank posted info yesterday that indicated Dunbar is just fine. Maybe Frank is an agent but his comments have been reasonable and intelligent so shouldn’t be discounted out of hand. This isn’t the place that house humpers turn to for positive reinforcement about their decision to buy.

It is very early in the game to make an accurate forecast as to how things will play out. Only a few sources know how many speculators are involved, but I think we will all find out shortly. I must confess that I’m enjoying this immensely after years of listening to brag and insolence from these newly minted HELOC millionaires.”
=====================

imo we’re still hooped…speculators will recede for the moment, allowing prices to go down but, being as savvy as some are, will later swoop in to purchase once more, to offset any lame 15% foreign tax….had read anecdotally that hong kong’s attempts at the same thing (foreign tax) had a brief affect before the prices starting shooting up again with mainland china investors coming back in.

#135 fembot ecorapper on 10.28.16 at 10:03 am

#62 Tina Frankenberg on 10.27.16 at 8:49 pm
Is this a gloomer website? Toronto real estate will never collapse in value.
Canada ranks as the second best country globally. Our economy is the largest in the world, larger than the American economy.
We have a Prime Minister who respects the right of women, and he isn’t afraid to be a feminist.”

Am guessing you are a troll-dude pretending to be a chica……no one could be this crazy…….if not keep on drinking whatever kool-aid it is your drinking….I mean I guess you measure the size of an economy by the geographic size of the land……Classic!

#136 NoName on 10.28.16 at 10:14 am

#109 South Etobicoke Trump Campaign Central on 10.28.16 at 12:36 am

funny that you show me twitter hashtag poster thingamajiger as an evidence of impending doom.

why dont you google civilian vs military casualties in a war. and see how ratio is tipping out of favor for civilian. so we can also asume that, maybe she is trying to “save” them.

in a age of pretend lumbarjacks baristas and pretend man, maybe we shod teach our women to protect them selfs.

https://youtu.be/uBZdLIfKrnU

#137 IHCTD9 on 10.28.16 at 10:19 am

#100 GreaterFool D. on 10.27.16 at 11:10 pm
Tina and Lisa – Feminist jokes!
Q. What did the feminist woman get her family for Christmas?
A. A bigger litter box and a brand new scratching post.

Q. What do feminists and Duracell have in common?
A They go on and on and on and on and…

Q. How to make a feminist dislike you:
A. Have a penis.

Q. How can you tell you are in a feminist bookshop?
A. There is no humour section.

Q. Why did the man cross the road?
A. To rape the women on the other side, according to Feminists.

My girlfriend is mentally retarded.
Or if you want to be politically correct, a feminist.

Q. What do feminists hate more than a sexist joke?
A. Having it explained to them by a man.

If a tree falls in a forest and no one is around to hear it, would the feminists blame the men for it?

Q. If two feminists get drunk and hook up,
were they both raped?

Q. How do you satisfy a feminist?
A. By telling her that you can’t.

______

LMAO, those are gold!

Here’s a few more beauties:

Q.What do you call a letter from a feminist?
A.Hate male.

Q.What’s the male equivalent of a feminist?
A. A sexist.

Q.What’s the difference between a baby and a feminist?
A. At some point in it’s life, a baby will grow up and stop blubbering.

#138 fembot ecorapper on 10.28.16 at 10:23 am

#96 Shane on 10.27.16 at 11:03 pm

If the loonie crashes, foreign money will buy all our prized real estate. That is a fact.

Why are we always confusing the public ? One day our grandchildren will curse their grandparents.”

Start studying spanish or mer-can as the other nafta members become ur new landlords!

#139 LL on 10.28.16 at 10:28 am

#3 – Paul on 10.27.16 at 6:18 pm
http://www.castanet.net/edition/news-story-179293-1-.htm#179293

Canada is for sale!
Welcome to all …with money!

#140 tony on 10.28.16 at 10:31 am

Annek #104

People are maxed out but they have been able to borrow their way out of trouble via HELOC as their fake equity goes up. Once they maxed out that option they use credit cards. When all their borrowing options have been maxed out they could escape their debt prison by selling as a last resort. Now HELOC’s are done as prices will not go up anymore so it’s just a matter of time before they are forced to sell. Add to the factspeculators are done with the housing market as many are trying to cash out right now. Debt to income ratio
of 170% tells you this housing bubble is all a house of cards based on debt. You can bet these people in private will be sweating as the reality hits they are broke to maintain a false illusion.

#141 WalMark of sadkatoon on 10.28.16 at 10:39 am


Garth should those that can’t shake the property addiction at least be looking to buy US houses in cash for yield in places like Phoenix Az for a tenth of 604 homes?

Phoenix, AZ yields are terrible. Try here instead:
https://www.biggerpockets.com/renewsblog/2016/04/02/best-single-family-rental-returns-2016/

#142 WalMark of sadkatoon on 10.28.16 at 10:50 am

The US economy is BOOOMING!

http://www.businessinsider.com/us-gdp-q3-advance-estimate-2016-10

Why does Canada’s economy suck so bad?

#143 isuckless on 10.28.16 at 10:51 am

I can see why Hillary is beating the war drums: the only industry you cannot outsource is defense (industrial- military complex) and the benefits to the citizens and exports are quite substantial.
Everything else is going the services jobs and quasi money makers like Google/Facebook.

#144 WalMark of sadkatoon on 10.28.16 at 11:17 am

Smoking Man isn’t an alien.

He is AI

I knew it!

http://www.dailydot.com/layer8/ai-predicts-trump-win/

#145 Bram on 10.28.16 at 11:18 am

Unhappy in $5M homes, with incredible vistas but without a community or neighbourhood-friends.

http://www.macleans.ca/news/rich-vancouver-neighbourhood-proves-money-cant-buy-happy-kids/

The melancholy of West Vancouver.

Progressively more parts of Vancouver were becoming this way. So maybe a RE-crash is just what’s needed to replace investments with residences.

In my EastVan street there are 3 empty homes in the block alone.
One condemned house and two marginally livable homes, all rotting away.
Previously appreciating like crazy, but since august depreciating each month.
And only one of those is for sale (on the market since foreigner-tax kicked in.)

#146 bill on 10.28.16 at 11:37 am

#112 Karma on 10.28.16 at 12:46 am
this is not a first . government handouts to the british auto industry was the norm back in the day…
all those ‘fine’ british cars, mercifully gone the way of the dodo …remember austins and the like?
I suspect that Nissan and Renault are biding their time and getting money from the government. while they look for another country to assemble cars.

#147 Econsensus on 10.28.16 at 11:44 am

#114 Karma on 10.28.16 at 1:31 am

Sure, it’s a landslide in this network of people who are likely all Republicans and are friends with Republicans, and shared it with other Republicans, who shared it with other Republicans. It literally means nothing in the broad scheme of things, aside that people from Republicans are active on social media.

And yes, I’m well aware that there are Black and Latino Republicans. It’s not news. Doesn’t mean the majority of them are Republicans though.

The sample size is skewed hard one way. When that happens, it’s not reliable as a predictor of a true outcome.

——————————————————

So because this poll is overwhelmingly pro Trump, it must be due to polling of networks of people who are likely all Republicans and are friends with Republicans?

The Poll was initiated by someone in Tennessee who stated ‘I have friends & family who are both republican & democrat. The poll ended up going viral across all of the USA. The Posting has been shared well over 14,000 times and even if you hypothesize that the initial network was predominately Republican, if the majority of support in the US was for Clinton, there would of been a surge in the amount of Pro Clinton comments being posted on this Poll.

Think of it this way.. When this facebook post started, it was like a small grass fire in a large grass field which is dry and flat. The winds are swirling in all directions and no rain is falling. Eventually all the grass in the field will be consumed in by the fire. The fire burns all grass indiscriminately.

#148 Steerage Bilge on 10.28.16 at 12:03 pm

#101 Smoking Man on 10.27.16 at 11:11 pm

BEING CRAZY SO UNDERRATED.

https://www.youtube.com/watch?v=DLOth-BuCNY

Hey crazy smoker dude… you are on track for the 5 D’s of retirement…freedom 55 will kill ya!

Drink, depression, divorce, dementia and death.

http://tvo.org/article/current-affairs/shared-values/lyndsay-green-retirement-has-become-a-bit-of-a-dirty-word

#149 Sean on 10.28.16 at 12:03 pm

Those mortgage changes are sure to have a huge affect. Only reason they haven’t yet is many people got pre approved. There will be a drastic change in the amount you can borrow which will leave sellers no choice but the sell. The time to get out is real.

#150 Context on 10.28.16 at 12:05 pm

I pity the greater fools in Toronto who are sitting in their condo high in the sky. Those who are fence sitters waiting for a miracle. They should have sold out for tax free dollars, rented an established apartment with a guaranteed renewal, and invested wisely with a competent investment advisor instead. I just made a call to have some cash transferred from my investment account to one of their banks as was getting short as do nothing by computer involving these transactions and it has been 5 months as don’t keep track. I was amazed at all the dividends that came in just sitting there to be harvested, so got me some to pay my bills and need to invest the rest soon.

#151 Millenial falcon on 10.28.16 at 12:06 pm

To put it another way, the share of the economy that real estate represents went up by 15% in a nineteen year period. By using a non – zero y axis, the 15% increase turns into a visual ski hill on the graph. It overdramatizes the reality of the situation, was my point.

http://gizmodo.com/how-to-lie-with-data-visualization-1563576606

But it got your attention. — Garth
————-

How is it a condo economy when it’s basically the same as It was 20 yrs ago. This guy was on point, that graph you posted is a lie a you should remove it

#152 Sean on 10.28.16 at 12:10 pm

I meant to say lower prices…

#153 Shao Yamuni on 10.28.16 at 12:23 pm

So have you walked away from your preferred share advisory? Hey, no ribbing from me cause it’s been these crazy Liberals who are running Canada into the dirt. Did ya’ll read about Ontarios AG call for the province to default in 2020? I got out of Canada years ago and told everyone who’d listen, sadly few did.

#154 MoneyMyHoney on 10.28.16 at 12:28 pm

Read this which sheds more light into the origin of the problem:
http://www.metronews.ca/news/vancouver/2016/10/26/uk-expert-blames-system-for-vancouver-housing-crisis.html

Like many jurisdictions, such as the United Kingdom and Australia, Maclennan says Vancouver began to see trouble in the 90s as federal governments were getting out of building housing and leaving things to the market.

Housing prices started outpacing income growth and people eventually realized there was money to be made in the real estate market, spawning a new class of small-time landlords who buy up several properties as investments, squeeze out other would-be buyers and put more upward pressure on prices.

#155 S.Bby on 10.28.16 at 12:36 pm

#116 Don Regan
Interesting price drop at, 475 East 46th Av, Vancouver East Side 33×121 ft lot and house. Org price $2,498,888
now down to $1,669,000 a reduction of $829,888.
Imagine if you had bought close to that, in the last 6 months.
=============================
WOW. That’s an even worse decline than Burnaby.
Things are really tanking now. $1,000+ a day value drops across the board.

#156 conan on 10.28.16 at 12:37 pm

#124 crowdedelevatorfartz on 10.28.16 at 8:10 am
As far as I know the food stamp program in the States is for the working poor. It does not mean they are unemployed. Many of Walmart’s employees are on stamps.

In many ways Americans treat their poor better then we do. They have health care for poor people and they have food stamps for poor people.

I was surprised as well.

#157 Bark on 10.28.16 at 12:37 pm

Wild Bill is doing all the right things. I’m actually surprised that our idealist pie in the sky PM picked the right man for the job. The reset is going to be brutal.

Any thoughts on the possibilty that the CAD actually goes up? If real estate prices fall we should expect massive deleveraging as debts fail to be paid back resulting in our debt money disappearing from existance. A much smaller supply of money means remaining CAD could be worth more. At least until money printing begins.

#158 AnythingButTrump on 10.28.16 at 12:55 pm

We are seeing the ramifications of Brexit in the GBP as it plummets to new lows. Any saavy Brit would have a core holding in gold as gold as a hedge to the currency has appreciated tremendously. If the Canadian dollar may face similar pressures why are you such a gold hater? It would seem any insightful financial advisor would recognize the pressures of the macro environment and create strategies that make sense. The volatility in currencies defies your simplistic model.

#159 Reasonfirst on 10.28.16 at 1:15 pm

Would everyone just shut up with their stupid arguments as to why Trump and or Hillary will win. Just wait a few days. What a friggin’ waste of energy.

#160 doug t on 10.28.16 at 1:21 pm

#71 Elizabeth

yikes calm down eh

#161 jess on 10.28.16 at 1:21 pm

utopia?

The richest village in China founded by Wu Renabo Huaxi
240 acres 2000 registered members have free health care,education,luxury houses cars and 250k in their bank…what is the catch?
https://www.youtube.com/watch?v=0ftrQQI1tOc
Hua

#162 Econsensus on 10.28.16 at 1:26 pm

BREAKING NEWS: FBI re-opening Hillary Clinton email investigation

https://twitter.com/NBCNews/status/792050195043192832

Is the FBI trying to preempt an investigation into their previous investigation? The timing is couldn’t be worse for the Clinton Campaign.

#163 Russ on 10.28.16 at 1:42 pm

fembot ecorapper on 10.28.16 at 10:03 am

#62 Tina Frankenberg on 10.27.16 at 8:49 pm

Am guessing you are a troll-dude pretending to be a chica……no one could be this crazy…….if not keep on drinking whatever kool-aid it is your drinking….I mean I guess you measure the size of an economy by the geographic size of the land……Classic!
===========================

Hey guys,

You are probably right about Tina, but women can be that crazy.

Let’s review the real world:

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

#164 Russ on 10.28.16 at 1:52 pm

Shao Yamuni on 10.28.16 at 12:23 pm

So have you walked away from your preferred share advisory? Hey, no ribbing from me cause it’s been these crazy Liberals who are running Canada into the dirt. Did ya’ll read about Ontarios AG call for the province to default in 2020? I got out of Canada years ago and told everyone who’d listen, sadly few did.
=======================

I believe the preferreds are counted in the “safe” part, so the basic portty looks something like:
20 – USA equity
20 – CDN equity
20 – International (Europe & yellow)
40 – Bonds, prefs, MICs & Reit

#165 WalMark of sadkatoon on 10.28.16 at 2:03 pm

#155 Bark on 10.28.16 at 12:37 pm

Woof woof woof!

#166 Context on 10.28.16 at 2:10 pm

The world of politics in USA amazes me to no end. Trump is speaking at a live rally and some clown has brought it into you tube with a satellite connection. There is Putin front and center clapping him on which has all been staged; never laughed so much in my life.

#167 Context on 10.28.16 at 2:39 pm

Its been about 10 days since I have checked the number of condo listings on one system for the City of Toronto. The number has more than doubled and its much the same for the GTA. Perhaps there is some panic in the air and am going to look further into this change.

#168 Victor V on 10.28.16 at 2:45 pm

Breaking News: FBI reviewing new emails in Clinton classified information probe

http://www.cnn.com/2016/10/28/politics/fbi-reviewing-new-emails-in-clinton-probe-director-tells-senate-judiciary-committee/index.html?adkey=bn

#169 jay on 10.28.16 at 2:47 pm

More bad news for the Alberta . http://www.wsj.com/articles/exxon-mobil-profit-revenue-slide-again-1477657202

#170 InvestorsFriend on 10.28.16 at 2:50 pm

The “We” Myth

#96 Shane on 10.27.16 at 11:03 pm said:

If the loonie crashes, foreign money will buy all our prized real estate. That is a fact.

*****************************************
There is no “we”, this is not a collective country.

If it is YOUR real estate your are free to not sell it to a foreigner.

If it is not your real estate then you have no say in who it is sold to. We call this concept “freedom” or “private property”.

#171 Understood by few on 10.28.16 at 2:53 pm

#117 DON on 10.28.16 at 2:49 am


The empty house down the road from me took the for sale sign down “the property sisters”. No sold sign. Took off the market. Re list and try to trick people, almost like trying to breath life back into the market.

So an anecdote of one house is indicative of the market? In any market there are going to be properties that languish. If the property is overpriced and the seller won’t budge, it won’t sell. If there are significant issues with the property, it won’t sell.

My point was VREU’s observation doesn’t match the current reality. It is still a seller’s market. It will turn at some point, but not on VREU’s schedule (previously he/she predicted prices going down by Sept).

He/she clings on any single variable that might indicate a slowdown while ignoring the bigger picture (and now ignoring teranet since it doesn’t fit his/her narrative).

Victoria has some tech – never see them hiring – the only ones hiring are public sector to replace retirees, and that has slowed down.

Then you are blind. Plenty of private companies hiring. There are always jobs on Viatec (70 listings currently) and plenty more that aren’t listed on there (lots of referrals and word of mouth). If you are in the industry you know there is a shortage of talent. Of course you could blame that on mediocre pay and high cost of living (I won’t disagree).

Tech in Victoria is twice the size of tourism and it’s thriving.

.. (economy doom and gloom)

Time will tell. I think anyone who is buying during this seller’s market is nuts and making a mistake, but home owners in general will be fine. Only 17% of buyers in Victoria are high ratio, that means most people have at least 20% equity. Not great if you bought in this recent upturn (as it could turn around and you’d have 0 equity), but most who bought prior to the spur in prices are fine and can handle a big drop in value. In other words, if you are holding out for huge price drops you may be disappointed. The market will return to a balanced market and most likely a buyers at some point, but the doom and gloom bears dreams of dime a dozen houses is unlikely.

Time will tell though.

#172 Mark on 10.28.16 at 2:58 pm

“Any thoughts on the possibilty that the CAD actually goes up? If real estate prices fall we should expect massive deleveraging as debts fail to be paid back resulting in our debt money disappearing from existance. A much smaller supply of money means remaining CAD could be worth more.”

Put on your flame suit on because you’re gonna need it around here.

On that note, I’ve been making the same argument for years. That the race to repay debt as housing prices collapse and risk premia explodes will cause significant deflation and upwards revaluation of the currency.

Of course, if the same is happening in the economies of our trading partners, then it becomes a question of the relative levels of deflation. I do believe that the USA, with chronic trade deficits, large quantities of USD$ overseas representing future demand on the US economy and hollowed out industrial capacity, will suffer inflation, not deflation.

#173 Takes Some Time on 10.28.16 at 3:18 pm

#54 Understood by few on 10.27.16 at 8:25 pm
Very wrote: “MORE AND MORE HOUSES SITTING ON THE MARKET UNLOVED”

Yeah, that’s why Victoria is at all time low inventory levels. It’s record low. Your prediction of prices falling by September was wrong and October is shaping up to be a big month for sales despite new mortgage rules. Sales to new list is in the 80s. Still a crazy seller’s market.
——-

You do realize that the rules kicked in on October 17th and that several buyers sought to ‘beat the rules’ by jumping in before the 17th? Just like the sales before the Foreign Buyers Tax came in.

If you have access to the listings and date of sale, you can see if anyone actually bought after the 17th. In my community, one one house that sold in October was actually bought after the 17th while the other ‘October Sales’ took place in Sept or early October.

So you cannot really say that October sales are strong as there has only been 10 days with the new changes in place. It will take a couple of months for the new changes to register and impact the market.

#174 traderJim on 10.28.16 at 3:35 pm

Ummm for the people taking ‘Tina’ and ‘Elizabeth’ seriously, please look up the word ‘troll’ as it relates to sarcastic internet scribblings.

A little concerned that ‘Tina’s rant was almost believable, lol.

Food stamps in the USA: I believe the accurate number is 49 million. Pffft, things are great in the US, obviously.

The 100 million someone mentioned was probably referring to the actual number of adults of working age who are unemployed. most of these people are not counted as unemployed officially as they have stopped even trying to find work (apparently).

You might also be interested to note that something like 5 million of the jobs Obama said he has created are a figment of the statistical imagination, created by various ‘adjustments’, not actually a headcount.

Doubt anyone wants to be bored with talk of participation rates and all that stuff, but if you want to know the real story you should look into it.

If things are as rosy as Obama says, the election should be no problem, so why even worry about it?

if the reality isn’t as painted, then maybe the Dems won’t have such an easy time.

We’ll know the truth on Nov 8th.

#175 Tony on 10.28.16 at 3:41 pm

Re: #171 Takes Some Time on 10.28.16 at 3:18 pm

The real mortgage rule that affects anyone with a mortgage kicks in this November 30th this year. The October 17th date was basically meaningless since it affected so few. The big decline in prices in Victoria will come after November 30th this year.

#176 Tony on 10.28.16 at 3:47 pm

Re: #170 Mark on 10.28.16 at 2:58 pm

The price of oil drives the Canadian currency up and down. Commodities do but to a lesser extent. The price of oil looks poised to retest the January 2016 lows and commodities as well are poised to make new lows. Both are negative for the Canadian dollar. The U.S. jobs report and the Canadian jobs report both for October should shave about 3 cents off the Canadian dollar by the middle of November.

#177 Incubus on 10.28.16 at 4:08 pm

“Lots of inflation and $8 cauliflower. ”

Last time they did it, cauliflowers ended up in the landfill.

Demand goes to ~zero, so there is no point to try to sell 8$ cauliflowers.

#178 Smoking Man on 10.28.16 at 4:15 pm

160 Econsensus on 10.28.16 at 1:26 pm
BREAKING NEWS: FBI re-opening Hillary Clinton email investigation

https://twitter.com/NBCNews/status/792050195043192832

Is the FBI trying to preempt an investigation into their previous investigation? The timing is couldn’t be worse for the Clinton Campaign.

Lock her up!

Spoke to Donald, he will pardon her. No worries.

#179 Joe2.0 on 10.28.16 at 4:18 pm

Fellow employees rental house was just bought.
7 acres near Langley BC for a mere 3.4 million.
The buyers are Chinese purchasing through a Canadian land development corporation.
No fuss no muss, change the rules and they just find a away around it.
The zoning which was “locked in” also was changed.
It’s a joke.
It’s all about the money.
Always has been.

#180 Wild Bill overreached??? on 10.28.16 at 4:20 pm

Wild Bill overreached?? He is the first in a long time that had the ballz to actually do something about this run-away train. Surely it ain’t enough but a good start. Oh and contrary to what all the so-called ‘economists’ are saying this will actually benefit millennials and/or first time buyers. They may not be able to qualify for that mortgage now but that would only save them from life-long debt shackles. Once the prices drop they’ll be able to get in.

#181 WalMark of sadkatoon on 10.28.16 at 4:32 pm

Put on your flame suit on because you’re gonna need it around here

Also get another job to offset the lost bet on the CAD going up against the USD for the last 4 years

#182 WalMark of sadkatoon on 10.28.16 at 4:46 pm

In my EastVan street there are 3 empty homes in the block alone. One condemned house and two marginally livable homes, all rotting away.

Foreigners weren’t buying those kinds of homes. Sorry that u bought into a crappy neighbourhood and can’t sell

#183 jess on 10.28.16 at 4:51 pm

annuities
“No agent selling these or investors buying these has the foggiest idea of how these work,” said Mr. McCann,

http://www.slcg.com/securities-consulting-professionals.php?c=securities-litigation-experts-resumes&i=10

http://www.nytimes.com/2016/10/29/your-money/403b-teachers-annuities.html?ref=dealbook

#184 Metaxa on 10.28.16 at 5:04 pm

My wife and I are both feminists.

Of course, being a man, I do it better.

In my hood the house immediately south is putting in a legal suite…30 grand. Owned by millennials.

I’ve got a crew of stone guys out back doing stairs and general reconfig of landscape…probably 15 grand when complete.

Immediately to the north of me he’s putting in new kitchen, new hardwood and re-doing his heating system entirely. 25 grand, plus or minus.

Across the street was a new driveway and roof earlier this fall…before the rains came. No idea on cost but both jobs were done to best practices and current standards so real $$$.

Across and up this past summer a complete yard, front and back as well as all new siding, soffit and rain goods.
He had to be over $40,000

So I’ve been talking with and watching a lot of trades recently and they all are busy, booked throughout the winter and beyond.

Life is good out here in what most of you consider the boonies, life is good.

there is more to it than Toronto and Vancouver, eh?

#185 MF on 10.28.16 at 5:16 pm

#156 AnythingButTrump on 10.28.16 at 12:55 pm

Yeah isn’t it awesome? A low currency is great for exports I hear! That’s why we can justify reduced purchasing power, a million years of worthless zirp, asset bubbles and higher inflation!!

…at least that is what these worthless experts and idiot “economists” tell us.

Is someone lying here?

MF

#186 Tony on 10.28.16 at 5:20 pm

#165 Context on 10.28.16 at 2:39 pm
Its been about 10 days since I have checked the number of condo listings on one system for the City of Toronto. The number has more than doubled and its much the same for the GTA. Perhaps there is some panic in the air and am going to look further into this change.
______________________________________
Speculators and realtors trying to get out before it’s too late. Two realtor friends are doing just that and trying to cash in. Brokers in private will even admit it’s game over

#187 bdwy sktrn on 10.28.16 at 5:54 pm

There is no foreign buyers tax in Langley. — Garth
————————-
langley is within metro van – tax applies.

Corrected. — Garth

#188 Ace Goodheart on 10.28.16 at 6:00 pm

#184 Tony:

The Toronto condo game has always been a sh*t show. It’s a holding tank for wanna be backyarders. Really, a condo is just a very expensive apartment. Condo fees around 800 per month, plus property tax, equals more than you would pay to rent. A lot of the new condos don’t even own the land under them (just have “air rights”

#189 Andrea on 10.28.16 at 6:02 pm

Hey Garth – I thought you had decided to crack down on comments more and yet #100 here managed to post rape jokes. I’m not sure how they are relevant to your blog post or how they are appropriate to post even if they were some how relevant.

#190 Long Branch Apprentice on 10.28.16 at 6:29 pm

#170 Mark on 10.28.16 at 2:58 pm

I sort of understand why you would think that way about the CAD, but that’s a textbook style understanding.

Surely you are aware of the Petrodollar?

USDCAD hits 1.38 before it hits 1.28 next.

#191 conan on 10.28.16 at 6:32 pm

Trump: Vote for her and it is WW III folks…..

His one ace in the hole…..does it resonate over the next 10 days?

#192 acdel on 10.28.16 at 8:42 pm

#106 Jay_Huhman

I stand corrected on the people on stamps but not the rest.

#193 Ronaldo on 10.28.16 at 9:05 pm

#186 Ace Goodheart on 10.28.16 at 6:00 pm

#184 Tony:

”Condo fees around 800 per month, plus property tax, equals more than you would pay to rent. A lot of the new condos don’t even own the land under them (just have “air rights”
————————————————————-
Absolutely true. Condo’s are what used to be apartment suites that developers converted to self owned properties when governments imposed rent restrictons back in the late 60s early 70s. They basically passed on all the expenses and problems onto the owners of these things. This was how developers reacted to the rent controls. Why build rental units if you have to subsidize the tenants?

#194 steerage steward on 10.29.16 at 3:02 am

52% of those domestic buyers have no intention of living in the condo units, picking them up instead as speculative or investment properties. Only 43% of trades were to locals who plan to live there.

WOW. They will get what they diverse as all do

#195 TJ on 10.29.16 at 9:35 am

182 – Metaxa – Funny stuff, you guys in the sticks competing with each other as to who can throw more cash into their bottomless pits. All that money would have been better off invested (well, except for the new roof, I’m guessing they needed that one).