The illusion

metal-modified

This, says Tennysen in Vancouver, is “the illusion of demand.”

How elegant. How concise. The real estate and development industry doing all it can to conceal that market fundamentals are changing by the day. And not for the better. It’s an attempt to fool the media, social media and ultimately consumers. In one Facebook post, we have before us the death knell of our times.

Shannen Carlson is a West Coast publicist, marketer and purveyor of beautiful women as president of Calendar Girl Productions. This time she’s been hired to make a new condo development look like it’s news – a purposeful act to mislead. The intent is not to market the real estate project to potential buyers, but to create FOMO by hiring people to pretend they want it.

Isn’t business great when ethics aren’t involved?

line-up

Needless to say, shams like this – intended to score a precious few minutes on the local TV newscast, or go viral – wouldn’t be required if enough people actually cared about a new set of condo boxes being built. But they don’t. Sales in Vancouver last month were a disaster (again) – down 38.8% from a year ago, and 15% below the declining 10-year average. The market in BC peaked last winter, and was in serious distress even before local politicians polished it off with the Chinese Dudes tax and the vacant-house levy – just as Wild Bill Morneau was stressing the moisters.

What a perfect storm.

“Changing market conditions compounded by a series of government interventions this year have put home buyers and sellers in a holding pattern,” says local realtor boss Dan Morrison. “Potential buyers and sellers are taking a wait-and-see approach to try and better understand what these changes mean for them.”

And that’s when you hire Shannen and her Lawn Asians.

But this is not just about losing a moral compass in troubled BC. People across Canada should see what’s happening in markets that were on fire three years ago – Vancouver, Calgary or even Saskatoon (apartment vacancy rates are now surging there with rents falling) – as harbingers of conditions everywhere. Lots of other people do.

The latest worriers are no slouches. On Monday Canada’s banking regulator gave financial institutions a blunt warning housing could blow up and taken some lenders with it. “A pronounced or prolonged economic downturn could well involve a meaningful housing price correction. This could translate into significant losses for lenders and insurers,” said Jeremy Rudin, head of OSFI (Office of the Superintendent of Financial Institutions). “Given the risks and vulnerabilities arising from the current environment, sound underwriting is now more important than ever.”

“A pronounced or prolonged economic downturn could well involve a meaningful housing price correction. This could translate into significant losses for lenders and insurers… House prices in most Canadian markets have never been higher, supported by mortgage rates that have never been lower.”

But here’s the thing. Bankers are coming off eight years of loaning money recklessly – financing first-timers with no credit history and no money, for example, at the same low rates provided to experienced buyers with 50% deal equity. Foreign students get loans. Retired pensioners get them. There are even mortgages for laneway houses, for people shacking up with unrelated other people and (of course) purchasers who have no down payment and need to borrow that, too. No wonder mortgage debt is off the chart at $1.3 trillion, yet wages have barely budged.

What’s Rudin worried about now? Simple. A real estate correction dropping prices 30% would (says Moody’s) result in $17 billion in losses for the companies he regulates. And just imagine the impact on taxpayers, who stand behind CMHC. No wonder that agency is arguing for higher down payments plus linking the amount a person can borrow to a multiple of their income.

There’s more. Now the OECD is on our case.

The international body has just issued a report spanking Canada for creating an “acute risk” of a housing correction, especially in Vancouver and Toronto. “Such a correction would reduce residential investment and, through wealth effects, private consumption, and in an extreme case could threaten financial stability,” it says, stating the downturn is likely to be “disorderly.”

Well, there ya go. The bank regulator, CMHC, Moody’s and the international community vs Shannen.

But, jeez. Eighteen hundred bucks for sitting outside in a chair? I’m in.

169 comments ↓

#1 That Guy on 11.28.16 at 5:37 pm

“A pronounced or prolonged economic downturn could well involve a meaningful housing price ”correction.”

Well Duh!

And this is news because…oh yeah this is a real estate bear site.

#2 Victoria Real Estate Update on 11.28.16 at 5:39 pm

#23 Andrew Woburn (from yesterday)

Certainly sales of detached houses have fallen significantly across Greater Victoria since April. Prices will follow.

As Victorias’s bubble reaches maximum inflation, the downtown condo market could be a central point of buying for investors. You’ll notice that the same thing happened in other bubble cities in Canada and elsewhere around the world – Japan, Ireland, Spain, etc.

Unfortunately for investors and flippers, Mr. Market deals harshly with those who buy at peak or near peak prices of a major housing bubble.

It won’t be different here.

Lol I don’t think Victoria’s downtown is much bigger than 4 blocks by 4 blocks.

It probably sucks for many to lose parking spaces in an already cramped, tiny downtown that some say could use more parkades.

#3 crowdedelevatorfartz on 11.28.16 at 5:40 pm

“Lawn Asians”

That got a howl at the office where I work.

#4 Oakville Stinks on 11.28.16 at 5:41 pm

I can share information from an insider that claims “the greatest scam in portraying artificial demand in Toronto and the GTA area is PHANTOM BIDS.”

Why doesn’t anyone talk about this factor in the media?

#5 old gringo on 11.28.16 at 5:42 pm

just need a small interest increase to put the last nail in this coffin.
And nobody still believes this can happen in Canada….daaa
Interest rates for one year term 6.47% now the new norm south of the border.

#6 conan on 11.28.16 at 5:42 pm

That 1800 is not that much considering. You have to camp out 5 nights and 5 days. Your campsite is a sidewalk.
Expect two days to recover physically and mentally. Which means you are not working.
So, that is a weeks work and you will need to hire someone to bring you food, clothes, and take your space in line while you take sanity/sanitary breaks.

It’s minimum wage when all is said and done.

#7 bb on 11.28.16 at 5:44 pm

Its not just “Chinese Dudes”. India banned their 500 (CAD10)-1000 (CAD20) Indian Rupee currencies. You now have less dudes to pay cash for a house.

#8 Bytor the Snow Dog on 11.28.16 at 5:47 pm

But, jeez. Eighteen hundred bucks for sitting outside in a chair? I’m in.

No offence G, but it’s likely you don’t have the proper “assets”.

#9 Don't Believe The Hype on 11.28.16 at 5:49 pm

Throwing this out there: what if the worry of today’s new real estate buyers getting over there heads in mortgage debt today is overblown? We’re currently witnessing the largest wealth transfer in recent memory as boomers die off, leaving large real estate gains to their offspring.
The next generation will just use those windfalls to pay down their massive mortgages, no? And by extension, pay down their debts, no?

#10 powder_hound86 on 11.28.16 at 5:56 pm

The arrogance.. Instead of paying people 1800 dollars to sit in a chair to scam interest, lower your prices!

#11 common sense on 11.28.16 at 5:57 pm

$1800 EZ Money..just like we all like it….

What is this nonsense about a “pronounced or prolonged downturn”? Does this ever happen anymore?

Would the FED, EU or China ever allow it? Never….

In the words of Texas tunesmith Robert Earl Keen:

“The road goes on forever and the party never ends…”

#12 Average Joe on 11.28.16 at 5:58 pm

Just checked Expedia, almost $1000 to fly YYZ-YVR, that would cut into my profit, and I’m all about the profit.
(Sold my house in GTA in February, renting now.)
When this madness comes to YYZ, I’m in too!

#13 X on 11.28.16 at 5:59 pm

10% downpayments would be better for the average taxpayer backing CMHC in the long run.

#14 Victoria Real Estate Update on 11.28.16 at 6:00 pm

A “disorderly” correction. After at least 16 years of the laxest mortgage lending standards in the world and emergency rates since 2009 inflating what could
be the biggest housing bubble the world has seen, the OECD would have sounded as ridiculous as a Canadian economist if they had predicted an orderly correction.

The rest of the world is watching Canada. They know what is about to go down.

#15 Dan on 11.28.16 at 6:03 pm

Following the market closely in Vancouver, it’s obvious the downturn has commenced with prices on SFH down 10 – 30% from recent highs; Low end condos seem flat to only down a few percent probably due to the low cost of financing which still seems to be available, True North Mortgage is still advertising 2.29%!! That’s probably lower than the real cost of inflation. Money for nothing!!!
This spring should be interesting but I wouldn’t count on bargains on the low end, only the high end as there seems to be excess supply building and these are likely to see disproportionate rises in taxes over the coming years as the voting public is unhappy with the 1% which is 30% of Vancouver!

#16 WaitingForTheWorldToChange on 11.28.16 at 6:08 pm

Doesn’t it really depend upon the lens you use. Isn’t equally confusing that on the night of the US election when it became apparent that Trump was going to win that the stock market futures were down over 800 points to mysteriously reverse overnight? Remember all of the experts leading up to the electiOn were predicting that Trump was bad for the stock market. Now all of a sudden he is saviour because he is going to implement protectionist policies but spend on infrastructure driving up the debt level in a rising interest rate environmen? Or maybe it is just big money creating the conditions to exit leaving the retail crowd holding the bag?

What do you say Garth….Trump represents smooth sailing for accelerated US growth or is it really just a house of cards?

#17 Millenial-falcon on 11.28.16 at 6:09 pm

So what , where are the price decreases ?
There is a 0.7 percent vacancy rate in vancouver. How far could prices fall? Back to 2015 prices ? There will be no meltdown here or vultching. Too many people looking for a place to live.
http://www.bnn.ca/canada-s-rental-vacancy-rate-rises-3-4-but-toronto-vancouver-markets-still-tight-1.618370

#18 Victoria Real Estate Update on 11.28.16 at 6:09 pm

# 38 Frank ( from yesterday)

“In 2016, sales from April to October pulled a Vancouver
Sales declined from spring to fall? Tell us more!”

You didn’t get it Frank. Not surprising. Read it again.

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%

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

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

Huge drop.

“Any charts with data from 2013?”

I could post charts soon showing that in recent years house prices in Victoria plunged, despite falling fixed rates and predictions of higher prices by house humpers.

You’ve contributed absolutely nothing but false information to this blog. You’re really good at twisting words. It may be that you simply don’t understand what others write. Perhaps the world confuses you.

Are you enjoying the beginning of what could easily prove to be a crash in Vancouver?

#19 They're doing it again on 11.28.16 at 6:10 pm

The same thing happened when they marketed mc2 for presales. I found out they were giving away $20 or $25 dollar gift cards to Tim Hortons to the first 200 people in line. I’ve heard from other people the same thing regarding standing in line for cash but not $1800. Heck I’d be in for that one too.
I sold in Richmond Bc in March this year and have noticed some smart people are pricing more realistically, meaning $400,000 less, so just 10 percent over assessed.

#20 crossbordershopper on 11.28.16 at 6:12 pm

if i can get a cheap flight to vancouver, i would stand in the cold for 1700. i know guys will do it for the fun of it.

#21 Shanghai Doll on 11.28.16 at 6:13 pm

Fintrac says 100 BC real estate companies are complicit in money laundering. With that kind off foreign corrupt cash rolling in who expects prices to roll over? The Chinese government has stated that 46% of their most wanted criminals reside in Vancouver. Yesterday it was reported that one corrupt agency alone was responsible for hundreds of false claims for citizenship. Canada is a sucker and too weak kneed to straighten itself out, shame on Trudeau for this embarrassment. Oh well, a kid that worships murderous dictators can hardly be expected to have the intellect to focus on the value of Canadian citizenship.

FINTRAC says nothing of the sort, only that there are document deficiencies. Makes sense, since the regulations are complex and compliance is expensive. If you’re going to be a bigot, be an informed one. — Garth

#22 THANKS MIKE HARRIS on 11.28.16 at 6:14 pm

You evil CONs make me sick. Deregulated hydro promising lower rates and now what happened? Rates went up and up and up. You evil monsters CONs are monsters who lie. Patrick brown getting up screaming like he cares about working families. You lying evil monsters it was your stupid CON buddy Mike Harris who is the reason.

#23 Victoria Real Estate Update on 11.28.16 at 6:17 pm

# 67 South Islander (from yesterday)

“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.”

Apparently you have reading comprehension issues.

My post said nothing about the rental market.

Again, a big drop in sales is a clear sign that the housing market has slowed and that buyers have backed off or the buyer pool is being depleted. It could also indicate that flippers and investors have lost interest in the market.

Again, first sales fall then prices.

The rental market will change again. We saw this happen quickly from 2009-10 when the vacancy rate in Victoria skyrocketed. It’s common for that to happen when house prices begin to fall.

A quick study of some US markets during the US correction would confirm that. I think Phoenix is a good example.

Again, the first thing to happen is falling sales. And we’ve already got that in Victoria.

#24 THANKS MIKE HARRIS on 11.28.16 at 6:19 pm

#4 Oakville Stinks

Every realtor knows about phantom bids but the ignorant public doesnt. Where is the government to protect the consumer? Realtors are PO garbage just like lying CONs. Both should be locked up for crimes against Canadians and Canada.

#25 Zimmerp on 11.28.16 at 6:19 pm

If that is a facebook post, I can’t seem to find it.

Perhaps it has been removed. As it should be.

#26 ole Doberman on 11.28.16 at 6:20 pm

Gartho do you think an ad like that is for holding spots in line for those interested in buying?

#27 The illusion - MASHDEX on 11.28.16 at 6:26 pm

[…] Read more here:: http://www.greaterfool.ca/2016/11/28/the-illusion-4/ […]

#28 WaitingForTheWorldToChange on 11.28.16 at 6:27 pm

#5….old gringo:
“just need a small interest increase to put the last nail in this coffin.
And nobody still believes this can happen in Canada….daaa
Interest rates for one year term 6.47% now the new norm south of the border.”

I think it is the opposite. Most believe a correction is imminent but don’t really care as long time owners who have seen appreciation of price far greater than any correction will bring.

But make no mistake…this is not a Canadian phenomena as the US will see a sharp drop as well. But after all the that me and energy of this blog over the last 6 years predicting this…..if people still don’t understand why bother caring?

#29 Garth which can we email? on 11.28.16 at 6:35 pm

These realtors are openly out trying to deceive the public since they don’t fear repercussions . Garth who can we email if I want to file a complaint ( government) wise. I think we blog dogs can vent here but we should also vent our anger to the government. Please Garth have links to where we should email our anger. Time to take action and not just complaining here.

#30 WalMark of Sadkatoon on 11.28.16 at 6:36 pm

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.

i agree

core areas like forest hill, rosedale and even willowdale will always be crazy expensive

#31 A belieber on 11.28.16 at 6:36 pm

Oh man, lawn asians? Now that belongs in urban dictionary.

#32 Lulu on 11.28.16 at 6:36 pm

Count me in as well…. 1800 sure is a good number..lol

Are those warning is another cry wolves? Hmm!! Yea, I think so, because Toronto is different, Toronto is a mega city that attract lots of investors and immigrant. The supple simply just not enough. How can the price be going south? No No No No!!! This is not true. I just lost a bidding war in Willowdale last weekend.

#33 maxx on 11.28.16 at 6:38 pm

“Such a correction would reduce residential investment and, through wealth effects, private consumption, and in an extreme case could threaten financial stability,” it says, stating the downturn is likely to be “disorderly.”

Could? It’s already here.
Ivory towers…..meet grass roots.
There’s no money to risk on weak wallets and weaker jobs- the banks say so.
Governments at all levels are screaming for money, businesses are screaming for money and most “consumers” are chiming in.
Buying re is a major tax-hike exposure.

#34 Al on 11.28.16 at 6:38 pm

I’m in too. $900 up front in cash.

#35 Bram on 11.28.16 at 6:44 pm

I am confused.

Is the line hired to fake interest?

Or is the line hired to “hold my place overnight, while I sleep in my comfy bed, and still get to buy the condo?”

It’s not clear from the job ad, and I wouldn’t automatically assume it is the former, Garth.

#36 traderJim on 11.28.16 at 6:45 pm

@ Mike Harris fan

Welcome back James! Smoking Man missed you

No one else did

#37 Mark on 11.28.16 at 6:46 pm

“We’re currently witnessing the largest wealth transfer in recent memory as boomers die off, leaving large real estate gains to their offspring.”

Guess where a disproportionate chunk of that boomer wealth is ‘stored’? In housing, or finance of housing (ie: those GICs that are used to fund mortgages at the banks, as a prerequisite of bank investment in mortgages is bank borrowing from customers and shareholders!). So as those boomers die and become sellers of housing, sure, their offspring might be able to pay down their mortgages. But there’s more housing on the market, thus suppressing prices. So the boomer die-off will have no meaningful impact on housing prices, other than it appears that boomers will be dying at a rate faster than young people form their own discrete households. Thus, shifting the supply/demand balance in favour of the buyers.

“just need a small interest increase to put the last nail in this coffin.

The big-5 have been increasing rates applicable to retail customers independent of the bond market or any BoC policy action. Not only their posted/”headline” rates, but also the sort of offers being made. Armchair analysts tend to overly fixate on the sort of “lowest” rates, but in reality, those “lowest” rates are only available to a small chunk of a bank’s customer base.

#38 Brian Ripley on 11.28.16 at 6:49 pm

“Changing market conditions compounded by a series of government interventions this year have put home buyers and sellers in a holding pattern,” says local realtor boss Dan Morrison.

Some realtors and some buyers are no longer willing to remain in a “holding pattern” as I illustrate with a couple of SFD repricings and a sale below assessed value:

http://www.chpc.biz/history-readings/sentiment-reversal

With respect to Vancouver’s detached housing values, Sentiment Reversal is happening now. Realtors have to guess the list prices and the only thing buyers are flipping are their POVs

#39 studentbodyleft on 2 on 11.28.16 at 6:51 pm

Beware the double reverse fake double entendre end around

#40 news or not?! on 11.28.16 at 6:51 pm

Don Campell of REIN quoted in an Oak Bay (municipality of Victoria) paper:
http://www.oakbaynews.com/business/402784136.html
Is this news or an advertisement?!

#41 a housing crash !! on 11.28.16 at 6:53 pm

Carnage !!!…tsx to get hammered !!!

Start sweating lenders !!!

#42 InvestorsFriend on 11.28.16 at 6:54 pm

Whither TSX Earnings and P/E Ratio

For those of us without a Bloomberg terminal it is not easy to find the a good summary of the current historical earnings of the Toronto Stock Exchange index or its P/E ratio.

Some ETFs publish a figure but I understand iShares for example excludes companies with negative earnings and so their data is not the actual P/E

Statistics Canada reports that the P/E ratio on Toronto is fuming just under 60. Yikes.

http://www5.statcan.gc.ca/cansim/a26

But iShares claims the P/E on the capped composite index was 16.99 on November 25.

https://www.blackrock.com/ca/individual/en/products/239837/ishares-sptsx-capped-composite-index-etf?locale=en_CA&siteEntryPassthrough=true

That is one heck of a difference.

The TSX used top provide the P/E for the composite and the sectors for free but that ceased maybe five years ago. And when I purchased some data from them it seemed quite suspect.

Does anyone have a good source of earnings and P/E on the TSX?

#43 Smoking Man on 11.28.16 at 6:55 pm

I’m calling a Troy landslide in the next Ontario provincial election.. Then a Tory landslide in the next federal election in Canada.

I have a tendency to see things long before humans catch on.. Brexit.. TRUMP..

EVENTUALLY. People will take notice to the absolute mental cases influencing liberal policy these days.

https://youtu.be/S_CWHz69H_U

Here is an example clip.. Just by pointing it out I’ll never get a job again in a city.. But then I think long term.. Politics are not out of the question for me.. Pay back will be a bitch. I’m more bad ass then Bannon.

#44 Context on 11.28.16 at 7:04 pm

#20 crossbordershopper:- Do what we did in high school as climb into a freight car and hit the rails with a 24 on board.

#45 TurnerNation on 11.28.16 at 7:06 pm

Looking on MLS the area between Dufferin to Bathurst, South of Bloor there are semis from 1.3-1.5m. Who. How. Why. Madness.

Our ruling elite have done a number on us at all levels: dropping the debt bomb onto us (2% mortgage rates) and also an actor PM.

A teacher friend of mine said their union arranged for T2 to appear at their conference. They’ll see him but not H.
I leaned in and said I bet your’re hoping he’ll take his shirt off.
Titters followed.

They won’t ask him why via his central bankers a family could never afford a home and childcare. It’s all going overseas; little girls going to school?
Sure, they can here too – with $60,000 in debt.

Wolf in She’ps clothing.

#46 SirHani on 11.28.16 at 7:25 pm

LMAO @ Lawn Asians

#47 Damifino on 11.28.16 at 7:28 pm

#28 WaitingForTheWorldToChange

“Most believe a correction is imminent but don’t really care as long time owners who have seen appreciation of price far greater than any correction will bring.”
————————————-

If you had $1M potential gain this year and didn’t crystallize it, then instead, managed only $500K real gain next year, would you “not really care”?

Easy come, easy go, you figure? I’m thinking not. How often in one’s lifetime does an easy $500K slip out of your hands?

I know a fellow who’s young kid asked him how many times you might get a hole-in-one during a golf game.

#48 Harbour on 11.28.16 at 7:40 pm

Weird… if I make a post it refreshes

#49 WaitingOnTheWorldToChange on 11.28.16 at 7:44 pm

#47….Damifino…..”Easy come, easy go, you figure? I’m thinking not. How often in one’s lifetime does an easy $500K slip out of your hands?”

So we are talking about a 50% correction now? Even Garth has suggested that in GTA it is maybe 10%? No different than a stock market correction. I would suggest that based upon Garth’s survey the vast majority couldn’t care less because their net worth comes from assets other than just primary residence. I know I couldn’t care less.

#50 AB Boxster on 11.28.16 at 7:44 pm

Garth,

I believe that in the past you have said that a housing correction would have little effect on finances of the major canadian banks.

Do you still feel this way given this recent report?

thx

I do. Those losses are imminently survivable, but common stock prices will likely take a hit. — Garth

#51 Ryan on 11.28.16 at 7:46 pm

I’d like to own a house but i’ve been reading this blog to long. Now i keep hesitating and sitting on side lines.

I rent and save. I max out my rrsp/tfsa and had to start an unregistered account. It is that balanced and diversified boring investment that Garth bores us with.

I live in Hamilton and sadly would like to continue living here for work. What buy signals should I be looking for? I don’t want to be jumping into a storm and making a bad choice that will hurt me for 25 years. I know nice houses show up on the market every month so there isn’t an immediacy to my needs. But i want to own a property and have something of my own.

#52 VH on 11.28.16 at 7:55 pm

In case you are wondering what starts selling December 3

http://www.thecityoflougheed.com/?gclid=CK70tqngzNACFUlNfgodgJUFDw

500+ homes
First of 23 towers

#53 Londoner on 11.28.16 at 8:11 pm

So yesterday’s post confirmed that Oakville is actually in a sellers market, as suggested by my friend who recently sold his house there. So much for all the posters claiming that the Oakville market has started to collapse. When demand is greater than supply prices go up. And a property sells for exactly what its worth (to the buyer).

Anyways, for anyone that read the story of my friend who received a bully bid from a foreign investor, it turns out that said investor did end up buying a house in the neighborhood. It just wasn’t my friends house but the house next door. He says the new owner is a homemaker who’s spouse works overseas. I’ve heard stories like this on this blog but it’s the first time it’s happened to someone I know personally. Anyways, I’m sure the locals who bought my friends house will get along nicely with their new neighbours knowing that they were trying to outbid each other!

#54 GFD on 11.28.16 at 8:14 pm

DELETED

#55 Lots in the pipeline on 11.28.16 at 8:19 pm

google new developments, vancouver

A lot of these buildings are already sold. Even if they become rentals, would that not put more inventory out and thus, reduce the rental price on an already bad investment.

People say that the hot money regardless where it’s from China, Iran, India etc want the money out no matter what and they will pay any price for it. True?

#56 Ace Goodheart on 11.28.16 at 8:22 pm

RE: “Vancouver, Calgary or even Saskatoon ” – This stuff’s all local Garth. Yes Calgary is going to be popular once the jobs are gone. There is nothing out there but snow and nice mountain views.

I have no idea why Vancouver houses were worth so much (and now apparently are worth slightly less).

Unless everyone is magically able to get dual citizenship and disappear to better locales (like me, but I stay here anyway) most of us will still be living in Canada.

There are really two cities in this country that are actually worth living in. The first is Toronto (by far) and the second is Montreal.

That is all we have.

If I can’t live in Toronto (which I can, I own my own pied a terre here) then I would possibly pick Montreal but other than that it would be back to the UK likely London (I am EU) or Paris or Berlin.

On the international loop, Toronto has a presence. We are known for our really crappy underdeveloped subway system and our cool neighbourhoods.

All the rest of Canada is just boom bust. People go places for jobs, build McMansions and then stick around until the pink slips start flying. No culture no permanence, all they thing about is their big screen TV over their fireplace and whether the fake chimney on their house is bigger than their neighbour’s.

Toronto, Toronto and only Toronto. Only liveable City in this country anyway. And likely to keep its RE values in the event of a country wide crash.

#57 Linda on 11.28.16 at 8:25 pm

#9 Don’t Believe the Hype – I’m with #37 Mark. Besides, I thought the biggest wealth transfer of all time wasn’t the Boomers, but the parents of Boomers leaving their wealth to – the Boomers. Who by all accounts recently are feckless sorts who are one paycheque shy of financial apocalypse. Plus, if the Boomers are leaving real estate to their offspring, is it still mortgaged? Lots of Boomers sized up over the past few years – built that ‘dream’ house where ride on vacuum cleaners are required. I’ve read I don’t know how many financial facelift posts recently where someone of the Boomer generation is a ‘few short years to retirement’ with ‘massive’ or ‘high’ debt & relatively little liquid net worth. Most have it in real estate, much of it still carrying a considerable mortgage. Many of the case studies are outspending their income by a significant amount & almost all are advised to work to age 65 or 70; defer taking CPP/OAS to get the increase by deferring same & also cutting back on expenses. Advice to sell some or all of the real estate to clear the mortgage costs is regularly offered. So I would not be counting on wealth transfer from the Boomers to their offspring to save the RE boat from capsizing if I were you.

#58 Riffmeister on 11.28.16 at 8:27 pm

#40,
It’s all BS advertising. Oak Bay has seen price reductions the last few weeks I was reading. Don Campbell’s timing is as good in Victoria as it was at Calgary’s bubble top. Him and Ozzie are full of it. Lots to rent here too, just look at Craigslist.

#59 Ace Goodheart on 11.28.16 at 8:30 pm

RE: “There are even mortgages for laneway houses”

This is actually a pretty cool concept. I own a couple of laneway patches of land, currently attached to rental buildings in Toronto. If I could convince the OMB to let me sever these things and sell them for housing, that would be a very nice day indeed. The tenants use these little land patches for storing garbage and having weekend pot parties anyway so really they’re not being put to good use. No one has a car anymore. I had one old minivan from the 1990s parked on one of these land patches for about four years. Tenant refused to get rid of it. Eventually the gas tank dropped out from rust and it leaked fuel everywhere. Environmental disaster. Neighbours called the City. Enviro dudes showed up in their little truck, checked the situation. Old concrete pad under about 3 inches of dirt, luckily no damage done, towed it off. Now I have a rule, no more crappy old cars on my laneway land patches.

Would love to sell these things. Yay progress. I love hippies and their cool ideas.

#60 Mark on 11.28.16 at 8:35 pm

“Does anyone have a good source of earnings and P/E on the TSX?”

http://ca.spindices.com/indices/equity/sp-tsx-60-index

If you click on “Factsheet”, and then click on “month-end”, your computer will download a summary of the TSX60 index.

These are the values quoted:

“P/E Trailing: 49.61
P/E (Projected): 18.74
P/B: 2.04
Indicated Dividend Yield: 2.94%”

Of course, I can only independently verify the indicated dividend yield of roughly 2.94% as that’s basically what the TSX60 tracking funds (ie: XIU) return, excluding management fees.

40% of the index is in 8 stocks, so you can independently verify those with relative ease. If you pick another dozen stocks, you basically have 80% of the index weighting. As we all know, the TSX is notoriously cyclical, so a framework that tries to equate P/E’s to bond yields can be highly problematic.

The BlackRock quoted P/E (~16X) seems to equate well to the S&P quoted P/E (18.74) if you toss out the negative earners (mostly in the oil and goldpatch these days!).

Last year had a lot of one-time writedowns, particularly as O&G assets were impaired. Hedge accounting practices can create some truly bizarre results in the O&G sector when everything is reconciled to GAAP for reporting purposes.

#61 Wrk.dover on 11.28.16 at 8:39 pm

Economy’s hooped when this many people chime in wanting $16.66/hr. in Vancouver of all places!

It is encouraging to assume though, that when the time comes, it won’t cost as much to hire folks to stand in line awaiting the few days the bank is allowing the actual cashing of a withdrawal cheque in the final stages of this horror show.

#62 Smoking Man on 11.28.16 at 8:51 pm

#36 traderJim on 11.28.16 at 6:45 pm
@ Mike Harris fan

Welcome back James! Smoking Man missed you

No one else did.
……….

Did you see my responce #43
You can’t bend what you don’t offend.. Soon it will be a crime to offend.. Looks like I’m going to jail.
I’ll never not speak my mind..

#63 data on 11.28.16 at 8:53 pm

VREU – Everyday you have something to say about Vic, how about tell us where your research shows is a good buy and could withstand a crash?

Thanks in advance

#64 Newcomer on 11.28.16 at 9:04 pm

@Millenial-falcon

>>There is a 0.7 percent vacancy rate in vancouver. How far could prices fall? <<

They could fall back to rent equivalents. Rents are high, relative to incomes, but they are still about half of the carrying costs for purchases with a 20% downpayment.

#65 John on 11.28.16 at 9:10 pm

Eh, Smoking Man. Re: 0ntario Liberal defeat. Yup… down to about 11 seats in the latest poll.. so after their recent AGM, Wynne says the energy mess is all her fault; Sousa is now ramming through an omnibus budget bill; likely Wynne will get the hook and a possible leadership convention in the spring of 2017; otherwise the Libs are in to an extinction level event in 2018. The big recession hurdling at us in 2017, when the US government hits the debt ceiling, is a a major drag on this situation. Wynne is likely gone after maybe a prorogue like McGuinty’s exit… either that or they bury themselves. (That omnibus bill bring debated now includes budget schedules right through into 2018)… Stay on top of this Smoking Man and blog dogs…

#66 toronto1 on 11.28.16 at 9:20 pm

OFCI
OCED
CMHC
BOC
Bank CEO’s
mortgage underwriters
on and on

guess what they all have in common— they have access to realtime raw date of all Canadians and their financial situations– not some fairy dust pseudo alice in wonderland claims from media but the REAL numbers

They all have quant departments that run risk models, they know how leveraged the population is and whats at stake. with the massive amount of leverage in the system so many are one or two missed pay cheques away from financial oblivion.

the fact that all of them are basically screaming in unison should tell everyone something.

at this point a minor blip in the economy, a slow down or mild recession will have disastrous effects for the over leveraged. Trust that they know and their models have shown what comes next.

It seems like everyone is trying to talk down the market to maintain the “soft landing” approach, but i feel its to far gone– its gone on to long– like a hot air balloon that looses fuel at the top of its flight, its only got one direction to go.

#67 falseprophet on 11.28.16 at 9:22 pm

This blog keeps citing the obviously cracking market out west b/c it plays into the predicted narrative.

But why not make bold predictions about the uncertain toronto market where supply:demand may counterbalance other forces?

potentially catastrophic? will potentially fall 10% in some indeterminate period? these aren’t predictions

#68 Moh on 11.28.16 at 9:24 pm

Hi Garth, love your blog been reading it for a while now. Just wanted to know your thoughts on Tories toll tax.
Thank you and God bless.

#69 Andrew Chan on 11.28.16 at 9:28 pm

Prices of an average home in Vancouver is not aligned with the average family income. Grim prospects for the younger generations with little financial help from family. How could this be sustainable?

#70 Spectacle on 11.28.16 at 9:38 pm

Response regarding #63
data on 11.28.16 at 8:53 pm
VREU – Everyday you have something to say about Vic, how about tell us where your research shows is a good buy and could withstand a crash?

Thanks in advance
******************my input for you********

CUBA!

And thank you so much for your excellent input into this Blog Vic Real Estate Update! Many of us appreciate and understand your work.

Ps: thanks Garth and the other boys, appreciated . M

#71 hope & ruin on 11.28.16 at 9:45 pm

@ Ryan #51

Just park outside a divorce lawyers office and when people come out follow them home. You’ll get a deal eventually.

#72 NoName on 11.28.16 at 9:50 pm

Incredible House that defies logic and gravity at same time.

https://www.youtube.com/watch?v=PKJYWhWg0hY

#73 BillyBob on 11.28.16 at 9:54 pm

Good grief. I’ve seen the astroturfing tactics described here used all over the world, but usually it’s done with a little more discretion. If you’re going to pull this kind of stunt, at least try and hide it.

An aside regarding the publicist tasked with staffing the con, Ms. Shannen Carlson (a Scandi-hooligan like myself it seems). When not flying my part-time passion/hobby is photography, particularly portraiture and I’ve taken countless pictures of similar women as she retains. There’s never a shortage of flight attendants who need quality headshots, portraits for job applications, etc. I have to say, looking at her roster of models, that while I would not disparage their attractiveness – such things are subjective – they definitely have a creepily generic uniformity. I mean, of the eight, four of them share a name with another, for gawd’s sake.

http://calendargirlproductions.com/models/?theme=theme-mint

Meanwhile, on the related topic of style over substance, Junior Trudeau lauds Castro as if the latter were a kindly, grizzled old grandpa. People are having a field day with this, check out

https://twitter.com/hashtag/trudeaueulogy

Hilarious. But what’s not so funny and is in fact kind of scary, is that I think Trudeau was actually being sincere in his praise of a dictator. Some very serious implications as it relates to Canada’s relationship with another, much larger authoritarian communist dictatorship – P.R.O.C.

Something to consider.

#74 WalMark of sadkatoon on 11.28.16 at 9:58 pm

Smokie, why is gold dying? How long?

https://www.bullionvault.com/gold-news/gold-price-112820162

#75 common sense on 11.28.16 at 9:58 pm

#62 Smokie

Jail? Please share…

#76 WalMark of sadkatoon on 11.28.16 at 10:02 pm

RE: “Vancouver, Calgary or even Saskatoon ” – This stuff’s all local Garth. Yes Calgary is going to be popular once the jobs are gone. There is nothing out there but snow and nice mountain views.

I have no idea why Vancouver houses were worth so much (and now apparently are worth slightly less).

Unless everyone is magically able to get dual citizenship and disappear to better locales (like me, but I stay here anyway) most of us will still be living in Canada.

There are really two cities in this country that are actually worth living in. The first is Toronto (by far) and the second is Montreal.

That is all we have.

If I can’t live in Toronto (which I can, I own my own pied a terre here) then I would possibly pick Montreal but other than that it would be back to the UK likely London (I am EU) or Paris or Berlin.

On the international loop, Toronto has a presence. We are known for our really crappy underdeveloped subway system and our cool neighbourhoods.

That sounds about right. Great city. Crappy public transit.

Toronto, Toronto and only Toronto. Only liveable City in this country anyway. And likely to keep its RE values in the event of a country wide crash.

Seems likely. Toronto real estate is highly prized compared to any other Canadian city

#77 WalMark of sadkatoon on 11.28.16 at 10:03 pm

Copied and pasted too much in my last post. My bad.

On the international loop, Toronto has a presence. We are known for our really crappy underdeveloped subway system and our cool neighbourhoods.

That sounds about right. Great city. Crappy public transit.

Toronto, Toronto and only Toronto. Only liveable City in this country anyway. And likely to keep its RE values in the event of a country wide crash.

Seems likely. Toronto real estate is highly prized compared to any other Canadian city

#78 WalMark of sadkatoon on 11.28.16 at 10:05 pm

Looking on MLS the area between Dufferin to Bathurst, South of Bloor there are semis from 1.3-1.5m. Who. How. Why. Madness

Developers have been busy up and down bathurst for awhile now. Gentrification here and there. Sometimes successful sometimes not. Bathurst is also a Street like Avenue or Yonge where one can go up and down Toronto relatively easily. And the real estate is priced somewhat better than property on either Avenue or Yonge

#79 Doug t on 11.28.16 at 10:06 pm

Don’t you get the feeling More and more as the months pass by that the train is derailing around the globe? It’s like we are destined for an “UH OH” moment in history in the not too distant future. Especially since the 9/11 event – it could be that historians will piece together a view of events, that we just can’t see right now, showing a timeline leading to a catastrophic collapse of culture, economy and society. Tick tock – we shall see.

RATM

#80 RIL on 11.28.16 at 10:22 pm

I’ve been pondering our host’s Top 10 list of seller’s markets yesterday (hopeless sales to listing ratios) out west here on the Prairies. I have spent time in 8 of those 10. Some good. Some bad.

In particular, I reflected upon Peace River, Alberta because my brother left Calgary for Riviere-La-Paix at the confluence of the Peace and Smoky Rivers in 1988 with his young wife, a toddler and an infant. The intervening 28 years substantiates the claims of those here that young people should contemplate life in smaller centres with lowered income expectations and end up having a higher quality of life with perfectly comparable economic success of those remaining in the large urban centres.

The Town of Peace River ( pop. What? ~7000) has followed the ups and downs of the Daishawa pulp mill on the River since 1990 and those in the know will be aware of what a wild market the pulp industry can be.

Of late, there was the shelving of the Carmon Creek oil sands development by Shell after sinking $2 billion in its project in the Peace River Oil Sands Area which is across the province of Alberta to the west of the Athabasca Oil Sands Area where I sit and type. Think about the cessation of a few thousand construction jobs near a town of 7000 people.

In any event, his perseverance for nearly three decades is about to fund a fabulous retirement in a city in the south central area of British Columbia. Not Kelowna. He has more brains than that. He had been in Peace River for only about 4 years when he knew he would never return to Calgary, although he could easily have done so.

Yes he will be selling his house into a down market within the next couple of years but no matter.

Young people, go to frontiers if you want to prosper or, if you prefer to remain in 604 and 416, make sure you are in an economic or career frontier. AI? Robots? Ganja?. You’ll do better.

Apologies for the prolix comment, but I get paid by the word in my line of work.

#81 AfterTheHouseSold on 11.28.16 at 10:24 pm

#49 WOTWTChange
Re ‘Correction’
“Even Garth has suggested that in GTA it is maybe 10%”.

The ‘correction’ is the initial drop. As discussed here often, it is the ‘long, slow melt’ which follows that erodes away the price. The 1989/90 correction and melt resulted in a 32% price drop in Toronto.

#82 Future Expatriate on 11.28.16 at 10:27 pm

Oh, Garth. You actually remember a world where business had ethics. How quaint.

Must have been from all those MGM movies we saw as a kid by scared immigrants afraid the WASP power structure would run them out of the country, THEN.

Ethics left the real business world around 1880’s. With the arrival of transcontinental railroads. Not been seen since except for quark flashes.

#83 mark on 11.28.16 at 10:28 pm

The CAPE 10 ratio is signaling the U.S. market overvalued and pricey.
Emerging markets and the EAFE index looks juicey.

#84 For those about to flop... on 11.28.16 at 10:29 pm

Stumbled open this PDF this afternoon when I was trying to help someone out with a question.

Top 5 cases of Hyperinflation.

Hungary in 1946 where prices doubled every 15.5 hrs tops the list.

There are some more recent ones in Zimbabwe and Yugoslavia…

M42BC

http://www.karlwhelan.com/IMB/Hyperinflations.pdf

#85 Smoking Man on 11.28.16 at 10:29 pm

Amazon girl. From yesterday.

Thanks for buying the book.. 8 years of building a brand on here.. Greate effort every night on greater fool trying to stimulate debate and thought.. Millions of readers.. And no book sales. Big miss calculation on my part.. Should have gone in as a lefty..

So my dream in retirement I get to write fiction and not worried about pay for the electrical bill in a trailer on vacant land trashed.

I’m not an idiot.. Need to find something else to do.. I’m thinking.. The role of a butts in the next pm office will work..

I just got to learn shit about sports teams.. That’s all weasel butts tweets about while destroying families in his demented quest to give the earth back to the trees.

The irony… Trees eat co2.

#86 traderJim on 11.28.16 at 10:30 pm

#62 SM

I knew it, Smoking Man is really Randle McMurphy!

#87 RIL on 11.28.16 at 10:39 pm

What a hopeless intro to my pot boiler of a novella above!!

“Sellers’ market”??! Buyers’ market.

Not thinking straight. Stamps whupped yesterday by the Eastern Bastards and the Isles beat the Flames tonight. I’ll seek medicationl

#88 45north on 11.28.16 at 10:46 pm

Linda: case studies are spending more than their income. They need to sell their real estate

but they’re not

the clock is ticking

Ace Goodheart: I own a couple of laneway patches of land, currently attached to rental buildings in Toronto. If I could convince the OMB to let me sever these things and sell them for housing, that would be a very nice day indeed.

nice for you!

City Council should be in charge. Not the OMB.

I know the laneways off Roncesvalles. Freshly squeezed orange juice at Sunrise.

#89 nonplused on 11.28.16 at 10:47 pm

They could make the scam even better: Take the $1800 a week, times it my 4.3 weeks per month and get a monthly income of $7,740 per month, times that by 12 and declare an income of $92,880 per year, go down to the mortgage broker and buy the condo! Then you don’t have to sleep on the sidewalk anymore!

Thinking outside the box is what I do.

#90 45north on 11.28.16 at 10:57 pm

video killed the radio star

we can’t rewind we’ve gone too far

Technology, Not Trade or Regulations, Killed Manufacturing in America

http://www.financialsense.com/contributors/urban-carmel/technology-killed-manufacturing

https://www.youtube.com/watch?v=Wd_pU80mGXk

#91 Context on 11.28.16 at 10:57 pm

#79 Doug t:- You must have missed the memo as the earth time stopped on December 21, 2012 detailed on the 29 ton Aztec Sun Stone. The 5th Sun disappeared and the Aztec bloodline awaits the arrival of the 6th Sun. It will become a spiritual awakening.

#92 For those about to flop... on 11.28.16 at 11:04 pm

Brexit update for anyone interested.

Canada gets a mention…

M42BC

http://www.dailystar.co.uk/news/latest-news/565983/Brexit-leak-France-block-European-Union-EU-cabinet-memo-government-Theresa-May-Downing

#93 blah..blah...blah on 11.28.16 at 11:09 pm

You people are so stupid.
This is Canada not Germany.
Real estate is the only way to go….duh

#94 Ole Doberman on 11.28.16 at 11:16 pm

Sounds like Trump is looking to abolish the Fed. Reserve and return to the gold standard?:

http://www.businessinsider.com/trump-meeting-john-allison-bank-ceo-abolish-the-fed-gold-standard-2016-11

You bullion-lickers are comical. No major nation will ever return to rocks. — Garth

#95 Mark on 11.28.16 at 11:24 pm

“The ‘correction’ is the initial drop. As discussed here often, it is the ‘long, slow melt’ which follows that erodes away the price. The 1989/90 correction and melt resulted in a 32% price drop in Toronto.”

I’d just add, its not only the drop (which, in the 1990s, wasn’t even all that much in nominal dollars), but its the huge (yuuuuuge) opportunity costs in other asset classes.

Had someone bought a Toronto house in 1990 (the peak of the bubble at the time), for example, they had their money tied up in a non-performing asset for over a decade. While if they bought the inversely correlated asset class of stocks (ie: an index fund such as the TIPS at the time, or XIU these days) — they would’ve had, with dividends re-invested, roughly 4X their money.

Actually, with long-term interest rates having little to fall, I’m not even sure if a 1990s-like decade over decade flat-lining is possible. House prices are, over the long term, determined by long-term interest rates, and it probabilities favour higher, not lower rates at this point. Even though we most likely will get a deflationary period of some fair significance which could chop long-term GoC yields, credit to the housing sector is likely to have a significant risk premium attached to it.

#96 YVR update on 11.28.16 at 11:39 pm

Vacancy rate approaching zero in Vancouver.

And here they say the influx of people is a myth. Too many vested interests distorting the truth.

#97 Maj on 11.28.16 at 11:41 pm

Hey, #73 BillyBob on 11.28.16 at 9:54 pm

Either you’re ignorant about diplomacy or a jerk.
Did you have the same concerns when Harper praised a dictator, with his condolence message for King Abdullah of Saudi Arabia?

Conservative fury over Trudeau’s condolences for Castro smacks of hypocrisy:
http://rabble.ca/blogs/bloggers/djclimenhaga/2016/11/conservative-fury-over-trudeaus-condolences-castro-smacks-hypocr

#98 Ole Doberman on 11.28.16 at 11:42 pm

#94 Ole Doberman on 11.28.16 at 11:16 pm

Sounds like Trump is looking to abolish the Fed. Reserve and return to the gold standard?:

http://www.businessinsider.com/trump-meeting-john-allison-bank-ceo-abolish-the-fed-gold-standard-2016-11

You bullion-lickers are comical. No major nation will ever return to rocks. — Garth
——————————————————–
Last president to try this was JFK and we know what happened to him.

The Federal Reserve is too powerful and doesn’t want to be over thrown. We’ll pray for Mr Trumps safety.

#99 Mark on 11.29.16 at 12:28 am

“No major nation will ever return to rocks. “

The gold standard isn’t about using gold as a medium of exchange. It is merely about the ability to exchange, officially, ones currency for gold, or vice versa. If you divide the official amount of US currency in existence (3.3T) by the amount of gold that is in US reserves (261.5MOz) yields a gold price of $1260/ounce. Which is precisely where gold is today, give or take daily trading fluctuations. So based on the current monetary base as expressed in M1, gold is neither overvalued nor undervalued to any degree of significance.

The real elephant in the room is that as higher interest rates and deflation take hold, that the monetary base will need to expand significantly to prevent the economy from going into hyperdeflation. And such would show up in a higher gold price, and, as some suggest, a speculative mania as additional gains and expansion in the monetary base are further anticipated.

Personally I’m a fan of producing miners, which are a spread play between the cost of labour, the cost of energy, and the price of gold.

#100 Bottoms_Up on 11.29.16 at 12:32 am

#13 X on 11.28.16 at 5:59 pm
—————————–
10% down payment is not realistic with todays prices, and wages. Let’s say an average couple, no kids, earns average wages $80k, and wants to buy an average house ($400k). How does that family save $40k? By eating catfood for 8 years?

#101 Chelsea on 11.29.16 at 12:37 am

RE sucks in BC …. with rain, green stuff growing on houses, cars and trees … why is it so popular living in BC …. asking stupid prices for homes that are shacks, some homes on the Gulf Islands are disgusting at the least, shameful to even to sell them at all. This RE market better smarten up … get real at least for the average person to buy a decent, livable home to live. RE is becoming a SHAM, deceitful bull of sh**t.

Cheers…..

#102 Bottoms_Up on 11.29.16 at 12:39 am

#51 Ryan on 11.28.16 at 7:46 pm
———————–
Hamilton…well, if you know you will work and live there the rest of your life, you might as well buy a house you enjoy and can afford.

#103 traderJim on 11.29.16 at 1:33 am

You bullion-lickers are comical. No major nation will ever return to rocks. — Garth

Ayn Rand was a big supporter of Austrian economics from the beginning, and she of course shared their admiration for the gold standard and it’s role historically.

But even she said there was no way in hell it would ever be brought back, and she wasn’t overly concerned about that.

Much more important things to try to get done before we get to a gold standard.

#104 Future Expatriate on 11.29.16 at 2:57 am

#94 You bullion-lickers are comical. No major nation will ever return to rocks. — Garth

Are you confusing the new possible Trumplandia with the major nation formerly known as the USA? That would be a mistake.

Even with a “genius” like Pence in charge. For the first time ever, BOTH President and Veep-elect of the US are utterly clueless demagogue idiots. Oh the US has had idiot Presidents before… Reagan, Dubyah. But they had veeps highly capable of running the show under their noses. No one to run Der Führer’s show but Twitter and a collection of yes-political-prostitutes and the neo-KKK.

If this isn’t turned around? Anything could happen, and horrifically, probably will. The inmates aren’t running the asylum; they’ve locked the doors, tossed the gasoline, and are about to toss the match.

Will the world return to the gold standard though? Not even after nuclear WWIII.

Which is one heckuva way to prove your point, Garth. Darn you.

#105 Sam the Sham on 11.29.16 at 4:07 am

Instead of $1800 for standing in line, I wonder if Shannen would get me a meaningful date with one of the calendar girls?

#106 JWD on 11.29.16 at 5:37 am

How is this legal Garth??

Illegal target marketing of some sort? I can’t believe they can pay people to do this with no consequences.

Interesting times.

#107 Wrk.dover on 11.29.16 at 6:59 am

#66 toronto1 on 11.28.16 at 9:20 pm
OFCI
OCED
CMHC
BOC
Bank CEO’s
mortgage underwriters
on and on

guess what they all have in common— they have access to realtime raw date of all Canadians and their financial situations– not some fairy dust pseudo alice in wonderland claims from media but the REAL numbers

They all have quant departments that run risk models, they know how leveraged the population is and whats at stake. with the massive amount of leverage in the system so many are one or two missed pay cheques away from financial oblivion.

the fact that all of them are basically screaming in unison should tell everyone something.

at this point a minor blip in the economy, a slow down or mild recession will have disastrous effects for the over leveraged. Trust that they know and their models have shown what comes next.

It seems like everyone is trying to talk down the market to maintain the “soft landing” approach, but i feel its to far gone– its gone on to long– like a hot air balloon that looses fuel at the top of its flight, its only got one direction

——————

Post of the month right there.

Print it and leave in the lunch room at work.

#108 Wrk.dover on 11.29.16 at 7:24 am

#100 Bottoms_Up on 11.29.16 at 12:32 am
#13 X on 11.28.16 at 5:59 pm
—————————–
10% down payment is not realistic with todays prices, and wages. Let’s say an average couple, no kids, earns average wages $80k, and wants to buy an average house ($400k). How does that family save $40k? By eating catfood for 8 years?

—————-

DINK’s can’t save 10% on 80K/yr with out resorting to cat food?

Not having a house is not as big a problem as actually having one will be for you.

Don’t kill the messenger. Just trying to help.

I know a career marine that raised a family living on private pay until retirement, although he was promoted many times during that period.

When he retired after twenty three years, he payed cash for a farm and all of the toys to go with it.

#109 HELOC & Boomer Wealth on 11.29.16 at 7:35 am

Not all of those Boomer’s will be doing a large wealth transfer.

This for age 65 yrs or older households with a HELOC (StatsCan source data):

As of 2012, 22% have a HELOC (new name for a 2nd or 3rd mortgage but not counted as such).

That’s 2.15 million Canadian homeowners. Only 200,000 have a “nil” balance.

As of 2014, the average HELOC debt was $57,000 and the average approved line of credit was $135,000 (basically, they have maxed out their home equity ATM card to 42% of the total).

HELOC debt equals $111 billion, $57K x 1.95 million homeowners (as of 2014).

Apart from HELOCs, 16% have highly mortgage-indebted households (debt-to-disposable income ratios in excess of 500 percent).

Mercifully, it is not all that bad for this age group but the above numbers give pause when talking about a large Boomer wealth transfer to the younger generations.

bsant

#110 Dominoes Lining Up on 11.29.16 at 7:49 am

Good analysis, Garth, and valuable to point out the raised eyebrows among the OECD and others who understand numbers and can’t figure us out.

Here’s some other numbers that I find compelling:

70% of us are “homeowners”

$25/hr is our average national wage

61% of us earn LESS than that $25/hr

(That 61% is growing, our jobs are declining in quality)

Where is the basic economic support for our housing bubble?

http://www.theglobeandmail.com/globe-investor/news-sources/?mid=cnw.20161128.C1168

#111 RR on 11.29.16 at 8:04 am

Hey Garth, take note of the recent shift on banks starting to push customers away from 30 year amortizations and where possible into default mortgage insurance. RBC is the first, but not the last to start the process through pricing. This all comes down to securitization. While the brokers have been known the offer lower rates on insured mortgages, the banks will soon follow suit. Of course all under the guise of helping out young first time homebuyers.

#112 crowdedelevatorfartz on 11.29.16 at 8:16 am

@#93 blah, blah,blah….

” Real estate is the only way to go….duh”
********************************************

Let me guess. (If your name is any indication)

Realtor?

#113 That Guy on 11.29.16 at 8:20 am

The jury is in.

Toronto is already a majority rental city and the percentage of rentals will only grow as we hit peak home-ownership rates in the GTA for various reasons, not the least of which is affordabilty.

A decade long lack of MLS inventory (and decreasing), combined with a large and growing pool of renters point to one clear conclusion, unless one or both of these fundamentals changes sharply; rental and ownership prices can only go up.

#114 Renter's Revenge! on 11.29.16 at 8:27 am

#79 Doug t on 11.28.16 at 10:06 pm
Don’t you get the feeling More and more as the months pass by that the train is derailing around the globe?

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

I used to get that feeling when I read zerohedge every day. Then I stopped reading it and the feeling went away.

Word becomes flesh, brother. Stay positive.

#115 fixie guy on 11.29.16 at 8:47 am

““Changing market conditions compounded by a series of government interventions this year have put home buyers and sellers in a holding pattern,” says local realtor boss Dan Morrison.”

This, folks, is how to lie like a seasoned pro. Positioning the repeal of government intervention stimulating high real estate prices as ‘government intervention’ is pure Pravda.

#116 Context on 11.29.16 at 9:30 am

#98 Ole Doberman:- This is a theory without merit as was never a concern to the cartel who planned the assassination. The conspiracy theorists continually spin this falsehood.

#117 May Peters on 11.29.16 at 9:33 am

#100

Then that family should NOT buy.

#13 X on 11.28.16 at 5:59 pm
—————————–
10% down payment is not realistic with todays prices, and wages. Let’s say an average couple, no kids, earns average wages $80k, and wants to buy an average house ($400k). How does that family save $40k? By eating catfood for 8 years?

#118 webspun3 on 11.29.16 at 9:40 am

Garth,

Hillarious moment on O’reilly Factor last night……

Oreilly pilloried Trudeau2 for his shameful support of the brutal dictator Castro, and then flashed T2’s picture on the screen and said “this kid looks like a camp counsellor….”
Joking aside, this does not bode well for Canada, as Trump policy is likely to follow the same tune.
Heaven help Canada

#119 baker two on 11.29.16 at 10:16 am

#18 Victoria RE update, what areas of Metro Vic do you think offer the best value? In most articles they mention that a softening has begun to occur and that this will continue. Even Helmut had bad things to say about the over supply and the effects of the new mortgage qualification program culling the moisters to a greater degree than builders had anticipated, hence the inventory overhang. I’d be interested in some on the ground observations and stats. Is is condos, th’s or sfh’s that are falling faster than any other? From a Times Colonist article I read it was the new builds that looked like they were going to take a hard fast kick in the gonads based on the stress test. What do you think of Langford, Metchosin and the other bedroom communities designed for baby poppers and average wage civil servants? Government workers are secure but in finite supply and as a cohort are 55 plus and wouldn’t be moving into the new builds designed for the first timers….what of them? Are those developments like Westhill ripe for low ball offers, or is that a few months away?

#120 Canadian Moose on 11.29.16 at 10:32 am

$1800 dollars to fake lineup to “market a condo”. Holy Moose. What will these idiots think up next. I wonder how many homeless will want to do this only to be turned away cuz of the look of their clothes etc. Desperate times with desperate measures.

I would line up myself but no one is gonna believe a Moose wants in on a condo pre-sale in Vans RIDICULOUS real estate market.

#121 Tony on 11.29.16 at 10:40 am

Re: #9 Don’t Believe The Hype on 11.28.16 at 5:49 pm

The next generation will end up with nothing just like in America. Real estate will completely collapse here as well low interest rates will leave most of todays’ retiring boomers penniless.

#122 Bytor the Snow Dog on 11.29.16 at 10:40 am

@104 Future Expat-

Don’t worry dear the recount in Wisconsin and the Electoral College will surely make things right for Hillary.

LOL.

#123 Context on 11.29.16 at 10:47 am

#104 Future Expatriate :- Tell us where you will be going to this paradise of yours as we need to know.

#124 Dogman01 on 11.29.16 at 10:52 am

Something to share: as a lot of people expect “the deal” and a lot of our society is based on that expectation; it produces stability……

https://www.linkedin.com/pulse/think-2016-crazy-wait-until-accountants-get-replaced-robots-mckissen?trk=hp-feed-article-title-hpm

“So I tried to get my Deal.
I went to college. I worked hard. I didn’t buy a $500,000 home when our household income was less than $50,000. And I assumed – and continue to assume – if I adhere to the terms of a subconsciously imagined deal, my family and I will be okay.
In other words, because I’ve done what’s expected, I’ll get what I’m expecting.
Except a lot of people are learning that it doesn’t always work like that.”

#125 WalMark of Sadkatoon on 11.29.16 at 11:10 am

The US is BOOOOMING!

http://www.businessinsider.com/us-gdp-q3-2016-second-estimate-2016-11

http://www.cnbc.com/2016/11/29/us-home-prices-hit-new-peak-in-september-sp-corelogic-case-shiller.html

And will continue to boom under President Trump!

#126 S.Bby on 11.29.16 at 11:13 am

#101 Chelsea
With the exception of 5 days, it has rained every day in Vancouver for the last two months. Rainfall amounts are above normal as well. We have likely broken our rainfall records. Lots of houses now with plastic tarps on their roofs.

This has hit the MSM:
http://www.cknw.com/2016/11/28/job-ad-claims-to-pay-thousands-of-dollars-to-wait-in-presale-condo-lineup/

See? Everybody reads this blog. — Garth

#127 Hey Kids, Just Throw in the Towel on 11.29.16 at 11:17 am

I kinda have to agree with this guy….at least for the nicer hoods of Toronto ….

The scummier hoods you might be able to live in….with a bulletproof vest and massive ADT security system LOL

http://www.mortgagebrokernews.ca/market-update/canadian-dream-is-over-for-nextgen-says-fortress-exec-217818.aspx

#128 Suchbull on 11.29.16 at 11:21 am

Garth, honestly…. Your steering people into the wrong direction with your ideas, opinions and beliefs. This is complete and utter bull. Did it ever occur to you that Realtors actually have clients that want to purchase these?!?! I find your article to be very inaccurate, racist, and inaccurate.

#129 Doug in London on 11.29.16 at 11:22 am

Yes, but doesn’t anyone in the OECD understand that it’s different in Canada?

#130 Doug in London on 11.29.16 at 11:28 am

Those losses are imminently survivable, but common stock prices (of Canadian Banks) will likely take a hit. — Garth
————————————————————
Great, at long last XFN could come back to a sensible price and be a good investment. Presently, it’s priced so it has a paltry yield of 2.9 %.

#131 InvestorsFriend on 11.29.16 at 11:29 am

Will the Real P/E Ratio of the TSX please stand up?

Mark responded to my question on the P?e ratio with some good data indicating:

http://ca.spindices.com/indices/equity/sp-tsx-60-index

If you click on “Factsheet”, and then click on “month-end”, your computer will download a summary of the TSX60 index.

These are the values quoted:
“P/E Trailing: 49.61
P/E (Projected): 18.74
P/B: 2.04
Indicated Dividend Yield: 2.94%”

**************************************
Okay, so the 49.6 actual trailing P/E agrees more or less with the Statistics Canada figure I gave a link to in post 42. Good.

BUT it also confirms that the trailing P/E claimed by ishares that I also linked to in post 42 is utterly false at 16.99.

Now the 16.99 may be more meaningful of the future but it is a false representation of the trailing P/E ratio. And ishares does not explain that it (apparently) excluded negative figures.

In my experience, the P/E ratios of the TSX and various segments provided by ishares are not to be trusted.

As for forward P/Es they are never to be trusted, because they are notoriously biased too low by optimism. Projected earnings growth is optimistically high.

But the source that Mark gave for trailing P/Es does appear to have honest trailing figures so that is very useful. And it has the sub-indexes as well. Thank you.

So ignore any P/E figures shown by ishares and use the link Mark provided for trailing P/E figures. As for forward P/Es I trust no one.

#132 InvestorsFriend on 11.29.16 at 11:43 am

Mark and the Gold Standard

#99 Mark on 11.29.16 at 12:28 am responded to Garth

“No major nation will ever return to rocks. “

The gold standard isn’t about using gold as a medium of exchange. It is merely about the ability to exchange, officially, ones currency for gold, or vice versa. If you divide the official amount of US currency in existence (3.3T) by the amount of gold that is in US reserves (261.5MOz) yields a gold price of $1260/ounce. Which is precisely where gold is today, give or take daily trading fluctuations. So based on the current monetary base as expressed in M1, gold is neither overvalued nor undervalued to any degree of significance.

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

Now THAT would be remarkable if true.

But check the math, assuming the data is correct, I get $12,620 per ounce, or am I mistaken? (A lot of zeros to get confused by)

Gold has been notoriously volatile and so any link to M1 at a point in time is not too meaningful without checking it over the years.

And why M1? Is that the only measure of money that matters?

But if Mark is right, he should definitely publish this important revelation.

But I suspect there is absolutely NO relation between the value of Gold in U.S. dollars and how much of the stuff the U.S. happens to have buried at Fort Knox. Nor, is there any basis for such a relationship given that the U.S. is not on a gold standard.

#133 Alice on 11.29.16 at 11:45 am

Jeeze, the best job in Canada is owning a home. The second best is waiting in line for one? FML

#134 Alice on 11.29.16 at 11:47 am

#128 Suchbull on 11.29.16 at 11:21 am

What’s racist? He’s actually holding back compared to different levels of our government.

#135 InvestorsFriend on 11.29.16 at 11:52 am

Case Shiller Cyclical P/E Gives Wrong Signal

#83 mark on 11.28.16 at 10:28 pm said:

The CAPE 10 ratio is signaling the U.S. market overvalued and pricey.

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

The Case Shiller Cyclically adjusted 10 year P/E has been erroneously signalling an overvalued U.S. stock market since at least 2010.

Be very cautious of simple signals like that.

Trust instead Warren Buffett.

Remember my rule number 1.

#136 Aggregator on 11.29.16 at 12:04 pm

#107 Wrk.doverguess what they all have in common— they have access to realtime raw date of all Canadians and their financial situations– not some fairy dust pseudo alice in wonderland claims from media but the REAL numbers

There is plenty of data to monitor. You just have to know where to find it.

BC Registered New Homes This is the Bank of Canada's leading economic indicator for BC. Ironically, real estate is so large as a percentage of the economy that it's now the leading indicator of BC's GDP. It's also a proxy for monitoring the presale market (Warranty Insurance Claims).

The top indicator of them all is still Canada's bond yield curve. At least from a macro point of view.

#137 For those about to flop... on 11.29.16 at 12:27 pm

Well ,we all remember the picture of the boss and Joking Man out the front of the store.

Here is a close up…

M42BC

http://imgur.com/a/YkILP

#138 nothing but good news on 11.29.16 at 12:29 pm

#101 Chelsea
“With the exception of 5 days, it has rained every day in Vancouver for the last two months. Rainfall amounts are above normal as well. We have likely broken our rainfall records. Lots of houses now with plastic tarps on their roofs.”

You know spring is “in the air” when you smell manure all the way from the valley. You know fall/winter is here when the staple blue tarps start to appear on the roofs and “we fix your leaks and drainage problems” ads pop-up on radio and tv.

#139 InvestorsFriend on 11.29.16 at 12:34 pm

Good Investment versus Good Dividend Yield

#130 Doug in London on 11.29.16 at 11:28 am said:

at long last XFN could come back to a sensible price and be a good investment. Presently, it’s priced so it has a paltry yield of 2.9 %.

*****************************************
A high dividend yield is neither a required condition nor a sufficient condition for a good investment.

Bank shareholders would be harmed if banks paid higher dividends rather than retaining the money to invest at their typical ROEs in excess if 12%.

Did you miss out on holding XFN? It’s been a very good investment.

Was it a wise old investor who was asked: “Why do you Invest in Banks” and he said “Because that’s where the money is”?

#140 Context on 11.29.16 at 12:43 pm

#128 Suchbull :- Oh really, since when cannot a client think for themselves based upon intelligent facts and make their own decisions with common sense. Is it up to a Realtor to force a decision upon a client by using deception and unethical manipulation as a form of mind control to earn a commission?

#141 Wolfram on 11.29.16 at 1:15 pm

It’s the listings, people!

I see no mention in any of these well informed posts about the number of listings. Regarding the Victoria market at least, sales are down because listings are down. Locals (and there are still a few of us here) ain’t listing in this madness because in this country, there’s no where better to go if we do sell.

Sure, I could sell my bungalow for a quick $650k today (overpaid $390k in 2007, put very little into it) but where would we go? Markham? Saskatoon? Port Alberni? Coshitlam? Eeesh…

Detached houses are selling in 1-3 days here in Canada’s Hawaii (sorry, but the ocean is right across the street, it’s about 9 degrees, and I’ll be mowing my lawn in shorts later this November afternoon).

And rentals, well, I dumped two rental condos six months ago. Old stock, dumpy building, but never even an hour vacant in the past 8 years, but the writing is on the wall. Condos = overbuilt and still building.

Single detached, small house, huge lot? They ain’t making more land on this island folks…

Once the flow of mainland imports dries up, and the obscenely low vacancy rate ‘improves’, then sure, I give you one real estate correction. But it’s hitting condos, like it does every 25-30 years here, and barely touching the main market of houses.

Anyway, enjoy your snow, ice, and sleet, TROC.

#142 Wrk.dover on 11.29.16 at 1:19 pm

#124 Dogman01 on 11.29.16 at 10:52 am
Something to share: as a lot of people expect “the deal” and a lot of our society is based on that expectation; it produces stability……

https://www.linkedin.com/pulse/think-2016-crazy-wait-until-accountants-get-replaced-robots-mckissen?trk=hp-feed-article-title-hpm

“So I tried to get my Deal.
I went to college. I worked hard. I didn’t buy a $500,000 home when our household income was less than $50,000. And I assumed – and continue to assume – if I adhere to the terms of a subconsciously imagined deal, my family and I will be okay.
In other words, because I’ve done what’s expected, I’ll get what I’m expecting.
Except a lot of people are learning that it doesn’t always work like that.

——–

And they will finance all of that automation with your savings.

#143 traderJim on 11.29.16 at 1:31 pm

#104 future expat

Trump 306 Hillary 232

How are those recounts going for ya? I think the money you sent to Stein might just go to Stein’s next campaign, no refunds remember.

37 electoral votes needed to switch. I hear the death threats Republican electors are receiving are increasing in frequency and seriousness, but still looks like the Dems won’t be able to steal the election.

Time to move to Mexico!

(p.s. You probably hate it, but Mexico is great. Good food, inexpensive, safe if you go to Yucatan, extraordinarily friendly people, beautiful women, warm climate, beaches. What are you waiting for?)

#144 Context on 11.29.16 at 1:45 pm

#139 InvestorsFriend:- To answer your question as it was originally asked of a bank robber as thus: Why do you rob banks and he said because that is where the money is.

#145 Mark on 11.29.16 at 1:48 pm

Scotiabank (BNS) results out this morning.

In short, BNS just killed it this past year.

And as house prices continue to fall nationwide (3 years of stagnation thus far in the big cities of Toronto/Vancouver), spreads will expand in favour of the banks. As the BoC, in response to the slow economy resulting from the housing slowdown, is forced to keep policy rates low.

Probably similar results at the other banks. Subprime lending tends to be more profitable (even after netting for losses/writedowns) than prime lending. So as Canadian credit metrics deteriorate, bank profits should continue to accelerate.

#146 Mark on 11.29.16 at 1:53 pm

“Bank shareholders would be harmed if banks paid higher dividends rather than retaining the money to invest at their typical ROEs in excess if 12%.”

16.4% for BNS last year. :)

But I’d have to disagree with your point. If banks re-invest excessively in bank capital formation (instead of paying dividends to their owners), the banks will damage their margins as more capacity will be brought to market than the market can bear. With house prices falling, and loan demand probably stagnating/falling with it, there is little need for the banks to retain earnings as there is likely to be little balance sheet expansion for quite a while to come.

So the banks would probably be best served going to higher payout ratios, whether through dividends, or through share buybacks. Rather than retaining earnings and getting into a price war which will damage everyone.

#147 Penny Henny on 11.29.16 at 1:54 pm

Today’s picture.
What is it about this picture that just makes me want to pound this guy in the head?

#148 Samantha on 11.29.16 at 2:07 pm

Mark, how do you expect anybody to take you seriously if you can’t do basic math?

Trillion = 1,000,000,000,000

3.3T / 261.5M = 3,300,000,000,000 / 261,500,000 = $12,619.50 for an ounce of gold.

I’m not saying this is a fair price for gold, however learn to use a calculator before opening your mouth and presenting us with another healthy dose of ignorance and BS.

You know what calculator is, right Mark?

————————————-

Mark on 11.29.16 at 12:28 am

“No major nation will ever return to rocks. “

The gold standard isn’t about using gold as a medium of exchange. It is merely about the ability to exchange, officially, ones currency for gold, or vice versa. If you divide the official amount of US currency in existence (3.3T) by the amount of gold that is in US reserves (261.5MOz) yields a gold price of $1260/ounce. Which is precisely where gold is today, give or take daily trading fluctuations. So based on the current monetary base as expressed in M1, gold is neither overvalued nor undervalued to any degree of significance.

The real elephant in the room is that as higher interest rates and deflation take hold, that the monetary base will need to expand significantly to prevent the economy from going into hyperdeflation. And such would show up in a higher gold price, and, as some suggest, a speculative mania as additional gains and expansion in the monetary base are further anticipated.

Personally I’m a fan of producing miners, which are a spread play between the cost of labour, the cost of energy, and the price of gold.

#149 Mark on 11.29.16 at 2:10 pm

“But check the math, assuming the data is correct, I get $12,620 per ounce, or am I mistaken? (A lot of zeros to get confused by)”

3.3 x 10^12 (trillion)
divided by
261.5 x 10^6 (million)

equals

3.3 x 10^12 (trillion)
divided by
2.615 x 10^8 (100 million)

3.3 / 2.615 ~ 1.26 x 10^(12-8)

= $1260/ounce.

I think that’s right. Most of the goldbugs use M3 when they come to their extravagant $10,000+/ounce claims (bigger numbers help sell their idea that gold is undervalued!). M3 being, of course, a reflection of all debt in the economy, public and private. Not just US currency in existence. The US government would have no obligation to redeem such credit instruments into gold under a hypothetical gold standard.

#150 TurnerNation on 11.29.16 at 2:12 pm

Are we witnessing our future in other cities?

State agents (police) are liquidating more lives than a war zone.

….
This is the 10th shooting by Calgary police in 2016 that has either injured or killed someone. Five, including this morning’s shooting, have been fatal.

Calgary police officers have shot more civilians than officers in any other Canadian city in 2016, according to statistics gathered by CBC News

http://www.cbc.ca/news/canada/calgary/woman-shot-dead-police-sunalta-1.3872286

#151 InvestorsFriend on 11.29.16 at 2:23 pm

The Toronto Stock Index is useless

It is composed 34% by Financials, 21% by Energy, 13% by materials and just 3% by real estate companies.

The TSX index is a poor representation of the Canadian economy (real estate 3%)

According to Statistics Canada CANSIM Table 176-0047, its trailing P/E is 58.

Its trailing GAAP earnings are $255. Going back to the year 2000 its earnings look like a random variable ranging from negative (2001) to a peak of $839 in 2011. The ten year average is $639.

If we use the ten year trailing average the P/E is 23.

And it may be generous to use that level considering that the current earnings are $255 and the past ten years were boosted by high oil prices.

We may never get back to $100 oil unless the OPEC cartel gets a lot stronger.

In short the TSX is not a good index for Canada. If you invest with ETFs then choose several from different segments to get a better representation of the economy.

#152 James on 11.29.16 at 2:26 pm

Why purchase a condo, 90% will be rentals anyway. Might as well rent so you will surrounded by like minded people who don’t give a shit about their property or yours. I have seen it happen so many times before where people say oh but my property is a classy high end condo. Ha, the renters don’t care if its high end or low, if they have the $$ the owners will rent it out to make a profit. It’s like cockroaches it starts with a few and then an infestation. Then the property value goes down all the while the fees start to rocket. Double edged sword people, you can’t control anything with a condo. So rent!

#153 Mark on 11.29.16 at 2:31 pm

Bleh, I’m sorry InvestorsFriend and everyone else who read my two previous posts. 1.26 x 10^4 is $12,600, not $1260. Hence, gold is severely undervalued if a gold standard, with redeemability of US currency were ever to take place. And if M1 eventually converges with M3, gold is the deal of a lifetime at current prices.

Sorry, it wasn’t my intent to mislead anyone. The ‘math’ was correct. Just that I converted 10^4 to 1000 instead of the proper 10,000.

#154 For those about to flop... on 11.29.16 at 2:33 pm

The Metrosexual Messiah must have put too much catnip on this morning.

He is getting clawed…

M42BC

#155 Pete on 11.29.16 at 2:36 pm

Wouldn’t hiring fake buyers be tantamount to ‘creating a fake demand/false level of interest’ or ‘manipulating the market’. I think that is considered illegal in the financial world (although I don’t believe that it should be).

#156 45north on 11.29.16 at 2:44 pm

Renter’s Revenge: I used to get that feeling when I read zerohedge every day. Then I stopped reading it and the feeling went away.

Word becomes flesh

profound

#157 F for Failure on the FBT on 11.29.16 at 2:51 pm

Uh oh, it looks like the Vancouver tax is not having its desire effect :)

“The number of foreign purchasers involved in Metro Vancouver residential real estate transactions increased from September to October, as the market continues to digest the 15 per cent additional tax applied to sales by non-Canadian buyers as of August 2.

For Metro Vancouver as a whole, the number of transactions involving foreign buyers rose from 1.8 per cent of the total in September to 3 percent in October, according to data released Tuesday by the province. ”

http://vancouversun.com/business/real-estate/foreign-buyers-involved-in-more-metro-vancouver-residential-real-estate-transactions-in-october

So while a stalemate has taken place between buyers and sellers with no price declines, it looks like the market is going to be reinvigorated with new FOMO and more foreign buyers! Once more foreign buyers are in jacking up prices the locals will follow.

Sorry bears. Its not over till the fat lady sings and you started clapping for her before she even opened her mouth.

It looks like the 15% tax will have the exact same effect in Vancouver as the 15% tax in Hong Kong – it simply held prices flat for a year in 2012 and then prices resumed their upward trajectory! There is no stomping the flow of foreign capital…

#158 Suchbull on 11.29.16 at 3:27 pm

@ #140 context
It sounds to me like you have had a bad experience with realtors before. Not everyone is like that, but thanks for pointing out your opinion “Trump”!

@ #134 Alice
I quote ” And that’s when you hire Shannen and her Lawn Asians.”
If this isn’t racist I don’t know what is!

@ #141 wolfram
What are you even talking about “It’s the listings, people!”??

Let’s face it people… If you’ve got enough money to afford a Presale you must have enough money to pay people to stand in line for 5 days to secure a spot for your customer!

#159 Doug in London on 11.29.16 at 3:30 pm

@Investors friend, post #139;
Yes, I missed out on XFN. Why? Because I put money into REITs and electric utilities like NPI instead. At their present price they have yields around 5%. Considering I bought them on sale in 2013 my yield is higher than 5% and much higher than the paltry yield on XFN. I much prefer to buy investments when they are on sale. How do I know when they are on sale? When a lot of the ‘experts’ here complain about how far their prices have dropped. Now. If you’ll excuse me, I’ll sign off and see what’s on sale these days. I recently scooped up some ZPR and may scoop up even more if the Black Friday sales are still on. As I’ve said many times before, invest like a governor that responds to a drop in speed by giving the engine more fuel/air mixture to produce more power to pull the speed back up.

#160 WalMark of Sadkatoon on 11.29.16 at 3:49 pm

If you divide the official amount of US currency in existence (3.3T) by the amount of gold that is in US reserves (261.5MOz) yields a gold price of $1260/ounce.

No.

Dec 31st, 2013 If you go by the Dow:Gold ratio, we’re looking at more than $16,000/ounce today (although the Dow probably will end up falling). If you look at the ratio between outstanding US treasury debt and the price of gold, the price could be in excess of $20k.
http://forums.redflagdeals.com/gold-bubble-bursts-1431262/#p18103199

Lol.

#161 rainclouds on 11.29.16 at 3:53 pm

#157 F for Failure

Did you actually read the Bob Rennie “advertorial” puff piece the Sun so compliantly printed.

And the idiots at the Sun wonder why nobody buys their fish wrapper.

Lemme guess, you sell used houses in YVR.

#162 Context on 11.29.16 at 4:06 pm

#143 traderJim: I just know you must be kidding in jest as the Yucatan is filled with cartel wars. November 28th in the heart of Cancun’s hotel zone multiple gunshots were heard on Sunday night leaving death and injuries. A cartel group sprayed the Mandala and Congo bar because they didn’t pay their union dues aka protection money.

#163 InvestorsFriend on 11.29.16 at 4:08 pm

#144 Context on 11.29.16 at 1:45 pm responded

#139 InvestorsFriend:- To answer your question as it was originally asked of a bank robber as thus: Why do you rob banks and he said because that is where the money is.

*********************************
Yes, I thought most people would get the reference.

It is interesting though how bank investors get to sort of legally “rob” bank borrowers and bank customers. They willingly give us our profits. Gotta love it.

#164 InvestorsFriend on 11.29.16 at 4:26 pm

Gold Standard Non Sequitor

Mark (sort of) admits his math error and then goes on to make silly conclusions not justified by the premises

Mark said:

Bleh, I’m sorry InvestorsFriend and everyone else who read my two previous posts. 1.26 x 10^4 is $12,600, not $1260. Hence, gold is severely undervalued if a gold standard, with redeemability of US currency were ever to take place. And if M1 eventually converges with M3, gold is the deal of a lifetime at current prices.

Sorry, it wasn’t my intent to mislead anyone. The ‘math’ was correct. Just that I converted 10^4 to 1000 instead of the proper 10,000.

*********************************
No worries about the math error. But the whole calculation is ludicrous. Gold is just one of millions of things priced in dollars.

You should have known there was an error when you value of Gold magically matched M1.

Call me please when dollars are priced in grains of Gold.

There is no gold standard. Nor will there be.

The value of gold in dollars has NOTHING to do with the quantity of dollars compared to the quantity of existing gold reserves in the world or in Fort Knox.

The value of Gold is logically related to how many dollars or pesos or whatever it takes to go and find new gold in the ground. And occasionally it can deviate from that due to speculation but in the long run the price of Gold like the price of oil is related to the cost of finding it and producing it from the raw state.

But if you believe your purported relation exists or will exist then by all means go buy some Gold.

Your original point was that Gold IS fairly valued today without the Gold standard. Now you try to change to the value if a Gold Standard were to be brought in, which is simply a fantasy.

That was Garth’s point that you weighted in on. THERE IS NO GOLD STANDARD.

#165 Context on 11.29.16 at 5:01 pm

#152 James:- Good presentation and agree with much of what you have to say. There are exceptions in the City of Toronto with a more dignified ownership with a meeting of the minds. The Board of Directors makes the rules and regulations of ownership with a meeting of the collective majority. In some cases there is a no renting out rule and if you do are history and must sell.

#166 bdwy sktrn on 11.29.16 at 5:06 pm

kinder morgan approved!

t-ball trudeau triggers tender snowflakes..

#167 traderJim on 11.29.16 at 6:26 pm

#162 context

What, a little machine gun fire scares you off? You don’t know how to duck when you hear the motos roaring up the street?

Wuss.

Speaking of real estate, I was in Playa del Carmen 30 years ago when it was a dirt road hippie hangout. I knew it would be huge one day. But I was a young lad just starting a career and couldn’t stay or invest.

Too bad, it would have been more fun and maybe more rewarding than Bay St.

#168 Dave on 11.29.16 at 9:07 pm

It worked, the local Global BCTV picked up the story on people camping out for condo’s

#169 Future Expatriate on 12.01.16 at 7:51 am

#123 Do I look nuts to you?

Guess again.