Another day. More reasons to fret about the future value of your home. They’re coming faster and furiouser than Vin Diesel flicks.
And then there were but two…
National Bank has just pulled out of the mortgage brokerage business, leaving only two major banks (Scotia and TD, for now) willing to fund home loans through the broker channel. The move seems a direct result of Wild Bill Morneau’s draconian moves to tighten up on lending, reduce loans to certain borrowers (kids, the self-employed, amateur landlords) and try to wrestle the gasping, bloated real estate gasbag softly back to earth before it blows up the entire deplorables class.
It’s “a stinging blow” says the leading mortgage brokerage site, and although National will continue for the time being to offer money through a third-party provider (Paradigm Quest), but this is no vote of confidence in the entire residential real estate scene.
“Anything but normal.” Ya think?….
Blood continues to seep out of Vancouver houses and rivulet down the gutters. The latest sales numbers are just as bad as the ones published last month. On Friday the Van board announced a 37.2% plop in deals during November, coming after a 38.8% rout in October. Ouch.
“While 2016 has been anything but a normal year for the Metro Vancouver housing market,” said cartel boss Dan Morrison, practicing for his gig at Yuk Yuk’s, “supply and demand totals have returned to more historically normal levels over the last few months.”
The average detached house price has dropped in price by just over $200,000 now. Last month the benchmark was down 2.2% from the previous month (26% annualized), and sales have collapsed 52% from this time one year ago. In the entire region, only 638 changed hands. Still working on his routine, Mr. Morrison put on his clown shoes and said, “detached homes are seeing modest month-over-month declines.”
“Wait and see” time in the Big Smoke…
Despite rising prices and a paucity of listings, some Toronto realtors are trying to frame news of the inevitable declines to come. “The urgency seems to be seeping out of Toronto’s real estate market as the year comes to a close,” reported Canada’s national house porn journal, the Globe and Mail, as the week ended.
“I think people have frankly gone into a ‘wait and see’ mode,” agent Janet Lindsay says. The reasons are simple, obvious. Trump. The bond market. Mortgage crackdown. And unsustainable prices in the GTA, where the average suburban house is now almost a million. There’s something in the air. Not snow.
Well, so much for that bronco…
Poor Cowtown. Things were looking so frisky for a month or two as house sales popped higher, breaking a year-long string of losses. But, alas, we are gelded once again. “The gains in last month’s sales were temporary,” says CREB chief economist Ann-Marie Laurie. “Stringent conditions for borrowers are converging with the current economic climate and weighing on demand.”
She means Wild Bill’s new rules, combined with 21,000 lost jobs, apoplectic landlords and tumbleweeds rivalling cars in downtown Calgary. Property sales last month were 17% below long-term averages with prices running about 4% less than year-ago levels. For the first time in almost three years the typical detached house is changing hands for less than $500,000.
Just eleven more sleeps…
After the latest US job stats, there’s no doubt American interest rates will be heading higher on December 14th. Close to 180,000 new hires came on stream, with the unemployment rate falling to 4.6%. Given American (and Canadian) demographics and a huge wave of retiring Boomers, this is now considered full employment.
Combine that with the bond market massacre since that goofy billionaire was elected, a stock market surge, looming tax cuts, inflationary government stimulus spending, raging greenback and an outbreak of trade protectionism, and you have the perfect storm for the rising cost of money. The Fed will move next month and (markets believe) twice more in 2017. Given Canada’s better job numbers and GDP growth, plus steamy bond yields, the next Bank of Canada move will be up, not down.
Well, that’s today’s news. Join me for a scotch? Or three?
153 comments ↓
Always wanted to be first to tell the world that Garth deserves our love and respect.
Treat him well
For anyone interested in U.S debt.
2 minute video for the kiddies…
M42BC
https://howmuch.net
Garth, I would love to join you for a scotch or two when you visit Ottawa
But “goofy” POTUS?
Maybe not: http://www.israpundit.org/archives/63619827
Has anybody posted this before? These are profiles of Vancouver residents and how they spend their monthly paycheque: http://vanmag.com/tag/month-to-month/
They include:
A burlesque dancer who’s cash flow negative
A lawyer who pays below-market rent for a condo her mother owns
A guy living in his van who spends $300/month on coffee
An engineer who has his act together…and was probably gifted a down payment by his parents
A barista who breaks even (no savings) on $25,000 a year
#78 Damifino on 12.01.16 at 10:50 pm
Here’s some more quick math. $1.4 invested with an average return of 6% annually gets you $7000/mo indefinitely.
And guess, what is the quickest way to amass a 1.4M working capital?
Well, you buy a YVR home at 1M, and sell it at 2.4M.
There’s your investment capital.
im in garth
my poison is great western beer and a wee bit of the herb
Thanks for the update GT! Always go to your site for happenings in RE and markets.
Scotch… I am in. I’ll bring a growler of Vancouver Island’s finest craft beer too.
Don’t forget swamp gas , Venus and mass hallucinations.
Got a favorite scotch, Garth?
Vancouver: The average detached house price has dropped in price by just over $200,000 now. Last month the benchmark was down 2.2% from the previous month (26% annualized), and sales have collapsed 52% from this time one year ago.
which is pretty much in line with Ross Kay: Vancouver and BC real estate has just gone down 20%.
Ace Goodheart: posted this link yesterday:
http://torontolife.com/real-estate/how-private-lenders-and-debt-crazed-homebuyers-are-pushing-torontos-real-estate-market-to-the-brink/
For the time being, high prices have the ability to forgive even the most egregious disasters of household negligence. The Millers are the perfect example. They bought a bad property and over the course of a decade made it worse. Yet at the time they sold, it had appreciated by an astonishing 80 per cent. “If the market isn’t strong, they lose everything,” says Alphonso.
Draconian? Hardly.
Someone had to have the balls to fend off the lobbyists and undo F’s short sightedness, returning the market (human shelter should never have become a market in the first place) to reason and affordability. There are plenty of other more sensible ways to create wealth without the social repercussions of an expanding have/have-not society.
Repealing the Dodd-Frank Act across the border? Now that’s draconian, with entirely predicable results. Welcome to GFC v2.0, the sequel.
In your opinion will the effects of these changes be seen across the board in Canada? What about real estate in places like Brandon, Moose Jaw, Lethbridge, Red Deer or Kamloops? If these market prices were never pushed to extent of Van or TO or Cowtown what do you expect to see there? Same questions goes for price for farmland? Curious what you think about the effects on more rural RE.
Wish for 2017…only articles about trump please. Canadian RE getting so boring.
#5 Bram on 12.02.16 at 5:58 pm
“And guess, what is the quickest way to amass a 1.4M working capital? Well, you buy a YVR home at 1M, and sell it at 2.4M.”
————————————
You are very nearly correct. You only need to change the word “is” to “was”.
That’s why Garth was imploring people to take their tax free windfalls last summer. That ship has now sailed out of YVR and will be soon be disembarking from the big smoke.
Going forward, people will have to start amassing wealth with tedious, old fashioned methods.
About the big smoke RE, the global news reported otherwise, just finished the evening news about the stat on Toronto sales and prices surging over 20% from a year ago? Is this for real or just the real estate board tactic to scare more ppl of missing out and jump in the bandwagon? It just so confused…
But as a renter….. not tempted in any sense… in fact if this trend keep going 20% year after year, blowing up is not far away….. fasten your seat belt…. we are about to crash.
Vancouver prices are so far out of line that so far the drop is meaningless to those who don’t have a house.
The real estate market is changing in Toronto. I know those who are leveraged up to their eyeballs and who just bought recently will respond angrily to this post, or try and correct my grammar, but SFH are not moving in my Toronto tree lined neck of the woods. There are a few houses that have been sitting and sitting. They are not overpriced, they look nice, but they are not moving. Every weekend an open house. No cars, no Chinese dudes, no one. Fine it’s December but these houses have been listed for months – no movement, no bidding wars, nada! I am telling you, the market is changing and the Frakennumbers that appear in the papers are presented in a way that doesn’t represent what’s really happening.
Getting tired of this. Some intervention by Ont Libs is sorely needed.
Home sales through the Multiple Listing System (MLS® System) of the Kitchener-Waterloo Association of REALTORS® (KWAR), totalled 535 last month, an increase of 27.1 percent compared to November of 2015, marking another record breaking month for residential properties sold in Kitchener-Waterloo and area.
From Reddit Calgary today: The real story.
The bank took my home of 10 years today. It was on the market for over eight months, we dropped the price over $50G, and we never got a single offer.
https://www.reddit.com/r/Calgary/comments/5fzlq3/calgary_home_sales_drop_3_in_november_as_new/
Calgary will never decline they said.
Vancouver can’t go down they said.
Toronto will never go anywhere but up they continue to say. “We’re special”, yeah, in the Olympic sense of the word.
It’s a world-class B.S. bubble that will unwind like a coil spring. If you think you saw crying after Trump’s win, wait till you see this thing pop.
Attn. new Blog Dogs, the following username are still available:
Baronial Bagholder
TokerNation
Buster Reeko
Triggering Troll
Tankard & Canards
KJV, AU and S&W
Social Justice Worrier
Luxuriating Elite
Long Branchidian
Reserved:
Blog Dog Poloz
Garth…you are the Best !!!
I have Charts up now for Vancouver Toronto and Calgary housing data: http://www.chpc.biz/
NOV 2016
Higher Average Prices in Vancouver than GTA:
43% more for a SFD
11% more for a Town House
15% more for a Condo
More Listings & Sales in GTA than Vancouver:
1.0 x more Listings & 3.9 x more Sales
Monthly Absorption Rate GTA:VAN = 3.7:1
Ratio of SFD to Strata
1 VAN SFD = 2.3 VAN Town Houses
1 GTA SFD = 1.8 GTA Town Houses
1 VAN SFD = 3.0 VAN Condos
1 GTA SFD = 2.4 GTA Condos
Earners needed to buy an average SFD:
VAN = 5.3 and GTA = 3.4 earners
10 Year SFD Inflation Rate:
VAN = 133% and GTA = 139% (first time Toronto has exceeded Vancouver since I have been recording the data. Toronto mania and fear of missing out is at record highs with the absorption rate still bumping up against 100%
@ #10 I would guess
https://en.wikipedia.org/wiki/Black_Dog_Scotch_Whisky
Oh Timmy…. timmy ….timmy! This isn’t a drop! This is just the tip of the iceberg!
http://www.richmond-news.com/news/weekly-feature/ghost-city-realtor-finds-large-number-of-city-centre-condos-vacant-1.3640322
Garth must have skipped the second half of his day job today, because this is the #best post ever.
I’d vote for #Garth if he ever runs for office and tries to Make Canada Great again!
#5 Bram on 12.02.16 at 5:58 pm
Well, you buy a YVR home at 1M, and sell it at 2.4M.
There’s your investment capital.
—–
Go do that right now.
I dare you, I DOUBLE dare you…
#4 Trading Naked: – I found an expense with Barista that is for clothes and $73.00 per month is way too high. She needs to buy wholesale where bargains can be found at a large Goodwill Store. I have seen this, as wealthy ladies kick the bucket and the heirs take the clothes there. I have seen designer dresses that may have been worn once that retail for $3,000 and can be had for $25. General clothing costs $2 to $5 a throw, as took a guy who was down on his luck and he came out looking like a millionaire for $20.
I have a “slightly abused” 35 year old bottle of BruichLaddich and a “heavily assaulted” 25 year old Highland Park .
Garth.
If you ever get stranded in Lotusland , you can crash at my rental. Your own “bedside” bottle of 12 year old McCallans will make the plebeian conversation and uncomfortable couch springs a little more tolerable…….
#20 Todd on 12.02.16 at 7:04 pm
Getting tired of this. Some intervention by Ont Libs is sorely needed.
——–
Careful what you wish for…
“First day on the job!
Very exciting week. Moved into new house yesterday, hand over the keys to the old one today to a young couple expecting their first child. Many fond memories for us there where we started our own family. Will be for them as well
And today marks my first day as the CEO of the Ontario Real Estate Association. The transition has been a great experience, getting advice from real estate professionals across Ontario and others close to the profession.
Now the training wheels come off.
Many thanks to my predecessor CEO Ed Barisa for his wise and successful time at the helm over 16 years. His leadership built a strong association and stood up for Ontario REALTORS and home owners.”
– Tim Hudak
Real estate prices are no longer considered a polite topic of conversation during Friday night dinners in this suburban Toronto home.
It always ends badly. The older generation who bought their homes 30 years ago telling the youngsters it was hard for them too. The kids respond with fury and disbelief.
Lots of heat but no light on this Sabbath.
The pic.. A lefty dog on Nov 8th 2016
http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/personal-finance/how-to-prepare-for-the-housing-crash-that-may-not-actually-happen&pubdate=2016-12-02
Imagine for a brief moment all the people who have predicted a housing crash in Canada for at least half a decade actually turn out to be right at some point.
Now take it a step further and picture yourself as the homeowner who bought at the top of the market and is now under water — namely you have more mortgage than your house is worth.
The question you might be asking yourself is, “Now, what do I do?” For starters, don’t panic.
#19 what part of Toronto?
Monthly TREB numbers were released today. 416 and 905 still red hot.
“just ask for data, and he’ll go away. very simple”
I provided data. Another guy provided data. The mortgage broker/Realtor trolls harassed the ops until him, and then I, were banned.
Really unfortunate. Fortunately Garth doesn’t stand for that crap here.
“You are wrong. U.S. bank shares rose this past few weeks because their earnings per share are quite rationally expected to rise as lending spreads rise and because they had been trading at low multiples of existing earnings. Banks are paying about zero on deposits.”
As rates rise, funding those portfolios (ie: the cost of borrowing or deposits) becomes more expensive. A lot more expensive, especially as the market senses weakening equity and increases the risk premia market participants, including public depositors, demand for their money.
Hence, in a rising long-term rate environment, margins shrink. Not expand. Expansion is seen in the falling rate environment, where gross margins can expand to near infinity as funding costs fall faster than return on investment.
Its pretty simple math. Intuitively, if banks have benefitted through falling rates (which they obviously have — being some of the most extravagantly compensating firms in the world, with large shareholder dividends and returns to boot!) — they will suffer with rising rates. The “stock market” might be fooled temporarily, but the market cannot remain perpetually irrational in response to declining earnings ability and falling portfolio valuations. Even if the ‘accounting’, at least for the moment, can appear to not reflect losses.
The low multiples were rational given the inevitability of rising rates and declining earnings power. Multiple expansion in the face of declining earnings usually only leads to pretty severe outcomes. When everything is said and done, the (US) bank index, a decade or two from now, will resemble the ^XAU or the ^GDX indices for the past few decades. A depressing waste of capital in hindsight.
The rank and file are finally catching on to what Lord Garth has been preaching for decades. Poor fools.
http://www.vice.com/en_ca/read/what-would-happen-to-the-economy-if-young-people-never-buy-homes?utm_content=buffercdea5&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
RE: #19 I know there will be haters but:
“Every weekend an open house. No cars, no Chinese dudes, no one. Fine it’s December but these houses have been listed for months – no movement, no bidding wars, nada!”
Your culprit is goldilocks.
How could a young girl in a fairy tale have anything to do with house prices?
Well actually, she has nothing to do with that. But I have this little theory called the “goldilocks zone” which I use to accurately predict housing prices in various markets.
I start with a “middle class family”. I figure such family, with two working partners earning around 80K each (or one earning more than the other) could bring in around 120K per year after taxes.
I then assume that they have alternative sources of funding, relatives, savings, friends, etc around 80K to 100K or so.
I then look at every possible method that this couple could use, to finance the purchase of an over priced house that they cannot afford.
The maximum price that they could possibly pay, using every method of credit available to them and all of their savings, is the “Goldilocks Zone” for house prices.
That is the “top of the market”. Once you are beyond that, the middle class can no longer afford the houses and they become toys for the 1%.
As we all know, selling to the 1% is not a business proposition, it is a hobby. It is not profitable and there is no market for doing this. Airplane companies sell jets to the 1% as a fringe business (their main business is selling passenger jets to the airlines, who cater to the middle class). There is no money in selling anything to the 1%. Any market aimed entirely at this demographic is doomed to failure.
Any product that gets so expensive, that only the 1% can afford it, will experience an immediate “Crash” in sales, as soon as its price level gets out of the “Goldilocks zone” of middle class affordability.
So if the govt and the banks trash the mortgage market and the Trumpster gets elected, then the Goldilocks zone price range goes down.
You know what happens next…….
#30 IHCTD9 on 12.02.16 at 7:43 pm
#5 Bram on 12.02.16 at 5:58 pm
Well, you buy a YVR home at 1M, and sell it at 2.4M.
There’s your investment capital.
—–
Go do that right now.
I dare you, I DOUBLE dare you…
—————–
it may take more than the 5 years it took last time, but any 1m piece of dirt in vancity will most assuredly reach 2.4m sometime in the future – guaranteed.
25′ lot on e. pender, about 50 steps from crackville, with nice house just sold for a hair under 2m
In Niagara I’ve been visiting open houses and talking to the realtors. From what they’ve been telling me the biggest problem right now are the appraisals are coming in low and causing the deals to break due to financing problems.
Altho I have had disappointing book sales.. The emails of encourgement and reviews Ive had from some real movers and shakers out there.. Amazing..
Going to put a serious marketing campain shortly.. Need to have a paper back avalable.
Just saying.
Garth your pathetic blog has reach… Probably far beyond what you think it does.
So glad I chose to be part of it rather than pushing dyslexicsmokingman.blogspot.com
I will always be part of it…. Why?
You radiate goodness no matter how much you try to hide it.. You must had great parents.
Im to nice.. Getting into the JD soon…
Yes, but Garth, the “new” pipeline and the OPEC deal
will resurect Cal’n’Ed and send RE blue sky high again!
(unless the youngsters figure out what a commodity is)
…an ole native calgarian…
I was disappointed not to be invited to the opening of the Evergreen transit line today.
I guess they didn’t trust me with Christy Clark and a pair of scissors in the same vicinity…
M42BC
The hillbilly band at the bar at seneca alighany playing copper head road.
A blond babe dancing a wierd and hypnotic country dance to it.. She got tiny feet.. We all know what means..
I’m in love…. Better pound down the JD faster and render myself usless..
Shit I do for a happy marrage.. I should win a nobel prize for the scarifises I make.
I have one system for Toronto and selective other areas that will give me the daily stats. Just need property type, area name, community name, street intersection, and first three digits of the postal code. It tells me everything daily that is occurring in your very neighbourhood too.
PS…
Sure I’ll join ya this evening with a nice Islay,
it’s a bit rainy out here in Victoria. Cheers!
#16 Damifino on 12.02.16 at 6:42 pm
You are very nearly correct. You only need to change the word “is” to “was”.
Ah, yes, you are absolutely right.
It WAS the quickest way to gain $1.4M. (*)
Now it IS the quickest way to lose $1.4M.
Bram
(*) Only took what, 8 yrs or so to go +140% ?
I wanted to know todays average asking price for a two bedroom condo in New Toronto – $874,800 as per all listings.
The next BoC move is down. Our rates are very high compared to the rest of the world. Poloz said he wanted to go down last time but chickened out. Now with Trump threatening to tear up NAFTA why would BoC want to raise rates and make our dollar stronger? Answer: the don’t.
They will neither raise nor lower now. The next move, months from now, will be up. — Garth
#21 Mr Schadenfreude on 12.02.16 at 7:15 pm
That guys story about losing his home sounds 100c worse than the link to the CBC article
Didn’t realize it was that bad over there
#46 Smoking Man on 12.02.16 at 8:29 pm
Altho I have had disappointing book sales.. The emails of encourgement and reviews Ive had from some real movers and shakers out there..
//////////////////////
I tried my best to boost your profile at your book signing event.
Shirley Valintine in the background for emotional support.
Robert Redford there as well…getting ready for the movie is what I’m thinkin’…
http://m.imgur.com/a/YkILP
M42BC
#43 ACE G. on 12.02.16 at 8:19 PM
I like it! Clear and concise.
Permission to use “Goldilocks” for ‘splanin’ purposes?
I dont know if this is an indication what so ever but talking about people in yvr and their lifestyle choices reminded me of a trip I took last weekend to the local value village on bloor and landsdowne.
I was clearing the garage, getting ready for winter dumping some of my crappie old furniture and while waiting for the guy to take it I peeked into this value village, it was packed with people, mostly young people late twenties.
I honestly don’t know if this says anything but I was surprised to see so many young millennias buying second hand crap.
Why I wear shades in bars.. I’m a male heterosexual with big bug eyes. Rotten teeth and a bald head.
In this culture of insanity I my get charged with sexual assault just from looking at small feet and letting my imagination run wild.
Thank God Trump won….. I may one day be able to take the shades off.
Ray bands bitches.
“Join me for a scotch? Or three?” – HonGT
#MakeMineATriple…
#TheManWhoWalkedAroundTheWorld
https://youtu.be/XOaotCU6lJU
#TheOneMadeForAKing
https://youtu.be/dbfNg-iWHpY
#NoRules,Or… #’Sporran’TrumpsHakaEverytime
https://youtu.be/txuzUgvZREs
Now Brad Pit could get away with his eyes a bit higher. With no shades.
But if Hillary won…. The blue haired freeks would have him sent to jail and hung just because her blue haired mate got jealous.
Why do I bring up Brad. SMOKING MAN FAN.
Get over it James.
Given Canada’s better job numbers and GDP growth, plus steamy bond yields, the next Bank of Canada move will be up, not down.
Interesting! I’ve been pro-USD for a long time but it appears it’s time to make a change. Who am I to fight the trend. What say you Smokie??
Something in here stinks; I live in Cowtown and considering on how badly this city has been affected I am not seeing the doom and gloom in real-estate as certain groups imply! Why is that? What is propping a sector that in the past would have certainly corrected to the regions dismal lack of opportunities to what it should be; I am all ears to the one’s that can educate me on this, thanks..
Long time resident, seen it all, experienced it all, but this time it is certainly different.
#19 I know: – You made me think of something rather dark throughout Toronto. Can you imagine a young couple buying a home but a few years ago without seeing a neighbour next door. The grass is cut; the lights go on and off at night; there are no visitors; no family car coming or going; the snow gets shoveled; no delivery man comes; no sign placed on this door because nobody has lived there for decades. What could possibly be in that house?
Shit year, we lost a few beauties. My dad. Lenord Cohen, David Bowe.
What do they have in common. Decomposition. And touching humans in such a positive way.
Artists and good father’s so under rated.
#155 Barb — “[…] yesterday’s announcement by a bank (TD?) that rental properties–during mortgage renewals–would attract higher rates is definitely discriminatory, and smacks of a lack of procedural fairness.”
Ever actually read TD’s mortgage terms?
http://www.greatlaw.ca/sct/201027%20The%20Toronto-Dominion%20Bank.pdf
Positively medieval. Especially 1.01a and c, 2.08, 2.09a, 3.06c, 5.01a. About all the procedural fairness of Torquemada. But I don’t think they mention that they’re not obligated to renew your mortgage AT ALL, never mind at the same rate differentials that you signed up for originally.
As much as Garth occasionally makes fun of people who buy their mortgage out of the back of a van, there’s no way I’d want to do any other business with a bank that also held my mortgage, with a contract like this.
Next statement from the RE cartel to come in 2017 after prices have gone down 50%:
“Prices have returned to more historically normal levels over the last few months.”
Sing along in my book turn a page.
https://youtu.be/3khH9ih2XJg
#14 Cowcow22 on 12.02.16 at 6:35 pm
In your opinion will the effects of these changes be seen across the board in Canada? What about real estate in places like Brandon, Moose Jaw, Lethbridge, Red Deer or Kamloops? If these market prices were never pushed to extent of Van or TO or Cowtown what do you expect to see there? Same questions goes for price for farmland? Curious what you think about the effects on more rural RE.
———
There have been stories in the local papers here in Nova Scotia and PEI about entire extended farming families up and leaving Ontario because there was no future for their children when the land prices were so high. If I remember correctly, the prices were $25,000 an acre, whereas they were able to get land in PEI for $2000 an acre. There are a couple of guys successfully growing hemp out here in Nova Scotia, where almost all of it is currently grown in Manitoba and Saskatchewan.
I think it’s fine to talk about the Vancouver region and the big smoke, but in lots of places like you mentioned, the prices are still too high relative to incomes, in my opinion.
#30 IHCTD9 on 12.02.16 at 7:43 pm
Go do that right now.
I dare you, I DOUBLE dare you…
Why would I? I already did in jan 2013.
Nothing super-spectacular yet, but tidy gains none the less in four short years.
I estimate 1.5 -> 2.4 so far?
It is a long term venture (as kids are just starting school) but a nice way to start my debt servitude, those 2013-2016 years, despite the downturn since august.
Bram
To would be great writers. If you don’t got ear buds on hammering words with the right thumb you may get more sales.. But your experience sucked.
I love my life force……. I only got one. As much as it’s not perfect.. That’s perfection. Let the historians figure it out…
Don’t confuse past results (if you sold) with future returns. If you bought a $1 million home today in YVR you will be lucky to get your $1 million back in the next 30 years. Nobody is going to see $2.4 million in the next 40 or 50 years.
Trump speaking with Taiwan President and tweeting about it! We are screwed.
Mattis for defense secretary…we are screwed.
The markets are retracking. The US dollar will crash in the next weeks. The intl. community is seeing that Trump really is an idiot, and that the russians were really smart to make him the US president. Way to sabotage a country.
China and Russia will be playing Donald, they will go on the offensive, I do not mean war, that is passé, but on a economic offensive.
Get out of the markets while you can. I am not predicting some gloomy futur, sorry but this crisis is happening now before our eyes. Do not worry about canada mortgage and Trumpocomics…. that was but smoke for those knowing that the US dollar would tank under Trump.
BTW No increase from Bank of Canada..too many uncertainties. Poloz not gutsy enough for that move.
Going to bed I ran out of tip money but got two 26 s of JD from duty free.
I hate every one of you……
Feel it my writers
https://youtu.be/ISmgOrhELXs
I forgot the hammer in TD’s mortgage contract. Section 2.02. If you default on any debt to TD, they get to decide which debt any subsequent payment you make gets allocated to. Resigned to losing the rental but want to keep up the payment on the family home and car? Their choice, not yours.
#21 Mr Schadenfreude on 12.02.16 at 7:15 pm
From Reddit Calgary today: The real story.
The bank took my home of 10 years today. It was on the market for over eight months, we dropped the price over $50G, and we never got a single offer.
https://www.reddit.com/r/Calgary/comments/5fzlq3/calgary_home_sales_drop_3_in_november_as_new/
!!
I went to the website and what struck me was how misinformed the guy must have been. He only lowered the price 50 grand. He had been paying the mortgage for 10 years. The price was a fraction of what it had been inflated to now, and he only dropped it 50 grand? Why not drop it 125 if that would get it sold? He would have still come out way ahead.
Cracking open a bottle alone in your hotel room trying to figure out the meaning of this song.
https://youtu.be/ZxJrdCIejus
I’ll be sleeping soon with a craving for a 20 foot pizza.
Canada
https://youtu.be/LUpBSvN1a50
The sad part of all this is that people with families get hurt. The push to buy was there by the realtors and the banks okayed it for them to sign, pressured by all.
A friend said her realtor told her not to buy as a correction is coming. More and more realtors are speaking out.
As for the new announced pipelines and more ships in B.C.: In any rescue mission the first cardinal rule is “if it is unsafe for the rescuers the orders are to stand back.”
Imagine a oil spill in a rough ocean!!!!!
Also, do a test(s) run on a oil spill but use a safe product like maple syrup (or other), use different weather conditions, proof in the pudding.
Vancouver Housing Market Freezes Up, Sales Crash, Prices Sag, For-Sale Signs Proliferate
http://investmentwatchblog.com/vancouver-housing-market-freezes-up-sales-crash-prices-sag-for-sale-signs-proliferate/
Mark on Banking
“As rates rise, funding those portfolios (ie: the cost of borrowing or deposits) becomes more expensive.”
Hence, in a rising long-term rate environment, margins shrink. Not expand.
*****************************************
Mark, in stating this, did you happen to check and see that bank interest rate spreads (margins) have been falling for about the last five years as interest rates declined? (See Wells Fargo, for example)
What happened was when checking account deposit rates hit zero, they could go no lower and spreads/margins shrank as loan rates came down but a good portion of the funding costs were at the zero boundary.
As rates rise the checking account deposit rates will stay at zero until rates rise a lot. Spreads will increase.
I suspect only one of us has been holding several hundred thousand dollars of Bank of America / Wells Fargo these past several years and making a lot of money despite the margin compression.
(And with an added currency bonus as the Canadian dollar moved lower while you stridently predicted higher)
But I did take substantial profits off the table about a week ago because balance has its place.
You got to experiment with shit to get this one.
https://youtu.be/UIVe-rZBcm4
Wow
#46 Smoking Man on 12.02.16 at 8:29 pm
Altho I have had disappointing book sales.. The emails of encourgement and reviews Ive had from some real movers and shakers out there.. Amazing..
Going to put a serious marketing campain shortly.. Need to have a paper back avalable.
Just saying.
Garth your pathetic blog has reach… Probably far beyond what you think it does.
So glad I chose to be part of it rather than pushing dyslexicsmokingman.blogspot.com
I will always be part of it…. Why?
You radiate goodness no matter how much you try to hide it.. You must had great parents.
Im to nice.. Getting into the JD soon…
—
The porn industry is always on the lookout for new plots…
Moving up the ranks!!! Nealy in the top 10000!! How many of the sales are from you?
Lulu Sales Rank: 10526
#76 Smoking Man on 12.02.16 at 10:13 pm
Cracking open a bottle alone in your hotel room trying to figure out the meaning of this song.
https://youtu.be/ZxJrdCIejus
I’ll be sleeping soon with a craving for a 20 foot pizza.
..
Where’s Mrs smokey???
Where’s shirley??
I’m drinking the Crown Royal Northern Harvest Rye this evening. Not bad. Now that the hype is over, it’s easy to find.
59 Smoking Man on 12.02.16 at 9:15 pm
Why I wear shades in bars.. I’m a male heterosexual with big bug eyes. Rotten teeth and a bald head.
In this culture of insanity I my get charged with sexual assault just from looking at small feet and letting my imagination run wild.
Thank God Trump won….. I may one day be able to take the shades off.
Ray bands bitches.
—
You seem to be in rut..
To change it up a bit you should get smashed drunk every friday and vent at the world
#19
You are right homes are not selling and this in usually hot areas. We all knkw realtors are
We all know realtors are already proven liars . Happy Housing Crash Everyone! :-) sorry realtors you are just lying to yourself
Ottawa. House across the street was listed 10% below average for the neighbourhood. Sat for 6 months. Now off the market.
But Garth I will say The Economist has a prediction out there will only be 1 interest rate rise in the USA (at most), and that this will occur in 2017. Reasoning given was based on low global GDP growth.
#75 Chico on 12.02.16 at 10:10 pm
————————-
You’re forgetting people have been using their houses as bank machines. They may have been carrying a 95% mortgage on an inflated value right up until they had to sell.
#40 Mark on 12.02.16 at 8:10 pm
“just ask for data, and he’ll go away. very simple”
I provided data. Another guy provided data. The mortgage broker/Realtor trolls harassed the ops until him, and then I, were banned.
Really unfortunate. Fortunately Garth doesn’t stand for that crap here.
——————————————–
Everyone saw what happened. The Realtor trolls much like here egged you on . When you provided dated and made all the realtors look stupid they complained like the cry baby useless eaters they are in life. Happy Housing Crash Everyone! :-) Sorry realtors no money for you.
The Orange Octopus is saying that he wants to put America first.
Canada needs to change some of these red states to blue.
The Midwest is the bullseye…
M42BC
http://imgur.com/a/jJsnV
#31 Context – Grace Church in tony Forest Hill yearly hosts a used clothing sale. One can imagine the used finds there.
– Buy or Rent. Was in a buddy’s One + Den in new Picasso condo downtown TO.
A similar unit on MLS is $485,000. High condo fees too.
But Kijiji has One + Dens there renting $2000-2200.
Save the DP.
Scotch it: photos this week of tasting I go to each year in TO.
(I don’t drink at home, these $300 bottles are lost on me.)
https://www.instagram.com/explore/tags/raisethemacallanca/
For some reason this came to mind when I was putting up my Christmas lights this year
https://www.youtube.com/watch?v=mvmAa1cYZK4
When this real estate thing is over, when the blood had dried and the fires had died down, then we found we were the same as we had always been – small and terrified human beings, with only the light of the Emperor Trump to see by in this dark galaxy of sin.
Re: #47 aerozone on 12.02.16 at 8:32 pm
Wrong, Calgary needs 80 dollar U.S. a barrel oil for the jobs to return to the oilfields which will never happen. Oil might put in a temporary floor at 50 dollars a barrel but as demand for oil wanes and the world economy worsens and all the OPEC members cheat oil prices will once again fall.
Victoria house sales and prices have risen dramatically in 2016, with a massive pop in September and October.
Regardless of VREU’s repetitive drivel and attempts to rephrase what Garth has posted for years, the numbers are out – no crash folks!
And some astute posters have pointed out that the sales that are ‘crashing’ are due to limited inventory. Again, confirmed below.
http://www.timescolonist.com/business/low-inventory-slows-capital-region-home-sales-in-november-1.3588909
VREU should get a subscription to the Times Colonist. They have a nice little graph on the paper version for this article that shows a massive pop in prices in the months following the implementation of the foreign buyer’s tax.
Hmmmmmmm….could there possibly be a link with the number of foreign buyers going from 1.6% in 2015 to 6.4% in 2016. Nah, that would be silly :) Be sure to stick your head in the sand as the Vancouver denalists did for years on the impact of foreign capital.
Maybe in a few years VREU can be quoted in the papers like the Mayor of Vancouver for completely underestimating the impact of foreign capital:
http://www.scmp.com/news/world/united-states-canada/article/2048798/vancouvers-mayor-never-dreamed-foreign-funded?utm_source=&utm_medium=&utm_campaign=SCMPSocialNewsfeed
#66 ROTFL on 12.02.16 at 9:49 pm,
#74 ROTFL on 12.02.16 at 10:08 pm
————————————————
“…I forgot the hammer in TD’s mortgage contract. Section 2.02. If you default on any debt to TD, they get to decide which debt any subsequent payment you make gets allocated to. Resigned to losing the rental but want to keep up the payment on the family home and car? Their choice, not yours.”
———————————
Your phrase “positively medieval” is an apt summary of the terms that these b(u)eggars created.
Ergo, vary the lenders for each property you own…er…a…are paying for.
Fortunately we’re at an age where we have no mortgage or cc debt, however, daughter has 4 rental units, none with the Big 5.
We’ve taught her to hate banks, just as we were taught by our parents.
Spotted: Our forum host!
http://www.postcity.com/Eat-Shop-Do/Do/November-2016/Real-Estate-Garth-Turner-on-a-post-Trump-market/
Perhaps the banks are playing this one close to the vest and holding off on the repos?
#63 acdel on 12.02.16 at 9:39 pm
Something in here stinks; I live in Cowtown and considering on how badly this city has been affected I am not seeing the doom and gloom in real-estate as certain groups imply! Why is that? What is propping a sector that in the past would have certainly corrected to the regions dismal lack of opportunities to what it should be; I am all ears to the one’s that can educate me on this, thanks..
Long time resident, seen it all, experienced it all, but this time it is certainly different.
Garth, I’ll invite you over for a scotch once it makes financial sense to buy respectable digs. I do think I’ll have to ditch Toronto to make it happen in a reasonable time frame.
Re: #63 acdel on 12.02.16 at 9:39 pm
Look harder property values have fallen 20 to 25 percent in Calgary since October 2014. Try looking on mls not believing the B.S about a 4.6 percent fall in home prices. With a vacancy rate of 37 percent real estate prices will keep falling.
Would you *please*, for the love of *god*, and your own body!, hold the God damn hammering?!
My area has a very low vacancy rate, somewhere around 2% with significant demand.
Here is a ad in today’s real estate insert in the paper:
…completely updated, spacious 3bd/3bath…townhome backs onto private park, vacant, rentable and central…
$175,000
Rent in the area ranges from $800 for standard basement suite to $900-1,200 for professionally managed apartments to $2,000 and up for a house, depending number of beds.
This thing will easily rent for $1,000 as its family sized.
If your future looks grim all you have to do is open your eyes and look around…its not all Alberta or TO, right?
https://www.youtube.com/watch?v=I9W-smdTVjA
#75 Chico on 12.02.16 at 10:10 pm
we don’t know the details. it’s possible he could have refinanced the property multiple times
I provided data. Another guy provided data. The mortgage broker/Realtor trolls harassed the ops until him, and then I, were banned.
i read the links and didn’t see any data. could u please post it here? thanks. or ignore as per usual. up to u.
https://www.youtube.com/watch?v=PfIF4SF21NQ
http://www.trump.com
https://www.whitehouse.gov/issues
God bless us in Canada. God help them down there.
Odd we find it so easy to get along here, and they go out of their way to find problems down there. Not enough hokey maybe
Nice eye opener this AM over my espresso + grappa to see Crystal Precious.
Budget voyeurism a lot more fun than I would have thought.
Thank you for that, very, very much (for Crystal).
bsant
#MakeMineATriple…
https://www.youtube.com/watch?v=B52L95xRYFs
Smokey’s getting’ hammered again!
Dang, i wish i could join him at Seneca. I’m feeling my once per 6 month booze up coming along.
Even though I’m a lefty.
But we are both Dudeists, and both fans of the Trailer Park Boys.
We could have a good debate… about Bukowski and Malcolm Lowry. Might end in fisticuffs if we get into the JD though.
Like all good literary discussions, if it doesn’t end in drunken fisticuffs, then it’s not a real debate.
Smokey you gotta read Lowry, (even if Bukowski hated it).
Wrote the book on the shores of Burrard Inlet, B.C.
https://www.theguardian.com/books/booksblog/2013/sep/18/reading-group-malcolm-lowry-under-the-volcano
Last line of the book?
Absolutely devastating. Gave me the chills when i read it the first time. And I’ll never forget it.
“Somebody threw a dead dog after him down the ravine.”
― Malcolm Lowry, Under the Volcano
Smokey dude– now *that’*s how to write.
Steve-O
Smoking Man:
“There were, in fact, rainbows. Though without them the mescal (which Yvonne couldn’t of course have noticed) would have already invested the place with a magic. The magic was of Niagara Falls itself, not its elemental majesty, the honeymoon town; in a sweet, tawdry, even hoydenish sense of love that haunted this nostalgic spray-blown spot. But now the mescal struck a discord, then a succession of plaintive discords to which the drifting mists all seemed to be dancing, through the elusive subtleties of ribboned light, among the detached shreds of rainbows floating. It was a phantom dance of souls, baffled by these deceptive blends, yet still seeking permanence in the midst of what was only perpetually evanescent, or eternally lost. Or it was a dance of the seeker and his goal, here pursuing still the gay colours he did not know he had assumed, there striving to identify the finer scene of which he might never realise he was already a part.”
“How, unless you drink as I do, could you hope to understand the beauty of an old Indian woman playing dominoes with a chicken?”
“Far above him a few white clouds were racing windily after a pale gibbous moon. Drink all morning, they said to him, drink all day. This is life!”
― Malcolm Lowry, Under the Volcano
Nice pic today of another pathetic, petrified, pooping puppy.
To the members of that inferior species and their ridiculous humanoid sycophants, remember this:
Cats are always in charge, always have been and always will be.
Don’t mess with us. Or else.
Some more proof:
https://www.youtube.com/watch?v=xiJwN4xCmi8
Own three properties . The housing market could correct 30% and we r still golden . Have never gone more than a month without either rental property at full vacancy . Have we been fortunate ? Suppose …… the market could correct 30-50% too, just like it did ’08. Can’t live in bank stocks Boyz. When that day arrives folks will
Be waiting for Garth’s reassurance . What will Garth have ? History ……and hope …:)
“The reasons are simple, obvious.” Don’t forget that damn Mike Harris!
Fellow tin foylers.
I give you. The king of tin.
Poor Shlong Zumanga. Flipping out in his castle London.
https://youtu.be/h3rMJA1tcEw
French, I bought under the volcano. Three pages in. Sorry, it sucks. Sucks huge.
I try again when the hangover wears off.
@#111 Stephan Francais
“Drink all morning, they said to him, drink all day. This is life!” ”
*******************************************
Wasnt that in Smoking Man’s book?
Smoking Man I tried to buy one of your books but was told they have all sold out.
#57 Aerozone:
“I like it! Clear and concise.
Permission to use “Goldilocks” for ‘splanin’ purposes?”
Sure, use it all you want. I wish more people would understand it. I read this stuff about houses in Vancouver being worth $40 million dollars in 10 years time and I just laugh. Who is going to be buying them?
Garth, for your next post… you should use this pic
https://www.instagram.com/p/BNZ3fNTAhex/
you can also find a bunch of cool ones in http://www.cheechandchong.com/
…. you know where I’m coming from….
I read your post a lot and follow your advise. I’m not a millennial (born in 1984…) but I did play all type of game consoles invented after intellivision…. all the way till Ps4. Not sure where I’m going with this.
Anyway, keep it up ( I mean the posting thing), when I make money, I’ll come see you to invest with your firm… (in the future…. not very near).
Trump pick for sec defence. Something tells me hustalavista ISIS.
“You go into Afghanistan, you got guys who slap women around for five years because they didn’t wear a veil. You know, guys like that ain’t got no manhood left anyway. So it’s a hell of a lot of fun to shoot them. Actually it’s quite fun to fight them, you know. It’s a hell of a hoot. It’s fun to shoot some people. I’ll be right up there with you. I like brawling.”
General MAD DOG James Mattis
118 Context on 12.03.16 at 10:16 am
Smoking Man I tried to buy one of your books but was told they have all sold out.
….
I’m sending you a free copy you cheap bugger.
To the guy on reddit complaining the bank took his home.
Well buddy banks tend to do that of you stop paying your mortgage. What a genius. You want the bank to carry you? Get over your entitlement.
If you cant work in an ivory tower downtown then you have to humble yourself a bit. There is work at the local 7-11.
Turner Nation you must have missed the memo. This is a high upscale density area with nothing to the east, west, north, or south. Tonight they will all be waiting for you with open arms at 803 King Street West so don’t be shy about it.
God I love trump. Over turning decades of political stupidity in one shot.
So we have had a “no talk/arm to the teeth” policy with Taiwan for 40 yrs??? WTF
Time to tame that paper tiger. Just shut off the cheap junk taps slap a tariff and they will be reduced to the shell the are.
T2 needs to get in the game right now with Trump. Canada can displace a lot of chinese trade.
#111 Steve French on 12.03.16 at 5:13 am
“How, unless you drink as I do, could you hope to understand the beauty of an old Indian woman playing dominoes with a chicken?”
“Far above him a few white clouds were racing windily after a pale gibbous moon. Drink all morning, they said to him, drink all day. This is life!”
― Malcolm Lowry, Under the Volcano
—
Muzzle a dog and he will bark out of the other end.
Malcolm Lowry
Every renters nightmare..
M42BC
http://www.dailystar.co.uk/news/latest-news/567243/landlord-sex-bed-tenant-security-cameras-mobile-app-wedding-dress
#116 Smoking Man on 12.03.16 at 9:45 am
French, I bought under the volcano. Three pages in. Sorry, it sucks. Sucks huge.
I try again when the hangover wears off.
………….
Good morning rise and shine.
Good God, if our civilization were to sober up for a couple of days it’d die of remorse on the third
http://cdn.quotationof.com/images/malcolm-lowry-6.jpg
#43 Ace Goodheart– nice index, something different
I expected a large push in MLS sales in GTA for Oct/Nov
As now, even move up buyers have to qualify using the new mortgage rules.
And then there were but two… this is why I love this blog, little tid bits of information that usually dont make the headlines and are nothing more then footnotes, but do have a large impact.
Credit is starting to be reigned in- ease and availability of credit are the main drivers of housing market- not city or location etc…. when that starts to get tight, watch out. In 08-09, credit was hard to come buy and there really was no bottom in sight for the RE market until the govt intervened.
same is true for vehicles, without financing and availability, the amount of new cars are on the road would be drastically reduced.
everyone is in for a massive shock as if the lenders actually enforce the ratios in terms of income- prices have a long way down.
Rates rise in US any good for preferreds vs utilities here? Whats the correlation?
#68 Farmland “There have been stories in the local papers here in Nova Scotia and PEI about entire extended farming families up and leaving Ontario because there was no future for their children when the land prices were so high.”
True Dat. Whilst visiting PEI last summer I can report the Amish have arrived in Kings County from ontario. Clip Clopping down highway 2 . The locals are bemused but accommodating. (The hardware store has installed a hitching post). Add in the Buddhists with their annual (and wholeheartedly endorsed by the local fishermen:-) “release the captured lobsters” program and it has become a rather quirky little spot.
Talking with an ex cop from Abbotsford living in Stanhope. (He purchased the ex premiers house)
His former neighbours son in BC couldn’t afford land to get his own Dairy operation running. Now in PEI.
#120 Pica
I read your post a lot and follow your advise. I’m not a millennial (born in 1984…)
——————————-
If you were born in 1984 you are most definitely a millennial. Although birth year criterion varies slightly, your birth year is well after the usual starting year typically defined as 1980, ’81 or ’82.
#111 Steve French
As a lefty who sounds honest and willing to debate, what do you think of Trump breaking 40 years of diplomatic protocol and annoying authoritarian/dictatorial China to chat with the leader of Taiwan?
How does that compare to Obama breaking 40 years of diplomatic protocol to cosy up to Raul Castro, an unrepentant dictator?
http://abcnews.go.com/Politics/president-obama-thought-awkward-handshake-raul-castro/story?id=37986277
Is the left intentionally staking out the pro-dictator territory?
Somehow I think that might be a mistake.
#53 Context on 12.02.16 at 8:54 pm
I wanted to know todays average asking price for a two bedroom condo in New Toronto – $874,800 as per all listings.
——
That is insane. How could anyone bring themselves that low. In my area you get a house and property equal to a Charleston SC plantation for that kind of coin.
That’s 4900.00/month + say 700.00 month = $5600.00/month. You need to earn about 7600.00 just to make that payment, and to keep just that one bill under 40 % of your total income, you’d need an income of over 226,000 per year just to get approved to buy what will eventually be a worthless leaking cash burning trash bin in the sky.
@ Pica
You played all the gaming consoles, use instagram and were born in 1984…..but you aren’t a millennial??
Sorry bud, you’re about as millennial as they come.
Don’t worry it’s a good thing, better than being grouped in with the oldies. It’s not like we can make a bigger mess of the economy than the boomers did. All we have to do is just not royally screw the whole damn thing up and we’ve already done better.
“Mark, in stating this, did you happen to check and see that bank interest rate spreads (margins) have been falling for about the last five years as interest rates declined? (See Wells Fargo, for example)”
Yes. But the cost of goods sold has also defined. When a bank can borrow for nothing, and lend for something greater than nothing, profitability is only limited by the amount they can expand their balance sheet with such activity.
As rates rise, however, the cost of funding also rises. Those account holders demand higher interest, as does the broader market for funding a bank’s activities (remember, every dollar the bank lends, must be borrowed from customers, the markets, or shareholders!). Typically the cost of funding rises faster than the return on investment. Quite the opposite of what you see in a falling rate environment, where funding progressively was becoming less expensive, while the lenders continued to collect returns on investments made under the existing rates.
The other thing that happens when long-term rates rise is that the collateral that the banks are lending against, whether it be real estate, long-term cashflows such as leases, etc., tend to lose value. So there’s less loan demand. Lower loan demand, with lenders chasing the same assets to lend against results in spread compression.
So in a nutshell, don’t get overly fixated on spreads. Margins are more important, and margins in the banking sector shrink with rising interest rates. If low rates were actually damaging to the banks, then banks would have suffered, like the gold stocks, for the past 20-30 years, as rates have been progressively been going lower until recently. We know this not to be the case, however. Banks not only haven’t suffered, but they’ve handsomely benefitted from having their duration of their assets > duration of liabilities, as most (US) banks do, collecting a tailwind on the mismatch.
Re: #66 ROTFL:
“there’s no way I’d want to do any other business with a bank that also held my mortgage, with a contract like this.”
Wow someone actually read the mortgage contract before they signed it? This is a first.
They’re all like that, btw. Some are worse. The bank can demand all the money anytime they want, for various reasons, and can even sell your house, for various reasons, but you can’t pay your mortgage off in advance or you have to pay a penalty (the “interest rate differential”). Mortgages are scary things to have attached to your house. The mortgage agreements are written for the banks, by the banks’ lawyers, in order to give the bank all of the rights and take away any residual rights that the homeowner might still have.
On the lighter side of things, this is becoming very popular:
http://www.pet-first-aid.ca/
These courses are apparently full with tons of people learning this.
The irony of this of course is that there will probably be far more people who can do CPR on their dog or cat, then there will be people who know how to do this on a human.
Which means, if Rover and his master collapse in the park, Rover has a much higher survival rate based on the probable amount of persons nearby who know pet CPR versus the probable amount who know how to do CPR on humans.
Doesn’t it warm your heart?
“i read the links and didn’t see any data. could u please post it here? thanks. or ignore as per usual. up to u.”
Please get help your for your illness of the mind. Stop being a total troll.
Wrong, Calgary needs 80 dollar U.S. a barrel oil for the jobs to return to the oilfields which will never happen.
Well when oil was $80/barrel, the CAD/USD pair was closer to par. Now we’re at 1.33, so that’s closer to $60/barrel. I do agree with the sentiment that its probably going to be a while before Canada’s oil and gas investment recovers, but the CAD$ devaluation (as unsustainable as it probably is!) and falling labour costs definitely have, over the past year or two, shifted the break-even $/barrel point on many projects. Upstream producers like Husky, Suncor, and Imperial, with their strong balance sheets, have been cutting capex like crazy, but are still accomplishing similar amounts of work on their lower budgets. Deflation in action!
#69 Bram on 12.02.16 at 9:56 pm
Why would I? I already did in jan 2013.
Nothing super-spectacular yet, but tidy gains none the less in four short years.
I estimate 1.5 -> 2.4 so far?
It is a long term venture (as kids are just starting school) but a nice way to start my debt servitude, those 2013-2016 years, despite the downturn since august.
Bram
———
If it’s true you are up almost a million in 3 measly years, and you are just starting out, you have won the lottery. You are insane not to sell.
I bought at 2x our family income (typical out here for two white collar incomes), took 15 years to pay it off (concentrated on saving among other things), and during that time, my mortgage rate varied from 1.5-6.4%. Monthly payment amount varied over 100%, Taxes have gone up over 100%, hydro is up near 100%, heating up 50%, insurance up 50%. My employer of 15 years went bankrupt and I lost my job while still owing on the house, my wife is on her third job since we bought. I purchased at a very good time for buyers and the house has appreciated 150% at one time but has also since declined about 30% from there. If I sold the place now, I don’t think I’d break even despite 100% appreciation.
Hopefully, you have not signed a mortgage that could have you in a bad way when all of the above happens to you, because all of it will. How’s your job security?
Throughout it all, everything was manageable because 2X income. A lot can happen in 15-25 years, you sure do not want to forego savings and investments in the hope that your house will be your retirement fund. Mortgages are long, life is short.
If you are telling the truth, you have been given a once in a lifetime get out of jail free card. I’ll work near a lifetime to save the million you could have next week. By the time you are in your mid 40’s you will really start liking the idea of retirement. Don’t roll the dice, sell now and make bank while the sun is still peeking out from behind the clouds. You’ll probably need to get 2.5-3 million in 25 years just to break even, now is the only time you can win, but only if you sell.
“In your opinion will the effects of these changes be seen across the board in Canada? What about real estate in places like Brandon, Moose Jaw, Lethbridge, Red Deer or Kamloops?”
Those places have probably always traded at a discount to the major cities because land has little value. Those places, in a RE crash, will continue to trade at a discount. Certainly in Lethbridge and Red Deer, the two places I’m most familiar with, the availability of CMHC subprime mortgage insurance-backed lending did elevate prices significantly on entry-level units, and stimulated a significant amount of construction. The main difference, it would seem, between those sorts of cities, and the big cities, is that there aren’t a lot of really high-end areas. So the sort of sales mix shifts that you see in YVR/YYZ, for instance, simply didn’t/couldn’t occur there. Additionally, because they are smaller communities (I’d lump Regina/Saskatoon into the same category), the RE sell side and the media can’t pull the wool over the eyes of the public by claiming rising prices when all that was really changing was the sales mix.
#96 Victoria BOOMING on 12.03.16 at 12:14 am
Victoria house sales and prices have risen dramatically in 2016, with a massive pop in September and October.
Regardless of VREU’s repetitive drivel and attempts to rephrase what Garth has posted for years, the numbers are out – no crash folks!
And some astute posters have pointed out that the sales that are ‘crashing’ are due to limited inventory. Again, confirmed below.
http://www.timescolonist.com/business/low-inventory-slows-capital-region-home-sales-in-november-1.3588909
VREU should get a subscription to the Times Colonist. They have a nice little graph on the paper version for this article that shows a massive pop in prices in the months following the implementation of the foreign buyer’s tax.
Hmmmmmmm….could there possibly be a link with the number of foreign buyers going from 1.6% in 2015 to 6.4% in 2016. Nah, that would be silly :) Be sure to stick your head in the sand as the Vancouver denalists did for years on the impact of foreign capital.
Maybe in a few years VREU can be quoted in the papers like the Mayor of Vancouver for completely underestimating the impact of foreign capital:
http://www.scmp.com/news/world/united-states-canada/article/2048798/vancouvers-mayor-never-dreamed-foreign-funded?utm_source=&utm_medium=&utm_campaign=SCMPSocialNewsfeed
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Ummmm….the Victoria Times Colonist is giving away free papers once a week. They need the real estate advertisements. The ads are written by realtors and given to the paper to print. No fact checking required Just a payment add into print.
Victoria is experiencing it’s own building boom as expected it trickled to Victoria…does not mean there is still momentum as builders are known to keep on building right up until and during a crash. Hence the pictures of unfinished houses.
It is hilarious to think that now Victoria and Kelowna are the hot markets…lol. If you live on an island and don’t partake in a lot of outdoor activities you will be bored, other than big box stores to keep you busy, Victoria has little else. We area retirement island, and they don’t stay for a long time. Click on any local island news rag and the Obituaries are front and center.
#106 ChrisPitzel on 12.03.16 at 1:03 am
Are we going to see you at the meet ‘n greet that Mark is planning in Vancouver?
#128 Lord of the Deplorables on 12.03.16 at 11:23 am
#116 Smoking Man on 12.03.16 at 9:45 am
French, I bought under the volcano. Three pages in. Sorry, it sucks. Sucks huge.
I try again when the hangover wears off.
………….
Good morning rise and shine.
Good God, if our civilization were to sober up for a couple of days it’d die of remorse on the third
http://cdn.quotationof.com/images/malcolm-lowry-6.jpg
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Nah, they’d just move on to the hard stuff…
https://www.amazon.com/Naked-Lunch-William-S-Burroughs/dp/0802122078
They will neither raise nor lower now. The next move, months from now, will be up. — Garth
But what pressure is there to raise rates? Inflation is low. The economy is weak and getting weaker and a housing correction will only exasperate this. Like it or not the BoC can’t – and more importantly – won’t raise rates.
“It’s not like we can make a bigger mess of the economy than the boomers did. All we have to do is just not royally screw the whole damn thing up and we’ve already done better.”
Oh?
Allow me to quote from a somewhat more erudite investing blog: “The internet and global demographics are both forces for deflationary pressure. That said, virtually the whole world has overpromised to their older populations. How that gets solved without inflation or defaults is a tough problem.”
There’s a lot of future misery baking into the cake right now, from declining birthrates, longer lives, productivity increasing more slowly than before, productivity increasing mainly through automation — with the resulting increased profits going to capital rather than labour, and capital fleeing to tax havens. Grossly underfunded public and private pension plans are the cherry on top. And if your generation doesn’t solve that, you’ll be wearing the blame.
#103 metaxa on 12.03.16 at 12:40 am
My area has a very low vacancy rate, somewhere around 2% with significant demand.
Here is a ad in today’s real estate insert in the paper:
…completely updated, spacious 3bd/3bath…townhome backs onto private park, vacant, rentable and central…
$175,000
Rent in the area ranges from $800 for standard basement suite to $900-1,200 for professionally managed apartments to $2,000 and up for a house, depending number of beds.
This thing will easily rent for $1,000 as its family sized.
If your future looks grim all you have to do is open your eyes and look around…its not all Alberta or TO, right?
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Your area is similar to mine, that 175k house would be a 1000.00 payment to buy at 4.64%. Cheaper to buy than rent. Young early 20’s couple down the road a ways bought a small fixer upper in the spring for 125k, mortgage payment was 600.00 or so he told me. He’s going to make out like a bandit someday, has all his young buddies over there on weekends and evenings trading beer for a new roof, new deck, driveway repairs. Puts a smile on my face :).
#108 Thank You Trading Naked on 12.03.16 at 1:27 am
You’re welcome. Your response prompted me to look up her music. I’m thinking maybe she should have banked the $5000 she spent on her album. But with her lifestyle, she’d still be cash flow negative.
#43 Ace Goodheart on 12.02.16 at 8:19 pm
“RE: #19 I know there will be haters but:
“Every weekend an open house. No cars, no Chinese dudes, no one. Fine it’s December but these houses have been listed for months – no movement, no bidding wars, nada!”
Your culprit is goldilocks.”
Bang on. keep the purchase price tagged to the largest buying segment of the population and it will always sell. The 1% don’t generally go for the pressed cornflakes crap above affordable but beneath excellent- they want better than that and wait for it.
Going forward, buyers will be increasingly patient and more importantly, picky. With with interest rates moving up, they will carefully consider the trade-off between higher (and higher) rates and buying brick facing, vinyl and chipboard.
#64 Context: I can see that nobody answered my quiz question. There are over one hundred homes that were built all over the City of Toronto called ghost homes as nobody lives there. It was to hide something huge away from the public eye because inside are Ontario Hydro sub-stations, and you wouldn’t want one as a neighbour.