Oh, crap (2)

crap

Politicians just can’t help themselves. In its last budget the BC government waved a wand and eliminated $13,000 in property transfer tax for any moisters buying a new house or condo worth up to $750,000. The rigorous requirements: be a citizen and live there for a year. This came atop a zero-tax break for first-timers buying any resale property for about half a million.

Days ago the Ontario government did the same. It doubled the tax break for newbies buying anywhere in the province – waiving up to $4,000 in tax that everyone else pays when they close. Of course, this is in addition to the $50,000 a Millennial couple can suck out of RRSPs tax-free for a downpayment, plus a bevy of tax credits, deferrals and outright grants given to kids so they’ll trade their freedom and youth for bricks and debt.

Now, these are the same governments who claim they’re worried sick that homes cost too much. They’ve mercilessly taxed non-Canuck buyers. Jacked taxes on top-end properties. Punished investors. Whacked empty houses. Brought in a stress test. Thumped the mortgage business. Shortened amortizations. Then they pivot, goosing demand with gifts to first-timers. Suck and blow. Nobody does it better.

The result?

The worst possible combo. Prices stay high. The children are forced into massive debt. And Boomer sellers walk off with a historic, tax-free windfall. It’s an inter-generational transfer of wealth of epic proportions – flowing uphill. The long-term consequences of profoundly indebting sons and daughters will be interesting, if not Trump-inspiring.

Well, this might change, as the T2 government gets ready for Stage 2 of its assault on house lust. Stage 1 came on October 3rd, with the MST in effect now for exactly a month. The chill on mortgage brokers was immediate, and the impact will likely be seen in sales and price stats surfacing between now and the Spring. Since then, the bond market went nuts after the US election. Mortgage rates rose this week as a result. Yesterday we told you about Ottawa’s housing internal stress test, which showed if rates continue to escalate the economy’s probably pooched. Real estate could plunk 30%.

But there’s more.

If we assume CMHC actually speaks for the government in terms of housing policy, further changes may be coming. The agency is now openly lobbying for higher minimum down payments (currently 5% for properties under $500,000, 10% to a million, and 20% beyond that), and mortgages which are tied to what a borrower actually earns, and not just the ability to pay.

On Friday the agency’s CEO (Evan Siddall) said tough love is needed to counter the destructive impact low interest rates have in making houses unaffordable and to negate dumb provincial measures (like those massive tax credits) creating more demand.

“Politicians are tempted to help first-time home buyers enter the market, but low down payments may be part of the problem adding to affordability pressures and macroeconomic vulnerabilities,” he said in a speech. “I have yet to be convinced that people in our country “need” access to 19:1 leverage to buy homes. In fact, it may be a fool’s bargain with the extra demand simply feeding higher house prices: the benefits of the policy accruing to wealthier home sellers rather than to the young first-time homebuyers it purports to help.”

Damn straight, Evan.

So his solution is to require buyers to come up with a lot more cash before they can jump into homeownership, plus a loan-to-income cap. That would automatically establish the maximum amount buyers could borrow, based simply on their incomes – a rad departure from the stress test now in place or the calculation of debt servicing ratios.

There are loan-to-income caps in places in several jurisdictions such as Britain and Ireland. In the UK, the maximum amount normally loaned to any purchase is 4.5 times annual income. Applying that to Canada, it means a couple with a joint income of $125,000 could borrow a max of $560,000. If they didn’t want mortgage insurance and had a 20% down payment, the most expensive house they could consider would be under $700,000.

The whole point of this? A soft landing. The feds understand the status quo cannot continue. They worry about $1.2 trillion in mortgage debt, which is growing at four times the rate of inflation and three times income growth. They know any country where 15% of GDP is dependent on something as emotional, flaky and hormonal as residential real estate, is a nation at risk. And it’s not as if examples elude us. Just look south.

The big question is whether or not a soft landing is possible. A gentle deflating of the Hindenbubble so the borrowing orgy stops, sales and prices waft gently lower, affordability is enhanced and the middle class ain’t gutted. It’s what they dream about on the Rideau.

Of course, no bubble in history has ever ended nicely. But we’re Canadians.

155 comments ↓

#1 Randy on 11.18.16 at 6:26 pm

Is that Scooby Doo ?

#2 Alice on 11.18.16 at 6:32 pm

The more news that keeps coming, the worse the bubble seems. Now 1 in 10 homes listed for sale aren’t occupied, which means basically 1 in 10 homes for sale are owned by someone that owns another home. This might be worse than even Garth is predicting.

https://betterdwelling.com/city/vancouver/10-of-homes-being-resold-in-vancouver-have-never-been-lived-in/

#3 Pulsars are Cool on 11.18.16 at 6:37 pm

One day this blog will end.
Don’t you ever take a vacation?

#4 IM in C on 11.18.16 at 6:40 pm

If a rise in interest rates will trash the housing market, and leave millions of Canadians in dire financial straits…
then there will not be any rise in interest rates.

#5 the other white meat (pork) on 11.18.16 at 6:42 pm

When has more government intervention begat anything other than more misery and a bigger mess? Call it a day and fold the CMHC. I don’t want to back anyone’s gamble on housing, let their parents do it.

#6 Thom on 11.18.16 at 6:45 pm

Trumpian backlash is right. What happens when everyone outside 2 area codes discovers they have lost mega-equity in their homes while a bunch of bloated new bureaucracies have formed to administer housing.

Ask the 3,084 out of 3,141 counties in the US what their reaction was.

#7 Suede on 11.18.16 at 6:45 pm

I bought at house 3 months ago, after it was reduced twice, for below asking. Probably could have paid less if i waited.

On the plus side, my wife hasn’t watched HGTV in 3 months.

I can watch all the sports i want now.

How can you put a price on that?

Winning.

#8 Lulu on 11.18.16 at 6:45 pm

Hmmmm…. what the government think is good in nature, but I highly doubt the market will landed softly… If I am the seller, and know the government implementing those higher restriction in hope of a soft landing, what shall I do? Sell right away to gain full profit and a lots of me will think the same thing…. guess what is next…. haha

We are pooched either way…. just a matter of WHEN??

#9 Doug t on 11.18.16 at 6:52 pm

It’s all a gong show – this is the biggest bubble Canadians have ever been inflated in. It’s going to be epic when it pops too and I feel for some (not all) that are going to pay dearly

#10 Md on 11.18.16 at 6:52 pm

Great read.
Keep it up Garth.

#11 Mike Stefulicano on 11.18.16 at 6:54 pm

DELETED

#12 Joe Schmoe on 11.18.16 at 6:55 pm

1997: all major banks were flying with a 3.5x gross income max mortgage for us newbies….other debt only reduced this. Interest was 5.25% on a 5 year. I made 53K a year and scraped up a $140K mortgage.

2001: 250K max mortgage if you used CMHC…don’t remember the ratios…didn’t matter to me at that point….put offers on 14 house that were listed at ~285K for 250K…one builder with a spec home bit…but I had to lay my own sod…it was a sour negotiation.

In 2003, CMHC cap was 300K but the Butt Hurts whined to get it removed….Interest rates start dropping ~2005?…Voila!

Sometimes you get what you ask for.

I never understood why they took the training wheels off the CMHC lending standards…they totally made sense.

It’s funny trying to coach folk about debt. No one really wants to hear it.

#13 Marty mcfly on 11.18.16 at 6:55 pm

Lol this will be fun to watch

#14 Realtors and mortgage brokers are out of a job on 11.18.16 at 6:56 pm

Happy housing crash everyone! :)

#15 Md on 11.18.16 at 6:58 pm

M in C on 11.18.16 at 6:40 pm
If a rise in interest rates will trash the housing market, and leave millions of Canadians in dire financial straits…
then there will not be any rise in interest rates.

Interest rates are already rising. Two major banks just raised. The rest will follow shortly…please try to keep up.

Thanks

#16 Vanilla Voyager on 11.18.16 at 6:59 pm

Thank you for your hospitality today Garth.

#17 mitzerboy aka queencitykid on 11.18.16 at 7:01 pm

  Double, double toil and trouble;
    Fire burn, and caldron bubble.

“Uh Oh, Chongo!”: “Danger Island” next

#18 Brian Ripley on 11.18.16 at 7:02 pm

The feds understand the status quo cannot continue. They worry about $1.2 trillion in mortgage debt, which is growing at four times the rate of inflation and three times income growth. Garth

The employment rate in Canada dropped Y/Y
Chart http://www.chpc.biz/earnings-employment.html#Rate

We know Calgary is bad… but Toronto is a close second much worse than the national numbers .. so I suggest buyers of real estate taking on maximum mortgages should consider matching the loan amortization rate with their employment contract expiry date.

Of course with the Bannon-Trump trillion dollar fiscal spending plan on their bucket list, I suspect a lot of Torontonians will head for the U.S. and seek employment there. The USD/CAD looks like it wants to breakout.

#19 Smartalox on 11.18.16 at 7:02 pm

Were mortgage loan limits based on income introduced in Ireland before, or after their property bubble burst?

If before, it obviously didn’t do any good.

Fixing loan limits to income wouldn’t take into account existing debts, the way that total debt service ratios do.

Still it would be nice to restore a bit of the ‘natural order’ to families struggling to keep up with the Joneses:

if loan limits were a more accurate reflection of status, then the family that could only qualify for a mortgage loan of $400k might not be starting bidding wars on a $1.6M house, with families that qualify for two to three times as much.

#20 GsAmazon on 11.18.16 at 7:04 pm

Don’t worry – we’ll say “Sorry” soon I’m sure…

I feel sorry. For all the people whose houses I’m never going to buy.

I plan on keeping my virginity until it’s WAY more valuable than this….and then I’ll sell. ;)

#21 PeteC on 11.18.16 at 7:04 pm

A soft landing just seems unlikely. As soon as the narrative changes from house prices always rise, to house prices are falling, everybody rational will stop buying in the expectation that prices will fall further. Classic deflationary behavior. This will become a self fulfilling prophesy. I am not sure there has ever been an example of a well managed soft landing in a housing market.

#22 EmilyOne on 11.18.16 at 7:08 pm

Predictions for 2017:

1. The loonie will become valued $0.90 to USD. The loonie will be at PAR with USD in Q2 2017.

2. Oil prices will be valued above $100/bbl.

3. House prices in TO/THE SIX will increase by 40% from 2016 records due to demand for living in Toronto.

4. Donald Trump will cause the USA to enter another recession. The Canadian loonie could be valued at $1.25 to the USD.

5. Canada will be in demand for investment, immigration and tourism while Donald Trump destabilizes the USA economy with his xenophobia, misogyny and hate speech against women.

6. Canada WILL become the largest economy in the world.

7. Canadian dollars are a good investment. The Canadian dollar will NEVER go below 73 cents this time. It is only a seasonal correction, but the loonie will reach above $1.10 levels in 2007.

I will encourage debate, but do not judge me because I am a woman. I worked very hard to become a CPA in Toronto in a patriarchy and rape culture where men treat women as sexual objects rather than human beings.

I will be more safe wearing a thong bikini to the group of Grade 1 elementary school students than in public because when a male student tries to rape me for how I am dressed, I can call security to restrain him. Street harassment is a major issue in Toronto. We need to do our part to prevent harassment of women!

#23 Millenial-falcon on 11.18.16 at 7:08 pm

Canadian housing being in a bubble is debatable, Further still is vancouver and Toronto in a bubble? Or is merely demand outstripping supply…? There are 280k new Canadians everyear pretty sure they are not headed to Moose Jaw or some other bush/farm town when their plane lands….. Prob headin for van or the T dot.

#24 oncebittwiceshy on 11.18.16 at 7:16 pm

IM in C

You have to understand the process which determines fixed mortgage rates. It’s not our Bank of Canada making those decisions.

Fixed rate mortgage loans are primarily influenced by the yield on Canadian gov’t bonds of corresponding
maturity.

That means when other countries looking for a “safe haven” during the GFC bought up hundreds of billions of dollars of our bonds it drove the yield and mortgage rates down.

Now, understanding that correlation, guess what happens when they find better yield elsewhere (USA) or decide that we are not the “safe haven” they thought because our economy sucks and 29% of our GDP is going down the toilet because of a housing correction/crash.

Is this a certainty? Absolutely (maybe, probably, possibly) not but you had better position yourself accordingly because when those bond yields are driven up by an exodus of “bond vigilantes”, rates will spike alarmingly.

Control your debt, control your life.

#25 I don't know! on 11.18.16 at 7:16 pm

“The result? The worst possible combo. Prices stay high.” – Garth

—————————————————-

Exactly! That’s just one reason why prices in TO will NEVER go down. The powers that be will do everything in their power to ensure that prices stay high. So, Garth, stop predicting lower prices.

#26 CL on 11.18.16 at 7:17 pm

Finally someone with some sense. Down payments should never have been at 5% to start with, not enough skin in the game just like the banks.

Returning to normal is going to be painful for many.

#27 earlybird on 11.18.16 at 7:18 pm

Soft or Hard, its got happen to anyways…housing cost in general is leaving people with no disposable income….how can you spend a have a robust economy when people have no money?

Even folks that have owned for years when it was affordable, are struggling with higher taxes, heating, food, electric, fees etc etc etc are losing their disposable income, no wonder the economy sucks..

#28 conan on 11.18.16 at 7:18 pm

I doubt we will have a soft landing and I suspect that Canada as a whole will regret in a bigly way the election of Trumpster the Great.

It’s time to spend more on our army and read up on the “winter war.”

#29 I don't know! on 11.18.16 at 7:20 pm

“Of course, no bubble in history has ever ended nicely. But we’re Canadians.” – Garth

———————————————————-

We are Canadian. And Canada has massive immigration. Just one reason prices will stay high.

#30 1-2-3 on 11.18.16 at 7:21 pm

There are loan-to-income caps in places in several jurisdictions such as Britain and Ireland. In the UK, the maximum amount normally loaned to any purchase is 4.5 times annual income. Applying that to Canada, it means a couple with a joint income of $125,000 could borrow a max of $560,000. If they didn’t want mortgage insurance and had a 20% down payment, the most expensive house they could consider would be under $700,000.

====

Since

1) there are relatively few, relatively young (max. 40 yrs old for 25 yr term before hitting retirement) couples with 125K or more income

2) there is virtually no house in Canada for $560-700 K in cities where decent number of couples have $125 income

3) lenders would have virtually no mortgage customers

#31 First on 11.18.16 at 7:22 pm

First

#32 Mark on 11.18.16 at 7:25 pm

““I have yet to be convinced that people in our country “need” access to 19:1 leverage to buy homes,” Mr. Siddall said. “

Does the CMHC need $900 / $25 = 38X leverage to guarantee subprime mortgages in Canada? If you figure that only 5X leverage against subprime mortgage guarantees is appropriate for a mortgage insurer, the CMHC is short some $150B or so of capital. Perhaps even worse given that some of CMHC’s assets are correlated to RE pricing.

At this point, CMHC is attempting a controlled demolition so that it doesn’t blow up and destroy the Liberals’ chances of re-election a few years from now. I’m beginning to think that the Liberals might wear this mess if they don’t manage to get the Canadian economy back into gear ASAP.

#33 fun and happiness on 11.18.16 at 7:25 pm

Lol this will be fun to watch
Happy housing crash everyone! :)

===

What kind of people find fun and happiness in other people’s hardship?

#34 Moses71 on 11.18.16 at 7:28 pm

Sucking and blowing seems the only way with the gov’t as the bouncers of the enter/exit door. Not to mention the back door, but never mind that. It’s too bad our current gov’t has to do handstands to balance something which should have been done years ago, by Harper

#35 Moses71 on 11.18.16 at 7:33 pm

“It’s funny trying to coach folk about debt. No one really wants to hear”-#12
Because they’re different lol

#36 Nat on 11.18.16 at 7:35 pm

CMHC is pretty smart. We are currently in a situation of a real estate deal we may be walking away from. We currently purchased a condo in downtown Toronto (Little Portugal) that is a resale. The condo is fairly new. The developer went bankrupt. (Yes it is the one that was in the media) and we found out that there are two large liens on the property from the status certificate to about
8 million dollars. Now, the condo corporation is being sued as well. My lawyer suggested to get the underwriter of the mortgage company to sign off on the status report and also expressed her concern but said this may work but it will take a few years for this building to get on its feet. Our intention would be to rent it out and the price we would pay is under value for the area and therefore we would cash flow well for the rent in the area. PRoblem with the lenders..well they won’t sign off and apparently no lender will apparently loan given the concerns of the status report. To boot, CMHC has blacklisted this building and told my mortgage broker that there is a 2.3 million dollar lien on each unit-which my lawyer never found. My realtor wants to find another mortgage broker for us..our hunch is to back away so fast..just curious if anyone else had these kind of issues with condos..it was about the only thing I found
thar cash flowed in Toronto on the condo front…thoughts? Yes we do have a balanced portfolio which we are happy so far with our advisors!

#37 Andrew Woburn on 11.18.16 at 7:36 pm

Re Evan Siddal’s common sense comments, it cannot be that CMHC has only just woken up to this reality. I am not one who believes everyone in Ottawa is a fool or a knave.

Perhaps we have hit a reverse Nixon-goes-to-China moment when gooey-hearted Liberals can get away with doing things that the green meanie Conservatives would have been fried for. Can you imagine the outcry if Harper had tried to take the housing punchbowl away like this?

#38 Context on 11.18.16 at 7:41 pm

In the City of Toronto which has a condo economy and the density per square block defies logic here’s how its going down. A gun triggers the system followed by a distant roar and the avalanche begins to roll with nothing to stop it. Its too late for government intervention.

#39 prairiegopher on 11.18.16 at 7:42 pm

What does baby Trudeau care, he lives in a rental!

#40 Andrew Woburn on 11.18.16 at 7:46 pm

Meanwhile, Jeff Bezos is eating the world.

“Amazon has partnered with Fiat Chrylser to sell cars online for the first time, showing the company’s growing ambition to go after the $1.2 trillion auto sales market.”

http://www.businessinsider.com/amazon-to-sell-fiat-chrysler-cars-online-2016-11

#41 Statastician on 11.18.16 at 7:56 pm

The solution to high prices is high prices because it encouraged more production. Econ 101. All we need is for municipalities to stop throttling back construction in an effort to keep prices high. They do this of course because developers are major campaign contributors.

One only needs look at what happened in the oil market. Prices rose until shale oil became feasible, well it overshot first, then there was a mad rush into shale and the money flowed everywhere, then prices fell to the cost of shale production but everyone kept right on drilling, then prices collapsed followed by drilling. The next chapter is still ahead but I imagine it looks something like prices slowly returning to shale oil economics but no more booms.

The shale oil boom was also in part influenced by the rate at which governments sold land, causing prices to go to unheard of heights which revenue hungry governments loved.

Of course oil will slowly become a smaller and smaller part of the economic mix as at shale oil economics it takes too much energy to get it out of the ground to support a modern economy. Renewables, efficiency, and perhaps nuclear will slowly power more and more of industry and transport. One only needs to look at China and the number of nuclear plants they are building. As they come on line, fossil fuel demand will decline. However shale oil should keep us in plastics and chemicals for the foreseeable future. Which is good because that’s what they build houses out of these days (and practically everything else).

#42 ANON on 11.18.16 at 7:59 pm

Interest rising means trust is shaken. Takes years to build, seconds to break, and a (different, usually nasty) narrative in-between to repair.

#43 patriarchy and rape culture on 11.18.16 at 8:03 pm

#22 EmilyOne on 11.18.16 at 7:08 pm

I will encourage debate, but do not judge me because I am a woman. I worked very hard to become a CPA in Toronto in a patriarchy and rape culture where men treat women as sexual objects rather than human beings.

I will be more safe wearing a thong bikini to the group of Grade 1 elementary school students than in public because when a male student tries to rape me for how I am dressed, I can call security to restrain him. Street harassment is a major issue in Toronto. We need to do our part to prevent harassment of women!

===

https://www.youtube.com/watch?v=S9Zz3IzU8AE

#44 Self Directed on 11.18.16 at 8:03 pm

Troll in a Bikini! Sorry, not biting.

#45 Thank God no Hillery on 11.18.16 at 8:04 pm

EmilyOne for Prime Minister …. You go Girl !

#46 Context on 11.18.16 at 8:04 pm

One Real Estate Developer has 17 projects either under construction or selling in the Toronto area. Now they have a subsidiary company on the side renting out condo units. LOL

#47 Karma on 11.18.16 at 8:07 pm

#4 IM in C on 11.18.16 at 6:40 pm
“If a rise in interest rates will trash the housing market, and leave millions of Canadians in dire financial straits…
then there will not be any rise in interest rates.”

LOL! Because hedge funds and traders give an isht about Canadians and their debt problems? And you think Janet Yellen et al give two ishts about Canadians in debt? Do you think Donald Trump does? Nope, not at all.

#48 45north on 11.18.16 at 8:22 pm

Evan Siddal: Politicians are tempted to help first-time home buyers enter the market, but low down payments may be part of the problem adding to affordability pressures and macroeconomic vulnerabilities,” he said in a speech. “I have yet to be convinced that people in our country “need” access to 19:1 leverage to buy homes. In fact, it may be a fool’s bargain with the extra demand simply feeding higher house prices: the benefits of the policy accruing to wealthier home sellers rather than to the young first-time homebuyers it purports to help.

Siddal says what Garth has been saying. Exactly.

people don’t realize the influence that Bill Morneau is having. He has struck a chord that resonates throughout the Canadian economy from CMHC through to the banks. A soft landing would only be possible if the economy were boosted by some other industry.

#49 Wrk.dover on 11.18.16 at 8:33 pm

I am so happy that the low interest rate is hurting the people on the paying end more than it harms me getting dick on my savings (which I never had until after paying double digit interest throughout the prime of my life). Meh, take my savings too…that happens next year I see, but still, the very best revenge is to live well. Which I do well, much below my means…which they wouldn’t understand, thus they will crash and burn no matter what you gift them with.

I’ll just save up some more of the excess in my $100/mo CPP. laughing now…

Going back to the land and learning every trade starting 35 years ago has worked out to be doom proof.

Remember this: money made away from the home gets spent away from the home. And the commute sucks.

#50 Damifino on 11.18.16 at 8:41 pm

#33 fun and happiness

“What kind of people find fun and happiness in other people’s hardship?”
——————————–

The kind of people who have saved diligently and lived within their means for decades only to be called fools by irresponsible one-trick-pony speculators.

The kind of people who are called low class renters even if they have more liquid assets than someone who chooses to pay rent to a bank and borrow against pumped up equity as if it were their birthright.

The kind of people shunned at social gatherings for lacking the will or intelligence to buy real estate and are content to pay the mortgages of smarter people.

That’s who gets a big kick out of a housing recession.

#51 Barb on 11.18.16 at 8:46 pm

“…mortgages which are tied to what a borrower actually earns.”

——————————————————–

The way it used to be.
The way it should be.

#52 Saul Linderman on 11.18.16 at 8:46 pm

@ Emily One # 22:

I will be more safe wearing a thong bikini to the group of Grade 1 elementary school students than in public because when a male student tries to rape me for how I am dressed, I can call security to restrain him. Street harassment is a major issue in Toronto. We need to do our part to prevent harassment of women! /Quote

—————————————————–

I don’t know about you, but what you’re saying would not only make me not take your Tumblr ranting seriously, but I would also keep my toddlers FAR, FAR, AWAY from you. Toronto is already known for their crazies, but you are the next level of crazy. Don’t come near my child wearing thongs. I know what you would want to do with them, and it’s not good. You and Hillary Clinton should join each other in PRISON….

#53 rickan on 11.18.16 at 8:46 pm

I suppose you know that Suck n’ Blow is a nick-name for the Cessna Skymaster AKA Mixmaster.

#54 X on 11.18.16 at 8:50 pm

‘In the UK, the maximum amount normally loaned to any purchase is 4.5 times annual income.’

Currently in Canada it is calculated by your income and ability to pay/qualify for a posted 5 year rate?

#55 ronh on 11.18.16 at 8:57 pm

#22 EmilyOne
Which subject do you want to debate?
The Loonie or harassment of women?

#56 Paul on 11.18.16 at 8:58 pm

9 I don’t know! on 11.18.16 at 7:20 pm

“Of course, no bubble in history has ever ended nicely. But we’re Canadians.” – Garth

———————————————————-

We are Canadian. And Canada has massive immigration. Just one reason prices will stay high.
———————————————————-
You think that the new people that are coming here are buying $750,000 semi detached houses???

Just saw a new building site big line for pamphlets and stick pins for lots!

Wait a minute no I think it was a food bank. Better wake up!

#57 EmilyOne = Ben Levin on 11.18.16 at 9:05 pm

Pro-predator rhetoric veiled as Feminist rants do not belong in a blog pertaining to financial advice Emily-One.

It’s street harassment when a woman like Emily One prances around in a bikini & men notice her,

BUT

When she does it in a thong in front of Grade One elementary school pupils, it is considered “MISOGYNIST” to accuse her of being a weirdo?

What sane person would want to prance around in flesh-baring skimpy clothes in front of little infants, while blindly accusing everyone else of sexual perversion for happening to notice a woman walking in a bikini on the street?

What became the world come to?

EmilyOne sounds like Ben Levin was given access to the internet… Only a sick person would want to approach Grade One students in skimpy clothing.

If strippers aren’t allowed to entertain people under 18, then what gives EmilyOne the feminist right to approach Grade One (six-year-old) minors in lingerie thong bikinis? It’s sickening…

BAN EMILYONE!!!!!

#58 Smoking Man on 11.18.16 at 9:08 pm

DELETED

#59 45north on 11.18.16 at 9:12 pm

Shared Services: James Bagnall: That’s never been the problem with Shared Services. The notion of consolidating email systems, telecommunications networks and data centres to achieve economies of scale makes perfect sense.

http://ottawacitizen.com/news/politics/sweating-the-details-at-shared-services-what-it-will-take-to-reset-it

no it doesn’t make perfect sense! email systems, telecommunications networks and data centres are cheap and getting cheaper. All by themselves. The industry is evolving at a tremendous pace. You don’t have to spend $1.4 billion a year to take advantage of this. What you are doing is to promise to understand all the requirements and complexities of all the computer systems in the Federal Government.

Shared Services Canada approved more than $1.5 million in bonuses and merit pay for its executives, despite a year of widespread criticism of the agency’s botched technology projects.

http://www.cbc.ca/news/politics/shared-services-canada-compensation-bonuses-information-technology-auditor-general-1.3833399

Shared Service is costing $1.4 billion a year! How many EX level positions? I’m not one of them. Thank God

http://www.greaterfool.ca/2016/11/11/trump-it-up/comment-page-1/#comment-483969

#60 Fred Vulgar on 11.18.16 at 9:15 pm

Well, according to EmilyOne, the Canadian economy will rebound so extravagant that it will become more powerful than the world’s 1st or 2nd largest financial centre in the world, NYC.

I guess those Grade One students that Emily is posing sexualized for probably will vote for her when they reach the age of voting. Call it #grooming.

#61 BS on 11.18.16 at 9:21 pm

So his solution is to require buyers to come up with a lot more cash before they can jump into homeownership, plus a loan-to-income cap.

It seems every day there is more bad news for those holding Canadian real estate. The crash in YVR is already in full motion since the foreign buyers tax was brought in this past August. Then CMHC put in massive new restrictions, mortgage rates went up, empty home tax approved, air bnb restrictions coming and now this. With YYZ still on the rise the feds could kick in these measures by Spring. YVR will get slaughtered. Nobody cares about YVR. It is all about YYZ.

#62 TCContrarian on 11.18.16 at 9:23 pm

#33 fun and happiness on 11.18.16 at 7:25 pm
Lol this will be fun to watch
Happy housing crash everyone! :)

===

What kind of people find fun and happiness in other people’s hardship?
————————————————————–

Probably the ones who were laughed at and ridiculed for being sensible and rented all these years.
I’m a renter now (sold last year), and I also sense the superiority complex that landlords (aka. mortgage-holders), exude. They seem to feel that ‘renters’ are a lower class of people. So, yes! F#@k’em sez I too!

TCC

#63 Vigilant Citizen on 11.18.16 at 9:23 pm

#22

Women in Toronto haterssss men so much that they would rather be pedophiles, iz it that what youz sayin’?

Grade One pupils enrolled in a Canadian elementary school are six years old, yet you wantzto sexxxx them?

Shame on yous and your sick mind.

#64 Mark on 11.18.16 at 9:24 pm

“We are Canadian. And Canada has massive immigration. Just one reason prices will stay high.”

Immigration suppresses housing prices as immigrants are, due to their lack of money, forced into the labour market almost immediately. Immigrants in the labour market disproportionately end up in the construction sector, thus fomenting additional supply of housing. Immigration hence reduces house prices.

If immigrants aren’t productive, and they end up relying upon government assistance (ie: as is claimed of refugees by some anti-immigration groups), then the government borrowing associated with taking care of them, again, decreases house prices by creating additional demand on the bond market.

#65 Marty mcfly on 11.18.16 at 9:26 pm

Lol this will be fun to watch
Happy housing crash everyone! :)

===

What kind of people find fun and happiness in other people’s hardship?

It’s simple if you don’t plan for the future that’s not my problem. I hope it ends badly. Why because I’m not all in on one asset.

#66 Marty mcfly on 11.18.16 at 9:33 pm

#22

I’m not sure I buy any of what your selling and that’s got nothing to do with you being a woman. Not sure what thongs and grade ones have to do with your forecasts.

#67 3.7% Rent Increase for 2017 on 11.18.16 at 9:36 pm

BC set the legislated rental increase for 2017 @ 3.7%

http://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/during-a-tenancy/rent-increases

#68 Ret on 11.18.16 at 9:44 pm

“What kind of people find fun and happiness in other people’s hardship?”

Well, there are two kinds of hardship for one thing. One kind results from events beyond a person’s control such as poor health, factory closings resulting in job loss, injuries caused by impaired drivers etc. Canadians feel genuinely sorry for fellow Canadians suddenly put into these and similar circumstances.

The other kind of hardship is self inflicted. Gambling in RE to have bragging rights, taking on excessive debt for things that aren’t needed, abusing drugs, alcohol or your health in general etc. will get you little sympathy from many Canadians.

Personally, I will feel a sense of fun and happiness vulching the RE foreclosures and price reductions.

As I see it, the previous owners had a sense of fun and happiness when they bought houses that they couldn’t afford to show off to their family and friends, so now it will be my turn to feel the same sense of fun and happiness buying things that I can now suddenly afford.

#69 Belinda on 11.18.16 at 9:52 pm

You’d be crazy to think if home prices are going to go down in Toronto.

Toronto attracts the best and brightest talent from across the world. It is the economic hub of Canada.

I’d say that house prices are only going to go up because our city is what makes Canada a global attraction.

Toronto is #1 ^-^

#70 Smoking Man on 11.18.16 at 10:12 pm

Watching the 1/2 moon rise on Lake maskoka.

https://youtu.be/1Z39KZAryzk on the buds.

#71 the other white meat (pork) on 11.18.16 at 10:26 pm

#33 fun and happiness on 11.18.16 at 7:25 pm
Lol this will be fun to watch
Happy housing crash everyone! :)

===

What kind of people find fun and happiness in other people’s hardship

You must be new here.

#72 oncebittwiceshy on 11.18.16 at 10:32 pm

#163 Mark on 11.18.16 at 2:38 pm
“You do understand that when the BoC moves rates down in conjunction with U.S. rates moving up our dollar will drop significantly?”

I wouldn’t take that as an absolute truth, especially with the spectre of an extreme amount of domestic deflation taking hold as the housing market collapses. The US Fed pushed its interest rates down to zero much faster than the rest of the world (ie: Europe, Canada, etc.) did, yet here we have an extremely strong USD$.

Hey Mark, I know that you realize that the USD$ is the reserve currency so there is obviously a different measure. Now, other currencies did certainly appreciate against it. I will give you that much.

Your theory on domestic demand didn’t seem to apply during the 1980’s housing crash or the 1990’s housing correction where the dollar sunk to .69 and .63 during those time periods.

Interest rate differential theory will prove to be very real for the U.S.A’s largest trading partner as opposed to the Banana Republic countries who’s GDP wouldn’t match some of the large corporations in the U.S.

I am hoping that you are not heavily leveraged in housing and that your only loss will be fx trading.

#73 Smoking Man on 11.18.16 at 10:33 pm

Got celery sticks, carrots, lays lightly salted chips with a bit of ketchup chips in to this Montage of oral happiness.

Munchies so under rated after screaming at the moon in the wilderness

#74 Fun and happiness on 11.18.16 at 10:50 pm

#50 Damifino on 11.18.16 at 8:41 pm
#33 fun and happiness

“What kind of people find fun and happiness in other people’s hardship?”
——————————–

The kind of people who have saved diligently and lived within their means for decades only to be called fools by irresponsible one-trick-pony speculators.

The kind of people who are called low class renters even if they have more liquid assets than someone who chooses to pay rent to a bank and borrow against pumped up equity as if it were their birthright.

The kind of people shunned at social gatherings for lacking the will or intelligence to buy real estate and are content to pay the mortgages of smarter people.

That’s who gets a big kick out of a housing recession.

—-

Everybody rolled the dice, made a choice – whatever it was, for whatever reason.

Whether you agree or not with those choices, finding pleasure in others pain is for the bankrupt souls.

#75 Julie K. on 11.18.16 at 10:58 pm

Any time the big wigs talk soft landing, us little wigs should expect the opposite.

#76 Smoking Man on 11.18.16 at 10:59 pm

If you people could only live one day in the life of freedoom. The I give no shit day bring it on.

That’s the day you made it. True success.

Every thing in between that moment.

Don’t matter you made it to the holly tablets

https://youtu.be/Tj75Arhq5ho

#77 ShawnG in TO on 11.18.16 at 11:00 pm

of course there is no such thing as soft landing.

if you see the home price dropping around you, do you stick around to see your “investment” go underwater? what actually happens is everyone hits the exist at the same time.

real estate market is just the same as the stock market, only about 100x slower. emotions controls everything.

see nortel, see valeant pharma, see nasdaq back in 2000. that’s the picture of yvr and yyz.

#78 Watching the moon on 11.18.16 at 11:01 pm

# Smokin’ Man

https://youtu.be/jcy9Iu6zEPU

#79 Bottoms_Up on 11.18.16 at 11:01 pm

I would like to see something like:

5% dp for 200k and under
7.5% dp to 300k
10% dp to 500k
20% dp to 1000k
25% dp over 1000k

#80 ShawnG in TO on 11.18.16 at 11:06 pm

my friend is a first time mutual fund investor. wynne, could you please give her 4000$ of tax payers money to help her get started? thanks !

#81 Smoking Man on 11.18.16 at 11:11 pm

Brain damaged so under rated

#82 Smoking Man on 11.18.16 at 11:18 pm

A glass of coke for normalizing this addiction.
https://youtu.be/1vBF8aY_mtY

#83 Capt. Obvious on 11.18.16 at 11:19 pm

When the government is tripping over itself to apply solutions, we know it’s already too late. We are going to see a mess unfold the next few years.

#84 WUL on 11.18.16 at 11:19 pm

Boy, do we spend a lot of time on this Blue Ribbon Blog discussing the value of corporeal hereditaments and the perils of being mortgaged to the hilt in 416 and 604. Nothing matters and what if it did? (Bob Dylan??).

If our brawny host will permit, I am changing my handle here among the riff raff. Henceforth, RIL (Re – Invigorated Lawyer. After a 4.5 year hiatus from slumming it in the Inferior Courts of the 403 and 780, I re-entered the practise of law.

I am not worried about rusty skills. I never had any skills.

Like Steven Poloz, I just faked it. Seemed to work.

Govern yourself like an accordion.

Condescendingly yours,

RIL

#85 Donna on 11.18.16 at 11:29 pm

I will defend EmilYone. There is nothing inappropriate or sexual about a female teacher wearing a thong in class. It is you who think it is sexual.

Misogyny should have no place on this forum. Treat women with respect.

Trolls in thongs. What a blog. — Garth

#86 RIL on 11.18.16 at 11:37 pm

Yes, I have gone over to the dork side.

#87 DIY Meow on 11.18.16 at 11:45 pm

These comments tonight…you guys are going to make Garth want to shut down the comment section again…

#88 MakingCents on 11.19.16 at 12:08 am

I wonder why we (Canada) don’t consider a major redirection and focus on producing for a global appetite. The housing market as a need for shelter is fine, there is more than plenty…. it’s just that you have to pay for it. We have shelter, so let’s focus on creating income. Considering that Canada has the 2nd largest land mass with fresh water and we could be sitting on the new gold mine. Food. Construction workers are hard workers so I am sure they could handle retraining as tractor drivers (by drone of course!). If that fails we have renewable resources too. Viva any rev. The housing market is not a debt – it’s a lifetime commitment/grave. I would never pay for anything less than land and water.
http://data.mongabay.com/igapo/world_statistics_by_area.htm

#89 Victor Y on 11.19.16 at 12:18 am

To #22 EmilyOne regarding loonie
I guess you are just kidding. It won’t happen even the weed is legalized in Canuck land.
Ask yourself, what do we make nowadays that people would buy?

#90 nonplused on 11.19.16 at 12:31 am

Well, they are just doing to the housing market what they’ve been doing to the hotel industry for years. I am sure hotels pay property taxes, but when you stay at a hotel there are 4 more lines of taxes and charges beyond the nightly rate. So you sign up on Expedia for $130 a night but the bill is $160. I’ve often wondered are states/provinces trying to discourage tourism and business travel? Why are they taxing hotels as if they are cigarettes? All these new taxes are just to make it so if you stay home and don’t live in a hotel you get to pay more taxes too. Sure they get you all at once with a “land transfer tax” or a “capital gains tax” or a “foreign resident tax” but it’s all the same sort of thing.

Oh and don’t get me going on airlines! $989 to New York return!” But if you want to check a suitcase that will be another $25. And don’t forget the fuel surcharge, the airport improvement fee, the luxury tax, the GST, etc. Who’s going to New York without a suitcase? No wonder there is never any room in the overhead bins anymore.

#91 Ino on 11.19.16 at 12:40 am

>(…)What kind of people find fun and happiness in other people’s hardship?

Why, Schadenfreudians – of course.

#92 nonplused on 11.19.16 at 12:41 am

PS I think what these new taxes like the “land transfer tax” indicate is that governments now view anyone who has enough money to own a house as having enough money to be subject to a “wealth tax”, or a direct capital tax. And it’s really misguided because it’s based on the value of the property not the gain or loss. So if I’m selling a house in Vancouver I just bought, I might get out with my purchase price, but then I have to come up with maybe $40,000 to transfer the property? Where is that money supposed to come from? Pass it on to the buyer? Well sure but then it comes off the offer so I still have to pay it.

Preston Manning used to use an old joke where he was proposing the liberals simplify the tax code:

Line 1: Gross Income:

Line 2: Send it in.

Slowly they are coming to that.

#93 Agree #19 Smartalox on 11.19.16 at 12:58 am

My Realtor of over 30 years told me that most YVR RE purchases were all about ego.

He told me that purchasers believe the house they live in was a reflection of how well off they were – keeping up with the “Jonses”.

He went on to say that invariably and rather, they were up to their nostrils in debt with almost all deals requiring a huge mortgage.

bsant

#94 drydock on 11.19.16 at 1:16 am

#22 EmilyOne on 11.18.16 at 7:08 pm

“I will be more safe wearing a thong bikini to the group of Grade 1 elementary school students …”

………………………………………………………….

No doubt while educating them in spirit cooking.

#95 Immigration People Give it a Rest on 11.19.16 at 1:21 am

Inform yourselves before making outlandish claims that immigrants will save your local RE market.

True 250,000 to 300,000 or so per year as of 2014.

Also true their unemployment rate at or above the national average.

Also true almost half have highschool or less/some postsecondary education.

About half are women and not all work.

In 2012, an immigrant who had landed in Canada just a year earlier earned a median employment income of just $20,000.

Immigrants who had lived in Canada for five years earned $25,000, and those who had come to Canada 10 years earlier earned $31,000.

The above immigrants will definitely be able to afford $1 MM + home.

Dream, on.

That vs. a 2012 median family of two or more Cdn. income of $71.1K per year.

Please don’t quote that your immigrant neighbor and/or friend is wealthy. From the above it is clear that the vast majority are not. Think instead that your neighbor and/or friend is a statistical aberration.

The facts do not lie, people do.

See StatsCan and CBC:

http://www.statcan.gc.ca/pub/11f0019m/11f0019m2014356-eng.htm

http://www.cbc.ca/news/business/immigrant-incomes-show-wide-gaps-between-groups-1.2897816

bsant

#96 WalMark of Sadkatoon on 11.19.16 at 1:31 am

You’d be crazy to think if home prices are going to go down in Toronto.

hard to bet against toronto real estate prices that’s for sure.

great city. a tad smoggy and congested.

expensive houses

#97 prairie person on 11.19.16 at 1:47 am

Gordon J. Reykdal, CEO of Cash Store Financial is taking home nearly $2.3 million in pay and bonuses this year thanks to record profits in the payday loan industry. His son, Barret J. Reykdal, who serves as president of the company, earned $720,761. The information is contained in a management information circular released this week.

As of September 1st, the publicly traded company had 22 payday outlets in Nova Scotia, more than half the provincial total. It operates under the names The Cash Store and Instaloans and charges $31 per $100 on its short-term loans, the maximum allowed under Nova Scotia regulations. A recent Coast cover story reported that people who borrow $300 at that rate would have to repay $393 out of their next paycheque.

#98 RIL on 11.19.16 at 1:57 am

“Nothing matters and what if it did?”

Mellencamp. Not Dylan. Next time I will do my research before spouting off.

#99 paulo on 11.19.16 at 2:16 am

How about privatizing the Mortgage Insurance Business completely The successful bidder or bidders would be
granted the rights to sell mortgage insurance, would be required to assume CHMC’S booked insurance.
this would generate revenue for the fed eliminate tax payer exposure and create a new private insurance industry replete with jobs take a page from the crtc

#100 NEVER GIVE UP on 11.19.16 at 3:39 am

Regarding the tax breaks for newbies.

It’s amazing what a brown bag of cash will do to a politician when a developer shows up crying he cant sell his condos!

We still do this in Canada, Big time. But we also have more first world ways for bribers to pay up. Like employing useless idiot relatives or children of politicians as payment for favors.
Or a little heads up when the stock is going to go up or down so the politicians sister can buy a load in advance.

http://www.ctvnews.ca/canada/montreal-mayor-applebaum-faces-14-charges-including-fraud-conspiracy-1.1328587

#101 Wrk.dover on 11.19.16 at 4:46 am

Emily One is Anthony Weiner

#102 dgb on 11.19.16 at 5:12 am

re:#3……if you want this blog to end then don’t come here…you fix your own problem!!!!! simple…as for the rest of the comments here today..only about 5 worth reading out of 86…maybe the other 80 could follow #3 and ‘not come back too’…this would be a wonderful comment section if it kept to the topic discussed by garth or financial questions we could get answered by garth or just discussing the financial problems of our country …we could all learn something useful but obviously about 97% of commentors are drunk or high…my advice is get lost but then most of you already are..just quit sharing with the rest of us who come here to learn …PLEASE PRETTY PLEASE…I love this blog but most of the comments are ridiculous!!!!!!!!!!

#103 maxx on 11.19.16 at 6:32 am

Garth needs no help from me, but this one’s too much:

#68 Andrew Woburn on 11.17.16 at 8:59 pm

“Not sure where Garth went to school….

(and all the useless crap in between)

Again, where did Garth go to school?”

Supercilious dick. Try getting off your high horse from time to time- a fourth has been requested for a quartering. But then, that wouldn’t be as degenerate as “As the duck said to the actress, of course, it’s all about stimulus.”, is it?

Btw, “entendre’s” is incorrect (erroneous use of the possessive case) and “practise” takes two “c”s, eh wot?

Your edition of long-winded blathering smacks of a place of learning where civility and oh, say, relevance to the topic at hand places far down the curricular list.

Where did YOU go to school?

#104 maxx on 11.19.16 at 7:03 am

“A gentle deflating of the Hindenbubble so the borrowing orgy stops, sales and prices waft gently lower, affordability is enhanced and the middle class ain’t gutted. It’s what they dream about on the Rideau.”

It’s what they dream about….they simply refuse to dispense the correct dose and type of fiscal medicine required to effectively solve the problem: raising rates.
These diddlers should stop dreaming and get to doing some actual work, having spent years “working” at creating an enormous housing mess with generalized economic fallout. The status quo of diddling won’t solve a thing.

They’ve done what they do best: diddled us all into massive economic malaise, consistently turning a blind eye to an effective solution.

Canada currently cannot “catch up” to other nations in its economic cohort. Many are already on the mend and raising rates, although painful to some, will accelerate their economies.

There is no “get out of jail free” card for this one.

#105 Herb on 11.19.16 at 7:34 am

RIL,

good luck, and don’t get too busy to post. A sane voice is needed in the comment section now and then.

#106 In the future on 11.19.16 at 7:36 am

the socialist Bolshevik model is shoe box sized apartments, that’s what millennials can look forward to

the socialist Bolshevik model also includes the elimination of the homestead, family farm, self sufficiency, well water, livestock, gardens etc.
in a word – disenfranchisement

In the future your children’s children will be paying their municipal water bill to Nestle, ha ha,
If you own property, think about putting them on title now, while you still can.

#107 cto on 11.19.16 at 7:37 am

Garth
please keep Emily on this blog!
this is the most stimulating conversation in heard in weeks!

#108 John on 11.19.16 at 7:52 am

Yo, Gartho… San Fran house sales crash… cosmic harmony?

http://www.zerohedge.com/news/2016-11-18/san-fran-home-sales-crash-lowest-level-2008-distressed-property-sales-fall-36-yoy

#109 rock beats paper on 11.19.16 at 7:59 am

#69 Belinda on 11.18.16 at 9:52 pm
“You’d be crazy to think if home prices are going to go down in Toronto.”

Tell that to R/E owners in London England.

#110 ROTFL on 11.19.16 at 8:02 am

#29 I don’t know! — “We are Canadian. And Canada has massive immigration. Just one reason prices will stay high.”

Why are immigrants coming? Fairly good economy. Why’s that? Building a lot of housing. Why’s that? Immigrants are coming.

Lots of immigrants came to America during its housing boom. Come the bust, they stopped coming, and many went home again. Look it up. Alberta experienced lots of in-migration until recently, but that stopped. Look it up. Toronto’s last big housing bust coincided with a drop in Canadian immigration levels. Look it up.

#111 Bytor the Snow Dog on 11.19.16 at 8:14 am

Come on man! Whoever is writing this “Emily” character and her various iterations….come out of the closet.

You are an artist and you deserve props.

#112 John on 11.19.16 at 8:18 am

Long line ups for scarce and rising cost new home builds, the promise of all day trains into Toronto, and Wynne’s new 80 people per hectare density (all high-rise) are creating single family home shortages across the greater GTA commute zone etc etc. Higher rates be dammed… Glitch: 100% chance of a recession in 2017 and new home builders are locking in suckers before things crater. Caution: Wynne’s land transfer tax garbage joke is going to waste loads of your moisters, many wondering if their job will exist before they move in!!! We’re lost, Garth. Ps. The train station in Guelph is an absolute useless joke for any kind of commute. Obsolete and no space for even a connecter bus! Blather…

http://www.guelphmercury.com/news-story/6971652-high-demand-and-listing-scarcity-leads-to-record-home-sales-in-guelph/

#113 Grey Dog on 11.19.16 at 8:41 am

Nat “2.3 M$ lien on every unit, my lawyer didn’t find”
Yikes Nat, get a NEW lawyer to start with. Get on with your life, leaving this ugly mess behind you. Messing around with Mortgage brokers to find one that will qualify you, means you should really be saving and investing your money now and be free and clear to scoop the condo of your dreams when the bubble bursts. Getting involved with bottom of the barrel mortgage brokers simply means at present day, YOU DO NOT QUALIFY FOR A MORTGAGE!!! The

#114 DoomandGloomer on 11.19.16 at 8:42 am

#40 Andrew Woburn on 11.18.16 at 7:46 pm:

“Amazon has partnered with Fiat Chrylser to sell cars online for the first time, showing the company’s growing ambition to go after the $1.2 trillion auto sales market.”
——————————————————————–

That Bezos feller sure is clever. He’s testing the market with disposable crap-mobiles to see how things work out before moving forward with quality vehicles.

#115 DoomandGloomer on 11.19.16 at 8:44 am

#100 Wrk.dover on 11.19.16 at 4:46 am:

“Emily One is Anthony Weiner”.
——————————————————————–

I believe you meant to say: Emily One has a wiener.

#116 Zen Headspace on 11.19.16 at 8:59 am

#68 Ret:

“…now it will be my turn to feel the same sense of fun and happiness buying things that I can now suddenly afford.”
——————————————————————-
Real happiness doesn’t come from satisfying our desires. Real happiness is to be found in dissatisfaction itself.

Sit down and shut up for a little while, and it all becomes crystal clear.

#117 Context on 11.19.16 at 9:03 am

San Francisco real estate has the same problems as Toronto and guess what? She is crashing and the panic is on.

#118 conan on 11.19.16 at 9:22 am

RE: #98 paulo on 11.19.16 at 2:16 am

Well I will start with the bidding, hmmmm CMHC ……..

****Negative 30 billion dollars****

Clause 1: The government takes care of all of their ex employees. I will be using robots.
Clause 2: Payment is in US funds, I don’t want Crown land. Don’t even think about it.

#119 GFD on 11.19.16 at 9:28 am

#22 EmilyOne you forgot to mention Trudeau lowering the Age of Consent for anal pleasures from 18 to 16.

-Elizabeth Smith, CPA (2015), CMA, MBA (University of Toronto, 2012), Internal Auditor for a large school board in the Greater Toronto Area morphed now to EmilyOne

#120 earlybird on 11.19.16 at 9:29 am

#101..Have to keep the comments! I do from time to time pluck a good piece of info out, and when I don’t…its pure entertainment! This blog is one of the best reads on the net…Thank you Garth for your work…

#121 GFD on 11.19.16 at 9:44 am

@#23 Millenial-falcon
7 out of 10 middle class immigrants end up in poverty for their first five years in Canada. 5 out of 10 immigrants to Canada eventually leave Canada for good after ten years and after spending their money in our economy and working in brain dead jobs like construction even thou some with decent education. Many die, many leave for work in US or disburse otherwise. Immigration is yet another convenient cause of reasoning behind Canadian real estate.

#122 crossbordershopper on 11.19.16 at 9:48 am

your missing the other side of the trade per say. Yes, these measures will dampen demand to deleverage the personal balance sheet of young and first time buyers. Yes, that will make them more stationary and restrict disposible income . The parents want their income flow, and will get it from the house . with low rates, you need more capital to get a standard of living they have become accustomed too. the other side is who gets the house or the money from the sale after they pass away. ? the kids, yes they will be in their 50’s when mom passes. and they will use their windfall to pay off their debt and have the intergenerational ponzi scheme continue. i think garth thinks this is the USA or something, the goverment of canada controls everything here. everything is planned out , you dont have to to worry . simply go to work everyday and everything will be ok. i am not joking its the truth. do you think a general has any problems sending a young soldier into harms way, no, what did you expect him to go because he is older.?
an overpriced home is a carry trade for the common guy. where else can you get that leverage and get the financing for it, like banks laugh at a lone of 10 grand but you need 300K for a house, no problem. growth via inflation and immigration and restricted real estate developments, bylaw, development levies, greenbelt area in southern ontario. everyone iin on the game, all you have to do is drive to work every day of your life, Freedom is not in the canadian dictionary.

#123 hoodwinkers on 11.19.16 at 9:50 am

Garth,

The Canuck government strategy is to get people hooked on housing like crack-addicts…..it ensures a docile base of tax paying lackeys, who won’t rise up and overthrow the govt elites….surprised no one has seen through this.

#124 hoodwinkers on 11.19.16 at 9:52 am

#22 EmilyOne on 11.18.16 at 7:08 pm

Predictions for 2017:

——————————

Emily what are your views on the climate change hoax?

#125 Context on 11.19.16 at 10:03 am

#110 Bytor the Snow Dog:- Emily must be forgiven as she suffers from MPD or a multiple personality disorder. There is a cure and all she needs is a good spanking late at night.

#126 ELL on 11.19.16 at 10:13 am

Dear RIL (formerly WUL),
Welcome back to the fold. Just in time to explain the Jordan ruling to all the clients/victims presuming that you do crim work. Even if you don’t do crim work, you’ll still need to explain Jordan and defend your place in the world as a part of the flawed system. Gosh that sounds pretty bleak – its my new diet of broccoli and celery sticks. It’s effecting my attitude. On the upside, I hope to fit back into my court vest soon (had to move the buttons over last month).
ELL (exhausted lady lawyer)

#127 Renter's Revenge! on 11.19.16 at 10:15 am

#84 Donna on 11.18.16 at 11:29 pm
I will defend EmilYone. There is nothing inappropriate or sexual about a female teacher wearing a thong in class. It is you who think it is sexual.

Misogyny should have no place on this forum. Treat women with respect.

Trolls in thongs. What a blog. — Garth

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

Here is my personal conspiracy theory regarding EmilyOne’s comments:

My understanding of feminism is that it was originally an attempt to achieve sexual independence for women. I.e. Not having to “put out” to men in order to obtain economic security. This has now largely been achieved.

My theory is that feminism has been co-opted by Agenda21 in order to achieve the complete de-sexualization of women, thereby reducing men’s interest in women and slowing population growth.

Bonus conspiracy theory: MGTOW is the compliment to the above cultural marxism, and is also endorsed by Agenda21.

OK, now I’m going to leave before the internet explodes.

#128 Penny Henny on 11.19.16 at 10:15 am

The result?

The worst possible combo. Prices stay high. The children are forced into massive debt. And Boomer sellers walk off with a historic, tax-free windfall.-Garth

//////////////////////////////////////

Works for me :)

#129 Aggregator on 11.19.16 at 10:26 am

“I have yet to be convinced that people in our country “need” access to 19:1 leverage to buy homes." -Siddall

Hmmm… let's look at CMHC's book to see where all this leverage is coming from.

As of Q2, CMHC's insurance-in-force is $523 billion and guarantees-in-force $426 billion. For clarity on why MBS guarantees is added on top of insurance-in-force:

Annual limit on new securities guaranteed

For 2016, the Minister of Finance has authorized CMHC to provide up to $105 billion of new guarantees of market NHA MBS and up to $40 billion of new guarantees for Canada Mortgage Bonds (CMB). The authorized limit for market NHA MBS was increased to reflect the changes under the CMB Program where all NHA MBS sold to Canada Housing Trust (CHT) for all CMB series issued after 1 July 2016, as original or reinvestment assets, will be subject to separate NHA MBS guarantee fees. These annual guarantee limits are separate and distinct from the $600 billion limit on mortgage insurance-in-force.  (Source: CMHC Q2 Financial Report)

So that's $949 billion in potential liabilities against CMHC's total equity of $20.3 billion dollars. That's a leverage ratio of 41:1. And this doesn't include their derivatives book (interest rate swaps) with financial counterparties, which I suspect may be with the Bank of International Settlements (PDF).

Don't trust anything CMHC says. That stress test report claiming it would only suffer a $1 billion loss against a 30% national correction is just another fairy tale published on the govt's mouthpiece G&M. It's all fancy accounting until it's time to pay the piper.

#130 toronto1 on 11.19.16 at 10:47 am

Oh crap is right

lets look at the numbers, remember that this is after tax net income:

500K mortgage at 2.4%/25 =$2151

500K mortgage at 3.0%/25 = $2366 (+$151 from 2.4%

500K mortgage at 3.5%/25 =$2496 (+$345 from 2.4%

500K mortgage at 4.0%/25 = $2630 (+$479 from 2.4%

For GTA centric- I would add another: PLUS
$25/ month in increase in condo fees/year or maint for house upkeep=
$15/ month in increase in transportation (either insurance or public transit- TTC/GO etc..) /year=
$25 / month increase in property taxes/year
$20/ month in misc, phone/internet/banking fees/food etc..
total of $85 month

an increase of 2.4% -3.0% plus $85 = $200/month

an increase of 2.4% -3.5% plus $85 = $430/month

an increase of 2.4% -4.0% plus $85 = $564/month

No one is going to lose their home over $200-$400 a month, but that amount puts a big strain on finances. and that is on a 500K mortgage which wont get you a lot in Toronto.

BUT an increase of 1.6 basis points is $564 a month and thats where its gets interesting.

I dont know what the breaking point is but I would wager that anything plus $400 a month is going to start to cause a lot of problems for a lot of people.

#131 Smoking Man on 11.19.16 at 10:49 am

#114 DoomandGloomer on 11.19.16 at 8:44 am
#100 Wrk.dover on 11.19.16 at 4:46 am:

“Emily One is Anthony Weiner”.
——————————————————————–

I believe you meant to say: Emily One has a wiener. She’s obviously Marks twin sister.

#132 crowdedelevatorfartz on 11.19.16 at 10:59 am

@#22, 43, 84

Similar comments under 3 different names.

Proof that a schizophenic is never lonely

#133 jess on 11.19.16 at 11:23 am

Money-laundering watchdog cites ‘significant’ deficiencies at 100-plus B.C. real estate firms
http://www.calgaryherald.com/business/money+laundering+watchdog+cites+significant+deficiencies+plus/12400710/story.html

FINTRAC found hundred’s of firms with “significant” or “very significant” levels of non-compliance,
http://www.fintrac-canafe.gc.ca/publications/operation/real-eng.asp
http://business.financialpost.com/personal-finance/mortgages-real-estate/anti-money-laundering-watchdog-found-significant-deficiencies-at-nearly-500-canadian-real-estate-firms-data
==========================
By Andrew Nikiforuk 10 Nov 2016 | TheTyee.ca
http://thetyee.ca/Opinion/2016/11/10/BC-LNG-Fraud/

#134 Context on 11.19.16 at 11:34 am

There must be some intelligence in this room as how can one buy or rent in the Toronto area proper without sufficient planning. Crime is on the rise as a daily occurrence and you would not want to live in such an area. The dream location is hidden and was surprised by this all because there is no reported crimes over a wide area from the core target to the north, south, east, or west as saw the stats. Lets ascertain who has done their homework for carefree living so – name it.

#135 GFD on 11.19.16 at 11:39 am

@#22, 43, 84 (Joke)
I was also diagnosed from schizophrenia in my younger days, but I was completely different person then.

#136 X on 11.19.16 at 11:44 am

‘as the T2 government gets ready for Stage 2’

Have they announced a stage 2? Not that I disagree with going back to the original 10% down requirement CMHC is recommending. More skin in the game for RE owners, less debt for CMHC to cover. It would be great timing to squash further stupidity for buyers with no money before the early spring market.

#137 Alice on 11.19.16 at 11:47 am

@#60 Fred Vulgar

:P

They should probably hold back on predictions about bouncing back until after we see the damage.

#138 falseprophet on 11.19.16 at 11:48 am

I wonder how quickly this would happen if Trudeau and Wynne were first time home buyers.

#139 Keith in Calgary on 11.19.16 at 12:03 pm

Well, I got my listing done.

The listing agent removed all the clauses about anything that can happen after the agreement expires or what I do afterwards,, as well as, they don’t get paid “UNLESS” the deal I accept within the listing period actually closes and I get paid….period….no other exceptions. They agreed to have deposit monies sent payable to my lawyer and held by same. The last point about deposits required some verbal back and forth, but they agreed in the end.

House goes on the market next weekend. I am paying a commission larger than the industry average, and will be priced 10% cheaper than “any” SFH in the neighbourhood.

#140 garth fan on 11.19.16 at 12:10 pm

Here is a nice video for #22 EmilyOne, courtesy of “Black Pigeon”

https://www.youtube.com/watch?v=dyX8-lFqBIc&t=318s

(Video is titled: “Women Love to Objectify Themselves: Here’s Why”)

#141 Millenial-falcon on 11.19.16 at 12:14 pm

#120 GFD on 11.19.16 at 9:44 am
@#23 Millenial-falcon
7 out of 10 middle class immigrants end up in poverty for their first five years in Canada. 5 out of 10 immigrants to Canada eventually leave Canada for good after ten years and after spending their money in our economy and working in brain dead jobs like construction even thou some with decent education. Many die, many leave for work in US or disburse otherwise. Immigration is yet another convenient cause of reasoning behind Canadian real estate.
——-
Lol , that was funny.

#142 White Crock BC on 11.19.16 at 12:14 pm

fun and happiness on 11.18.16 at 7:25 pm

Lol this will be fun to watch
Happy housing crash everyone! :)

===

What kind of people find fun and happiness in other people’s hardship?

————————————-

The kind of people who have been renting musty basements for the last ten years while their friends have been making a killing in RE, that’s who.

Lots of Schadenfreude on this blog, get used to it.

#143 Fleabitten Monkey on 11.19.16 at 12:20 pm

Anybody catch the “done deal” column in the globe Bc section this morning? Sale of a large lot home in the Cambie area sells for $3.4 mill on a $3.68 mill ask. The house sold in may but only recently completed. What the realtor said was this “nothing is selling with the 15 pct buyers tax, mtg stress test, higher interest rates and uncertain political situation around the world. I have advised all my buyers to never try and catch a falling knife.” Good on him, this from a realtor…so they are not in fact all buy now or buy never types. He added that this property will hold its value IN THE LONG RUN. Hmmmm so it would seem the market sees the writing on the wall.

#144 Damifino on 11.19.16 at 12:21 pm

If a house value is somewhere around $700K then rises to $1.4M over 7 years, then falls back to $700K over the same length of time… is that a soft landing?

Or, more to the point, is that a financial calamity or just the way it goes? If you are in for the long run how is a 50% drop over 7 years any better or worse than one that occurs overnight?

There should be a rule: No one may use the term “soft landing” without first defining specifically what is meant.

This comment should be taken with a smidgen of salt. If you’re looking for me, I’m just down the road a piece.

#145 Millenial-falcon on 11.19.16 at 12:24 pm

#94 Immigration People Give it a Rest on 11.19.16 at 1:21 am
Inform yourselves before making outlandish claims that immigrants will save your local RE market.

True 250,000 to 300,000 or so per year as of 2014.

Also true their unemployment rate at or above the national average.

Also true almost half have highschool or less/some postsecondary education.

About half are women and not all work.

In 2012, an immigrant who had landed in Canada just a year earlier earned a median employment income of just $20,000.
———–
Absolutely. still they contribute to a growing city population though mainly in vancouver an Toronto where resources and community support are. So relax and jump off your soapbox no one saying they all drive bentleys.

#146 Context on 11.19.16 at 12:52 pm

#133 GFD:- You didn’t win the prize at Jane and Finch as said fine dining for 1/2 price in a classy hood.

#147 Mark on 11.19.16 at 12:58 pm

“Don’t trust anything CMHC says. That stress test report claiming it would only suffer a $1 billion loss against a 30% national correction is just another fairy tale published on the govt’s mouthpiece G&M. It’s all fancy accounting until it’s time to pay the piper.”

That was my point as well. The banks, if they were to take the risks that the CMHC is taking, would only be allowed 5X-7X leverage. (they’re generally allowed around 10X leverage against mortgages that are 80% LTV at origination!). So if we reduce that 41X leverage to a mere 5X leverage, that puts the CMHC short in excess of $160B of capital.

Even worse is that most of CMHC’s “asset” base is held in RE (or loans against RE) itself which are correlated to the guarantees it has written against subprime mortgages. So in a housing downturn, CMHC may very well have $0 of capital, and require every last dime to come from the Federal government.

Hence, as I’ve written here before, the real lynchpin to the solvency of Canada’s banks, is how the federal government reacts to the CMHC needing additional funding. Just the mere threat of instituting a deductible, not even clearly retroactive to claims under existing insurance, caused a noticeable dislocation in spreads recently. The OSFI periodically makes moves towards increasing capital requirements. And prices continue to stagnate/fall across Canada. Anyone looking to touch RE at this point must really like toxic waste (or living under a bridge when it all falls apart!).

#148 Mattl on 11.19.16 at 1:43 pm

The renters that have been sitting on the sidelines and have dumped 200k into rent for more than a decade are in for a big suprise when housing goes down to 2012 levels, their investments get beat up and they lose their customer service jobs. If you think you will be immune to a crash you are in for a big surprise. The only fool greater than the one that is buying now is the one thats been waiting since 2006. While you’ve been waiting and praying for a crash and hardship us fools that are in the market have been paying off our homes. By the time you buy into 2012 prices, in 2020, us fools will be mortgage free.

#149 Tony on 11.19.16 at 1:54 pm

Re: #36 Nat on 11.18.16 at 7:35 pm

You’re probably paying more than ten times what it costs the builder to build your condo. Common sense says pay no more than about 20 to 30 percent above the builder’s cost. You’re paying about seven times what the condo is worth. In 25 years time you’ll be lucky to see the price you paid for it today. Next time think before you buy something.

#150 soost on 11.19.16 at 5:16 pm

Mattl – what a vapid response. Rent, when having deducted property taxes, maintenance and other ‘sunken costs’ is relatively cheap. I’ve been saving and investing.

When the price of the capital you have paid off experiences a 30% drop, my eyes will light up with opportunity. You are very fortunate to have your mortgage ‘paid off’ and to have jumped in at the right time but consider everyone who has been waiting.

Young people will now experience the ability to save without being outpaced by market gains – people who would not have had an opportunity otherwise.

I think the sidelines have been wise.

#151 GFD on 11.19.16 at 6:38 pm

#144 Context
Now this is getting little too personal. Don’t you think?

#152 Ronaldo on 11.19.16 at 10:42 pm

Here’s a gem you can have for only 3.3 million.

http://www.estateblock.com/vancouver-real-estate/2848-e-brdway-vancouver-bc-v5m-1z1-mls-r2119722-1

A place that was up for sale on west 8th in Mount Pleasant for $2,198,000 has now reduced to 1.998 million in the past couple weeks. The place is a dump. Probably to avoid the 2% tax on houses over 2 million. The only other house that was for sale in that 30 sq. block area that I walked is still up for $2.65 million. Kinda tells you something doesn’t it? Two houses for sale in a 30 sq. block area and no interest. LOL

#153 maxx on 11.20.16 at 8:06 am

#78 Bottoms_Up on 11.18.16 at 11:01 pm

“I would like to see something like:

5% dp for 200k and under
7.5% dp to 300k
10% dp to 500k
20% dp to 1000k
25% dp over 1000k”

Triple the top three, double the bottom two and I agree.

#154 soost on 11.20.16 at 8:09 am

Wow that place in Mount Pleasant is a dump. It makes me wonder whether Toronto still has a deplorable bench mark to stoop to before things get better.

#155 m. raczkowski on 11.21.16 at 12:00 am

why can,t I be posted ? because predictions on this side are wrong for many many years if it comes to real-estate prices. I Don,t offend anybody those are facts..