The locals

worries

If you have a house to sell in Cambridge, you win. Ask whatever the hell you want. But if you’re selling in Thompson, Manitoba, fail. Your chances of not finding a buyer quick are almost 90%. So start chopping the price.

As this pathetic blog has oft repeated, all real estate is local. These days among the marquee markets, Vancouver is in correction with dismal sales, the GTA is hot with demand exceeding supply, Calgary’s massively confused, Victoria is awash in YVR refugees while SW Ontario and Niagara accept Toronto’s rejects, and most other places (from Halifax to Montreal, Winnipeg to Edmonton) are in various stages of morbidity.

A measure of market vitality is the sales-to-listings ratio, which most local real estate boards published monthly. This tells you about absorption – how many available units are sold in a given period, expressed as a ratio of the number of listings that appeared in the same market during that time. When the ratio is between 40 and 60, the market is considered ‘balanced’. Above 60 and the sellers are in charge, which means prices are generally rising. Below 40, the opposite – sellers are tormented, buyers are in control and price movements will likely be lower.

It might surprise everybody in BC, where they think only special people live, that this autumn every one of top 10 cities (with the highest sales-to-listings ratios) were in Ontario. And all ten of the worst markets were in the West. As mentioned above, the best was sleepy Cambridge, where houses costing around $400,000 are starting to attract serious attention from GTA buyers 90 minutes down the 401. By the way, the average detached house in 905, that soulless horse collar surrounding Toronto, now costs more than $950,000.

Industry publication BuzzBuzzNews tapped into the following stats, gathered by CREA. You will notice that almost all of the dogs run in the prairies.

Top sellers’ Markets (by Sales-to-Listings Ratios):

1. Cambridge (103)
2. Guelph (93)
3. Woodstock-Ingersoll (92)
4. Northumberland Hills (89)
5. Kitchener-Waterloo (89)
6. Kawarthas (86)
7. Oakville-Milton (85)
8. Hamilton-Burlington (85)
9. Niagara (84)
10. Welland (83)

Top Buyers’ Markets (please pray for the sellers):

1. Thomson (12)
2. SE Saskatchewan (23)
3. Battlefords (26)
4. Fort Mac (29)
5. Yorkton (30)
6. Grande Prairie (30)
7. NE Alberta (31)
8. S Central Alberta (33)
9. Lloydminster (34)
10. Peace River (36)

By the way, the ratio for Toronto (GTA) last month was 72.5. The ratio in Vancouver in October was just 24.4. Ouch. But because everything in YVR is weird, this is what the local board says of that number: “Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.” Go figure.

Meanwhile there are lots of people who would like to piddle in the GTA’s wine glass during the current boom. Toronto city council will be dealing with a few motions in the coming days which will impact house prices, one of them being a suggestion that Vancouver’s ridiculous vacant-house tax (1% of assessed value annually) be aped in the Big Smoke. At the same time, Ontario has increased the land transfer tax grab on properties changing hands for $2 million or more (try finding even a semi-detached house midtown for less than that), and there is still considerable pressure for a Chinese Dudes levy, also copying the BC tax that finally brought Van back to earth.

A big proponent: BeeMo’s chief economist. Doug Porter.

“I do believe that it is foreign investment that’s really driven prices into the stratosphere, and I do believe it’s a provincial and municipal matter to basically try to offset some of that strength’” he says. “BC attacked it head on. We’ll wait to see how successful it is and whether it does what they wanted it to do. I think Ontario will one day wish they did it.”

Maybe Ontario will wish it didn’t try to engineer the market by doubling the transfer tax break for moisters at exactly the same time the feds were attempting to soft-land this gasbag with a new mortgage stress test. Perhaps BC will feel the same. All across Canada, governments have diddled massively with the housing market, sending out conflicting messages, helping inflate household debt and ensuring millions of families will be negatively impacted when the inevitable occurs.

Rest assured, by then the Chinese dudes’ll be long gone, debt and disappointment in their wake. Just ask around in Saskatchewan.

119 comments ↓

#1 Victoria Real Estate Update on 11.27.16 at 4:41 pm

A CHANGED MARKET

Last year from April to October, sales of detached houses either remained the same or fell some in the following areas:

Oak Bay: (remained the same)
Victoria: -18%
Saanich East: -17%

A LOSS OF CONSUMER CONFIDENCE IN VICTORIA’S MARKET

In 2016, sales from April to October pulled a Vancouver:

Oak Bay: – 56%
Victoria: -50%
Saanich East: -54%

“VICTORIA IS AWASH IN YVR REFUGEES”??

Earlier this year that may have been worth talking about. However, .sales of detached houses have tanked 48% since April and this is a clear sign that Victoria’s correction process has begun.

FIRST SALES FALL, THEN PRICES

Only those who know nothing about real estate would attempt to argue that this is false.

PRICES FALL AS RATES RISE

Naturally.

CANADIAN FIXED MORTGAGE RATES WILL FOLLOW AMERICAN RATES HIGHER AND HIGHER

This will happen regardless of what the BoC does with its key rate.

Only those who gain financially in some way from the sale of houses and rising prices would say this won’t affect Victoria’s market.

CANADA’S NEW MORTGAGE RULES HAVE BEEN DESIGNED TO BRING PRICES DOWN

Canada brought in lax lending standards to boost house prices for at least 15 years.

Removing some of these lax standards has been done with the intention of lowering house prices.

IN IT TOGETHER

Sales fell dramatically in both Vancouver and Victoria before the mortgage rule changes were implemented.

DOUBLE BUBBLE TROUBLE

It doesn’t look good at all for mortgage holders in either city.

It doesn’t matter what city or country you consider – Ireland, Japan, Spain, Canada, Greece, the US, etc. – there comes a point in the bubble inflation/deflation cycle where it’s clear that things will soon turn south and that ugly is the only possible outcome.

#2 rainclouds on 11.27.16 at 4:50 pm

Angry locals

http://vancouversun.com/news/staff-blogs/canadas-public-guardians-failed-vancouverites-readers-respond

I doubt the shysters drunk on tax revenues will be to concerned with the rabble and their concerns

#3 thomas on 11.27.16 at 4:53 pm

Hit the nail on the head Garth.
I currently live in Squamish and the sales to listing ratio is continually climbing for Detached, Attached and apartments. It’s ridiculous to think people are paying 650,000 for a 1300 square foot townhome with zero parking or a 1970’s split level home for 850,000 k. Then commute 120k round trip to YVR daily just so you can say you own a home.

#4 Muttley O'Toole on 11.27.16 at 5:14 pm

Whilst the western world apart from the good ol’ U.S. of A. continues to experience that sinking feeling, do you think Trudeau the younger will be the leading pall bearer at Castro’s funeral? It would appear he has pried loose Hilliary’s grip on “wanker of the year”.

#5 Dave on 11.27.16 at 5:14 pm

Just need the federal reserve to start bumping interest rates up…then its all over but the crying.

#6 Exilled on 11.27.16 at 5:17 pm

Sir Garth:
How can that be? Kitchener/Waterloo, Cambridge are all attached to each other. Kitchener is surrounded by Cambridge in the south! Waterloo in the north! Wilmot Township in the west! And finally across the Grand River in the East is Guelph! Thou it Sixteen Km’s away! I don’t get it? Cambridge is still broken up into Preston, Hespler, and Galt. I just don,t see it? Though the far east end of Hespler is closest to Toronto, and all points east! Just saying that Cambridge is the on the 401 the most. The 401 passes right through it. Where as Kitchener is just North of the 401. Waterloo and Guelph are a distance from the 401!

#7 For those about to flop... on 11.27.16 at 5:21 pm

This map shows how localized real estate is in the U.S.

Two cities I have visited on this list are San Francisco and St Louis and the gap between being able to afford a median priced home in each city is over 100k a year.

Pittsburgh is even worse…and they’ve got penguins…

M42BC

https://howmuch.net/articles/how-much-must-earn-to-buy-a-home-metro-area

#8 common sense on 11.27.16 at 5:26 pm

Whew..glad I am still in the top 10 and hope I am still there come Spring 2017…

#9 AGuyInVancouver on 11.27.16 at 5:34 pm

It amazes me that GTA residents appear to be meekly accepting the Wynne Liberals failure to act on foreign ownership. With the example of how Vancouver was so thoroughly thrown off kilter by the phenomenon, why aren’t they clamouring for action?

#10 ww1 on 11.27.16 at 5:50 pm

Completely off topic (as usual) but I think it’s very illuminating to try the different options here and understand a bit about how things are divided up on this small planet we inhabit.

http://metrocosm.com/how-we-share-the-world/

#11 Millenial on 11.27.16 at 5:56 pm

Hey Garth,
Do you think BuzzBuzzNews is related to BuzzBuzzHome?
Remember Erin Bury, 88 Creative? LOL.
Wonder what she’s up to these days? Do you keep in touch?

#12 Ret on 11.27.16 at 5:57 pm

Hamilton is lumped in with Burlington? Oakville is a similar market to Milton?

I love the games that the RE boards play.

Those two structures have been in place for decades. — Garth

#13 Todd on 11.27.16 at 6:15 pm

Kitchener Waterloo is only in a sellers market because listings are down 50-60%. Pretty sure people aren’t selling because of the prices they are faced with up-market. I have a hard time believing Toronto folk are clamoring for a 401 commute 5 days a week.

#14 Happening now on 11.27.16 at 6:16 pm

WOW……Everyone needs to read this !!!!

http://vancouversun.com/news/staff-blogs/canadas-public-guardians-failed-vancouverites-readers-respond

#15 BobC on 11.27.16 at 6:21 pm

Off subject but this blog seems to have some of the smartest people and I’m begging to learn.
When a country like Venezuela is so deep in the crapper how can they fix it?
Peg to the dollar and let the chips fall where they may?

#16 Chris L. on 11.27.16 at 6:42 pm

Look at Guelph, man, right up there. Making me look like a genius once again. Too bad about that fire house though. Up, up, up and away…..

#17 Tony on 11.27.16 at 6:44 pm

Short the shares of Home Capital Group while there’s still shares to sell short. Buy back the shares under the 2 dollar a share level.

#18 Tudval on 11.27.16 at 6:53 pm

Sooo, the head of a major Canadian corporation, a voice that you’d expect to advocate free market capitalism, asking instead for new arbitrary xenophobic head-taxes?? What sorry state our business ‘elites’ are in these days. And to think everything our government does is just to line their pockets, but they want more.. and more.. Where’s our Trump??

#19 conan on 11.27.16 at 7:00 pm

#109 traderJim on 11.27.16 at 9:29 am

Not defending Castro

More then a coin flip that Cuba under Batista would have been worse. It could have turned in to a second Haiti, or a massive sinkhole of crime and corruption.

Pirate Island meets Noriega meets Escobar .
Twice the addicts and crime in USA.

#20 original dave on 11.27.16 at 7:02 pm

Sir Garth:
How can that be? Kitchener/Waterloo, Cambridge are all attached to each other. Kitchener is surrounded by Cambridge in the south! Waterloo in the north! Wilmot Township in the west! And finally across the Grand River in the East is Guelph! Thou it Sixteen Km’s away! I don’t get it? Cambridge is still broken up into Preston, Hespler, and Galt. I just don,t see it? Though the far east end of Hespler is closest to Toronto, and all points east! Just saying that Cambridge is the on the 401 the most. The 401 passes right through it. Where as Kitchener is just North of the 401. Waterloo and Guelph are a distance from the 401!

——-

is this a lesson in geography and over-using exclamation points?

#21 Exilled on 11.27.16 at 7:05 pm

Sir Garth: and Company:
Just a follow up! The last five or six houses in my area have gone to Toronto people. repeat all of them!! Older 50 ish, homes on hugh make that humungous lots! And they are selling fast! But only when the listing goes to the GTA. Bumped into a couple, that sold they shack in GTA ! They retired. In the outskirts , in New Hamburg. Thats Wilmot township.

#22 TRT on 11.27.16 at 7:13 pm

Garth is the only voice in media that denies foreign money.

Everyone else acknowledges it.

Good for you. Lol

It exists, but does not set pricing. Demented locals do that. — Garth

#23 Andrew Woburn on 11.27.16 at 7:24 pm

It’s hard to figure out what is actually going on in Victoria. VREU reports falling SFH sales and prices which I have no reason to doubt. On the other hand there is a downtown condo boom which has been vacuuming up cheap parking spaces on formerly empty lots.

” In the past year and a half, 400 parking spaces have disappeared, Appleton said. “And we’re slated to lose 350 more next year.”

“Young doesn’t expect the downtown building boom, which includes nearly 1,000 condos and rental apartments, to generate a significant amount of new public parking space”

http://www.cbc.ca/news/canada/british-columbia/victoria-parking-shortage-construction-1.3868560

Theory One is that retirees are choosing condos over SFH which is not too likely IMO.

Theory Two is that reports of the growth in Victoria high tech are realistic and the tech kiddies want to live downtown. Certainly the average age of Victorians appears to have dropped since I lived there in the 80’s.

Theory Three is that the developers have mistakenly all piled into the market. Wouldn’t be the first time.

Can VREU or anyone else offer informed comment?

#24 For those about to flop... on 11.27.16 at 7:27 pm

Being Grey Cup day I will leave this chart here as well.

It shows how much revenue is made in the top sports leagues in the world.

NFL is the top dog.

Australian football is last on their list.

CFL nowhere to be found.

I think the CFL needs to expand into a secondary cross border competition with teams in cities like Portland and Boise for example with connections to NFL teams to reach it’s true potential…

M42BC

https://howmuch.net/articles/sports-leagues-by-revenue

#25 Barb on 11.27.16 at 7:28 pm

This piece o’ crap individual, named Oliver, burned down his residence…parents paid for it:

http://www.cbc.ca/thislife/blog/first-look-i-burned-my-house-down\

I’d skin him alive…

#26 Smoking Man on 11.27.16 at 7:29 pm

If this tweet don’t get me on a shit list nothing will.
Why haven’t they been after me yet.

https://ci6.googleusercontent.com/proxy/UV3uD15RS7-KKMjPKQV_bOTy6ySM3nE2BZalJfsCdOTjQDwOqn3C7zAZ4tdDi9pU6-Rijj8RjVX-nhw2ciPwQinmoMaVbDnNus2ViM4dLNCloupAIC_z3Fl8XTZC8tTNDjsffRmcJCZyUh4=s0-d-e1-ft#https://pbs.twimg.com/profile_images/795346273079619590/EJhGxyG__reasonably_small.jpg

#27 Andrew Woburn on 11.27.16 at 7:43 pm

I suggested recently that blog dogs keep a close eye on the December 4 Italian referendum on political governance because of its potential impact on bond markets. Italy is the world’s third largest bond market at $3.0 trillion Canadian. It is certainly the world’s creakiest and largely propped up by the European Central Bank.

Eric Reguly, European Bureau Chief for the Globe, has weighed in on the matter and thinks that investor concerns are overblown or at least premature. He guesses that there will be a rejection of the referendum. But even though the Italian prime minister has promised to resign if it fails, Reguly says there will not likely be an election until mid-2018 so no need to panic.

To quote Mr. Reguly:

“The wrinkle in the scenario has little to do with the referendum and a lot to do with Italy’s new electoral law, called the Italicum, which would guarantee a solid majority to the leading party through the awarding of bonus seats. A couple of years ago, when Mr. Renzi’s Democratic Party was way ahead in the polls, the Italicum was a dream come true for the centre left. Now it’s a nightmare, because M5S (opposition party) has come on strong and is now roughly equal to the Democrats in the polls, at 30 per cent.

In other words, a “drain the swamp” protest party, led by a loudmouth former-comedian named Beppe Grillo, could get a super majority if an election were held today. He wants a referendum on the euro and resuscitation of the old lira, a currency that suffered from endless devaluations.”

Mr Reguly is not down playing Italy’s problems and recently filed a report on the countries shocking level of youth unemployment and voter disaffection particularly in the southern regions. However I am not so sure bond markets will view a “No” result as calmly as he does. For one thing, senior members of the MSM have been seen to be overly invested in the status quo of late. Secondly, the status quo in Italy depends almost entirely on Germany’s willingness to play.

In my view, German political stability rests on the odd-couple relationship between “we can manage a million immigrants” Chancellor Angela Merkel and hard money, austerity-loving Finance Minister, Wolfgang Schaeuble. I suspect debt-averse Germans tolerate Merkel as long as Schaeuble controls the cash box. Merkel’s political strength has been at least diminished by the immigrant crisis and, if she survives the 2017 elections, it is hard to imagine her pushing for a bailout for Italy, even to save the Euro. Given Mr. Schaeuble’s hard-line attitude to Greece, we probably know where he stands on forking over German cash to spendthrift Southerners.

As Mr. Reguly reports, bond yields in Italy were as high as 7.8% five years ago before the ECB managed to waltz them down. What would they be today based on their appalling fundamentals without implied support from Europe, which really means ultimately from Germany? If I were a major bond investor, a “No” on December 4 would leave me starting to look for the exits. If the jig is up, why wait for 2018? As they say, hope is not a financial strategy.

http://www.theglobeandmail.com/report-on-business/economy/economic-insight/how-political-chaos-in-italy-is-affecting-global-bonds/article33053192/

#28 soost on 11.27.16 at 7:46 pm

Hope you are coming around Gartho. Don’t write off the impact of the ‘Chinese Dude Tax’. Foreigners need only participate in bidding wars to drive up prices. That is a metric that can not be measured.

It also sends a message to speculators and those using Canada as a bank. Nothing is safe. We can legislate it away in an instant. If you aren’t buying your house for its consumption value, you may be in for a surprise!

#29 Herb on 11.27.16 at 7:48 pm

… by then the Chinese dudes’ll be long gone …

especially if the CBSA keep checking.

http://www.cbc.ca/news/investigates/clients-of-convicted-immigration-consultant-facing-deportation-for-lying-1.3868330

#30 boomer88 on 11.27.16 at 7:51 pm

“I do believe that it is foreign investment that’s really driven prices into the stratosphere”

BMO guy is right. I went to few open houses in Mississauga last weekend (my wife dreams of up-sizing, while I prefer to be mortgage free). All were busy like hell packed with Mainland Chinese buyers and their agents. This market is not slowing down. When you have 400k newcomers coming to Canada, lots of them with cash there is no way a crash will happen. My wife who is Chinese btw thinks Canada is still very cheap compare to Hong Kong, where people make less than here and 30% downpayment is required. Get used to mortgage payments eating out most of your income. Demand is stronger than supply, it will take global financial implosion like 2008 to put a dent here, but with President Trump in charge this will not happen. He will keep adding do debt and the party will go on, market smells it and keeps going higher.

#31 dosouth on 11.27.16 at 7:59 pm

Just keeps changing like the weather. Sort of like Millennials in deciding which phone is “it” this month. Save your coins….change is a comin’….

Rate cut more likely than you think – Financial Post

#32 mike from mtl on 11.27.16 at 7:59 pm

This is precisely why I don’t trust real estate it’s totally emotional and based on loads of vested interests.

The closest analogy I can think of is vintage items on eBay. Say seller sells trinket xyz at one price, vintage, then another follows suit. This goes on for years eventually setting a kind of benchmark prince for trinket xyz.

Now the bidding goes crazy due to renewed interest in the same trinket xyz. Years pass and this new asking and getting price is considered normal for trinket xyz. Vintage and rare the usual justifications buys buy and sell trinket xyz. Could be anything from Benie Babys to vintage guitars to RE same difference. I’ve personally witnessed this human behaviour with vintage keyboards.

It’s exactly the same mental gymnastics are residential RE, “well they’re not making any more of these”.. “it’s totally unique”.. “Compared to last listing this is a bargain”… “hold and sell in a year for 2x price”…

You get the picture.

Now keeping that in mind consider RE then add in the fact no-one can reliably look at past solds like eBay, plus all the overheard in transactions costs and massive vested interests, then you have a pretty good picture of what’s wrong with RE.

#33 mike from mtl on 11.27.16 at 8:07 pm

As a fellow up personally I’ve made a LOT of gain from buying and selling vintage keyboards on eBay. Not far from flippers in RE.

The older I get the more I find we as as humans are not that far detached from animals apparently we think ‘below’ us.

#34 Andrew Woburn on 11.27.16 at 8:13 pm

#102 Metaxa on 11.26.16 at 1:21 am
#34 Andrew Woburn There’s a new robo-adviser aimed at retired people instead of millennials.

You know what I think would fly? Lunch Bucket Financial. Blue Collar Financial…whatever
Why do you have to start with the banks and hope you make an account minimum that enables you to obtain some higher end, real financial planning and advice? If you even know it exists.
=======================

That’s not a dumb idea.

In one of my many incarnations I worked closely with blue collar workers, mainly truck drivers and heavy equipment operators. As a college grad with a professional degree, I was conditioned to expect they would have low information and moderate intelligence but I was very wrong. I found the distribution of IQ was about the same as among my professional colleagues. There is a lot to know about moving frighteningly heavy objects precisely into tight spaces without killing anyone. It’s not like screwing up a spreadsheet. A typical flat-deck trailer load of steel is 100,000 lbs. The fact that we don’t get a lot of these falling onto Kia’s is a tribute to the way blue collar guys generally take their jobs very seriously.

What I did gradually realize is that they lived in a completely different head space than my urban, college educated friends. For example, they lived in the outer suburbs of Vancouver but never went there except for sporting events. They weren’t intimidated by hipster cool, they simply had no interest. I once took our office manager to a business meeting. She was a forty something bright-as-a-button woman who IMO had all the competence and smarts to pass law school. We dropped into a nearby Starbucks to discuss the meeting. She said she had never been in a Starbucks before.

They liked to see themselves as rednecks. I finally figured out that for a redneck, driving a big red truck with lots of chrome is not a middle finger to the middle classes, it’s their version of a BMW. They don’t care about the middle classes, they just like big red trucks and don’t get why anyone would want to drive a Beamer.

When I was a young man most Canadians were blue collar or lower middle class. They weren’t ignorant or incompetent. The wide social gulf has only appeared since the education industry has convinced us you need a B.A. to wipe your butt.

So, yes, Metaxa, there is a huge cultural and information divide to cross when, or if, blue collar workers sit down with TNLTB. Rednecks built this country and they deserve better service. At least until they are automated out of existence.

Writing this made me realize that the great divide in politics isn’t really the cities v. the country. There aren’t enough votes in the country to count. It’s the city v. the suburbs. If you are a suburban blue collar high school grad you won’t meet a lot of urban liberals even if, for some unlikely reason, you want to. Think Rob Ford.

#35 That Guy on 11.27.16 at 8:14 pm

New mortgage rules kick in this week… lets see how it all plays out

#36 GTA foreign tax needed now on 11.27.16 at 8:18 pm

Rampant buying in Toronto of homes by foreign money. The realtors names are the evidence on evidence on every mls listing showing buyer brokerage. Chinese, Persian, Russian, middle eastern names on tons of homes selling over 1 million.

Proof is in the pudding. Period.

That was deep. — Garth

#37 InvestorsFriend on 11.27.16 at 8:29 pm

Tony the Resident Doomer Loses Big on Teck

October 5th Tony is short Teck

#197 Tony on 10.05.16 at 2:07 pm

” I have a heavy short on Teck Corporation and still believe it will fall to 5 dollars Canadian by the end of February 2017.”

**************************************
Teck closed Friday at just under $35.

A monumentally poor trade by Tony.

It just does not pay to be a doomer.

#38 Frank on 11.27.16 at 8:32 pm

In 2016, sales from April to October pulled a Vancouver

Sales declined from spring to fall? Tell us more!

Any charts with data from 2013?

Keep saying the same thing for another 3 years, you might get lucky and be right eventually.

#39 joe2.0 on 11.27.16 at 8:33 pm

My bro Inlaw just had his Burnaby house appraised.
His RE Agent said he can sell it sight unseen.
Guess to who?
That would be overseas.

#40 Smoking Man on 11.27.16 at 8:35 pm

Just retarted.. No WiFi yet at fallsview casino.

Duh.. Dumb stupid morons…. What if I hit a jackpot and I was a somebody to share the big win with the world. Way it’s set up now No one would know.

7 bucks for a half drink of wine..

Just another pathetic liberal money grab….

Commies every last one of em. They could make so much more money if they had a brain.

Lefties, convinced they have ultimate brain power.
So wrong…. Look at T2 make an ass of himself today. He has no clue he’s an ass.

#41 common sense on 11.27.16 at 8:39 pm

bump please. Thank you

#42 traderJim on 11.27.16 at 8:40 pm

#18 Conan

Didn’t mean to imply you were supporting Castro.

My point was it’s irrelevant if Batista would have been worse, or if Mussolini was worse, or if Mao killed 65 million or only 25 million.

Dictatorship=bad, evil, indefensible.

Castro=Dictator

Batista=Dictator

Why some people (not you) insist on defending a dictator is beyond me.

Costa Rica is quite developed and not a one party state, no reason Cuba could not have followed the same path as CR.

#43 traderJim on 11.27.16 at 8:44 pm

@ Context

I was living in South America for all of Harper’s term, so I have no idea what he is like, seemed like a typical middle of the roader from the little I know.

However, I’m pretty sure that if Canada had firing squads, was jailing gays, was not allowing people to leave the country, had turned into a one party state, and had millions risking their lives fleeing a reign of terror, I would have heard about it.

So I assume that was a joke, or you are. Not sure, honestly, as I don’t know you either.

#44 Keith in Calgary on 11.27.16 at 8:55 pm

The house I am selling in Calgary hits the MLS tomorrow. Days on market in my neighborhood are 29………let’s see what happens.

#45 Keith in Calgary on 11.27.16 at 8:56 pm

Hey Smoking Man………

I am staying at the Crowne Plaza in Niagara Falls all week. Just checked in 2 hours ago. Wanna go for a beer or two sometime this week ?

#46 Smoking Man on 11.27.16 at 9:03 pm

In the smoking lounge of fallsview. Looking at the rainbow bridge.

Cars flowing nicely to the usa.. The cars heading to canada.. Huge line.

This Isent a random staffing mistake. It’s delebart..
Commrade code 101. If we let the minions think they are special by staffing this properly they might develop an ego.. Talk to much and out us.. Best to treat them like shit so we can control these pathetic polite morons and keep them in there place.

Phyops people.

Canadians.. Most over taxed, hardest workers in the Western world with nothing to show for it other than an over valued property.. And that’s ending soon.

Can’t wait. The un diversified lefties are going to take a hit.. Then 50 years of free enterprise and free speech will live again.

#47 Smoking Man on 11.27.16 at 9:23 pm

DELETED

#48 The Technical Analyst on 11.27.16 at 9:39 pm

“1. Cambridge (103)
2. Guelph (93)
5. Kitchener-Waterloo (89)”

– Please provide proof.

I live in K-W and this simple is a lie.

Go argue with the real estate boards. Their stats. — Garth

#49 S.Bby on 11.27.16 at 9:41 pm

#38 Joe2.0

Some real estate agents will say anything to get a listing.

#50 Who luvs ya baby on 11.27.16 at 9:50 pm

#39 Smoking Man on 11.27.16 at 8:35 pm

Just retarted.. No WiFi yet at fallsview casino.

Duh.. Dumb stupid morons…. What if I hit a jackpot and I was a somebody to share the big win with the world. Way it’s set up now No one would know.

7 bucks for a half drink of wine..

Just another pathetic liberal money grab….

Commies every last one of em. They could make so much more money if they had a brain.

Lefties, convinced they have ultimate brain power.
So wrong…. Look at T2 make an ass of himself today. He has no clue he’s an ass.

So why go there?

Free drinks in casino is the way to go – gettem tanked. Every casino knows that!

#51 Smoking Man on 11.27.16 at 9:51 pm

Smoking in a non smoking room.

Ahhhh. One tiny victory at a time. Knowing that a few doors down…. I could have finaly had a amazon posative book review.

I hate you Garth for being such an ass.

But then. If I could have a buck every time you saved my ass I’d be rich.

Screw the x files,, The deleted files.. Priceless….

#52 Yanniel on 11.27.16 at 9:56 pm

Garth, could you please redirect this to Ryan?

I only ask here because the comments in Ryan’s last post (http://www.greaterfool.ca/2016/11/19/trumped-2/) are now closed and I have a question that might benefit “us” simple amateur investors.

Thanks Garth.

—————–

Dear Ryan,

Thank you for sharing your wisdom with us. I really appreciated it.

In your last post you said “a must have in portfolios right now are real return bonds (RRBs)”, but I am having trouble assimilating that advice. My (amateur) reasoning is as follows:

Canadian Real Return Bonds have long “Weighted Average Maturities”. For instance, iShares Canadian Real Return Bond Index ETF (XRB) has a Weighted Average Maturity of 18.54 yrs.

“Bond ETFs do not mature. Individual bonds have a fixed, unchanging date at which they mature and investors get their money back.” [1]

“Bond ETFs, however, maintain a constant maturity, which is the weighted average of the maturities of all the bonds in its portfolio. At any given time, some of these bonds may be expiring or exiting the age range that a bond ETF is targeting” [1]

“As a result, additional bonds are continually being bought and sold to keep the portfolio’s maturity constant.” [1]

“You aren’t guaranteed to get your money back (with a bond ETF). Because bond ETFs never mature, they never offer the same protection for your initial investment the way that individual bonds can. In other words, you aren’t guaranteed to get your money back at some point in the future.” [1]

Given all the above, how can it be a good idea to buy a bond ETF with almost 20 years of Weighted Average Maturity when the interest rates are beginning to rise?

I understand that XRB (for instance) will benefit from the inflation that lies ahead, but at the same time XRB will get nailed by the increasing interest rates.

Ryan, I am sure there’s something you know that we don’t.

Please, share some light on the matter: how can it be a good idea to buy Canadian Real Return Bonds ETFs when the interest rates are destined to rise?

Thanks.

Yanniel.

[1] – http://www.etf.com/etf-education-center/bond-etfs-vs-bonds-which-are-better?nopaging=1

#53 Context on 11.27.16 at 9:59 pm

#42 traderJim:- You nailed it perfectly as you weren’t around and you had no idea what he was like. Count your blessings as you missed our reign of terror.

#54 Comrade on 11.27.16 at 10:04 pm

So the recent stats estimate that 5-10% of vancouver market share is by foreign money. But my understanding is that this is only activity. Are there any data on how many properties have been bought by foreigners and kept off that market for the past decade? Even if small percentage of monthly activity, over the time this would seriously deplete available stock.

#55 Anon KW on 11.27.16 at 10:19 pm

Try commuting from Cambridge to Toronto and call me in a couple of weeks. I do it once a couple of weeks over the weekend and the traffic is beyond belief. The 401 west is a nightmare any day any time of the week.

#56 OttawaMike on 11.27.16 at 10:33 pm

#36 InvestorsFriend on 11.27.16 at 8:29 pm

Read Tony and Mark then invest on the inverse. Those 2 guys are remarkable in being so consistently wrong.

#57 Ex-Hillary on 11.27.16 at 10:35 pm

So Hillary is clawing her way out of the grave and trying to come back from the dead.

Where’s Negan when you need him?

#58 Big boschman on 11.27.16 at 10:42 pm

the best place to live in Canada in BC hands down! Ontario is a have not province, BC supports Ontario ! All BC tax dollars should stay in BC! BC rocks!!

#59 Ace Goodheart on 11.27.16 at 10:43 pm

Re: “By the way, the average detached house in 905, that soulless horse collar surrounding Toronto, now costs more than $950,000.”

And….

“Ontario has increased the land transfer tax grab on properties changing hands for $2 million or more (try finding even a semi-detached house midtown for less than that)”

I suppose you’re talking about Toronto.

$950,000 for a house in the 905.

$2,000,000.00 for a semi midtown.

And right here, inner city, directly next to what looks to be the largest transit expansion project in recent history, across the street from a mobility hub that will include a UPX stop, Go Train service, and Eglinton Crosstown, you can STILL buy a semi detached house for under 400K.

You can STILL buy a detached house for under 650K.

I can ride my bike to the Eaton Centre. It takes 20 minutes.

We have 22.5 hour transit service (89 Weston does not run from 3:00am to 4:30am).

I guess you could buy a semi for $2,000,000.

I have one I would sell you for $900,000 any day of the week (but apparently it’s only worth $450,000).

Toronto is a city of prime, and not so prime, neighbourhoods. This has not changed. Have a close look and you’ll see. It is all about location.

#60 Victor V on 11.27.16 at 10:53 pm

Realtors warn against raising Toronto’s land transfer tax

https://www.thestar.com/business/2016/11/27/realtors-warn-against-raising-torontos-land-transfer-tax.html

#61 For those about to flop... on 11.27.16 at 11:02 pm

Technical Analyst on 11.27.16 at 9:39 pm
“1. Cambridge (103)
2. Guelph (93)
5. Kitchener-Waterloo (89)”

– Please provide proof.

I live in K-W and this simple is a lie.

Go argue with the real estate boards. Their stats. — Garth

/////////////////////////////////I

I technically analyzed this post and then decided that the boss didn’t give two craps where you lived…

M42BC

#62 hope & ruin on 11.27.16 at 11:04 pm

@ Andrew Woburn #33

You hit the nail on the head about the blue collar workers IQ distribution. The only thing they seem to be lacking is a piece of paper that somehow entitles them to smugly dismiss opposing viewpoints as uneducated.

A whole class of people being told their opinion is wrong because they didn’t attend a liberal, left leaning university. And they just gave the world a big F*** you and elected Trump. I’m impressed.

#63 Mystiqe on 11.27.16 at 11:09 pm

But because everything in YVR is weird, this is what the local board says of that number: “Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.” Go figure.

Of course the Real Estate Board here in YVR reports different numbers. They pick whatever sounds the most positive. Worst case scenario “the market is always balanced”. I never believe anything that is reported by this board.

#64 TurnerNation on 11.27.16 at 11:16 pm

Smoking Man did call for Toronto housing-robustness into 2017 (everyone clamoring into slanty semis on the raccoon laden streets).

#65 Tony on 11.27.16 at 11:17 pm

Re: #43 Keith in Calgary on 11.27.16 at 8:55 pm

Take the valuation back in October 2014 and chop 25 percent off of it and that’s just the list price. Be prepared for your house to sit on mls for 6 months to a year unless by some miracle it sells before November 30th this year. Remember the term crickets.

#66 bb on 11.27.16 at 11:21 pm

What!? No Markham from top seller’s market list?

#67 South Islander on 11.27.16 at 11:27 pm

I do not know what VREU is smoking, but the Greater Victoria region is still hot with rents going through the roof! This from a ‘Vancouver refugee’ from a few years ago.

When I lived in Vancouver, I could easily take solstice in knowing that paying 2.5k or more got me an almost million dollar house and my price to rent ratio was great. In South Island, it went from a 25% vacancy rate to almost none. People are paying over 2000 in rent for a 350K crappy house in small communities! I meticulously track the rents and confirm that this is the case.

The real estate market has finally softened in many areas but people are actually paying more in rent than for a mortgage! And no, these are not educated, discerning types who follow the predicted crash. People are being outbid in Victoria and flowing to the other regions and bidding up rents! There is still an outflow from Alberta (it seems) given all the license plates.

All I can say is that this better be short lived because if there is no correction soon, all those ‘smart renters’ are going to look like idiots if they end up paying more than the mortgage for many many years of a stagnant or slow melting market. The pop in prices took place over a year ago because of Vancouver refugees, priced out Victorians, and Albertans, and there is now a stalemate between buyers and sellers.

I am hoping that it will only be a year of these ridiculous rents as everyone has commented that rents always fall when sales drop and prices drop. That better be true because I can no longer rationalize renting to the wife with a young family when the price to rent ratios are skewed towards buying now!

#68 South Islander on 11.27.16 at 11:34 pm

#34 New mortgage rules kick in this week… lets see how it all plays out
———-

New rules have been in place since October I thought.

#69 bring_it_on on 11.27.16 at 11:40 pm

I don’t care what Garth calls the derogatory tax that was imposed in Vancouver. It is having the desired effect of stopping the mania that in the year before boosts prices by 30% on detached homes in greater vancouver. In the long run by curbing this parasitic type of investment, the next generations of Vancouverites might actually be able to afford to live in their own city in a reasonable way like the previous generations. The tax was LONG OVERDUE, and I guess it means nothing to Garth that a senior exec at BMO agrees with us dumb-ass citizens what one of the root causes of our housing crisis has been. If Toronto is clever they will put in a similar tax. Bring it on….

The root causes include loose monetary policy, lax lending and a debt-embracing, financially-illiterate populace, aided by myopic politicians. The foreign dudes are mere sauce. — Garth

#70 chatter on 11.27.16 at 11:42 pm

2 xmas party’s this weekend in Vancouver….was quite different from the last few year’s. …no mention of real estate. ..tip toe around anything related. It was weird…lots o talk if above average rainfall and booming Mary Jane shops though

#71 stage1dave on 11.28.16 at 12:17 am

#31 Mike from Mtl

Bang on…Ebay/Etsy seem to be the quickest indicator of whats hot/whats not. I tried to spread my “risk” out by selling several different lines of collectibles, but it’s a tuff market to “time” simply because the next stampede of buyers (of tour t shirts, for example) won’t reveal themselves until someone famous dies, reforms for a tour, announces their final tour, or regroups for their “final tour”.

(in order of mention, Leonard Cohen, GnR, TTH, and Motley Crue)

All of these bands shirts have been “hot” for a few months over the last year. (Mind you, Cohens’ stuff has always been hard to source, so his vintage t’s always pricey) What sold quickly for $100 last quarter can’t be given away today for half the money!

Timing this market is as useless as the “market timing” that Mr. Turner is always deriding, and it doesn’t work in this area either…if yer in it for the long haul, it’s been my experience to look at the overall average of sellers’ prices and expect to get about 50-65% of that…your items will move in a steady manner.

#33 Andrew Woborn

I’ve gotten into more arguments over the “HS vs. BA” and the plus/minuses of a university education than anything else. Great synopsis, btw…

Strangely, I’ve been on both sides of this debate a couple times because some people “assume” I have a degree in, well…something.

(Either its the way I talk, or I’ve let it slip how many times I saw the Pursuit of Happiness while drunk…that was essential for most undergraduates apparently. Little do they know my sister worked at the bar, and it was a nice change from the usual car/biker/trucker crowd I usually hung with)

Anyway, that “divide” between the grade 12’ers and the MBA’s has sure illuminated one way people love to segregate themselves…and it’s obviously getting worse.

The most recent example occurred when a university-educated middle-manager decreed over drinks that he’d feel a lot safer if he knew the pilots of his continual airline flights had an advanced education; like a degree…in what? I inquired…well, in like, something, he replied…why? I asked…well, y’know, aircrafts (!) are complicated things, he replies…

I mentioned (perhaps somewhat out of context) that whatever freedoms he currently enjoys were, in part, won by a group of men barely out of their teens flying aircrafts (haha) that the other side was continually trying to shoot down, and they required considerably more “piloting” input. (physical manipulation, dead reckoning skills, much quicker training timelines with somewhat more severe penalties for failure – both for the trainees and anyone unfortunate enuff to be in the immediate area of that failure – and, ummm…the ability to shoot back)

It was also RCAF/RAF policy that aircrew who had reached their 26th birthday (as a general rule, there were many exceptions) were not doing much combat flying. (supposed lessened G-tolerance) Less than 1% of Canadians had a degree 75 years ago, btw. And by the time they got out of college, there wouldn’t have been enuff time left to train ’em to wings standard, let alone ops standard on anything.

For decades, the RCAF/CAF refused to implement a rule requiring a degree for pilot training…their reasoning was simple…those were the prime flying years for any young man! Why waste them in the classroom? Promising candidates (who desired, or were offered, a long term engagement, ISE, whatever) had the option of CAF sponsored University education to enhance later career opportunities.

Our conversation didn’t end well…my mention of CAT 3 landing systems, integrated cockpits, electronic guided flight control systems (and the continual presence of a very clearly defined airway and ATC system, something my father and uncles didn’t have) has unfortunately reduced a lot of talented pilots to systems operators whose skills only become apparent upon landing, taking off, or during their response to a failure of something that is not supposed to fail!

I’ve never understood how having a BA in something would get you thru unanticipated heavy weather, partial structural desintegration, or multiple engine failure…but by then he understood I was just a HS graduate so our convo tailed off.

He probably should have asked me if I actually flew aircrafts (damn, I just love that word!) for a living, which I don’t, btw. And never have…funny how the most important questions don’t get asked…even by an educated person!

#72 Koshy Alex on 11.28.16 at 12:17 am

This Is How Steve Bannon Sees The Entire World

Well before victories for Brexit and Trump seemed possible, Bannon declared there was a “global tea party movement” and praised European far-right parties like Great Britain’s UKIP and France’s National Front. Bannon also suggested that a racist element in far-right parties “all gets kind of washed out,” that the West was facing a “crisis of capitalism” after losing its “Judeo-Christian foundation,” and he blasted “crony capitalists” in Washington for failing to prosecute bank executives over the financial crisis.

https://www.buzzfeed.com/lesterfeder/this-is-how-steve-bannon-sees-the-entire-world?utm_term=.pfJ1lka71#.ejpz4ZmVz

#73 Fed-up on 11.28.16 at 12:26 am

Ahhh the dangers of buying a house in meccas such as Thomson or Peace River.

In the past 15 years it has, however, worked out extremely well without meaningful correction after explosive gains, pretty much everywhere else where people actually have hydro and running water (tongue firmly in cheek).

As it turns out, The Greater Fools have proven to be those who revel in 5-7% portfolio gains and insist that they are happy paying $25,000-$40,000 per year in rent and find that they have to move every 2 years due to their landlords cashing out on lottery-like gains via their 0-5% deposits. Of course, these same happy renters who now face a dog-fight renters market in the GTA and YVR, must have $1,000,000 + in liquids assets at work for this to make any remote sense…doubtful at best.

We need to stop grasping at straws. When we 1st started spewing the “all real estate is local” spiel years ago, who here really thought we would eventually be referring to all of southern Ontario including Grimbsy of all places??? Weren’t we talking about small affluent pockets like Leslieville and Rosedale? Wouldn’t a crash in oil trigger a significant or dare I say, massive price correction in Calgary and Edmonton?

No, I am not a realtor. Yes, I believe market prices are obscenely high and that this country’s economy is an international joke. Yes, I also believe in diversification. But I have also come to the realization, and I’m humble enough to admit that not buying in any major Canadian market in the past dozen years, has proven to be a huge blunder thus far.

#74 Historian on 11.28.16 at 12:42 am

To my friends from yesterday:

#92 Conan

It is a thought experiment. If time travel actually worked, then as Douglas Adams speculated in the same way long distance travel makes all places look king of the same time travel would make all times look kind of the same, and a certain number of deranged individuals would be spending time trying to become their own fathers. He was making humor of course, but he makes a good point that time travel is probably impossible because the Terminator never did get sent back, at least not yet.

#105 Doug Rowat

Being endorsed by someone is not the same thing as accepting the endorsement or agreeing with their ideas. For example I endorse both you and Garth but I bet neither of you cares or would accept the endorsement.

#75 stage1dave, #119 SWL1976

Thanks! I think it’s interesting to think about these things. “Control of the press” really started in a big way with the RC church. They kept all of the books and indeed most of the liturgy in Latin for ~1500 years because they really didn’t want the “non-initiated” reading the materials. The printing press and Luther’s German bible translation changed all that and look what happened.

#84 Don Der

No one can contest that Russia lost many lives and made great sacrifices to help defeat Germany in WW2. But had it not been Stalin in charge, would Russia have surrendered? I think not. Russians do not surrender on their own land and never have. This is the trend to watch. When Napoleon marched on Moscow how did he fair? It was his undoing. But I do think Churchill and indeed the US and other allies including Canada helped Russia along by creating a second front and providing material assistance. The combined resources of all those countries together were simply more than the Germans could deal with. It’s how they thought up NATO, even though Russia has never been considered a possible member.

#91 Pete

I think that there has always been “powers that be” who act in their own interest. Caligula didn’t appoint his horse to the senate because he thought the horse would make a good senator, but to discredit the senate in the eyes of the public. He was crazy too but it was classic propaganda. Much like calling Trump the new Hitler.

And on to another subject:

#73 Toronto Crushes the 905!! (Also yesterday)

I don’t know how it works in Ontario, but around here the province pays the lion’s share of any major infrastructure projects. If this is so in Ontario, it would mean the 905 has contributed to the cost of the roads in Toronto as much as Toronto has contributed to the roads in 905. Well, adjusted for population naturally but that also naturally affects who is on the roads and in what numbers.

So, the net result will be that if Toronto starts tolling people from 905 who have business in Toronto, well, people in Toronto better hope they don’t have a desire to transit 905 on the weekends because there will be a similar toll within weeks.

The end result of all this proposed tolling is predictable. Nobody will be able to go anywhere without paying a fee to transit jurisdictions in which they do not live. Is this the direction we want to go? And what will be the ultimate size of the tolling jurisdictions? Will it be cities only? Or will communities start charging for entrance if you want to visit your parents? If you want to drive to your cottage for the weekend, how many counties will you have to cross and thus pay a toll? How many towns do you go through that now all have a toll?

Ideas like this sound great when applied to other people but sound really bad when applied to you. This is the hallmark of bad policy. It must be understood, although not many people do, that if there is one underlying principle behind good law, it is the principle of everyone playing by the same rules. Even the 10 commandments have it, well at least 6 of them. “You shall not kill.” Well, do you want to be killed? “You shall not steal”. Do you want your stuff stolen? This we can add another: “You shall not impose travel taxes on others unless you also wish to pay travel taxes.”

It was said in the positive by the great JC: “Do onto others as you would have them do unto you.” But there is a corollary to that: “Others are likely to do unto you as you have done unto them”.

#75 jane24 on 11.28.16 at 12:47 am

I used to live in Cambridge, Ontario. Lovely place to bring up a family but well into the snow belt and a LONG way from a Toronto job. Not so bad if you work in Mississauga though. The 401 traffic was hell in 1992 when I left, I assume that it is much worse now. Does work for a Kit-Waterloo job though as you can take the back roads, which is where I worked.

I still can’t get over why when there is such a wonderful world out there, young people want to live in Canada and go through this daily commute hell for such little money and such a high cost of living. They trudge through the snow for basically nothing. In any other Western country, young folk would get out and find better options. Even the Greek and Italian youngsters move faster than the Canadian ones.

#76 Garth on 11.28.16 at 1:34 am

This means nothing. There is a reason why those places are buyers markets–no one wants to live there!

#77 Mr Reguly? on 11.28.16 at 2:39 am

No idea who this guy is that you write about.

What got the attention of Italians and Renzi, are the recent Economist and Financial Times articles about the referendum.

Go to RAI News or the centrist dailies (neither Left or Right) Corriere della Sera, La Stampa or La Repubblicca for what is really going on here w.r.t. the referendum (use Google translate) – with respect, not the Globe & Mail.

If you want economic news from Italy that WILLSHAKE the EU, the draft 2017 budget that just passed in the Camera dei Deputati, 348-144 votes, breaks EU rules at a 2.4% budget deficit of GDP (should be 1.8%) – it now goes to the Senate Dec. 4 (well, if it does not become a lame duck after the referendum).

An expansionary growth oriented budget that BREAKS the EU’s Stability Pact rules on purpose and DARES the EU to impose fines and restrict access to EU funds.

Austerity EU budget guidelines, thanks to the Germans, prevent Italy from budgeting additional funds for migrants, earthquake reconstruction and the list goes on.

Posturing, maybe?

Poll moratorium here now. Last poll had No up by 5%. Still, 20% or so undecided.

Few are investing here in Italy. With a no growth economy for 4 years, there is no money to go around for what Mr. Reguly seems to be concerning himself about, well, other than Berlusconi and friends.

bsant

#78 Re: Mr Reguly? on 11.28.16 at 2:52 am

Forgot, Renzi would like to start bailing out Italian banks but the EU Stability Pact rules prevent the Italian Government from doing this.

Yes, €4 Trillion but at least the start of a bailout will calm default rules.

bsant

#79 The locals - MASHDEX on 11.28.16 at 3:31 am

[…] Read more here:: http://www.greaterfool.ca/2016/11/27/the-locals/ […]

#80 BillyBob on 11.28.16 at 7:56 am

As someone who DOES actually fly “aircrafts”, I found your comments interesting, stage1dave. As someone who has managed to claw my way to what might be considered the top of the airline profession without formal “higher education”, I tend to agree with your overall thesis: that education is not necessarily correlated with ability or even the simple ability to solve problems. What is far more valuable is the ability to think critically. But I suppose that could be said of just about any profession.

That is not to say there is no value in a degree. To dismiss it completely is as foolish as believing it confers some special ability. But the world is very, very short of what earlier generations would have simply called “common sense”. Problem-solving ability. Practical solutions to actual problems. Fitting complex pieces of the puzzle together.

It’s unfortunate that much of academia has become simple degree-selling. It used to be that universities were the last bastion of free thought, now in many cases they have become extreme examples of the opposite.

#81 RR on 11.28.16 at 8:18 am

“It exists, but does not set pricing. Demented locals do that. — Garth”

When there are multiple bidders on a property and certain parties have a seemingly limitless appetite and budget to purchase GTA properties the locals don’t have a chance.

We are in an environment where Canadians making local incomes are forced to either commute ungodly distances, or rent at exceedingly high amounts because ontario allows unfettered access to our real estate market.

Over the past 5 years I have witnessed Garth go from a complete dismissive attitude toward foreign purchasing, to a more cautious approach.

Even the big banks are all clawing back exposure. When you see what happened in GVA there can no longer be any doubt.

To refute that statement Garth, it’s not the locals driving up the price willingly. We need somewhere to live, we need to get to and from work. Whether it’s to pick up the kids at daycare, or help our elderly parents shovel the driveway.

5 years ago renting did seem like a smart option. But having had to move 4 times due to shitty landlords and ludicrous rent increases, I should have bought many years ago, god knows I could have afforded it back then.

Now, unless Wynn actually steps up and puts in the same tax in the GTA as the GVA, I know there is no hope. With ny locak inc8ne I will never be able to compete with offshore riches.

In New York, 67% of citizens rent. We have a very unhealthy attitude towards real estate in this country, and willingly accept penury in order to own some. Like I said, demented. — Garth

#82 crowdedelevatorfartz on 11.28.16 at 8:23 am

@#2 rainclouds.
http://vancouversun.com/news/staff-blogs/canadas-public-guardians-failed-vancouverites-readers-respond

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

The only annoying thing about this article is its timing.
Im sure other Vancouver Sun reporters wanted to write similar stories over the years but those Saturday Editions of the Vancouver Sun with their massive real Estate “pull out” advertising sections were probably just too juicy for the owners and editors to pass up.

This housing sales charade will truly be over when Global 6pm “News” finally bites the hand that feeds it and pushes the truth about the markets as relentlessly as they promoted it.
Although I have noticed lately that not all the 6pm Newshour ads are from Remax………..unlike the past 5 years.

#83 Wrk.dover on 11.28.16 at 8:48 am

#34 Andrew Woburn…
It boggles my grade 12 mind that the educated don’t know that there is more to life than being haughty, as Hillary Billy just found out too.

I was a problem child, so they did comprehensive testing, my IQ ( at that time) registered on the right side of the bell curve just before flat line.

People that complete education at grade 12 might not need ” formal” education to achieve their goals.
Who knew? Not you, you say?

The smartest people I have ever met are the toothless ones that fix poor peoples junky cars at filthy run down junkyards. Swap places with them for a day and see if you can earn supper with what they have to work with.

Neil Young penned the lines:
Meet the losers in the best bars
Meet the winners in the dives

#84 traderJim on 11.28.16 at 8:55 am

My agent in Muskoka just sent me the latest (October) results for waterfront properties, which might be of interest to some:

http://cottagesinmuskoka.com/sell/market/

Sales in Oct are down sharply from last year, but year to date still way up.

They say prices are climbing, which might be true, but very hard to say as the cottage market is so incredibly diverse. You have $500,000 and $10 million properties in reasonably close proximity on the same lake.

They also say listings are declining, thus explaining rising prices in a mkt with falling sales. Hmmm.

I really have no idea which way the cottage market will go. I saw some (island) properties that languished for all of last year, and finally sold at less than replacement cost (island construction is expensive).

Yet anecdotally people here say anything reasonably ($1m) priced is snapped up in days. Must only be mainland. People are so lazy, island life is so much more rewarding.

A friend has been trying to sell his Whistler property for about 3 years now. He’s a bit unrealistic, however I would have thought that the Whistler market would be absolutely booming given that Vancouver was one of the top 2 markets in the entire world.

So what’s up? Chinese don’t like to ski? No water views in Whistler? Interest rates higher in Whistler?

Very curious.

#85 Ole Doberman on 11.28.16 at 9:14 am

#65 Tony on 11.27.16 at 11:17 pm

Re: #43 Keith in Calgary on 11.27.16 at 8:55 pm

Take the valuation back in October 2014 and chop 25 percent off of it and that’s just the list price. Be prepared for your house to sit on mls for 6 months to a year unless by some miracle it sells before November 30th this year. Remember the term crickets.
———————————————————-
All depends what part of Calgary – Varsity for example houses still move well. But i know some people looking to sell (not sure where) are not having the same luck.

#86 That Guy on 11.28.16 at 9:36 am

The golden horseshoe remains just that – golden.

And platinum in the centre, if you isolate T.O.

#87 The Technical Analyst on 11.28.16 at 9:38 am

Go argue with the real estate boards. Their stats. — Garth

True enough.

Since moving here, I by (and visit) may of the homes for sale in KW and the realtors say how slow the market is here and that they have to reduce the home prices (and expectations) of the sellers.

Not many have sold in the past two months that I have seen.

Thus, the call out of the Realtorfrankenomics.

#88 Ronaldo on 11.28.16 at 10:05 am

#71 stage1dave

“I mentioned (perhaps somewhat out of context) that whatever freedoms he currently enjoys were, in part, won by a group of men barely out of their teens flying aircrafts (haha) that the other side was continually trying to shoot down, and they required considerably more “piloting” input. (physical manipulation, dead reckoning skills, much quicker training timelines with somewhat more severe penalties for failure – both for the trainees and anyone unfortunate enuff to be in the immediate area of that failure – and, ummm…the ability to shoot back)”
————————————————————–
Like this fellow for instance. He was the Captain of the WWII Bomber, Squadron 431 that my uncle flew with and who received the George Medal for saving Reg’s and other crew members lives life when they crashed on takeoff from a base in England with a full load of bombs. All but one survived. None and any BA’s but very well trained in what they were doing. He is still going strong today.

http://saskatoon.ctvnews.ca/wwii-veteran-connecting-with-students-through-historic-project-1.1644978

http://www.ctvnews.ca/canada/crash-harrison-93-pilots-same-model-plane-he-flew-in-war-1.2654475

#89 amazon girl on 11.28.16 at 10:10 am

Amazon girl @Smoking Man#51

You know I am behind the secret door.
If you recall in the past , I was the one who believed it
you can do it. But also told you must sell 50 copies
as fan 51 I will step in , buy the 51 book.
But I want sign on the back, in the secret area with no humans, well you better work on it .I am leaving to Europe again this year leaving in December came back on March.

#90 Ronaldo on 11.28.16 at 10:11 am

#73 Fed-up

”But I have also come to the realization, and I’m humble enough to admit that not buying in any major Canadian market in the past dozen years, has proven to be a huge blunder thus far.”
———————————————————-

Another market that obviously cannot be timed. A lot of people became greater fools as a result.

#91 soost on 11.28.16 at 10:14 am

Garth, do your prophecies rely on the premise that I should be willing to keep renting indefinitely if GTA prices DON’T come back down to earth?

Pursue that path the best guarantees you financial security and lifelong cash flow. — Garth

#92 No Money Down on 11.28.16 at 10:19 am

The REBGV number is the monthly sales to total listings, not the monthly absorption.

“The sales-to-active listings ratio for October 2016 is 24.4 per cent. ” This is the inverse of the months of inventory, 1/0.244 = 4.1 MOI.

According to Zolo stats, the current 4-week Detached absorption rate for the City of Vancouver is 38%, and 67% for condos.

#93 the fires are starting in the GTA on 11.28.16 at 10:22 am

Looks like the fires are starting in the GTA as over their head speculators lights their speck homes on fire. The down turn has started.

http://www.cbc.ca/news/canada/toronto/joicey-boulevard-fire-1.3870511

#94 flinflonned on 11.28.16 at 10:45 am

Garth

All any of this proves is that 90% of Canada is not liveable….most people are massed near the borders, thus skewing markets and prices.

#95 NoName on 11.28.16 at 10:53 am

When trupm cuts taxes he does so well.

http://imgur.com/a/CB7qN

http://www.foxnews.com/politics/2016/11/28/analysis-for-some-in-middle-class-trump-plan-would-mean-tax-increase.html

#96 Context on 11.28.16 at 11:36 am

$Billions needed to fix the Gardiner Expressway so what are you going to do now? In the near future you will be riding a horse to get into the city. The density at the Yonge – Bloor interchange will become a disaster if needed because the condo towers are going up there. One of the most important considerations of any residence location is to establish a travel vector of getting from X to Y with the least resistance and to be cost effective. Sell the junk condo immediately and move into an apartment tower where the location meets the criteria of living in style.

#97 Rexx Rock on 11.28.16 at 12:34 pm

We’ve been brain washed since youth that to own real estate is a sign of success and not owning your own house is a failure.The goverment and BOC has done everything possible under the sun to keep this rackett going and have people buy real estate.One day the piper will be paid and it won’t be pretty.Be happy that you 4x or 5x your money in a few years and sell then pay less money back to our corrupt goverment while living in a more sane country.

#98 Fireside Chat on 11.28.16 at 12:42 pm

Looks like the fires are starting in the GTA as over their head speculators lights their speck homes on fire. The down turn has started.

http://www.cbc.ca/news/canada/toronto/joicey-boulevard-fire-1.3870511
——-
I told my wife the other day that what I remember most about Vancouver’s 14.5% drop in 8 months in 2008 was the number of fires on half built properties.

It seems that Vancouver now caught an arsonist that burnt down 29 homes that were ‘vacant.’ Is it a repeat? I don’t know but I do know that the insurance agencies better be doing forensic audits on the burnt homes as all are extremely suspicious. I bet my insurance rates go up – thanks specuvestors for another of your enhancements to my community livability.

#99 Context on 11.28.16 at 12:46 pm

This is interesting as nothing like a farmer with the stats. He will be expanding his greenhouse operations across the lake in Ohio as Ontario is toast. He pays 18 cents per Kilowatt in Ontario while the cost in Ohio is only 6 cents per Kilowatt – yikes! He has lots of land so am wondering if he has looked into geothermal heating and other options instead.

#100 Fireside Chat on 11.28.16 at 12:49 pm

Garth, do your prophecies rely on the premise that I should be willing to keep renting indefinitely if GTA prices DON’T come back down to earth?

Pursue that path the best guarantees you financial security and lifelong cash flow. — Garth

———

Yes, you have to keep renting for years, hoping and waiting for the ‘inevitable’ inevitable price declines.
declines to set in. That is the only way you can justify sitting out for a decade plus of returns.

It is important to manage expectations because the market is not going to revert to 2010 levels overnight. And as much as you want to think that you are one of the ‘smarter’ ones for waiting, you will only be the ‘smarter one’ if you wait until the market bottoms out. But then that is market timing – inherently difficult to do.

And if you buy before the market drops, and prices keep dropping, well then you will have not only lost ‘equity’ but you will have wasted years and dollars on renting.

This is one of the dirty secrets of being a RE bear that nobody wants to discuss or acknowledge. To avoid being the ‘greater fool’ and catching the falling knife in prices, you will have to wait for many many more years to buy at the bottom.

#101 Penny Henny on 11.28.16 at 1:29 pm

Not only are the Chinese gorging on SFH’s in Vancouver, now they are buying all the retirement homes!!

http://www.theglobeandmail.com/news/national/chinese-company-anbang-buys-stake-in-bc-based-retirement-home-chain/article33065536/

Cue the scary music.

#102 Joe2.0 on 11.28.16 at 1:34 pm

#49 S.bby
“Some agents will lie to get a listing”

I agree but I have also seen multiple homes and business sold “sight unseen”
It’s happening on the Sunshine Coast also as well as VCR island.

I think the issue is that people have to wrap their heads around the fact that parts of Canada are some of the nicest places to live in the word and this fact combined with millions of wealthy foreigners can only lead to the inevitable outcome that we are witnessing.
It’s a world class city and this is what happens to world class city’s.
It sucks for the home town crowd but it’s not going away.

#103 Context on 11.28.16 at 2:25 pm

How did I miss this 20 level apartment building with a few to rent. The ownership is known with deep pockets so all will be maintained. You have a front row seat to the view of the lake and are surrounded by parks and expensive homes just a few minutes away from the yacht club for your boat. A new indoor pool was installed; a game room for billiards, all updated inside and no small box; the GO train is a 10 minute drive; the village is a 5 minute drive with all the goods and services you will ever need and becomes a paradise for the dog. A two bedroom apartment is for rent at $1,650 but all utilities are included and it can be found at this address – sorry as cannot remember.

#104 Victor V on 11.28.16 at 2:27 pm

OECD warns Canada at risk of ‘disorderly’ housing correction

http://www.bnn.ca/oecd-warns-canada-at-risk-of-disorderly-housing-correction-1.618243

Canada is at risk of a “disorderly” correction in the housing market that could threaten the country’s financial stability, the OECD warned on Monday in its latest global economic outlook.

The risk of a housing correction is most acute in the “over-valued” Vancouver and Toronto markets, the Organisation for Economic Cooperation and Development said, citing the potential difficulty for some debt-ridden households to make mortgage payments if interest rates or unemployment rise.

“Such a correction would reduce residential investment and, through wealth effects, private consumption, and in an extreme case could threaten financial stability,” the OECD said.

The group also said Canada’s federal budget this year gives the Bank of Canada leeway to raise rates to tame financial stability risks.

#105 IHCTD9 on 11.28.16 at 2:41 pm

#91 soost on 11.28.16 at 10:14 am
Garth, do your prophecies rely on the premise that I should be willing to keep renting indefinitely if GTA prices DON’T come back down to earth?
______________________________________

Look at your GTA income first – if you don’t want to own digs in the projects, and aren’t making 300+K/year, then you will live explicitly to pay the bank for 25 years if you buy at any time. Your choices then become renting forever, or debt slave.

Unless you earn several multiples of the Toronto median household income, home ownership for you will never happen no matter what the market does. The GTA will not see the kind of correction the average Joe needs to make sfd’s affordable.

Then you’ll need to decide if the “additional money” made in the GTA job market is getting you to your goals any quicker than a lower paying job outside the city would.

#106 AGuyInVancouver on 11.28.16 at 3:02 pm

#18 Tudval – You complain about xenophobia, than ask for our own Trump. You can bet “our Trump” would campaign on slamming shut the door on foreign ownership of Canadian real estate so fast it would make your head spin!

But if you really want “your Trump” maybe Kevin O’Leary has set up a Gofundme page!

#107 stage1dave on 11.28.16 at 3:06 pm

#80 billy bob

I agree…those “critical thinking” skills weren’t being taught (or even encouraged) during my schooling in the 60’s and 70’s, and I noticed during my exposure to the college crowd in the 80’s that the emphasis was on “getting a degree to get a good job”.

(during a Jack Green cabaret, a very inebriated engineering student confided to me that he couldn’t wait to get out of school and “…git started on that 35K a year job!”…times change, huh?)

And I’m not a huge fan of education simply for educations sake; (the stereotypical perpetual student syndrome) particularly if it’s being subsidized by the taxpayer…it should be furthering your lifes’ interests, talents, and priorities; not something that has to be acquired simply to achieve an above-average income stream…which is, I think, where we are now.

#88 Ronaldo

Great links…that was quite a “tour” he had! I think it’s a good thing that many vets are finally talking about their wartime experiences; when I was growing up NO ONE did. Despite the fact that (it seemed) everyones’ dad had served in WW 2.

Back then, youngsters who had an interest in this were labelled as “warhappy” btw, tho a lot of this derision might have been the fault of the horrific images of Vietnam and the daily broadcasting of grisly, depressing details of that conflict on the evening news…along with the growing opposition to it.

“War” was not deemed a proper subject for polite conversation; along with any remembrances of past wars, perhaps rightly so.

Regardless, the thought of maneuvering a fully-loaded Lanc or Hally down a narrow runway at night, knowing damn well the thing was going to try and swing to port during the entire TO run; and that the loss of an engine would spell disaster for everyone on board (and perhaps many others on station) is a wee bit more than I had to deal with on any evening during my formative years!

#108 Santa Claus on 11.28.16 at 3:20 pm

#100 Fireside Chat on 11.28.16 at 12:49 pm
Garth, do your prophecies rely on the premise that I should be willing to keep renting indefinitely if GTA prices DON’T come back down to earth?

Pursue that path the best guarantees you financial security and lifelong cash flow. — Garth

———

Yes, you have to keep renting for years, hoping and waiting for the ‘inevitable’ inevitable price declines.
declines to set in. That is the only way you can justify sitting out for a decade plus of returns.

It is important to manage expectations because the market is not going to revert to 2010 levels overnight. And as much as you want to think that you are one of the ‘smarter’ ones for waiting, you will only be the ‘smarter one’ if you wait until the market bottoms out. But then that is market timing – inherently difficult to do.

And if you buy before the market drops, and prices keep dropping, well then you will have not only lost ‘equity’ but you will have wasted years and dollars on renting.

This is one of the dirty secrets of being a RE bear that nobody wants to discuss or acknowledge. To avoid being the ‘greater fool’ and catching the falling knife in prices, you will have to wait for many many more years to buy at the bottom.

—-

that’s why this site is popular –
hope to the confused
the secret is buy and hold
RE is a long term investment

Real estate ownership is not the goal of life. Financial security is a better one. They’re not synonymous. — Garth

#109 Ace Goodheart on 11.28.16 at 3:49 pm

RE: #100 Fireside Chat:

“This is one of the dirty secrets of being a RE bear that nobody wants to discuss or acknowledge. To avoid being the ‘greater fool’ and catching the falling knife in prices, you will have to wait for many many more years to buy at the bottom.”

Toronto’s not coming back down anywhere affordable in terms of houses (detached and semis).

Condos will behave as condos always behave, the older they get, the less they are worth (they are like cars that way).

You can buy a condo within the City limits of Toronto right now for under $100,000.00. You would not want to live in the building, but you can purchase the units (ever heard of “Dixon City?”).

Bottom line right now for a detached house in Toronto is slightly above 600K. Semis can be had for slightly under 400K. That is if you don’t care about the neighbourhood.

These prices are not going down. Where I live in Toronto, from 2012 to today, detached prices have gone up 300K, semis around 200K.

Really what a person purchasing real estate in Toronto should be worried about is stress testing. Try to see if you could keep up with the payments if interest rates were around 6% on your mortgage. If you can’t, don’t buy.

Also figure out whether you can actually keep working, full time, for the 25 year period necessary to pay off your house. A lot of people don’t consider this. People ten years away from retirement should not be purchasing houses with 25 year payment plans and million dollar mortgages.

Toronto’s detached house market has become a playground for the wealthy. That is not going to change.

Most people who come to live here will be living in Condos.

#110 For those about to flop... on 11.28.16 at 3:55 pm

#15 BobC on 11.27.16 at 6:21 pm
Off subject but this blog seems to have some of the smartest people and I’m begging to learn.
When a country like Venezuela is so deep in the crapper how can they fix it?
Peg to the dollar and let the chips fall where they may?

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

Hey Bob ,being one of the dumbo’s on here I can’t help you with your question, but I think you might be interested in this GIF.

It focuses on Venezuela in particular…

M42BC

https://howmuch.net/articles/inflation-rates-around-the-world

#111 Ace Goodheart on 11.28.16 at 3:56 pm

Another thing everyone on here wants to remember with regard to any possibility of a large “Crash” in Toronto house prices is to have a close look at the US housing price collapse that occurred in 2008.

People in the USA were paying top dollar for crap houses located in far flung areas in the middle of nowhere. All these weird “McMansion” neighbourhoods were springing up in deserts and fields.

These are the houses that lost all their value.

New York brownstone townhouses did not become affordable to middle class working persons. Los Angeles did not become a buyer’s market. Yes you could buy crap housing in Arizona for 70% off, but who wants to live in Arizona?

Same thing will likely happen here. Outlying areas will get crushed. But inner city detached houses in Toronto are not going to be affordable to your average Wal Mart cashier married to a busboy. It isn’t going to happen people.

#112 JW on 11.28.16 at 4:08 pm

back to Calgary now and will stay here for ten years at least. did my calculations and considering (still high) rents and (still low) interest rates and buying a downtown condo (half a mil range) makes more sense than renting one.

I doubt it. What are the numbers? — Garth

#113 S.Bby on 11.28.16 at 4:12 pm

#102 Joe2.0

You didn’t quote me properly. But you are reading from a good script.

#114 crowdedelevatorfartz on 11.28.16 at 4:24 pm

@#101 Penny Henny

Not to worry.
One foreign owner is just as good as another.
Retirement Concepts is owned by rich Iranians based out of West Vancouver that fled Iran in the late 1970’s.
The patriarch of the family slowly built up the company to where it is today with mergers and acquisitions. Apparently a real gentleman and businessman………
The son was taking over the day to day operations over the past few years and is more interested at “playing” owner than actually getting down in the trenches and learning the retirement home business. He is more interested in aquireing chichi hotels and custom made suits.
Nah.
This is a no brainer. A cash cow for the new owners with almost a billion dollars a year in govt subsidy payments.
And with the aging boomer cohort.
Its only gonna get more profitable.
Im just surprised no one else was sniffing around…..

#115 jess on 11.28.16 at 4:43 pm

#14 Happening now on 11.27.16 at 6:16 pm

“conduits”

…hey pssst…how bout lending your name and becoming a director … the townspeople are desperate for cash but no one seems to ask any questions ?

An investigation has revealed that the residents of Consett are directors of more than 1,000 businesses

Alasdair Pal, Himanshu Ojha
Friday 25 November 2016

> than 400 people in and around Consettshell companies often have no real operations or staff in

http://www.independent.co.uk/news/uk/home-news/porn-hub-hardcore-porn-sites-consett-durham-simon-dowson-a7438201.html#commentsDiv

#116 Mark on 11.28.16 at 4:46 pm

“back to Calgary now and will stay here for ten years at least. did my calculations and considering (still high) rents and (still low) interest rates and buying a downtown condo (half a mil range) makes more sense than renting one.”

1) What long-term interest rate are you using?

2) What’s your long-term opportunity cost on equity leveraged to the extent that you propose to leverage?

Get these ‘numbers’ wrong, and sure, you can twist the math to make almost any RE purchase look viable. The biggest n00b mistake people make is assuming their opportunity costs are way, way too low. The second biggest mistake people make is assuming that rates will remain abnormally low for their entire amortization. The third mistake people make is assuming their tenure will be longer than it truly ends up being, for various reasons/life events/etc.

Calgary prices have fallen significantly since the 2011 apex, and never really were as overheated as GVR/GTA. But on the flip side, with so many great high ROI investments available in, and correlated to the Alberta economy, the expected ROE should be much higher for the risk involved. So Calgary may not be as much of a bargain compared to GVR/GTA as some may believe. Also, quality of housing construction, anecdotally, in Calgary, is junk in comparison with the nice brick construction ubiquitous in the GTA.

#117 Context on 11.28.16 at 5:31 pm

#108 Santa Claus: – I hope your Holiday Train arrives on time tonight in Toronto at 8:15 PM, as will be waiting for you at 750 Runnymede Road in front of the yard area. I cannot miss the big all star show performance so you had better be on time.

#118 Ace Goodheart on 11.28.16 at 7:10 pm

#112 JW:

Buying a condo NEVER makes more sense than renting one. Ever.

Condos depreciate as they get older. You get no land at all. Often they sit on leased land, so even the condo company doesn’t own the dirt.

Condo fees property taxes and utilities are often more than rent.

Buying a condo is just really stupid.

#119 Skippy on 11.28.16 at 10:37 pm

Can someone please explain what Mr. Turner means by “Moister,” like when he makes reference to “The Moisters?” Is it insulting? Thanks in advance.