Think different

monkey-dog

It now costs the better part of $1 million more to buy a detached house in that paradise known as the GTA than it does to get a condo. That’s $1,345,000 for some dirt, and $471,000 without it. Both prices are extreme. Limited supply has lofted detacheds by more than 30% in the past year. Meanwhile the condo I rent downtown sells for about $750 a foot.

Last month, which was as euphoric in Toronto as it was depressing in Vancouver, saw a 28% surge year/year in condo sales, while house deals were ahead less than half that – 13%. Sure, supply plays a role and listings are scant, but this is more about price than anything.

And Millennials.

The moisters now outnumber the Viagra-popping, Jaggeresque thirsty-underwear set for the first time. In Toronto alone the Mill population swelled by more than 40,000 every year between 2011 and 2014. Since the 1950s Boomers have dominated the demographic pyramid. No more. Fully 34% of the country’s inhabitants have reached adulthood (sort of) since Y2K. And while they may love facial hair, plaid, probiotics, left-wingers, work-life balance, emojis, social justice, organics, online commerce, vaping, fintech and selfies, they’ve sure embraced the property lust that defined their parents, once they got over bell bottoms and hash.

When realtors (who else?) asked a mess of moisters what kind of home they planned to purchase, 75% had the same answer – a detached, single-family house. A decade ago seven in ten new houses sold in the Toronto region were just that. Today only three in ten are singles. The number of available properties has decreased by 90%.

So, figure it out. The biggest cohort’s now entering its rutting and nesting years at the same time low interest rates, land use restrictions, runaway building costs and inert Boomers have sliced the number of properties on the market. The result, as mentioned, is a $1.3 million tag on detached resales and $1.2 million for new singles. No wonder more money is now being channeled into high-rise condo units, especially given the recent mortgage rule changes including the stress test.

The average Toronto-region condo costs roughly $440,000. The average monthly fee is about $650, and property taxes average a little less than $3,000 a year. So buying a one-bedder with 20% down means having almost $100,000 in cash to close, with a mortgage payment of $1,500. Add in fees and taxes and the monthly nut comes to $2,400. Consider the hundred grand you had to put down which, if invested to earn 6%, would yield $512 a month (inside your TFSAs), and the true monthly cost is now almost $3,000.

The average one-bedroom apartment in Toronto rents for $1,453 while a two-bagger averages $1,805 (according to the rent control board people). So, it’s fair to say  moisters taking the condo ownership plunge, as opposed to renting, fork out about twice as much per month. Not the greatest strategy for building wealth, especially with higher mortgage rates and Trump on the horizon.

But there’s more to consider: average monthly maintenance fees rise an average of 14.8% during the first three years that a new building is occupied. Ouch. And you’ve no control over that. Nor property taxes, which are under considerable upward pressure. Plus there are special assessments to worry about – replacing suspect glass panels in the curtain walls of new builds, or repairing aging boilers and crumbly, salt-infused parking garages of older places. And then, when you sell, there’s a 5% outlay to the realtor.

Given all this, and the certainty a mortgage taken out today will renew at a higher rate, why would anyone buy?

Over five years the average Toronto condo renter will save $90,000 over the average condo owner. If that were invested for modest growth inside a TFSA or RRSP (starting with $1,500 and adding that amount monthly) it would total $106,700. Of course, owners are able to convert some debt into equity as they make mortgage payments, plus employ leverage. But they also absorb all kinds of risk that renters never face – like market risk, rate risk, occupancy risk and a-dickhead-just-move-in-next-door risk.

Renters have flexibility, mobility, enhanced cash flow and the complete freedom to ignore mortgage rates, property tax increases and real estate corrections. And with 52% of all new condos in Toronto going to amateur landlords who will never move in themselves, the odds of being turfed from your rental unit are microscopic.

Of course, all of these rational arguments are no substitute for hormones. Millennials are flooding into their peak house lust years in droves. Those unable to cough up the $280,000 in cash for a detached downpayment, or the monthly financing cost of a $1.1 million mortgage ($5,000), will likely stagger into the wealth trap called the condo market.

Big mistake.

After all, if you can live without Starbucks and don’t mind a soul-sucking commute, there’s this for $429,900. And they’ll probably throw in the deer head!

Seriously, kids. Get some dirt.

160 comments ↓

#1 Maury Lawson on 12.04.16 at 5:39 pm

Great Job by our PM for approving the Pipelines! We are lucky to have a balanced leader and I will support Liberals headed by Trudeau for a long time to come! PS. The house is beautiful!

#2 This Week in Money on 12.04.16 at 5:39 pm

Ross Kay on This Week in Money:
-new real estate numbers for Vancouver and Toronto
-$191 Billion in BC wealth evaporates
-$2 Trillion personal debt bubble
http://www.howestreet.com/2016/12/03/this-week-in-money-81/

#3 For those about to flop... on 12.04.16 at 5:40 pm

I will use this guy as an example of how quickly the tap has turned of for realtors in Vancouver,not because I have anything against him but because he has sold a lot of property in my area and has been in the game for nearly 3 decades.
http://www.normflockhart.com

He had 5 places to sell in late September,since then he sold one ,3 were taken off the market and he has only one listing left which has had two price reductions.

Unless he is selling Hatchimals on Craigslist he did not earn a paycheque in November.

According to his site,he sold 15 pieces of property last year so I am unlikely to see him at the food banks and although there is a seasonal slowdown he must be a little concerned.

I’m sure he will get some more listings early next year and make a lot of money on the way down ,but maybe he might start referring to pre 2017 as the good Ol days…

M42BC

#4 not 1st on 12.04.16 at 5:49 pm

Seriously if you are gonna drop 1.3 MM for anything do it in Vancouver over Toronto. Vancouver has a serious weather and environment premium over anything else. At least you can say you bought because of the weather.

What reason can you even give that you chose toronto to go all in on?

#5 Linda on 12.04.16 at 5:51 pm

Why on earth would monthly maintenance fees rise nearly 15% within the first 3 years on a brand new building? If this is the normal state of affairs, what are people paying for? Are the buildings that poorly constructed? Seems like a bad deal.

The Acton house may be a soul sucking commute, but it does look like peace & quiet once you get there. Though I’d want to find out why the ceiling in that one bedroom has a crack in it prior to making any kind of bid.

#6 Alice on 12.04.16 at 5:51 pm

Renters are still vulnerable to the dickhead-just-move-in-next-door.

They can move. — Garth

#7 Marcus on 12.04.16 at 5:51 pm

Italy votes NO. Renzi is out! The Rout for European Union begins. Nation states and monarchy will return. A multipolar world.

#8 Ace Goodheart on 12.04.16 at 5:55 pm

RE: “It now costs the better part of $1 million more to buy a detached house in that paradise known as the GTA than it does to get a condo. That’s $1,345,000 for some dirt, and $471,000 without it.”

Not true. Our street is now full of young folks under 40 who have finally found us (we got here in 2012, back when this street was still a ghetto). The large detached down the street from us just sold for 600K (two car garage, backyard, four bedrooms + a basement apartment) and another cute little detached up the street (2 car laneway parking, huge backyard, three bedrooms) sold for 650K last week. Watching as the young folks are moving in now.

Still lots of these houses left, one or two pop up every other week. We own two ourselves (a semi split up into three units, rented out, and the detached that we live in). Paid $329,000 for the detached in 2012 and $279,000 for the semi in 2013.

I mean, come on people why does no one see this? You don’t have to spend over a million dollars for a house in Toronto. And they’re building a massive transit hub complete with an underground LRT, UPX stop, go train, tons of busses:

This will be a short walk down the street from your 600K detached house:

http://www.thecrosstown.ca/the-project/stations-and-stops/mount-dennis-station

It is cheaper to buy here than it is to buy in the 905. Houses in Hamilton cost more.

Toronto is full of deals like this. People just have to look around

#9 LesserGenius on 12.04.16 at 6:00 pm

Renting is fantastic in theory. Then your landlord wants to sell to make a profit and you’re back yet again sifting through neglected rental stock. We started renting 3 years ago and have built liquid wealth of 180k in that period….(feels good man!) ….but these days it’s also becoming more important to us to know where we’ll be living in a year or two.

#10 Smoking Man on 12.04.16 at 6:01 pm

That’s a cute house. Acton, where the hell is that.

Oh, in other news Italian Deplorables winning.
Globalization toast. Can some one please tell T2.
Before he makes a complete idiot of himself.
No let him make a fool of himself. I see Kevin O’Leary’s going hard against T2 and Butts.

Mr wonderful will be the next prime minister of Canada.

#11 Keith on 12.04.16 at 6:08 pm

There is nothing else like house ownership. It’s an investment, a forced savings plan and a place to live. With a basement suite, you can cover your property taxes and all your maintenance costs. Ask your older relatives how they did with their house, and they will eagerly tell you their story.

For the average person, “rent and invest the difference” would require so much character, so much self discipline and desire to acquire financial knowledge – how many people actually follow the wealthy barber’s advice?

It takes robust bad timing to get caught in real estate buying at the peak and going through a painful crash or correction, it isn’t part of the home ownership narrative that people hear about.

For the twenty and even thirty somethings of today, they would be advised to rent and wait. Odds are that they will hit a buying opportunity in the next ten to fifteen years, one of those fables “once in a lifetime chance.” Do people have the sense of self to go their own way against the advice of family and friends?

#12 Context on 12.04.16 at 6:09 pm

Nice home and a beautiful village setting with lots of stores; not to mention two ice cream establishments. The Go Train is there so who could ask for more.

#13 TurnerNation on 12.04.16 at 6:11 pm

King West Kando backlash!

I’d posted here, about this development,  how crazy it seems.

https://mobile.twitter.com/StopBradLamb

#14 joblo on 12.04.16 at 6:17 pm

Say goodbye to the EU.

#15 Freedom First on 12.04.16 at 6:22 pm

Yes. Great pic and great Post Garth! I feel even better now.

……..why would anyone buy? -Garth

I’ll get that. To keep the wife happy at any cost and to fit in with the Herd.

Thankfully, my primary concern is always myself. And, the best kept secret about that, is that men like me are the guys that women have always chased.

Vasectomy first. Woo me.

Bonus is, the judge is deprived of the power of removing my wealth and my kids from me at any woman’s whim. This is the scenario for half of the men. Court backed.

007
Freedom First
Master of Freedomonics

#16 Mark on 12.04.16 at 6:23 pm

Sounds like some serious bait and switch, with the condo fees rising so much. While there are some one-off causes, such as engineering or construction errors that can cause new buildings to be delivered with higher than normal expenses, it seems to me that few condo buyers, particularly of condos intended for revenue investments, are fully incorporating the full cycle of costs associated with their ownership in their pro forma planning.

The other elephant in the room is that when people go to buy condos, the adequacy of the reserve fund for a particular building is reviewed by a lawyer. The mere suggestion, that reserve fund adequacy be reviewed by a licensed engineer for accuracy and reasonableness, drew laughter on the last condo transaction I was part of on behalf of a family member.

Last but not least, condo owners need to understand that condo fees do not cover interior unit maintenance. The condo will not replace your carpets when they’re old or outdated. They will not replace your taps, nor remove the ugly old wall coverings. In some cases, where HVAC units are individualized, the condo may not even be obliged to maintain such units from the condo fees. So the all-in costs of owning a condo unit and maintaining it are certainly much larger than just condo fees alone. Especially so for a unit intended for rental for which a condo with a lack of interior maintenance and upkeep will face significant impairment of its revenue producing capability in the rental market over time.

#17 Paully on 12.04.16 at 6:25 pm

Woo hoo! I’m moving to Acton!

Think of it: A WHOLE HOUSE, for LESS than the amount that some goof paid over the asking price for a placed in Parkdale last month!

http://www.theglobeandmail.com/real-estate/real-estate-video/video-done-deals-a-detached-home-in-parkdale-that-sold-for-440000-over-asking/article33007022/

#18 Mark on 12.04.16 at 6:26 pm

“Ross Kay on This Week in Money:”

Always great interviews to listen to. Thank you very much “This Week in Money” for having him, and Garth Turner as guests periodically. Sometimes I don’t agree 100%, but with the RE sell side severely over-represented in Canada’s media, and very little buy-side analysis presented, its certainly a breath of fresh air that the public should avail themselves of.

#19 Marty mcfly on 12.04.16 at 6:30 pm

It’s worth the drive to Acton
#ohh

#20 Grantmi on 12.04.16 at 6:30 pm

Just drove through South Surrey! (the REAL South Surrey! The one between King George Hwy and White Rock.

There are FOR SALE signs GALORE!!! and almost no sold on them. I’ve been driving by one home in choice neighborhood now for 6 months… Still up for sale. Year ago, it would have sold in a day in a biding war!

The Tide has turned Bodhi!! No surf left…. flat as a pancake!

#21 Renter on 12.04.16 at 6:36 pm

What about the cost of moving? As a renter you are exposed to the risk of landlord decided to sell the place you are living in. This is especially painful when you have kids and the increased “stuff” that comes with that. You need to take into account the cost of potential moves if you are renting for life.

We are currently renting in AB and following your strategy but I always dread the possibility of our landlord selling the place and forcing us to move out (he tried to sell the place before we rented but couldn’t so decided to rent the place out). And no I’m not going to feed my buddies pizza to help me move. I’m just going to hire a company and that costs extra $.

#22 drydock on 12.04.16 at 6:41 pm

Boot cut jeans,red Lebanese and a second hand BSA 650
Fire Bird scrambler.
Listening to a rock band at the Maples Inn on Lakeshore.
The world was my oyster.

#23 Smoking Man on 12.04.16 at 6:44 pm

So I hit refresh on gf… Now showing zero comments. CIA must be in my phone.
Deplorables are on the shit list I’m thinking.

#24 Smoking Man on 12.04.16 at 6:46 pm

12 Context on 12.04.16 at 6:09 pm
Nice home and a beautiful village setting with lots of stores; not to mention two ice cream establishments. The Go Train is there so who could ask for more.
…….

I love the porch, if it’s facing south east I’m buying it.

#25 Mark on 12.04.16 at 7:01 pm

“You need to take into account the cost of potential moves if you are renting for life. “

Sure. And you need to take into account the 5% hit, plus whatever bid-ask spread is present in the market at the time, one is going to take when they sell their owned housing every time they have to move.

Average tenancy in owner-occupied housing is allegedly 7-10 years. On a half million dollar house, professional fees could run $25k every move, and maybe double that for the spread (RE, being relatively illiquid, tends to have larger spreads than stocks and bonds).

The other problem that arises, particularly in a significant RE crash, is that people can’t chase better career opportunities if they’re anchored to a house with minimal or negative equity. The “cost” of this, over a career, could very well be extreme.

If one is in their 40s and 50s, or beyond, sure, go out and buy a house. Reasonably diligent savers should have been able to accumulate enough to easily meet Garth’s “rule of 80” with respect to housing as a percentage of asset allocation. And chances are, by the time you’re that age, you’re not going to need many more costly moves and RE transactions in your lifetime. The kids who emptying their family’s bank accounts, and leveraging to the hilt to buy SFH’s in this insane (albeit declining) price environment are absolutely setting themselves up for failure.

Finally, as one last comment, if you are a renter, its vitally important to have a balanced portfolio and seek out professional help if you don’t know what a balanced portfolio is. I’ve been with a few Realtor types over the years who, in conversation, always frame RE ownership against investing 100% of a portfolio in a cash savings account or GICs. This comparison is disingenuous, but given that Garth tells us that minimal return investments make up an overwhelming majority of TFSAs, its one that too many Canadians have adopted.

#26 Izzy Bedibida on 12.04.16 at 7:11 pm

Good strong points, but with hardly any 2 bdrm condos available and 3 bdrm condos non existent in most of the new developments. Most of the rental buildings in my old hood have larger family sized apartments, but cater to riff-raff. What is a family with children to do following this advice given the above constraints?

#27 WiseOwl on 12.04.16 at 7:12 pm

https://www.bloomberg.com/news/articles/2016-12-04/vancouver-housing-tax-pushes-chinese-to-1-million-seattle-homes

#28 Smoking Man on 12.04.16 at 7:14 pm

3 blonds sitting next to me at the pulse night club at senica Niagara.

Yes I’m not an idiot. I know it’s hair die. Do I care? Hell no. Trying to understand the cryptic message the blue jeans designer placed on the pockets of those perfect asses.

The most successful people in the world are great bull shitters. Why would anyone with an ounce of brain power in their right mind tell the truth about anything.

Read linked in I rest my case.

If one of you zombies out there could figure out how to make my book a best seller. I pledge I will go full blown crazy on Branson in likedit.

Till that. I got to suck up. My wifes casino addiction needs funding.

If I was a man I would say. Bitch enough is enough.

One thing is for sure, I’m not is an idiot…
Play babe. I got me lots of plan b’s..

#29 Paul on 12.04.16 at 7:16 pm

When was the last time a new rental apartment was built in the G.T.A.? Does anyone know?
Maybe that is the biggest housing issue.

#30 love u on 12.04.16 at 7:22 pm

Sold all my condos and am now renting thanks garth

#31 Smoking Man on 12.04.16 at 7:26 pm

Poor millennials, they’ve never lived this song.

https://youtu.be/1dAwI_jqcFQ

When the bar of making it is a coffee boy, girl, or what ever it is at Starbucks is the badge of success.

Move to Russia.

#32 The Technical Analyst on 12.04.16 at 7:31 pm

Like, Garth and co., the misses and I can afford to buy basically anything in Toronto, but we choose to rent. It just makes SOLID financial sense.

Are we “missing out”? Yes, missing out of the lost income we would not have had if we bought at the top of an unstable, ill-liquid market.

#33 Jungle on 12.04.16 at 7:33 pm

Amazing analysis, been waiting for a current look at the rent vs buy for a while now. Clearly new homeowners or condo buyers are paying a huge premium to own vs rent right now.

There is some weird stigma people have about renters, and lots of misunderstanding on just how expensive home ownership is.

#34 Spiltbongwater on 12.04.16 at 7:47 pm

There is nothing owners can do about strata fee increase? They have no vote on the annual budget at the AGM? It is worse living in Toronto then I thought

#35 Londoner on 12.04.16 at 7:47 pm

“Seriously, kids. Get some dirt.”

You’ve provided all the reasons why detached houses have risen in price: lack of supply, low rates, availability of credit. From my days in retail banking (back in ’99) I remember there was no shortage of people willing to max out their budget to buy a house. The only things holding them back from million dollar mortgages were CMHC underwriters and 7% interest rates. These days you can get approved with higher debt ratios and lower rates. Consumer sentiment towards detached houses hasn’t changed. So when you take those 2 variables out of the equation you’re left with the only one the matters: supply.

#36 Smoking Man on 12.04.16 at 7:53 pm

Garth I hope your not hording all my deletes for your own gain. I don’t see it.

Please, after I’m gone, it’s close, and they have some value.

Please donate directly to the homeless. Don’t be like a track sixer. Talk to them. Listen to their stories.

Wonderful people who took the wrong fork in the road..

#37 Polls R Phake on 12.04.16 at 7:56 pm

Brexit check
Trump check
Renzi of Italy resigns check
Hollande gone check
Merkel next

Sorry to break it to most of you pubic sector people that make up most of this blog with your love of Hillary, the un-elected troika of the EU, the failed socialism of Canada. And your love of balanced and fair markets (HAHAHAHAHAHHAHA) via the international bankers plus your tax payer funded pensions.

Your time is up. Big Govt and the Corporations that control them are coming to a crushing end. You have not seen anything yet.

#38 Londoner on 12.04.16 at 7:56 pm

“The number of available properties has decreased by 90%.”

The same thing happened in London (UK) a couple of decades ago. Eventually, single family houses in the city started becoming multi-family units. It’s now estimated that over half of the city’s houses have been converted into flats.

#39 Ben Hyatt on 12.04.16 at 7:59 pm

Tomorrow, Garth’s opinion of Italeve. buying opportunities upcoming or a head-fake like Trump’s win and then soaring to newer record highs. I think at some point the musicx gonna stop. But I guess it probably will be the buy and hold (and rebalance) adage. Curious what other posters on here like Smoking Man for instance have to comment on what this means for the market. Can the USA still hike with Italeve?

#40 Binder Dundat on 12.04.16 at 8:01 pm

I see by tonight’s photo that Donald Trump has finally found a friend. Good for him.

#41 Context on 12.04.16 at 8:02 pm

#24 Smoking Man :- There is a good backyard and look at photo #30. A garage has been built that is wrapped with insulation ready for siding. It might be for the boat or the car as its hard to tell. Acton even has a shopping center, a community center, a golf course, and a lake.

#42 Gasbag Boomer on 12.04.16 at 8:11 pm

#22 Drydock: I remember the “Mapes”, great times, for sure.
Ex-West Islander…..

#43 Smoking Man on 12.04.16 at 8:13 pm

Now that’s a real feminist

https://youtu.be/CJcT6sWDnNw

#44 Ciaran on 12.04.16 at 8:13 pm

I’ve read your blog since 2013, and enjoy
Your humour
And your wrong predictions with trump. I’m 27 now and still haven’t bought property, influenced a lot on your blog. I run a residential painting business in Vancouver and over the past two years watched houses go up
About 30% and had to listen to all the homeowners I’m selling paint jobs to brag how much they have made… Now it’s gone down a bit and as always your predicting a crash and I hope your right! Rent for a one bedroom in kits, downtown, false creek, or anywhere I want to live for a one bedroom is about $1600-1800 unless I want to live in a garage. I’ve put my money in stocks, etfs and precious metals, and they have done alright making mistakes on the way of
Course. I’ve accumulated about 75k now. At what point should I actually buy a house? As at some point it would be nice to own my own home even if it’s in Prince George as it’s getting old spending about $35000 a year just to live in an apartment now and would like to paint my own house…. keep up the good work! Also just another comment; I paint homes in the west end in Vancouver and I contact a lot of people. I have clients from china not Canadian citizens; one which bought three homes all worth over 4 million in vancouver over the past year. From talking to people about painting and seeing what’s going on in the neighbourhood I would definitely say that foreign buyers have greatly increased the price of housing here, and for about every 5 homes I paint with new homeowners in them maybe one won’t be from china. That’s what I’ve seen from my end over the last two years; it may be different in Toronto.

#45 Rent the podium on 12.04.16 at 8:24 pm

This doesn’t dramatically change your argument Garth, but I was under the impression you couldn’t put 100 big ones into a TFSA. Isn’t the limit currently $46,500?

You & the squeeze. — Garth

#46 I am the mighty Oz on 12.04.16 at 8:31 pm

#7 Marcus on 12.04.16 at 5:51 pm
Italy votes NO. Renzi is out! The Rout for European Union begins. Nation states and monarchy will return.

—–
name a sovereign country,
you can’t

#47 common sense on 12.04.16 at 8:40 pm

Renting a great idea if one can be found….The Niagara Region is very tapped out at this point with rents similar to Toronto.

#48 Context on 12.04.16 at 8:40 pm

#28 Paul:- Rental building apartments are going up everywhere in Toronto and the GTA.

#49 Questions on 12.04.16 at 8:40 pm

If only there was reasonable data available on real estate, one could look at the price tags in other cities and determine if there really is value.

#50 palebird on 12.04.16 at 8:41 pm

“#1 Maury Lawson on 12.04.16 at 5:39 pm
Great Job by our PM for approving the Pipelines!”

Hey Maury Mr T2 can approve all he wants but is it going to happen. Don’t think so. Mr T2 is a one hit wonder. He will be gone next election. He is completely out of synch with what is happening in this world. An embarrassment.

#51 You forgot development fees on 12.04.16 at 8:41 pm

Garth, I’m hearing more and more horror stories of surprise development fees and levies on new condos.

One of my clients just paid $19000 on a 350k price! Insane….

He thought it was going to be $5000, builders are sneakily
Putting fine print in agreements and clients are
Getting hammered on closing.

#52 steerage steward on 12.04.16 at 8:43 pm

Looking forward to two weeks of snow on the ground

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

#53 eddy on 12.04.16 at 8:43 pm

#22 drydock on 12.04.16 at 6:41 pm
Boot cut jeans,red Lebanese and a second hand BSA 650
Fire Bird scrambler.
Listening to a rock band at the Maples Inn on Lakeshore.
The world was my oyster.
——
Was it these guys ?
https://www.youtube.com/watch?v=tbfTCbWUI1I

#54 Smoking Man on 12.04.16 at 8:46 pm

9 11

https://youtu.be/Lin-a2lTelg

#55 meslippery on 12.04.16 at 9:18 pm

GTA ?
https://en.wikipedia.org/wiki/Greater_Toronto_Area#/media/File:Greater_toronto_area_map.svg

Here you go GTA half million.

https://www.realtor.ca/Residential/Single-Family/17557858/Tbd-STREET-CD-Brock-Ontario-L0K1A0-Beaverton

#56 Sorry, the euro's not dead on 12.04.16 at 9:21 pm

Europe has political problems, and so does Italy — a lot. Though this referendum has nothing to do with it’s euro membership. I’m Italian, and have lots of family there and can tell you by anecdote and by reading real poling that the majority of italians by a wide wide margin want to stay in the euro. The country is still screwed in a lot of ways but it’s not irreparable and does not necessarily threaten their EU or euro membership, see Greece which is in worse shape. Also Austria just had an election that turned out very pro EU. This referendum was just about a constitutional change which had nothing to do with being in the euro, I don’t know why all you drama queens thing otherwise.

#57 ChrisPitzel on 12.04.16 at 9:23 pm

Forget buying an overpriced home in toronto. Take a trip and enjoy Europe! The euro is getting destroyed!

http://money.cnn.com/2016/12/04/investing/italy-referendum-renzi-markets/

#58 ChrisPitzel on 12.04.16 at 9:29 pm

Gold will continue to fall. Sorry goldbugs. Hopefully you listened to Gartho and lightened up on the useless rock!

http://www.kitco.com/news/2016-11-28/Gold-To-Weaken-as-U-S-Economy-Remains-Bright-Spot-Gan.html

#59 Barb on 12.04.16 at 9:38 pm

Love the lobster trap on the back porch of Garth’s link!

Entirely appropriate.

#60 Lac St. Pooey on 12.04.16 at 9:46 pm

#41 Gasbag Boomer on 12.04.16 at 8:11 pm

#22 Drydock: I remember the “Mapes”, great times, for sure.
Ex-West Islander…..

But the telephone polls in the middle of lakeshore road were a bit of a bitch.. …the Pioneer the only survivor!

#61 IHCTD9 on 12.04.16 at 9:52 pm

That’s a cute little house, a lot of work has been done. Still needs a lot more though, saggy facia and ridge lines, and no pics of the cellar probably for a reason. Deck looks like it needs a little help too. That’s a tiny little house with a couple additions probably, ceiling heights are all over the place. One or two rooms actually have an extremely low ceiling height, barely taller than the door. Painted planks and some exposed plumbing upstairs. That super heavy popcorn upstairs is to cover the ugly cracked plaster lath that will cost a fortune to replace with dry wall. All the money went downstairs. There must be a line from that area gong to the GTA, 429,000 is pretty high for a house like that IMHO.

The average buyer likely doesn’t know just how much work that old place will be over 25 years, ask me how I know lol!

But, I’d own that old house over a cement box hanging in the GTA smog any day- it is a delightful looking place in a quiet spot. Looks like there’s a nice place to take the ATV just down the street too if you satellite the google map :).

At least I’d smile when I pulled in the driveway instead of cringing as I drove underground into a bomb shelter parking garage.

#62 West End Toronto on 12.04.16 at 9:55 pm

I couldn’t agree more with your renting advice Garth. We currently are renting a place in Bloor West Village, right in the heart of west Toronto that we could never afford to buy. So, we get to live in a fantastic neighborhood, in a $2M+ home with our nest egg invested and zero concerns about the inevitable housing “correction” when it comes! Sweet!!

#63 bat flipper on 12.04.16 at 9:57 pm

Home owners, listen to me. With the rule changes, many would not qualify for the house they live in now, and that means they can’t move. Sure, downsize, but no one downsizes. Everyone wants a bigger house. Private mortgages can help but at huge rates. If no one moves and less people buy, then what does the realtor and mortgage dude do?

#64 Values on 12.04.16 at 10:07 pm

Bought a bigger house on 65×120 lot 5 minutes from subway, 24 Hour bus service in Toronto for 275K just 15 years ago, stretched to our financial limits at that time, even pulling 20K from my RRSP.

I would do it again.

#65 SEATTLE IS BOOMING on 12.04.16 at 10:10 pm

About half of the homes sold in Seattle’s suburbs are going to Chinese buyers, with many of the transactions requiring the use of interpreters, international banks and multiple escrow deposits, according to Dean Jones, chief executive officer of Realogics Sotheby’s International Realty. That’s up from about 30 percent last year, he said.

https://www.bloomberg.com/news/articles/2016-12-04/vancouver-housing-tax-pushes-chinese-to-1-million-seattle-homes

#66 IHCTD9 on 12.04.16 at 10:11 pm

#55 Sorry, the euro’s not dead on 12.04.16 at 9:21 pm
—-

From what I understand, Italy’s political issues go hand in hand with their financial issues. It takes years to get anything done. The reforms were supposed to change that, and since they got shot down, presumably the financial issues will continue. From there, it won’t be long before the ECB will need to help them, and Italy will then be pressed into the same austerity imposed on Greece. If so, there might be another referendum coming up, just like Greece; to stay in the EU or reboot their own currency. Not sure why the changes were shot down if the average Italian wants to stay in the EU…

#67 Winners announced on 12.04.16 at 10:12 pm

Lets get real on this blog for a moment.

Homeowners have been the hands down winners over the last 20 years in Canada.

Renters screwed. SCREWED.

I bought homes for my kids when they were in their teens knowing the forces of globalism thrusted upon the masses by the elite would be unstoppable due to the naive public.

Now gifting 2 to both of them. Starting their careers and lives, they are way ahead of their peers. Their peers are worrying about rentals and will pay most of their working lives toward shelter.

Try that with a portfolio of stocks and bonds bought without leverage!

#68 Context on 12.04.16 at 10:13 pm

Move In Now – Pure luxury within a 200 yard walk to the nearest bus and its a rental building. 1 Bedroom from $1,795, 555 sq. ft., and a 2 Bedroom from $2,395, 764 sq. ft. with nothing said what is included. Perhaps the hydro and parking are extra at 305 Roehampton Avenue.

#69 Smartalox on 12.04.16 at 10:15 pm

I remember the pre-euro Italian Lira. Around the time the Toonie coin came out, the 2000-lira was a similar two-tone coin, perhaps a little smaller.

An Italian co-worker here on a temporary visa used to love substituting the Italian coin for the Canadian one, to ‘fool’ the vending machines.

At the time, one Lira was worth about 9/10ths of a Canadian cent, so the vendor was losing 10% on every sale.

One of the senior guys on our shift owned the vending machines, and figured out what Guido was doing to him when he tried to take those coins to the bank.

Long story short: a euro-less Italian currency won’t be worth anything, and beating someone with a sack full of change leaves some nasty marks.

#70 Paul on 12.04.16 at 10:20 pm

Context at #47
Rental apartments or condo’s please send a link or address?
Thanks

#71 Newcomer on 12.04.16 at 10:21 pm

“…I always dread the possibility of our landlord selling the place and forcing us to move out (he tried to sell the place before we rented but couldn’t so decided to rent the place out).”,

This is why renters must choose carefully. You did your homework in looking into your landlord’s financial situation, which is good. I would be very reluctant to rent a place that the owner wanted to sell. Hopefully, your rent is lower by an amount that compensates for this. The financial hit of having to move is much bigger than the check you cut to the moving company. There is time spent and lots of costs involving things like replacing furniture that doesn’t fit and not knowing the cheapest butcher in the new neighborhood.

Landlords frequently deal with deadbeats, so renting to people who are in good enough financial shape that they could buy, but are not that stupid, is landlord’s dream come true. You can afford to pick and choose, and if you are considering a place that seems likely to be sold out from under you, add that cost to your calculation before signing on the dotted line.

#72 yorkville renter on 12.04.16 at 10:34 pm

#46 I rent for $2500 for 1100 sq ft of condo. What’s $2500 get you in Niagara? For the record, I consider my place to be a bargain.

#73 yorkville renter on 12.04.16 at 10:45 pm

#69 Theres “concert” or “jazz” that is a purpose built rental building on Church, south of Dundas… and a new one on Bay around Gerrard.

They are out there

#74 Monte Paschi de Sienne on 12.04.16 at 10:48 pm

ITEXIT

Italy referendum: PM Matteo Renzi resigns after clear referendum defeat – BBC News

#75 Neil M on 12.04.16 at 10:56 pm

I think about buying based on we are a nation based on delusion and foreign investment. I work for a crown. Corp maybe with 10-15% born Canadians working there. A lot of people I know have small business to clean the money coming in, look on Bridgeport, 500 Chinese flooring stores that don’t wan to you to buy anything, just clean the money coming in.It sure makes you proud to be a Canadian, scam and you will succeed. Im sure that’s all an illusion though.

#76 Self Directed on 12.04.16 at 11:02 pm

Yellen will have her excuse not to raise rates, thanks to the no side victory on the italuan referendum.

Gold will pop, markets will drop. Hang on, everyone. Don’t sell! Instead, buy more during the turbulence.

#77 Soost on 12.04.16 at 11:04 pm

When you tell us to buy real estate within a stones throw of the GTA it sends us mixed messages Gartho.

I can tell you confuse easily. — Garth

#78 Trump is whats needed everywhere on 12.04.16 at 11:06 pm

DELETED

#79 Vanrentor on 12.04.16 at 11:09 pm

#5 Linda on 12.04.16 at 5:51 pm
“Why on earth would monthly maintenance fees rise nearly 15% within the first 3 years on a brand new building? If this is the normal state of affairs, what are people paying for? Are the buildings that poorly constructed? Seems like a bad deal.”

The reason new condo fees often go up so quickly in the first few years is because the developer uses a bare bones budget to keep the monthly fees low to help sell the units. When a management company comes in they then have to raise fees to pay for the actual costs of running the building. This increase happens before you even get into the possibility of poor construction raising your fees even more.

#80 I like cookies on 12.04.16 at 11:12 pm

That’s not a monkey – it’s an orangutan! https://www.youtube.com/watch?v=JaOdSiyD6xQ

#81 Self Directed on 12.04.16 at 11:22 pm

#66 fake story. Or Troll. Only a parent that doesn’t love his kids would be incentivized to do such a stupid thing. Either way…dumb.

#82 Self Directed on 12.04.16 at 11:58 pm

More posts please…

#83 Pete on 12.04.16 at 11:58 pm

You’re right Smokey: the homeless very often are “Wonderful people who took the wrong fork in the road.”
——————-
If you want to give to them, give directly to a homeless person; not to an agency where only 5 cents on the dollar goes to something somewhat homelessness-related.
That’s the way I do it.

#84 Pete on 12.05.16 at 12:06 am

36 Polls R Phake on 12.04.16 at 7:56 pm
Brexit check
Trump check
Renzi of Italy resigns check
Hollande gone check
Merkel next
Big government is coming to an end.
—————————-
Bigger government will appear right after the financial collapse. Political correctness & feminism is on its way out. It’s 1929-1945 all over again.
They (those groups who have had their interests shoved down our throats for 20 years now) will be the scapegoats this time around. Why do you think that certain crazy PC issues are being pushed so hard at this time.

#85 Hotdogs from Heaven on 12.05.16 at 12:11 am

#5 Linda on 12.04.16 at 5:51 pm

Why on earth would monthly maintenance fees rise nearly 15% within the first 3 years on a brand new building? If this is the normal state of affairs, what are people paying for? Are the buildings that poorly constructed? Seems like a bad deal.
—————————————————-
When condos are first incorporated the developers subsidize the costs for the first couple of years. Also, they put developer friendly people on the board of directors until the new unit owners get in the groove of finding better people to nominate and vote for the board. These initial people usually do the developers bidding and keep repair costs low by putting them off into the distant future.

After a few years and the real costs of utilities and contributions to the reserve fund are realized, PLUS the costs of dealing with any issues that had been put off until the building was no longer under the Tarion warranty, a new unit owner will find their monthly maintenance up several hundred percent from the initial cost right after incorporation.

#86 Pete on 12.05.16 at 12:12 am

45 I am the mighty Oz on 12.04.16 at 8:31 pm
name a sovereign country,
you can’t
————————-
The Republic of Kanata.
Look it up. It’s the first step.

#87 Hotdogs from Heaven on 12.05.16 at 12:15 am

#28 Paul on 12.04.16 at 7:16 pm
When was the last time a new rental apartment was built in the G.T.A.? Does anyone know?
Maybe that is the biggest housing issue.
———————————————–

They are being built all over Toronto. Some of the new buildings that went up with the Emerald City condos at Sheppard and Don Mills (across from Fairview Mall) were Rental only.

A new building was put up on the south west corner of Bay and Dundas just north of city hall that is rental only. It now seems to have alot of Ryerson students in it since it’s so close to the campus.

Allied properties is building a new rental building down in the entertainment district. In fact there may be more than one.

#88 Seattle your turn on 12.05.16 at 12:15 am

Foreign money may not be 100% responsible but their money was not mute in our markets. They’re moving on:

https://www.bloomberg.com/news/articles/2016-12-04/vancouver-housing-tax-pushes-chinese-to-1-million-seattle-homes

For Vancouver investors, Seattle is a lure because it’s a waterfront city just a few hours away by car. It’s also more affordable than other West Coast destinations. Toronto, as one of the world’s financial capitals, already has an established base of foreign investment in condominiums and a large Asian population.

“Chinese money isn’t going to sit and wait,” said David Ley, a Vancouver-based professor at the University of British Columbia’s Department of Geography, who focuses on housing. “Investors are going to find another city,” and Toronto and Seattle are the top two contenders, he said.

#89 Sorry, the euro’s not dead on 12.05.16 at 1:22 am

#65 IHCTD9 on 12.04.16 at 10:11 pm

You’re first point is debatable, but I won’t die on that hill. Secondly, Greece did not vote to leave the euro during their crisis, they voted on wether to accept the conditions of the bailout package, their was a lot of spin in the media about it so I won’t hold that against you. Third, I read the proposed Italian constitution unlike most people commenting, and there were a lot of problems with it, although it did have good reforms too. Probably the biggest reason anyone voted against it was that any party even with a minority win as low as 30% of the popular vote would have 100% of the power to pass legislation. Italy has a scary recent history of giving a bully minority power uncheck rule of the country. As you can see that has nothing to do with wanting to be in or out of the EU. So now you know.

#90 paulo on 12.05.16 at 2:19 am

Well Italy votes neyt. should be interesting market today, more uncertainty pressure on bonds and rates .

#91 Bat Shit Crazy EU Doomers Give it a Rest on 12.05.16 at 3:45 am

I live in Italy and a card carrying Italian [and Canadian]. Watched the election last night and Renzi resignation speech, live.

La Stampa carried out a poll about Italians and the EU, just before the referendum poll blackout, and the results were:

15% of Italians would leave the single EU currency.

So where you bat shit crazy EU doomers are getting your news I do not know…Breitbart?

The referendum was a backlash against Renzi’s Democrat’s for 4 years of stagnant economic growth and true, populist disdain against weakening the elected Senate here in Italy.

Also, Austria yesterday voted in a Lefty government and rejected the extreme Right.

Missed by your typical idiot savant MSM is an Italian budget that thumbs its nose at the EU Stability & Growth Pact by exceeding the annual budget deficit of no greater than 3% of GDP.

Austerity, earthquake reconstruction, medical spending and the start of a €1 trillion bailout of Italian banks cannot happen without the recent budget.

Other EU countries just as pissed about austerity, not just the Italians [e.g., the French and Greeks].

Will the World’s largest and richest trading block dissolve, unlikely. Just as unlikely the UK will negotiate away its preferential trading status with the EU.

Recall, money talks and BS walks.

bsant

#92 ...bell bottoms and hash on 12.05.16 at 3:53 am

You forgot Fu Manchu mustaches, Paisley shirts, plaid pants, Nehru jackets, Afros and platform shoes.

I like it though, that you remembered the hash.

I’m just saying.

bsant

#93 DoomandGloomer on 12.05.16 at 6:46 am

#25 Mark

“This comparison is disingenuous, but given that Garth tells us that minimal return investments make up an overwhelming majority of TFSAs, its one that too many Canadians have adopted.”
——————————————————————

Please see this:

https://www.youtube.com/watch?v=etBoJJ0GZI8

Thank you.

#94 Tonyw on 12.05.16 at 7:38 am

Think Differently is the correct grammar…

#95 Data being hoarded on purpose... on 12.05.16 at 8:06 am

http://www.theglobeandmail.com/real-estate/realtors-reluctant-to-share-data-on-foreign-buyers-cmhc-meetings-reveal/article33202319/

#96 IHCTD9 on 12.05.16 at 8:32 am

#88 Sorry, the euro’s not dead on 12.05.16 at 1:22 am
#65 IHCTD9 on 12.04.16 at 10:11 pm

You’re first point is debatable, but I won’t die on that hill. Secondly, Greece did not vote to leave the euro during their crisis, they voted on wether to accept the conditions of the bailout package, their was a lot of spin in the media about it so I won’t hold that against you. Third, I read the proposed Italian constitution unlike most people commenting, and there were a lot of problems with it, although it did have good reforms too. Probably the biggest reason anyone voted against it was that any party even with a minority win as low as 30% of the popular vote would have 100% of the power to pass legislation. Italy has a scary recent history of giving a bully minority power uncheck rule of the country. As you can see that has nothing to do with wanting to be in or out of the EU. So now you know.
——

I’ll take your word for it, I’ve only read a little bit on the situation over there and it did not paint a pretty picture. Hopefully the Italians can keep the ECB from paying a visit.

#97 AfterTheHouseSold on 12.05.16 at 8:33 am

” … bell bottoms and hash.”

Ahhh yes, the hash … hot knives, knife slippage, the inevitable ‘cold sore’, and the reason, I suspect, that I couldn’t find a complete set of vintage cutlery; mine’s missing the telltale two knives. :)

Bell Bottom Blues

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

#98 crowdedelevatorfartz on 12.05.16 at 8:35 am

Snowing heavily in Vancouver this Monday morning.

Watch the National News tonight folks for the inevitable scenes of West Coast Caramageddon.

Lowerbrainland drivers dont need snow to smash into each other with amazing regularity….so today is extra special!

#99 Toronto being raided... on 12.05.16 at 8:44 am

DELETED

#100 GFD on 12.05.16 at 9:12 am

“Lock her up” continues. . . . . . now in Alberta. LOL!

http://www.nationalobserver.com/2016/12/04/news/tory-leadership-hopeful-grins-crowd-calls-alberta-premier-be-locked-policies

#101 ROTFL on 12.05.16 at 9:14 am

#55 Sorry, the euro’s not dead — “Europe has political problems, and so does Italy — a lot. Though this referendum has nothing to do with it’s euro membership. […] I read the proposed Italian constitution unlike most people commenting,”

I’ve only read summaries of the constitutional changes. But I bet that you’ve read the complete proposed changes unlike a lot of the people WHO VOTED.

When the question is framed as 1) a change in the constitution, but 2) the Prime Minister, by threatening to quit in the event of a NO, makes it a referendum on his popularity, and 3) the leader of the other popular party has a radically different direction for the country, then it’s hard to tell WHAT the people voted for. Probably not bank failures, though.

That said, the Greeks have put up with an amazing amount of pain. Not stoically, but without leaving the Euro or the EU, so far.

#102 Alex on 12.05.16 at 9:14 am

Actually Acton is nice place, close to several conservation areas (Rockwood, Guelph..) and quite close to many other: 10 minutes to Guelph, 10 minutes to Milton, 10 minutes to Brampton, 15 minutes to NW Mississauaga – actual y you have a better flexibility in terms of where to work comparing to e.g. Whitby.
I do agree with Gart, this one financially more wise then condo. Condo fee sometimes is equal to your mortgage payments, out of control, rising at will…many ppl I know once had it and said never ever anymore :)

#103 Centre Wing on 12.05.16 at 9:16 am

What people (Millennials like myself) need to realize is that there is civilization, and yes even jobs, outside of the GTA. If you can be content with life in small town Ontario, you can land a 2,000 sq ft SFH for $350k.

#104 Penny Henny on 12.05.16 at 9:22 am

Finally, as one last comment, if you are a renter, its vitally important to have a balanced portfolio and seek out professional help-Mark @#25

I’m sure you have heard that line many times yourself Mark.

#105 Context on 12.05.16 at 9:45 am

#60 IHCTD9: – I have looked at all the photos and see nothing materially wrong and keep in mind photos can have distortion as see it. This is a beautiful home for the price as has been restored. The land value alone has merit and would make a great work project as so much can be done with it. The location is good and the area is settled near the heart of the village with the GO train at hand. The entire purpose of this essay is to demonstrate an option and that small town has so much going for it with energy, atmosphere, charm, and facilities for a great lifestyle. The most important item of any residence is the kitchen and it looks great.

#106 jay on 12.05.16 at 10:02 am

Garth, here is a guy who made millions ,not buying real estate. http://www.bbc.com/news/business-38144980

#107 TurnerNation on 12.05.16 at 10:29 am

#28 Paul rental kando only.

Concert building, SW corner of Bay and Dundas. Toronto. A few years old.

#108 GFD on 12.05.16 at 10:31 am

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

#109 Incentivized on 12.05.16 at 10:51 am

#80 Self Directed on 12.04.16 at 11:22 pm
#66 fake story. Or Troll. Only a parent that doesn’t love his kids would be incentivized to do such a stupid thing. Either way…dumb.

This couple got a 8 storey apartment building with several hundred units as a wedding present on Bathurst Street in Toronto.

They are pretty fine, thanks, they don’t seem to be hurt by “stupid parents who don’t love their kids”.

#110 Mark on 12.05.16 at 10:55 am

“http://www.theglobeandmail.com/real-estate/realtors-reluctant-to-share-data-on-foreign-buyers-cmhc-meetings-reveal/article33202319/”

Not surprised. I doubt they even have much ‘data’, and if they did, releasing it would be a tacit admission that the narrative that certain RE sell-siders have tried to cast, that of foreign national participation driving the marketplace, would be demonstrably false.

The sell-side has had a very serious credibility problem for the past 3-3.5 years since the Flaherty/CMHC-induced 2013 apex of the Canadian RE market. Its unfortunate that they just continue to dig the hole deeper instead of coming out and being forthright about the shifting sales mix, the lack of meaningful foreign national participation, etc. Realtors seem to often forget that they represent, in many cases, not only the sell side, but also the buy side of RE transactions (although hopefully not both simultaneously — that would be a problem!).

#111 Johnny Boy on 12.05.16 at 11:15 am

#10 Smoking Man on 12.04.16 at 6:01 pm

That’s a cute house. Acton, where the hell is that.

Oh, in other news Italian Deplorables winning.
Globalization toast. Can some one please tell T2.
Before he makes a complete idiot of himself.
No let him make a fool of himself. I see Kevin O’Leary’s going hard against T2 and Butts.

Mr wonderful will be the next prime minister of Canada.
………………………………………………………………..
Jesus Smoking Dude you must be an alien, “Acton, where the hell is that” Come on man?

Well first take you head out of your ass, then make a left on the 401 and a right on highway 25 north. When you reach Acton turn around as they are nice country folk and probably wouldn’t put up with the likes of you!

#112 Nemasis on 12.05.16 at 11:22 am

#[email protected]###

https://www.youtube.com/watch?v=B52L95xRYFs&t=54s

#113 Johnny Boy on 12.05.16 at 11:27 am

#78 Vanrentor on 12.04.16 at 11:09 pm

#5 Linda on 12.04.16 at 5:51 pm
“Why on earth would monthly maintenance fees rise nearly 15% within the first 3 years on a brand new building? If this is the normal state of affairs, what are people paying for? Are the buildings that poorly constructed? Seems like a bad deal.”

The reason new condo fees often go up so quickly in the first few years is because the developer uses a bare bones budget to keep the monthly fees low to help sell the units. When a management company comes in they then have to raise fees to pay for the actual costs of running the building. This increase happens before you even get into the possibility of poor construction raising your fees even more.
……………………………………………………………………..
Agreed this bait and switch tactic is typical of the Condo Bastards that flog their crap. Cost to purchase oh only $1750 per month, cost of fees only $450 per month, then whamo two years later fees at or near your mortgage payments. I would never set foot in any condo in the next twenty years. Let them all fail and then you will see your investment shrivel into dust. So many boomers are set to fail as they are getting into this condo market now. Many will be on fixed incomes and no pensions. There is no way they can combat raising condo fees. A heat boiler system replacement alone can be $500K to $1.1M. Guess who pays for it.

#114 Johnny Boy on 12.05.16 at 11:38 am

#90 Bat Shit Crazy EU Doomers Give it a Rest on 12.05.16 at 3:45 am

I live in Italy and a card carrying Italian [and Canadian]. Watched the election last night and Renzi resignation speech, live.

La Stampa carried out a poll about Italians and the EU, just before the referendum poll blackout, and the results were:

15% of Italians would leave the single EU currency.

So where you bat shit crazy EU doomers are getting your news I do not know…Breitbart?

The referendum was a backlash against Renzi’s Democrat’s for 4 years of stagnant economic growth and true, populist disdain against weakening the elected Senate here in Italy.

Also, Austria yesterday voted in a Lefty government and rejected the extreme Right.

Missed by your typical idiot savant MSM is an Italian budget that thumbs its nose at the EU Stability & Growth Pact by exceeding the annual budget deficit of no greater than 3% of GDP.

Austerity, earthquake reconstruction, medical spending and the start of a €1 trillion bailout of Italian banks cannot happen without the recent budget.

Other EU countries just as pissed about austerity, not just the Italians [e.g., the French and Greeks].

Will the World’s largest and richest trading block dissolve, unlikely. Just as unlikely the UK will negotiate away its preferential trading status with the EU.

Recall, money talks and BS walks.

bsant
……………………………………………………………………
Italy will be fine! Always has and always will. My fathers relatives still live there and they have seen over sixty governments come and go. No one has lasted five years except for once since 1945. My advice buy Eruos while they are low. Domani è un altro giorno

#115 well said... on 12.05.16 at 11:45 am

Renting is fantastic in theory. Then your landlord wants to sell to make a profit and you’re back yet again sifting through neglected rental stock. We started renting 3 years ago and have built liquid wealth of 180k in that period….(feels good man!) ….but these days it’s also becoming more important to us to know where we’ll be living in a year or two.

……….

sad times it really is. Family of 4 to rent? ….owner tells them to move, you’re OUT. Now what? the children off to a new school, meet new friends……

oh well

#116 Carlito Brigante on 12.05.16 at 11:47 am

Italian EU exit will never happen. The Germans will capitulate and bail out their banks essentially showing the rest of the World who the insiders and outsiders are (Italy / Germany / France = insiders, Ireland / Greece etc = outsiders).

Populism will rise in the smaller countries and they’ll ditch the EU……….Meh.

Housing will crash over here but not in GTA for a while. My neighbor is selling his house in Oakville and he said that theres been huge interest in the 4 days thats its on the market. I know Gartho might not be cool with this but 3 of the interested parties are Chinese Canadians looking to buy for a family member back in China. Definitely not the biggest piece of the puzzle but its still a piece.

#117 Scott in Gibsons on 12.05.16 at 11:50 am

All be on the lookout for a false flag to justify censoring the internet. The elites are going for more control. Russia is being singled out as the bad guy but truth be told, everyone is hacking everyone.

We’ve hit the tipping point.

#118 my parents on 12.05.16 at 11:51 am

immigrated to Canada from western europe. Bought a house in toronto in the 70’s. That damn house of modest size is valued at more than $2,000,000. Unreal. Who is buying these houses?!?!?

#119 TurnerNation on 12.05.16 at 12:12 pm

101 new laws or taxes each year from our ruling elites who wish for 100% of our money. Really why do we deserve to keep it anyway? We are just tax farm slave breeders and feeders.

Liberals looking to tax private health and dental plans, announced.

And Kanadians will be shivering in their homes this winter due to new natural gas cap n trade nonsense.
Complete theft.

#120 IgnoranceIsBliss on 12.05.16 at 12:20 pm

$1,4xx may be the average GTA 1-bedroom rental price, but nobody in their right mind would want to live in units in the lower price range – cockroach hell. More like $1,800+ for something decent nearer the city – still cheaper than owning it, mind.

But otherwise I agree – crazy to buy anything in the GTA.

#121 Doug in London on 12.05.16 at 12:23 pm

If any of you of my fellow Boomers who own a house in the GTA are losing your hearing, it’s because your house is screaming SELL ME NOW in your ears. Cash in that winning lottery ticket RIGHT AWAY! With the proceeds you could retire and buy that house or one like it in Acton. If 430 grand seems too much you could look at a cheaper place like Sarnia.

As for buying “dirt”, if house prices are too excessive where you live you can buy dirt in a different form like LAND or FPI, both listed on the NYSE. That’s assuming, of course, you took Garth’s advice and stocked up on U.S. dollars (or real dollars) while they were still on sale.

#122 Ogopogo on 12.05.16 at 12:28 pm

Garth writes:

“Renters have flexibility, mobility, enhanced cash flow and the complete freedom to ignore mortgage rates, property tax increases and real estate corrections.”

I have whiplash from violently nodding my head in agreement. As my portfolio grows and my salary is increased, my rent has effectively DECLINED every single year.

Suck it greasy, soulless realtors: in this toxic bubble, renting rules!

#123 cramar on 12.05.16 at 12:41 pm

After all, if you can live without Starbucks and don’t mind a soul-sucking commute, there’s this for $429,900. And they’ll probably throw in the deer head!

————————-

Or you can buy a SFH in my area for $300k less than Acton! Garage included.

https://www.realtor.ca/Residential/Single-Family/17515559/9-POPLAR-LEAMINGTON-Ontario-N8H3L3

Or if you really want to spend over $400k you can get a brand new 4 Br 2,600 sq. ft., worthy of a Millennial.

https://www.realtor.ca/Residential/Single-Family/17585891/17-SUNNINGDALE-LEAMINGTON-Ontario-N8H5P8

Think different!

#124 Capt. Serious on 12.05.16 at 12:49 pm

Bought a bigger house on 65×120 lot 5 minutes from subway, 24 Hour bus service in Toronto for 275K just 15 years ago, stretched to our financial limits at that time, even pulling 20K from my RRSP.

I would do it again.

Useful if one has a time machine, I suppose.

#125 Londoner on 12.05.16 at 12:54 pm

Mark Carney speaking about the impacts of low interest rates in Liverpool today:

“Just 2% of households have deposit holdings in excess of £5,000, few other financial assets, and don’t own a home. So the vast majority of savers who might have lost some interest income from lower policy rates have stood to gain from increases in asset prices, particularly the recovery in house prices”

http://www.bbc.com/news/business-38210169

#126 Mattl on 12.05.16 at 1:09 pm

I agree that it would be crazy to buy now into some of these markets. But why isn’t the home eventually being paid off factored into the overall comparison of rent versus purchase? Sure the first 10-15 years of ownership may be favourable to the renter but what about the next 20 or 30? Is it really a great strategy for a 28 year old to pay 2-3k in rent for 20 or 30 years?

In my case, I would have put 250k plus into rent the past 10 years. Purchased instead and will own my home in 8 more years. Will only be responsible for property tax 2250 a year and maintenance on the house and will have a 450k asset (assuming a 30 percent downturn). I can’t for the life of me figure out how I would be better off sinking 400k into rent instead of my primary residence.

The folks that sat on the sidelines the past 10 years are going to be very disapponted when they hit their late 40s, have spent 200k on rent, have saved only marginally more than the average homeowner and will be facing 2012 prices. They missed out on an amazing opportunity, and the fact that rent versus purchase may be attractive now doesn’t negate that it was a terrible strategy from 2006-2014.

#127 How do you raise a family in Toronto ? on 12.05.16 at 1:09 pm

There is no affordable housing . Crazy

Rent rent rent …by default

#128 jess on 12.05.16 at 1:10 pm

digital borders

An operation by 40 countries shut down a cybercrime network that used malware to steal hundreds of millions of dollars from email users around the world, law enforcement agencies announced Thursday.

https://www.occrp.org/en/daily/5864-international-operation-shuts-down-malware-network
==========
Microsoft Crimes Unit, Partners Disrupt Huge ‘Click-Fraud’ Botnet

Friday, 06 December 2013 13:48

https://www.occrp.org/en/daily/2254-microsoft-crimes-unit-partners-disrupt-huge-click-fraud-botnet

#129 For those about to flop... on 12.05.16 at 1:58 pm

At least with some snow on his window Pegger Robertson will have a valid reason why he can’t see what’s going on in his own city…

M42BC

#130 TurnerNation on 12.05.16 at 2:07 pm

Smite lefties and buy Kinder Morgan pipeline stock.

Say…their natural gas heating and gasoline all delivered via pipelines.

#131 For those about to flop... on 12.05.16 at 2:27 pm

Get out of the city…

M42BC

https://howmuch.net/articles/start-up-jobs-across-america

#132 refreshing on 12.05.16 at 2:30 pm

this blog
oil to 65.

#133 Sheane Wallace on 12.05.16 at 2:41 pm

GTA is full of idiots. This is not a news.

1.35 mil for a ‘house’ in GTA?
Sure,

Condo with 1 k monthly fees and property tax after the mortgage is paid in full?
Absolutely, where do I sign?

And this for the privilege to enjoy the most horrendous traffic that North America can offer for absolutely incompatible ridiculous pay, hude taxes, most expensive alcohol on the planet, ever increasing fees, hydro prices, etc.

It feels absolutely fantastic not to live in GTA any more, this place is a dump inhabited by brain frozen idiots.

i thought the same in 2004 when a house culd be bought in Toronto for 400k, I am even more convinced of it know when it goes for 1.35 mil.

It can go for 10 mil, I could care less.

#134 Mark on 12.05.16 at 2:42 pm

“sad times it really is. Family of 4 to rent? ….owner tells them to move, you’re OUT. Now what? the children off to a new school, meet new friends……”

It will end up being a similar situation for families who over-extend themselves into housing on credit, and find themselves in foreclosure or forced into lifestyle downsizing.

Balance is important, but so is recognizing the extreme and unsustainable valuations that exist in the RE market at the moment and acting accordingly.

You don’t have to get it 100% right. All of us are wrong sometimes. But when the bubble is staring you right in the face, there can be absolutely enormous, life-changing gains by stepping aside.

#135 Sheane Wallace on 12.05.16 at 2:43 pm

non-competitive pay.

#136 Sheane Wallace on 12.05.16 at 2:45 pm

#126 How do you raise a family in Toronto ? on 12.05.16 at 1:09 pm
There is no affordable housing . Crazy

Rent rent rent …by default

—————-
I always thought that ‘Torontonian’ is a diagnosis. The same goes for Canadian truck drivers.

#137 ROTFL on 12.05.16 at 2:48 pm

#104 Context — “IHCTD9: – I have looked at all the photos and see nothing materially wrong and keep in mind photos can have distortion as see it.”

My take on the photos is you can’t tell from the photos. Given IHCTD’s read, which I agree with, the difference between a well done and insulated job and a poorly done and insulated job could be 3x the gas bills every month (hey, at least it’s gas heated).

And the fourth opinion, Garth’s, is that it’s the land that holds the value.

#138 Sheane Wallace on 12.05.16 at 2:49 pm

#119 IgnoranceIsBliss on 12.05.16 at 12:20 pm
$1,4xx may be the average GTA 1-bedroom rental price, but nobody in their right mind would want to live in units in the lower price range – cockroach hell. More like $1,800+ for something decent nearer the city – still cheaper than owning it, mind.

But otherwise I agree – crazy to buy anything in the GTA.

—————————
One must be the absolutely dumbest incompetent professional to stay in Toronto providing the opportunities in the US at the moment.
Both in terms of living expenses and salaries.

And let’s repeat again the 64 k question:
Which is the only place on earth where people live in basements, under ground?

Canada.

#139 Sheane Wallace on 12.05.16 at 2:54 pm

#113 Johnny Boy on 12.05.16 at 11:38 am
#90 Bat Shit Crazy EU Doomers Give it a Rest on 12.05.16 at 3:45 am

Italy will be fine! Always has and always will. My fathers relatives still live there and they have seen over sixty governments come and go. No one has lasted five years except for once since 1945. My advice buy Eruos while they are low. Domani è un altro giorno.

————————————-

Absolutely,

Don’t expect the average brain frozen idiot-kanukistan to ever understand Europe.

#140 For those about to flop... on 12.05.16 at 3:01 pm

The owner of the club in Oakland where all those people perished in that tragic fire has been complaining about his lost livelihood.

Reminds me of the time the boss of BP said he wanted his life back after having to deal with the oil spill in the Gulf of Mexico…

M42BC

#141 jess on 12.05.16 at 3:16 pm

sounds familar

Plans to turn the ancient coastal town on Budva into a new Monte Carlo collapsed leaving taxpayers the ultimate bill.
https://www.reportingproject.net/unholyalliances/

#142 YUP!! on 12.05.16 at 3:22 pm

Lets get real on this blog for a moment.

Homeowners have been the hands down winners over the last 20 years in Canada.

Renters screwed. SCREWED.

I bought homes for my kids when they were in their teens knowing the forces of globalism thrusted upon the masses by the elite would be unstoppable due to the naive public.

Now gifting 2 to both of them. Starting their careers and lives, they are way ahead of their peers. Their peers are worrying about rentals and will pay most of their working lives toward shelter.

Try that with a portfolio of stocks and bonds bought without leverage!

…………

winna winna chicken dinner!!

ship sailed for those looking to buy….

#143 IHCTD9 on 12.05.16 at 3:38 pm

#104 Context on 12.05.16 at 9:45 am
#60 IHCTD9: – I have looked at all the photos and see nothing materially wrong and keep in mind photos can have distortion as see it. This is a beautiful home for the price as has been restored. The land value alone has merit and would make a great work project as so much can be done with it. The location is good and the area is settled near the heart of the village with the GO train at hand. The entire purpose of this essay is to demonstrate an option and that small town has so much going for it with energy, atmosphere, charm, and facilities for a great lifestyle. The most important item of any residence is the kitchen and it looks great.
—-

Yeah it’s a nice place in a nice town, don’t get me wrong. I own a 1870 farm house myself, so I know what to expect. These old places in old neighbourhoods ooze charm from every pore, but to live there, there will be costs. Best is if a guy can do his own work, hard to lose that way.

If you’ve read any of my posts, you know I’m the last guy you need to convince of the great, affordable existence one can have in small town Ontario. I live in a tiny village with 1 gas station, and two convenience stores, 500 people, median house price 260k, family income 115k, bought our house for 123k in 2001. It’s awesome on all fronts as long as our jobs hold out!

IMHO, it’s pretty much unbeatable for the price of entry. I will never be able to wrap my head around folks piled into 400-600k condos living among a sea of anonymous folks and endless traffic.

#144 Context on 12.05.16 at 3:43 pm

Three large apartment renting towers have recently gone up called the Heathview in a good location near the subway at 310 Tweedsmuir Avenue. You wouldn’t even want to know the rents there.

#145 jess on 12.05.16 at 3:45 pm

Fake US embassy in Ghana shut down after ‘about a decade’? What took so long?
FRANCIS KOKUTSE
A fake U.S. embassy that operated for “about a decade” in Ghana’s capital issuing counterfeit and fraudulently obtained visas has been shut down, the State Department announced.
http://www.state.gov/m/ds/rls/263916.htm?source=techstories.org

#146 IHCTD9 on 12.05.16 at 4:00 pm

#122 cramar on 12.05.16 at 12:41 pm

Or you can buy a SFH in my area for $300k less than Acton! Garage included.

https://www.realtor.ca/Residential/Single-Family/17515559/9-POPLAR-LEAMINGTON-Ontario-N8H3L3

Think different!
——

Holy moly what an awesome deal! I just love those old stone houses. It’s going to last for centuries if looked after. I was just reading about 19th century stone mason built houses in Southern Ontario. Some of the best were built by Scottish masons, every granite block in the wall was shaped by hand, collected from the fields by hand, and “chinked” (rock on rock) such that the motar joints were largely aesthetic. These guys busted granite boulders with a sledge all winter to be ready for building in the spring.

Just beautiful with all the different colours, and an incredible outpouring of labour. Houses will never, ever be built like that again; and the knowledge of the art is in the hands of very few folks today.

#147 IHCTD9 on 12.05.16 at 4:25 pm

#141 YUP!! on 12.05.16 at 3:22 pm
Lets get real on this blog for a moment.

Homeowners have been the hands down winners over the last 20 years in Canada.

Renters screwed. SCREWED.

I bought homes for my kids when they were in their teens knowing the forces of globalism thrusted upon the masses by the elite would be unstoppable due to the naive public.

Now gifting 2 to both of them. Starting their careers and lives, they are way ahead of their peers. Their peers are worrying about rentals and will pay most of their working lives toward shelter.

Try that with a portfolio of stocks and bonds bought without leverage

—-

Another get real moment should be added to the above.

The insane prices afflict all of two markets, and their surrounding (commutable) areas.

Outside of these areas are places with a very affordable lifestyle if you can get into the local job market.

The whole price insanity in the GTA boils down to jobs and ethnicity, that’s pretty much it.

I know several young guys in their early twenties in the trades comfortably making mortgage payments and are getting paid to go to school instead of racking up a 6 figure school debt to land a 50-60k/yr job. These rural guys are similarly way ahead of their millennial degree bearing brethren trying to make it in the GTA, and they are paying for their own houses with no parental help.

Don’t get me wrong, kudos to you for looking after the kiddies and seeing the future – I see the same things myself. I am doing the same for mine, although it will be large quantities of cash I hand over years down the road, and I have a couple building lots as well if they don’t object to living beside the old man :).

#148 dontcallmeshirley on 12.05.16 at 4:38 pm

Garth is considering what happens in the next 20 yrs.

——————–

#66 Winners announced on 12.04.16 at 10:12 pm
Lets get real on this blog for a moment.

Homeowners have been the hands down winners over the last 20 years in Canada.

#149 jess on 12.05.16 at 4:38 pm

UK suffering ‘first lost decade since 1860s’, Carney says
Carney’s inclusive capitalism in new york oct.
http://www.inc-cap.com/conferences/conference-2016/agenda/

Mr Carney listed three priorities:

“Economists must clearly acknowledge the challenges we face, including the realities of uneven gains from trade and technology”

“We must grow our economy by rebalancing the mix of monetary policy, fiscal policy and structural reforms”

“We need to move towards more inclusive growth where everyone has a stake in globalisation.”
============
“closet trackers”
Moody’s: FCA review to ‘exacerbate’ loss of confidence in active fund managers
ByAndrew Pearce 29 November 2016
The City of London watchdog’s damning summary of active managers “will likely exacerbate the loss of confidence” the sector is facing, the ratings agency Moody’s has warned.
http://www.efinancialnews.com/story/2016-04-11/closet-trackers-no-slapdown-just-turn-of-screw?mod=article-related

“It has been a big issue in the Nordic countries. Denmark’s financial watchdog began investigating in 2014. In March 2015, the Norwegian regulator accused DNB Asset Management, the funds arm of the country’s largest bank, of closet tracking on one of its funds, and ordered it either to increase active share or lower fees.”

#150 NoName on 12.05.16 at 5:00 pm

zestimate as accurate as FDA food labels, 20% off

http://blog.duvora.com/exactly-how-bad-are-zillow-zestimates-case-study/

#151 Self Directed on 12.05.16 at 5:17 pm

#108 Incentivized on 12.05.16 at 10:51 am

Now what you are describing is something 99.9% of all Canadian families will never be able to afford, let alone have the foresight to predict what is now 20/20 hindsight. No one can relate to such an outrageous claim therefore does not matter… even if such a thing is true. Kapeesh?

#152 maxx on 12.05.16 at 5:19 pm

#82 Pete on 12.04.16 at 11:58 pm

“You’re right Smokey: the homeless very often are “Wonderful people who took the wrong fork in the road.”
——————-
If you want to give to them, give directly to a homeless person; not to an agency where only 5 cents on the dollar goes to something somewhat homelessness-related.
That’s the way I do it.”

Me too. I’m deeply suspicious of organized charity. I love giving directly to people on the street and also to my local charity shop. If a version of CharityCorp International pesters me, I ask for their annual report disclosing full fund distribution and a donation form with full description of its works and beneficiaries so that I can think about it.
That stops them in their tracks.

#153 jess on 12.05.16 at 5:38 pm

How to Hide $400 Million
…”the day when she (the wife of Robert Oesterlund.) tailed him through the streets of Toronto
http://www.nytimes.com/2016/11/30/magazine/how-to-hide-400-million.html

#154 Mark on 12.05.16 at 5:49 pm

“Try that with a portfolio of stocks and bonds bought without leverage!”

Worked just fine in the 1990s when just the downpayment on a house, in 1990, invested in a portfolio of stocks and bonds bought without leverage, returned enough to own a house outright by the end of the decade. The combination of housing depreciation and portfolio appreciation/reinvested dividends.

Rules of thumb can be extremely dangerous, especially when inappropriately applied at or near inflection points.

#155 Context on 12.05.16 at 5:52 pm

The millennials who have bought into the condo markets of Toronto see all as the new normal. The box units with the no nothing kitchens looking out to a table and four chairs beside what is a living space called the living room is a cool condo. Its all a con by the Real Estate cartel to make black look like white, and you are the suckers accepting this pitch. These would never have been bought years ago because nobody would buy this junk high in the sky. I have lived in dorm rooms that had more class for a very cheap price than some of these condo units. My master bedroom with a walk in closet and bathroom has more square footage than some of these box units so go figure.

#156 Henry Morgan on 12.05.16 at 6:49 pm

I did it, just sold the house I bought in Hamilton ~3 years ago for $125K profit and paid cash for bigger house in Welland for $110K, leaving $50K to put back into investments after costs.

Mortgage free in less than 3 years of ownership!

#157 crowdedelevatorfartz on 12.05.16 at 8:50 pm

The commute was AWESOME.
Normally it takes 15 minutes……took just over an hour but I had the added bonus of seeing a 5 car pile up on Royal Oak hill

ICBC rates goin up fer sure
Aiiiiiiiii Yaaaaaaaaa

#158 AGuyInVancouver on 12.06.16 at 2:12 am

#115 Carlito Brigante – Yes, Garth does seem to underplay the Chinese money connection. There’s no question in Vancouver and some of its suburbs (Ruchmond, Burnaby) it has been huge. And just as huge but unreported is the money sloshing into the market from those boomers who cashed out and sold to those Chinese dudes and now have big bucks to buy their retirement place on Vancouver Island or the Okanagan.

PS why are there three different posters all flogging the Bloomberg article about Chinese buying houses in Seattle?

#159 Cindy on 12.06.16 at 9:08 am

To all you renters waiting for a CRASH/DECLINE to happen…I hate to break it to you, but even if after another 5 years or so you do get a bargain on your house, and it’s 200k cheaper than at its peak, you aren’t getting yourself a bargain. Your friends who invested 10 years before you already made 700k (easily) of unrealized profit while you were renting away. See? Now you don’t think you are getting a bargain anymore, do you? Even a broken clock is twice a day, remember that.

#160 derkavich on 12.06.16 at 11:01 am

Garth that link is NSFW, you made me so horny man..