The game changer

money-jar

Well, that’s it. The denial, bravado and fake news is over. Not only did the Fed (as promised) raise its benchmark rate by the obligatory quarter point Wednesday, but the central bankers told everyone to get ready for three more in 2017. Three. Wow. And here I was being covered in chucked tomato juice and old coffee grinds for suggesting there’d be two next year.

This means US rates will be one full percentage point higher in a year than they were yesterday. That’s yuge. Trumpian. Game-changing. So back to the question I’ve been asking you for months. Are you ready?

The hawkish words from the Fedheads sent off a bomb in financial markets. New York stocks raced to a new record high on the initial news then fell back on word of those three more looming hikes. The US dollar roared ahead, cratering gold and crashing oil prices. And because US rates now surpass those here, our dollar was collateral damage, losing a cent.

The big news was over in the bond market, where two-year US Treasuries ballooned to their highest level since way back in the credit crisis of 2009 as the impact of all those rate hikes to come was factored into prices. The yield on a Government of Canada 5-year bond (the one that dictates five-year mortgage rates) soared. It was just 0.484% last February, and tonight has climbed to 1.179%. That, kids, is an increase of 143% this year.

bonds-yield

So it’s easy to see what’s coming. Higher mortgage rates. The Bank of Canada doesn’t need to raise a finger for this to happen. As this pathetic blog has been yammering about for months, when the Fed moves, we all move. The action today, plus the potential now of three more moves over the next 12 months, is signalling the end of an era. The golden age of Canadian real estate. Stick a fork in it. Peak house is in the rear view.

It’s worthwhile noting the S&P 500 real estate sector took a dive after the announcement, since higher interest rates will do some damage to the US housing industry, where average financing costs had already risen by $16,000 since the deification of Donald Trump. This despite the fact most Americans have mortgage rates locked in for 30 years and are far more insulated from rate roulette than Canadians, who have to go back and seek financing every five years or less. Americans also aren’t at peak debt levels (like us), nor have they pushed average home prices into the stupid seven-figure bracket now common even in the soulless suburbs of Toronto and Vancouver.

This is happening for the reasons spelled out here since November 8th. Trump may be completely weird, but just about everyone’s reached the conclusion that he’ll move the needle on US economic growth, cut corporate taxes, reduce government regulation, repatriate trillions in offshore profits, stifle trade outflows, spend a ton of government money, and make inflation great again. The Fed’s acting now, signalling it won’t roll over or allow wages or prices to get out of control as a result.

Even before the election a rate increase this week was a done deal. Lots of new jobs created. Virtual full employment. GDP rebounding, Corporate earnings back in the black. But with the added stimulus of lower taxes, higher spending and a cabinet full of CEOs and billionaires, we’ve moved into a whole new game. The Fed now says “inflation expectations have increased considerably” which is the central bank equivalent of having your underwear combust. Plus the Fed chair – Janet Yellen, whom Trump hates – says she’s going to fulfill her whole term (at least) and will be around until 2018. Thus, expect more tightening. The lady’s serious.

The implications for Canada are exactly as conjectured here, and slapped down by the macroeconomists in the steerage section. Namely: fixed-rate mortgages will start going up soon. So lock in on Thursday. The real estate market will travel in the opposite direction. Already the benchmark average for a single-family home in Vancouver was whacked for a $193,000 decline last month, while Toronto continued to rock. As you may recall, this blog suggested early in July that you bail out of Vancouver. If you’ve racked up big gains on a Toronto property, it’s epiphany time.

Oh yeah. The Bank of Canada. There’s no way those dudes can resist four Fed increases in a dozen months. If they tried, we’d be yakking here about $22 cauliflower. The next rate move will be up, not down, and it will take place in 2017. More mortgage grief.

In short, time to shift some of that net worth from real assets into financial ones. You won’t want to miss what happens next.

182 comments ↓

#1 Rick Fast on 12.14.16 at 6:53 pm

GTA housing will crash in 2017, 30% decline coming

#2 Yadda da da da on 12.14.16 at 6:53 pm

What do all of the fed chairs have in common aside from being run by the mafia banksters?

#3 ANON on 12.14.16 at 6:55 pm

Love the photo! One of the best example of cognitive dissonance there is.
Money is the root of all evil … only in contractions. In expansions, it is the tokenized trust in the narrative, the root of all that is good.

#4 Bob on 12.14.16 at 6:57 pm

Interest rates to rise in 2017….about time and long overdue. Maybe now our culture and society will start to embrace saving rather then spending. Of course, that is on a personal level…government is a whole other and depressing story.

#5 RentYVR on 12.14.16 at 6:58 pm

” The Bank of Canada. There’s no way those dudes can resist four Fed increases in a dozen months.”

Problem is Garth, the BoC actually wants our dollar to fall (cauliflower be dammed) as they wrongly believe that will boost our export market; so yes, they can and will resist fed increases and are still more likely to cut than raise next year.

#6 Lulu on 12.14.16 at 6:59 pm

Next Spring the RE market is gonna be a freak show for sure since Mother Yellen said that in the meeting, at least three more raise… Not believe it? Wait and see. Now the wild man is in charge and he will do what he said mostly related to economic growth and raising interest rate is one of them, so like Garth said, if you want to make a great windfall of the century, do it NOW!!! Don’t be a sour grapes like those in Vancouver right now!!

#7 Smartalox on 12.14.16 at 6:59 pm

Possibly overlooked given today’s big announcement was the press release that noted Canadians’ debt to income ratio spiked again in the 3rd quarter to 1.699, up from 1.667 in Q2. And that’s BEFORE Christmas spending, and the impact that Arctic outflows and Polar Vortices will have on people’s debt levels.

And remember for every person that has NO debt, someone else owes at least $3.40 for every dollar they earn. Yikes!

#8 Prairieboy43 on 12.14.16 at 7:00 pm

Full steam ahead. Yahoo. Great to be a Cowboy.

#9 God Emperor of Mankind and Holy Terra Trump on 12.14.16 at 7:01 pm

Did I not tell you people that the Emperor Protects?

#10 ying yang on 12.14.16 at 7:04 pm

Increasing cost of servicing jumbo government debts and programs has the potential to demand higher taxation, lower TFSA contribution limit, etc. on profits from (financial) assets.

You gotta be careful what you wish for.

#11 Bye bye! on 12.14.16 at 7:04 pm

Yeah! Yeah! Yeah! Good bye cheap money. Good bye, over leveraged real estate people. Good bye, lying real estate agents. Good bye to all those who were pretending to be rich using credit. It was not nice knowing any of you. Hello real world, I have missed you.

#12 Victoria Real Estate Update on 12.14.16 at 7:06 pm

IT’S ALWAYS DIFFERENT UNTIL IT ISN’T

“In short, we are asked to worry about something that has never happened for reasons still to be coherently explained. ‘Housing bubble’ worrywarts have long been hopelessly confused. It would have been financially foolhardy to listen to them in 2002. It still is.”

* Alan Reynolds, Senior Fellow, Cato Institute (US):
“No Housing Bubble Trouble”, Washington Times (January 8, 2005):

From March 2006 to May 2009 house prices in San Francisco fell 45.3%.

WARM VS COLD

Canada’s world famous loose mortgage lending standards (since 2000) and emergency rates (since 2009) have created extreme housing bubble conditions in cities from coast to coast.

Compare what Canadians in cold, small prairie communities pay for houses to what Americans pay for similar (bigger in most cases) houses in massive California cities.

Note that incomes in the two countries are approximately equal and that house prices were similar until 2006 (when Canada loosened lending standards even more).

More prudent lending standards in the US (after 2008) have prevented house prices there from completely bubbling over (compared to incomes) the way they have in Canada. For example, in most parts of the US, the minimum down payment is 20%. For a lot of buyers in Canada, it has been zero or almost zero (5%) for a long time. Another example would be Canada’s mortgage fraud problem. Mortgage fraud is a known bubble-blower. Just ask our neighbours to the south.

All houses:
– Min. 3 beds, 2 baths, 1,300 – 1,700 sq. ft.. (above ground, primary living space), basement unfinished (if one exists)
– Attached double garage

MASSIVE CALIFORNIA WEST COAST CITIES:

$427 K – San Diego, CA
– 3 beds, 3 baths, 1,662 sq. ft.
– new construction

$440 K – Pacoima, CA (Los Angeles)
– 4 beds, 3 baths, 1,441 sq. ft.
– new construction

SMALL CANADIAN PRAIRIE COMMUNITIES

$399 K – Brandon MB (** SMALLER**)
– 3 beds, ** ONLY 2 baths **, ** Only 1,315 sq. ft.**
– new construction

$420 K – Outlook, SK
– 3 beds, ** ONLY 2 baths**, 1,669 sq. ft.
– built in 2015

$390 K – Carlyle, SK
– 3 beds, ** ONLY 2 baths**, 1,470 sq. ft.
– built in 2015

THE IMPOSSIBLE – ONCE A HOUSING BUBBLE EXISTS, NO POLICY CHANGES CAN BRING ABOUT A SOFT LANDING

If Canada’s bubble-blowing policy has pushed house prices to ridiculously extreme levels in these small communities, imagine what it’s done to house values in cities like Victoria and Vancouver.

In tiny Victoria (accessibly by ferry or plane only ** we’ve had our share of snow lately **), Canadians pay approximately twice as much (likely more) for a house like the ones above as Americans do in San Diego and Los Angeles. That’s how ridiculously risky, irresponsible and dangerous Canada’s lax lending standards are.

Unfortunately for Canadian mortgage holders, history has clearly shown that all bubbles end badly – no matter how different anyone thinks their city or country is.

Did I mention rising rates?

#13 Trump on 12.14.16 at 7:07 pm

My plan all along……raise interest rates, crash housing prices and buy real estate on the cheap.

Brilliant aren’t I.

Oh and by the way hate to say I told ya so….who won the election again ?!?

#14 Jeff on 12.14.16 at 7:10 pm

Last time they hiked a quarter point the U.S. Stalled for six months.
Fundamentally nothing has changed.
Trump will crank some debt but that’s about it.
Interest rates in Canada are going nowhere fast

#15 Looks like the rooster is coming home to roost! on 12.14.16 at 7:11 pm

Well, all those folks who just purchased a house, with a big fat mortgage will soon be under water. Man, they must be nervous, I hope they can swim. Toronto is full of people “pretending” to be wealthy, it will be a blood bath here. Toronto land of the dummies, thinking that the party of cheap money would never end and now, the punch bowl is being taken away.

#16 Bat Flipper on 12.14.16 at 7:12 pm

Are you trying to say sell your house and buy US equity?
You’ll make a shipload of money just on the exchange rate. Let’s make America Great Again!

#17 GTA Realtors on 12.14.16 at 7:13 pm

The realtors should update their resumes, the crash is coming.

#18 Bram on 12.14.16 at 7:16 pm

#152 Mark on 12.14.16 at 2:17 pm
Pretty flimsy argument you’re making there. One month? Really? That month could (and likely is) reflective of what happened years ago.

Guess when the 2008 financial crisis showed up in Teranet HPI?

“Years Late?” as you like to think?

You can see here:
http://www.housepriceindex.ca/images_template/ChartEN01_00182.gif

There… lag is in months, not years, and the little smoothing (low pass filter) there is, does leave enough signal left in the data, as shown above.

#19 Greater stool.ca on 12.14.16 at 7:16 pm

Quarter point chaos! ….can’t believe all the people in the comment section saying this could never happen….bet they feel pretty stupid now…and if they don’t…they should…..cus they are! Ha.
Any how…what happens next? And why wouldn’t we want to miss it Garth? …i hate these cliff hanger statement r you end of with..

Thanks for blog…always a good read.

#20 Pete on 12.14.16 at 7:17 pm

shift some of that net worth from real assets into financial ones. – Garth
——————————–
You got that right Garth. There is nothing REAL about financial assets.

#21 bb on 12.14.16 at 7:18 pm

Unless the CAD goes below 0.68 (Price last January 2016) and continues to trend down, Homeowners have no reason to worry.

Higher rates will also mean higher rents for properties without rent controls. Renters subsidize landlords’ properties.

The thing is though most house/condo flippers are unwilling landlords. RE is a versatile investment. If there are less buyers, that means more renters (Or more government subsidized housing applications).

#22 Catalyst on 12.14.16 at 7:19 pm

Wasn’t there supposed to be 4 increases by the Fed this year?

#23 nice on 12.14.16 at 7:20 pm

first. hang-on, the rough ride just started

#24 Doug t on 12.14.16 at 7:21 pm

Calm down everyone – just take a deep breath – with the corpocapitalist machine demanding GROWTH via consumption of widgets and doodads (like since foeva) we are a doomed bunch of monkeys. We are at PEAK growth in the world – we’ve destroyed the planet and societies getting here but goddamit we did it. sit back light up a cigar and gaze at the wonder of it all – in the short time that was the industrial revolution to the techno age now, we have truly run the mother ship of humanity into one huge death spiral. Yes yes we have created and invented lots of handy machines and systems to live a more lazy life BUT the cost – oh my – the world population is weighing down on this rock and somethings gonna give.
You can stick your head in your balanced portfolio and pat yourself on the back for being “financially smart” all the while the financial machine that draws from all of these portfolios continues to destroy lives around the globe.
Feeling good never cost so much.

I don’t have to tell you things are bad. Everybody knows things are bad. It’s a depression. Everybody’s out of work or scared of losing their job. The dollar buys a nickel’s worth, banks are going bust, shopkeepers keep a gun under the counter. Punks are running wild in the street and there’s nobody anywhere who seems to know what to do, and there’s no end to it. We know the air is unfit to breathe and our food is unfit to eat, and we sit watching our TV’s while some local newscaster tells us that today we had fifteen homicides and sixty-three violent crimes, as if that’s the way it’s supposed to be. We know things are bad – worse than bad. They’re crazy. It’s like everything everywhere is going crazy, so we don’t go out anymore. We sit in the house, and slowly the world we are living in is getting smaller, and all we say is, ‘Please, at least leave us alone in our living rooms. Let me have my toaster and my TV and my steel-belted radials and I won’t say anything. Just leave us alone.’ Well, I’m not gonna leave you alone. I want you to get mad! I don’t want you to protest. I don’t want you to riot – I don’t want you to write to your congressman because I wouldn’t know what to tell you to write. I don’t know what to do about the depression and the inflation and the Russians and the crime in the street. All I know is that first you’ve got to get mad. You’ve got to say, ‘I’m a HUMAN BEING, God damn it! My life has VALUE!’

✌️

#25 Foxnews on 12.14.16 at 7:24 pm

Trump, crazy like a fox.

#26 TurnerNation on 12.14.16 at 7:24 pm

Furrst rate hike!

#27 economictsunami on 12.14.16 at 7:24 pm

The second 1/4pt. rate increase in a decade of recovery?

How many more decades of recovery before rates are normalized?

Last December the Fed forecast 4 rate increases in 2016 but only managed one.

This time they have only forecast 3 for 2017; due to the “uncertain” economic outlook. (read political.)

Canada’s Gravity-Defying Household Debt Swells to C$2 Trillion:

https://www.bloomberg.com/news/articles/2016-12-14/canada-household-debt-ratio-hits-record-with-c-2-trillion-tab

Canadians keep digging themselves deeper into debt:

http://www.theglobeandmail.com/report-on-business/economy/canadas-household-debt-rises-in-third-quarter/article33318488/

Meanwhile in LaLa Land, we still believe that we can solve a personal debt problem with ever larger amounts of debt.

Now wherever did we get that idea from?…

#28 Lindsay on 12.14.16 at 7:25 pm

NO!!!! Interest rates will not increase in Canada. I cannot afford any more increases on my payments for my mortgage, It isn’t easy being a single woman paying a hefty mortgage to live in the Toronto Annex (For those who do not know our great city, The Annex is Spadina and Bloor to Avenue Road).

I will complain to the Bank of Canada if they raise interest rates. It is veiled misogyny and sexism because our male-dominated economy isn’t doing that well, and because I’m a woman, I will have to pay more interest on my mortgage while the unemployed men in Alberta mooch off E.I and welfare.

I will not let the Bank of Canada raise their interest rates. Starting a Change.org petition soon and get some of my co-workers at CUPE to sign the petition to lower interest rates instead of making borrowing costly for women!

#29 Mark on 12.14.16 at 7:28 pm

“Virtual full employment. “

Key word here is ‘virtual’. Because almost nobody, aside from a few delusionals, believe that the economy is anywhere near ‘full employment’. Make believe. Fantasy. “Virtual”. Where, for example, is the wage inflation? Where are the job ads, the signing bonuses? Why are employers still so overwhelmed with applicants that they’re not bothering to respond to most? Why are student loans defaulting left and right if people were able to find jobs after graduating? The labour participation rate, especially for men, is collapsing.

I’ve been fairly resistant to labelling the mainstream media as “fake news”, but it seems that they, along with the Fed, are peddling a lot of it. Trump didn’t win because people were happy with the employment market and its awful state of affairs, that’s for sure!

#30 Kurt on 12.14.16 at 7:31 pm

What happens next: Wheeeee!

#31 Jungle on 12.14.16 at 7:32 pm

What happens next? Stocks go up?

#32 firebird on 12.14.16 at 7:32 pm

It’s good to see Breix, T2 and Trump showing the civilized world how to survive. I love it.

#33 Jungle on 12.14.16 at 7:33 pm

GTA market is a BEAST, it needs high rates to cool it down.

#34 Pet Vet on 12.14.16 at 7:37 pm

I like to save, so this should be good.

#35 Self Directed on 12.14.16 at 7:40 pm

Wow! My REIT’s took a big hit today. So much for that Financial Asset…. I guess time is our friend, right Garth?

#36 Randy on 12.14.16 at 7:41 pm

The Fed has lost all credibility. Yellen is a hack. Fire Her.

#37 Tulip Bulb Mania on 12.14.16 at 7:42 pm

Well, looks like the boom is set to bust. I find it funny that there was more Canadian news coverage on the the Fed rate hike than in the US. All those over leveraged beavers must be getting nervous.

#38 Dennis on 12.14.16 at 7:45 pm

Oh goody. Higher interest rates for my GICs finally.

#39 Lindsay and her gigantic mortgage on 12.14.16 at 7:46 pm

Is that post a joke? If not, more reasons why Toronto is a house of cards!

#40 Brian Ripley on 12.14.16 at 7:48 pm

“Americans also aren’t at peak debt levels (like us)… Garth

I updated my household debt chart with the new 3Q data today:
http://www.chpc.biz/household-debt.html

The widening spread between total household debt and household mortgages means we are borrowing even more to maintain lifestyle.

That’s consumption of other people’s production and according to StatsCan in their notes on FDI-FDO… “United States’ share of total Canadian direct investment abroad increased from 41.5% in 2014 to 44.6% in 2015.​”

It’s all about the USA… eh?

#41 Money Miser on 12.14.16 at 7:49 pm

Bring on the rate rises and bring this gasbag down! Here’s to 2016 being the beginning of the end!

#42 45north on 12.14.16 at 7:53 pm

So it’s easy to see what’s coming. Higher mortgage rates.

the end of an era!

I suppose there are people in Woodbridge that know but most don’t. I mean sales are always down in December so in the GTA most people don’t know and won’t know until May 2017. Maybe they’re not really going to know until December 2017.

#43 Long-Time Lurker on 12.14.16 at 7:54 pm

Good article, Garth.

You were warned.

#44 Capt. Serious on 12.14.16 at 7:56 pm

2017 is shaping up to be at least as interesting as 2016.
Pretty happy most of my bonds are short duration. Portfolio is nicely diversified, reasonably light on maple, house is not a huge percentage of overall assets, mortgage is manageable at much higher rates. Looking forward to the show.

#45 Sam hughes on 12.14.16 at 7:57 pm

I for one welcome the return of our interest rates above Zirp. The FEd move is epic – the great rebalancing is beginning – Canada is toast .

#46 I Have No Debt on 12.14.16 at 7:58 pm

And that makes me so happy! Raise those rates! Raise those rates! No mortgage, no debt, and happy as can be!

#47 morry on 12.14.16 at 8:01 pm

hope you are correct about Canadian mortgages are about to rise,

TD raised again today. — Garth

#48 Craig on 12.14.16 at 8:06 pm

About a week and a half ago I saw Larry Berman give his interest rate predictions to Andy Bell on BNN before heading off to South America for holidays. He said that this week the US will raise rates but for the next US Fed interest rate decision after that… rates will be lowered again. He also said that Canada’s next rate decision will be a cut as well . With today’s news of a possible 3 banger in the US , is Mr. Berman out to lunch ? Is Ms. Yellen’s big turn around warranted or is she trying to appease the Donald who sharply criticized her ? Stay tuned .

Yes. Lunch. — Garth

#49 Yellen's A Babe! on 12.14.16 at 8:10 pm

I love this gal! Keep raising rates sweetie, the world needs to be reminded about the worth of a dollar. A massive mortgage for a slanty semi, won’t seem so pretty next year.

#50 zee on 12.14.16 at 8:14 pm

Hey Garth

Janet Yellen said the same thing last year and could only do one rate hike because of so called global risks to the economy.

My feeling is that one little problem in the global economy and all bets are off.

#51 the other white meat (pork) on 12.14.16 at 8:20 pm

The Dow is only down by 118 points instead of the 1000 plus from the last rate increase. A relief to be sure, but hardly worthy of this “50 Shades of Grey” prose, tantalizing though it may be. Let’s see if Mr Trump alone can fend off global deflation and right the ship.

#52 Scotia raising variable rates on 12.14.16 at 8:20 pm

Just got the email…

VRM pricing p-10 for owner occupied

P+15 for rentals….

Discount is basically gone now….

#53 Debtslavecreator on 12.14.16 at 8:20 pm

Fed is stuck
The economy requires growth in debt to keep GDP and asset prices at illusory levels but rates are too low and debt levels are crushing
Yet the Fed is scared of losing its credibility and needs to endure it has 4-5 bullets in its chamber before the inevitable next recession
Now over the next few months the USD , yields and possibly US stocks will rise
The rise in us yields and the usd will steadily and slowly strangle the us and global economy like a boa constrictor
Over 9 trillion in usd debt held outside the US will start to default soon and the rising USD will also choke off us exports and global corp earnings
You will likely see a massive rush of foreign capital into the us until it all comes crashing down within the next 3-4 years
The next major bear market will be the ONE
Shut down of the system, print trillions of SDR by the IMF and massive unemployment with sharply rising inflation and wild increases to most taxes
Can you say Canadstan

#54 Bill Grable on 12.14.16 at 8:21 pm

The Party, long over, is now about to turn ugly.

Had you listened to Mr. Turner, from day ONE, you wouldn’t be sitting staring at the screen and realizing your ‘pile of bricks’, are about to lead you to a life of Ramen noodles and the Subway. Don’t say you have not been warned. Mr. Turner has tried, begged, cajoled, and joked, to try and talk some sense into a great swath of folks. Now the Tide is sweeping out – we are going to find out how many people have been living in dreamland.

This will NOT be pretty.

#55 Andrew Woburn on 12.14.16 at 8:24 pm

From the Handelsblatt, one of Germany’s major financial newspapers

– Government Advisor: Germany Should Quit Euro

Germany should withdraw from the euro zone to save the European Union, said Roland Berger, the doyen of German strategy consultants, in an interview.

Europe is in a “disastrous” state and Germany should quit the euro zone to enable the E.U. to survive, one of Germany’s best-known management consultants and government advisors, Roland Berger, told Handelsblatt.

“The cause is primarily the euro. I think this crisis can only be solved through radical steps and not through continued muddling through,” said the 79-year-year old founder of the company that bears his name, one of the world’s foremost strategy consultancies.

“Otherwise Europe will break apart ever more. The economic cultures in the 19 member states of the euro zone are simply far too different. We shouldn’t think so much about whether Greece can be saved but whether it wouldn’t be far more logical if Germany were to leave the euro zone to preserve the E.U. as a whole.”

https://global.handelsblatt.com/politics/germany-should-quit-euro-says-top-consultant-661114

This is not a new idea. What is interesting is that a person of Herr Berger’s status is floating it in public, possibly as a trial balloon. Still it is not clear to me how this would help Europe’s debt problems.

One would expect a new deutsche mark to rapidly gain value against the Euro. Whether German banks face a massive haircut from an Italian default or from a currency devaluation of Euro receivables looks like the choice between gunshot and poison.

#56 DavidLi on 12.14.16 at 8:30 pm

More uncertainty in the US market place! Will President Trump fight the Fed? Of course he will. US is looking scarier by the day.

Already Chinese investors are viewing Toronto and the Greater Toronto Area as the safest place to invest…and the investment will be into more real estate, especially detached homes and townhouses.

A potential blip in mortgage rates is nothing compared to the security and boring predictability of Canada. And in Canada the place to invest in is Toronto and the GTA (or Vancouver island to a lesser extent).

Except huge migration and prices rises in 2017-20 in Toronto and the GTA. And there is even a good basketball team.

#57 TS on 12.14.16 at 8:36 pm

How long until rate reset prefs gain their value back?

2018?

#58 45north on 12.14.16 at 8:38 pm

Lindsay: NO!!!! Interest rates will not increase in Canada. I cannot afford any more increases on my payments for my mortgage, It isn’t easy being a single woman paying a hefty mortgage to live in the Toronto Annex

https://en.wikipedia.org/wiki/The_Annex

#59 predictions for the TSX in '17.. on 12.14.16 at 8:45 pm

the country is too fragile–a housing correction to lead to double digit loses?

can OIL save Canada?

#60 Smoking Man on 12.14.16 at 8:48 pm

Gartho is hugging bandit tonight.. Yes baby I told you so.

It’s only because a Nictonite allowed it. You got to tose a milk bone to your favourite dog every now and then.

Got me some bad news sunshine. I’ll post when book sales it 100. My goal.

Till then your on your own. Less off course you randomly run into the great Smoking Man at the Duke of Windsor..

Why would the blog dog pick up the tab knowing I’m a member of the white patriarchal clan. Good parents is what I’m thinking…

Pleasue dude. . Thanks for the beers.

#61 Leo Trollstoy on 12.14.16 at 8:54 pm

Maybe now our culture and society will start to embrace saving rather then spending.

Canadians won’t have a choice. Totally spent

#62 DG on 12.14.16 at 8:56 pm

If we end up witnessing a material real estate correction here in Canada and, specifically, the major urban bubbles—Wouldn’t that lead to lower interest rates? Especially with a good segment of the Canadian economy already on the ropes, despite the potential for a weaker CA dollar—which has done little aid our economy with the weakening over the last couple of years???

#63 earlybird on 12.14.16 at 8:57 pm

Rates are still very accommodative, but like the trend nonetheless. Lack of money forces people to do evil….

#64 jess on 12.14.16 at 8:57 pm

wilful misconduct in public office – pension cancelled
That rule should be here too.

“Former Labor minister Eddie Obeid is set to be stripped of his annual $120,000 parliamentary pension following his sentencing for wilful misconduct in public office.On Thursday, Obeid was sentenced to a maximum 5 years in jail with a non parole period of three years.Presently MPs convicted of a serious offence – punishable by at least five years imprisonment – can keep their pensions if they are not charged while in office.

“The crimes of Eddie Obeid and his cronies are the most serious instance of official corruption we have seen in our lifetimes,” Mr Baird said.”Regardless of political affiliation, any MP who commits a serious offence while in office should face the consequences, and should not be shielded simply because they resign before being charged.”

http://www.smh.com.au/nsw/eddie-obeid-to-be-stripped-of-parliamentary-pension-as-baird-government-reacts-to-his-sentencing-20161215-gtbnca.html

#65 Ray Skunk on 12.14.16 at 8:57 pm

#21
Higher rates will also mean higher rents for properties without rent controls.

Sorry, but that’s nonsense.

It doesn’t matter if a landlord now has an increased mortgage payment – they can try and double their rent if they wish – nobody will pay it and the market won’t play along.

You’re forgetting that most renters have to live within their means, a minimum-wage fast-food server paying $750/mo for their basement won’t suddenly be able to afford $1300 when their pay hasn’t increased.

Landlords can get a leveraged loan to fuel their RE fantasies. Renters cannot. Landlords can spend spend spend as much as they want. Renters can only afford to rent with what they have. Landlords can try to increase, if they do, chances are they’ll find their property empty.

#66 Smoking Man on 12.14.16 at 9:01 pm

DELETED

#67 Victor V on 12.14.16 at 9:03 pm

TD Bank raises key mortgage rate

http://www.theglobeandmail.com/report-on-business/td-raises-key-mortgage-rate/article33327638/

Toronto-Dominion Bank has hiked its main mortgage rate for the third time in a month, reversing earlier plans to compete with its biggest rival on price.

TD raised the rate on its five-year fixed mortgages to 2.94 per cent, a jump of 10 basis points, or 0.1 per cent.

#68 Herb on 12.14.16 at 9:04 pm

#29 Mark,

Trump didn’t win because people were happy with the employment market and its awful state of affairs, that’s for sure!

You’ve done cracked the code, Mark!

#69 steerage steward on 12.14.16 at 9:08 pm

Some reasons the Fed may not raise rates as fast as some people think.

http://www.nytimes.com/2016/12/14/upshot/will-the-trump-era-bring-higher-interest-rates-dont-count-on-it.html

#70 InvestorsFriend on 12.14.16 at 9:11 pm

How The Canadian Banks Set the Five Year Mortgage Rate

The 5 year mortgage rate is set based on competition which itself is based on what it costs the bank to fund those mortgages and what margin they need to cover costs and profit.

I believe it has been suggested by some that they fund these with 5 year government bonds.

From my reading of bank financial statements and annual reports, I don’t think that is the case.

They would ideally like to fund 5 year loans with 5 year deposits (GICs). But there is far more profit to be made if they fund these mortgages with short term deposits upon which they are often paying zero interest. BUT this is risky if rates rise and they have to start paying interest on deposits.

I am not sure if you could figure out from bank financials exactly how they fund the five year mortgages. They list all their loans and other assets. And they list all their deposits and other borrowings and liabilities. But they don’t necessarily tell you which deposit is funding which loan.

Perhaps bank insiders can enlighten. But I doubt that very many people inside the banks know this. It’s not necessary for 99% of the staff to know.

#71 InvestorsFriend on 12.14.16 at 9:16 pm

A U.S. Home Price Prediction

I will go on the record here and predict U.S. home prices will rise at least marginally in 2017 and the home builder stocks (I follow Toll Brothers) will rise. The reason is pent up demand after eight years or so of below trend new home construction numbers and the fact that U.S. home prices remain quite affordable. The next few months may see a surge in demand as people try to lock in a home purchase before rates get any higher.

By the way in the U.S. a new $700k Toll Brothers Home is considered a luxury home. Compare that to million dollar crack shacks in parts of Canada.

#72 Ogopogo on 12.14.16 at 9:17 pm

#26 TurnerNation on 12.14.16 at 7:24 pm
Furrst rate hike!

You’re a fraud, exposed after viciously denying the possibility of rates ever going up this year. Whatever shred of credibility you might have had here has evaporated. Sad little ideologue.

What? No witty retort?

You’re a failure.

#73 Bond Junkie on 12.14.16 at 9:24 pm

#24- Good God Doug quiet down man! I only used 4 letters of the alphabet for my first three words try ever claiming that again! Anyways I don’t know what suburb of Baltimore you crawled out of but here in Toronto proper I am out with my two children on the regular. You know, normal life things like having lunch at the resto down the street, talking to your neighbours in the driveway, going to the park to play catch and feed the ducks. I hope you don’t live in Aleppo and if you do, my condolences but dear Lord get a grip!!!

The more important development tonight was having beers with one of the best people I have met in some time, our beloved Smoking Man (sorry TurnerNation you had your chance). As Garth can fearfully attest he is exactly who he claims to be and does not pretend or even care to put up a facade. We talked (and drank) for a couple of hours and I would encourage anyone else on this blog who has a non-conformist zombie view of the world to reach out and do the same. It’s healthy and refreshing. Now go out and buy his book goddamit it’s the best thing since Fear and Loathing met 3rd Rock from the Sun. 3 hikes will prove to be the best bluff at 2017s world poker championship FYI.

-Bj

#74 condopoor on 12.14.16 at 9:27 pm

Dear Garth,

If some of us have in fact moved out of real estate, could you suggest some (non-specific) holdings to lust after? Or just stick with the http://www.greaterfool.ca/2014/05/15/the-millennial-portfolio/?

Thank you kindly.

#75 Londoner on 12.14.16 at 9:28 pm

As stated, the Dec rate hike was already decided before the election. No one should be surprised by it. Also, the dot plot is nothing new. Go back to 2015 (or 2014, 2013, etc.) and see where they projected the federal funds rate to be in a year.

“Oh yeah. The Bank of Canada. There’s no way those dudes can resist four Fed increases in a dozen months. If they tried, we’d be yakking here about $22 cauliflower. The next rate move will be up, not down”

Nope, the next move by the BoC will be down not up. Poloz is itching to cut and had to wait until Bill put in the mortgage rule changes before he could make his move. If you believe otherwise you must be a doomer, in denial or (even worse) both.

#76 WaitingOnTheWorldToChange on 12.14.16 at 9:28 pm

#46….”And that makes me so happy! Raise those rates! Raise those rates! No mortgage, no debt, and happy as can be!”

Quite frankly…most of us should be less worried about the Joe Citizen and more worried about our Province that has a debt level of over $300 Billion, with debt servicing costs representing the third largest expenditure…and on the precipice of having their debt downgraded thereby increasing borrowing costs. You have aging parents that are going to need robust public services….you want safe neighbourhoods etc….think again about cheering on a rise in mortgage rates so that posters like Happy Housing Crash Everyone can feel good about themselves?

You’re banned, remember? — Garth

#77 Andrew Chan on 12.14.16 at 9:32 pm

Cheap money has done enough damage as cash rich players jack up the real estate markets. Working families have been forced into accepting downgraded housing conditions in Toronto and Vancouver.

#78 Smoking Man on 12.14.16 at 9:34 pm

Gartho such a light weight. Deleted, really. I was just trying to project the truth of the human condition. And I made it past the small stuff.

Man, Jesus’s save you…

Move to Arizona… Where free speech has a chance.

Amazonians got to be moderating tonight. Cause the guy I know and met who flipped the bird to Harpo would not delete my last post.

I hate you amazon’s….

Oh and to Johnny… The Italian… You got to be short. Can’t see any other reason for your hostility toward me.

Dwarf syndrome. Please tell me your company name dosent start with Tru. Or Teck.

Trying to project to the tribe your smart.

You want projection of brains.. Type like me grass hopper..

#79 Victor V on 12.14.16 at 9:35 pm

Woman living in shelter after she says real estate agent took her life savings

http://www.cbc.ca/news/canada/toronto/woman-living-in-shelter-after-she-says-real-estate-agent-took-her-life-savings-1.3892586

#80 WaitingOnTheWorldToChange on 12.14.16 at 9:36 pm

BANNED

#81 paulo on 12.14.16 at 9:49 pm

#28 can a troll smoke a joint? if so light another one lol

#82 JSS on 12.14.16 at 9:59 pm

I gotta tell ya, I’m getting attracted to REITs.
Ones like Brookfield Property Partners(BPY.UN), with growing distributions. Or Dream Office (D.UN), monthly distributions with around 8% yield.

Tucked nicely inside a TFSA is h-a-w-t.

#83 Happy Housing Crash Everyone! on 12.14.16 at 9:59 pm

Realtors better learn how to flip burgers since we all know they dont even have the skill set to even do that. Happy Housing Crash Everyone! :-)

Enough with the petty, juvenile generalizations. — Garth

#84 Happy Housing Crash Everyone! on 12.14.16 at 10:02 pm

Realtors are the biggest shysters and scum the world has even seen. Many realtors will lose everything in the coming housing crash.http://www.cbc.ca/news/canada/toronto/woman-living-in-shelter-after-she-says-real-estate-agent-took-her-life-savings-1.3892586

Happy Housing Crash Everyone! :-)

#85 Alex on 12.14.16 at 10:07 pm

Great post Garth. I saw the news about TD increasing mortgage rates again. What are your thoughts on CIBC, Scotia and Bmo? Not sure if they want to follow suit. It could be a competitive advantage to keep lower rates for a while?

#86 InvestorsFriend on 12.14.16 at 10:08 pm

Real versus Financial Assets

I’ve never really bought into this distinction.

If you own REIT units you own a financial asset, right?

If you own a shopping mall it’s a real asset, right?

If you buy up all the units in a REIT (that owns only shopping malls) and own them all yourself then the financial asset becomes a real asset, right?

Yeah, that’s why I don’t buy into the distinction so much.

#87 X on 12.14.16 at 10:11 pm

Wish I had cut and saved what the banks posted rates were for the variable and 1 through 7 year, and 10 year mortgages this summer. Would be interesting to compare next summer…..

#88 JM on 12.14.16 at 10:15 pm

Why believe the Feds this time that 3 increases will come in 2017? Weren’t they supposed to have 4 in 2016; what happened?
I really believe Yellen did this increase to save face, since it would have looked bad to say she would do 4 and note even do 1. Don’t you think she would want Trump to take office and see what steps he takes before moving rates.
I wouldn’t bet on 3 increases in 2017, since they only had 1 in 2016.
That’s my two cents.

#89 InvestorsFriend on 12.14.16 at 10:21 pm

Taking away Pensions for crimes

Former Labor minister Eddie Obeid is set to be stripped of his annual $120,000 parliamentary pension following his sentencing for wilful misconduct in public office.

****************************************
To me, stripping a pension seems like theft by the government. It’s exactly equivalent to trying to take back his pay, which is almost never done.

It’s not right and it’s vindictive. If the punishment is 5 years in jail then that should be enough.

At very most suspend the pension while he is in jail.

This is vindictive.

What about giving the guy a chance to resume a normal life AFTER he has done his time?

Pensions should be at arms length from the employer and simply not touchable for a crime against that employer. That’s my opinion.

What is next? Confiscate all financial assets of anyone convicted of 5 years or more. Yes, I know, most people would vote for that as well.

#90 Smoking Man on 12.14.16 at 10:25 pm

Wife says you don’t know what planet your from
.
Temptation to tell the truth.. She’s not ready.

#91 A box in the Sky on 12.14.16 at 10:27 pm

Janet the Jackhammer!

#92 slinky on 12.14.16 at 10:27 pm

Your advice to buy preferred shares will be proven right.
With even less room for Poloz to cut, we should see ZPR grind higher while paying us 5%.

#93 IHCTD9 on 12.14.16 at 10:32 pm

#5 RentYVR on 12.14.16 at 6:58 pm
” The Bank of Canada. There’s no way those dudes can resist four Fed increases in a dozen months.”

Problem is Garth, the BoC actually wants our dollar to fall (cauliflower be dammed) as they wrongly believe that will boost our export market; so yes, they can and will resist fed increases and are still more likely to cut than raise next year.
—–

Consumer spending is like 60% of our GDP. It would be economic suicide to drive the cost of everything up like that by letting the loonie slide. Especially considering how so many Canadian households are already drowning in debt.

It would be much safer to crank the rates. Some folks would suffer, some folks would prosper, the government would just raise taxes/fees to cover the increased debt servicing.

#94 the point on 12.14.16 at 10:32 pm

many folks have missed the point of Morneau’s retroactive changes to the reporting of the disposition of RE,
understandable because of the lies he presented and the truth he omitted at his media event on Oct 3
friends, this has nothing to do with stabilizing any over heated markets

he was not trying to
‘fix’ or cool the gta market for future buyers,
although he may have given that impression
but that was the smoke and mirrors,
because as he lied to you on tv the cra website was updated with the stuff he deliberately omitted

‘reporting of the disposition of RE’ when you file your taxes.
so the point is the erosion of the principal res exemption and hst collection, that’s it.

and because of those changes, supply will shrink in some markets

#95 Ace Goodheart on 12.14.16 at 10:40 pm

Interesting thing about the rate increase is the preferred share game has just radically changed. No one seems to know what they’re worth anymore. Valuations are all over the place and we are getting some really weird redemptions.

If you know a bit about preferreds and understand the individual habits of each company that has issued them, there is money to be made right now.

Just remember, a preferred is a bond in stock’s clothing with a weird inverse relationship to interest rates. If a person can take the time, now, to study up on them and understand them, there is a ton of cash to be made…..

#96 IHCTD9 on 12.14.16 at 10:49 pm

#10 ying yang on 12.14.16 at 7:04 pm
Increasing cost of servicing jumbo government debts and programs has the potential to demand higher taxation…
——

It’s a certainty, not a potential. Look who’s running the show. The low interest debt binge is officially over as of right now.

2017 may be the year Ontario’s debt interest costs conquer education costs and move into second place – and start gaining ground on healthcare for the number one spot. It’s the fastest growing expense the Province has.

The real question though: how much extortion is the ultra-dumb Urban Ontario voter willing to take?

#97 Keith in Calgary on 12.14.16 at 10:50 pm

Just sold my house in Calgary tonight.

Days on Market……14 +/-
Discount accepted from list price……..6.3%
All cash
Closing in 45 days
$15K deposit payable to me

Initially priced 10% cheaper than the lowest priced comp……and the fixed commission I offered was equivalent to the higher priced comps on the market that were $100K more. I ended up with $10K more than my bottom line price.

Moral of the story ?

Price it right the first time.

#98 TurnerNation on 12.14.16 at 10:54 pm

Lucky you Bond Junkie.
No I was at an event party in Distillery district. Open bar and food and was busy getting phone#s.

#99 TurnerNation on 12.14.16 at 11:02 pm

This is why I’m not on Facebook. If you aren’t making enemies in life you’re doing something wrong. All of life is a trade – Win or lose and move on.
Heck I got 50 years left. Trading time for….

M41ON

#100 Last of the boomers on 12.14.16 at 11:03 pm

What I don’t get is why there is so little in the media on this epic event.

Crickets in the media for the next 6 months I expect.

I also expect Lindsay and Elizabeth smith plus a few other posts may all be of the same author of another gender submitted to infuse a little entertainment if nothing else.

#101 Andrew Woburn on 12.14.16 at 11:06 pm

#84 Happy Housing Crash Everyone! on 12.14.16 at 10:02 pm
Realtors are the biggest shysters and scum the world has even seen. Many realtors will lose everything in the coming housing crash
========================

Can we reasonably infer that you were married to a realtor?

And you didn’t get the house?

#102 RIL on 12.14.16 at 11:08 pm

It is good that the Fed moved. As Garth put it, wages could “get out of control” in the US.

#103 Original dave on 12.14.16 at 11:35 pm

I think spring 2017 will be the last of the bull market for housing in toronto. I think toronto is a year behind vancouver. By this time next year, the decline will be known across the board

#104 Angela on 12.14.16 at 11:37 pm

Deification.
Defecation.
Tomayto Tomahto

#105 Happy Housing Crash Everyone! on 12.14.16 at 11:42 pm

Realtors here or up to their eye balls in debt greaterfools posting nonsense that some how they will be saved. Not going to happen. Housing sales stalli g in the GTA. Happy Housing Crash Everyone! :-)

#106 Polls R Phake on 12.14.16 at 11:42 pm

Well I sure hope your right about 2017 and more rate hikes. Remember they said that last year too. Things are too far out of control now. They know it. Time to burst the world bubble.

Look out below.

#107 Mandingo on 12.14.16 at 11:44 pm

Garth, please do a post on bill c-27. Everyone needs to be informed of this and sign the petition to stop it

#108 Ponzius Pilatus on 12.14.16 at 11:58 pm

#55 Andrew Woburn on 12.14.16 at 8:24 pm
From the Handelsblatt, one of Germany’s major financial newspapers

– Government Advisor: Germany Should Quit Euro

Germany should withdraw from the euro zone to save the European Union, said Roland Berger, the doyen of German strategy consultants, in an interview.

Europe is in a “disastrous” state and Germany should quit the euro zone to enable the E.U. to survive, one of Germany’s best-known management consultants and government advisors, Roland Berger, told Handelsblatt.

“The cause is primarily the euro. I think this crisis can only be solved through radical steps and not through continued muddling through,” said the 79-year-year old founder of the company that bears his name, one of the world’s foremost strategy consultancies.

“Otherwise Europe will break apart ever more. The economic cultures in the 19 member states of the euro zone are simply far too different. We shouldn’t think so much about whether Greece can be saved but whether it wouldn’t be far more logical if Germany were to leave the euro zone to preserve the E.U. as a whole.”

https://global.handelsblatt.com/politics/germany-should-quit-euro-says-top-consultant-661114

This is not a new idea. What is interesting is that a person of Herr Berger’s status is floating it in public, possibly as a trial balloon. Still it is not clear to me how this would help Europe’s debt problems.

One would expect a new deutsche mark to rapidly gain value against the Euro. Whether German banks face a massive haircut from an Italian default or from a currency devaluation of Euro receivables looks like the choice between gunshot and poison.
———————–
Thanks for some broader view on the world economy.
Rather than the focus on the procastinations of old granny Yellen.

#109 ole Doberman on 12.15.16 at 12:04 am

Gartho please no more. What about US healthcare, won’t it go bankrupt in this environment?!

#110 Ponzius Pilatus on 12.15.16 at 12:09 am

Trump is 70.
Yellen must be 80.
Scary.

#111 FED on 12.15.16 at 12:16 am

“It was just 0.484% last February, and tonight has climbed to 1.179%. That, kids, is an increase of 143% this year.”

US rates went from 0.01% to 0.75%. That boys is an increase of 7500%!!!!!

#112 FED on 12.15.16 at 12:23 am

The US 30 year treasury today is yielding less than it was in June, 2015 when we were saying rates are going to shoot up. Boy were we wrong.

#113 will on 12.15.16 at 12:26 am

I think the Fed is politicized. No, I have nothing to back this up, no evidence, but right now that’s what I think.

#114 M on 12.15.16 at 12:45 am

“but the central bankers told everyone to get ready for three more in 2017. Three. Wow.”

…Gartho baby..when would you learn ?
Last year at this time they were menacing the plebe with FOUR rises in 2016.

Those bonds ?…pa-da-boom if Mein Trumph gets his trillion
or
Stocks pa-da-boom if he doesn’t

:)

#115 M on 12.15.16 at 12:47 am

…but rejoice you sinners… for the Big White North is either 25bucks for a 10lb of potatoes or 60% downside on housing prices.

Both gorgeous for a quick buck-then-bail

#116 Olive on 12.15.16 at 1:36 am

#5 RentYVR ….

Get your head out of the sand and wake-up… Give yourself a good shake !!!!

#117 steerage steward on 12.15.16 at 1:44 am

Dear Garth

Have been greatly enjoying your posts for some time (required ingratiating). Perhaps I’ve missed them, but it seems you’re entertaining blog is missing a few posts regarding goal based investing.

Shouldn’t people start by setting a goal, eg own a boat, retire in 24 years with 70% of current income, etc. Selection of assets should be the last thing on a very long list.

It’s educational and enjoyable to read your posts every day. Yet could you find it in your heart to make a post or two now and then about what a person with a 20 year time horizon should do?

-Respectfully yours
steerage steward

#118 Buy? Curious? on 12.15.16 at 2:35 am

According to Slate.com, rents in New York City are falling and the Telegraph.co.uk is reporting that house prices in London are falling. If those two cities are suffering declines, Toronto is doomed! Doomed I tell you! Sell now! Sell! Sell! SELL!

#119 Tony on 12.15.16 at 2:58 am

The first true increase in GIC rates today with Community Trust raising their 5 year rates (50,000+) to 2.48 after Oaken slashed their interest rates.

#120 Tony on 12.15.16 at 3:20 am

Re: #84 Happy Housing Crash Everyone! on 12.14.16 at 10:02 pm

Even if the guy had of paid her back she would have lost her $95,000 when the condo market tanks hopefully 80 percent like Miami did. The guy’s wife will also be rendered virtually penniless having to sell her condo in America to stave off personal bankruptcy whilst her two Toronto condos implode in price.

#121 Tony on 12.15.16 at 3:31 am

Re: #71 InvestorsFriend on 12.14.16 at 9:16 pm

Good luck with that prediction, the dead cat bounce from the year 2012 is officially over. The big conglomerates and syndicates paying all cash thinking they picked the bottom of the residential real estate market are very sadly mistaken. The American real estate market has been and still is in a downtrend since late 2006.

#122 NoName on 12.15.16 at 3:50 am

Interesting read,

The American Dream, Quantified at Last

…After the research began appearing, I mentioned to Chetty, a Stanford professor, and his colleagues that I thought they had a chance to do something no one yet had: create an index of the American dream. It took them months of work, using old Census data to estimate long-ago decades, but they have done it. They’ve constructed a data set that shows the percentage of American children who earn more money — and less money — than their parents earned at the same age.

The index is deeply alarming. It’s a portrait of an economy that disappoints a huge number of people who have heard that they live in a country where life gets better, only to experience something quite different.

Their frustration helps explain not only this year’s disturbing presidential campaign but also Americans’ growing distrust of nearly every major societal institution, including the federal government, corporate America, labor unions, the news media and organized religion…

https://goo.gl/zvhfTo

#123 #78 Smoking Man... on 12.15.16 at 5:18 am

Forget about Johnny Smoking Man, this Italian likes you.

If in my neck of the woods, drop by to Harry’s Bar in Venice and we’ll have a Bellini or 2 or 3. You too Garth.

Currently hungover from last night at the Rose & Crown in Rimini and now on a fast speed train to Modena…it hurts to type.

Great post Garth.

bsant

#124 DoomandGloomer on 12.15.16 at 7:00 am

#86 InvestorsFriend

“If you buy up all the units in a REIT (that owns only shopping malls) and own them all yourself then the financial asset becomes a real asset, right?”
——————————————————————-

Wrong.

It’s still a financial asset.

You have the logic of a flea.

#125 Victor V on 12.15.16 at 7:10 am

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/personal-finance/the-tfsa-cap-will-stay-at-5500-for-2017-and-we-have-low-inflation-to-thank-for-it&pubdate=2016-12-15

The annual TFSA dollar limit will remain frozen at $5,500 for 2017 and, in fact, may be stuck at that level until at least 2019, as a result of years of low inflation and the unusual rounding mechanism built into the TFSA limit.

#126 crowdedelevatorfartz on 12.15.16 at 8:15 am

@#28 Lindseed, Elizabeth, whatever.
“will complain to the Bank of Canada if they raise interest rates. It is veiled misogyny and sexism because our male-dominated economy isn’t doing that well, and because I’m a woman, …”
********************************************

Your “schtick” is getting old.
Time for some new material.

#127 pBrasseur on 12.15.16 at 8:16 am

Rate hikes alone are not enough to «kill» the Canadian RE market, not as long as easy access to credit is still enforced by government.

Of course rate hikes should slow the market some and/or push prices lower. But that doesn’t mean the debt binge is over. If fact rates have been creeping up for a while and market has slowed in many areas but both mortgage and household debt are still growing.

This is really unfortunate, a more responsive market (read more free and more private) would have already responded to ne many signals out there, but since it is politics and government who decide who has access to credit not much happened.

So the great Canadian debt binge rages on. Of course it is unsustainable et very damageable to this economy in the long run. But the fact is the bubble is still on and could be for quite a while yet.

#128 Leo Trollstoy on 12.15.16 at 8:25 am

I’ll believe a crash in Toronto real estate when I see it. Nothing but sky high prices here. In the meantime I’m gonna enjoy my usd

#129 Bat Flipper on 12.15.16 at 9:12 am

tons of people complaining their electricity bill is too high. just wait till the rates go up, and their mortgage payment goes through the roof!

http://globalnews.ca/news/3115346/hydro-one-electricity-rates-ontario/

#130 loonbusters on 12.15.16 at 9:20 am

The Bank of Canada. There’s no way those dudes can resist four Fed increases in a dozen months. . The next rate move will be up, not down, and it will take place in 2017. More mortgage grief. Garth”

Garth unfortunately those geniuses at the BoC have snookered themselves and there will be 2 rate cuts next year…..the loonie goes to usd/cad 1.50

#131 };-) aka Devil's Advocate on 12.15.16 at 9:46 am

Bank of Canada? Yeah right.

Want to know the future of interest rates, look to the Bond Market, the ultimate difinative source, the true free market, the ultimate power house.

#132 };-) aka Devil's Advocate on 12.15.16 at 9:50 am

The economy is at odds when interest rates are below 6.0% or higher than 12.0%. 9.0% is sanity. We’ve been there before and we will get there again… one way or another.

#133 traderJim on 12.15.16 at 9:54 am

Yeah baby, loonie stopped killing me and is being very nice again.

It’s all paper gains/losses until I lock in, but still nice to be on the right side of things.

Perfect storm for the loonie could be a Canadian housing correction just as US rates take off.

I’m not so sure the BOC will follow the Fed’s lead, at least not in lockstep. Hard to say, but I’m going to say Poloz lags significantly behind.

And so I think a 60 cent loonie is entirely possible by end of next year.

That would be a nice 25% gain in value for my USD assets, who needs to work?

(p.s. 20C and sunny here)

#134 Sean P on 12.15.16 at 10:08 am

Hi Garth,

Are you able to shed some light on why Americans can lock in for a 30 year mortgage at pretty good rates when we only see good rates in the 5 year range? If the money is cheap now, can’t the banks do some financial wizardry to give you a nice 30 year locked in rate, or is it simply greed?

#135 traderJim on 12.15.16 at 10:18 am

#76 Banned Guy

Some people hoping for a return to normalcy in markets and interest rates in particular are those that want to see the world end so they can buy a few city blocks with some bags of silver dimes they have hoarded over the years.

But most of us just hate to see the Government and fed in particular intervene so massively in a way that distorts things so that intelligent investment decisions cannot be made, and money flows to all the wrong places, and bubbles are formed that inevitably burst causing far more damage than would have happened if markets were just left alone.

I’m heavily invested in (mostly income producing) real estate, but have been advocating for years an end to the flood of easy money and low rates.

And then we can talk about the ‘financial repression’ effect that low rates have on seniors and others living off their savings.

And we won’t even start to talk about the terrible effects artificially low rates have on pension plans. Most everyone will be hurt by that.

The idea that low rates are all good and have no ill effects is one of the biggest lies ever told.

#136 traderJim on 12.15.16 at 10:25 am

Strong vs weak currency

University profs teach that weak currencies are great, because exports are everything.

Oh, and spending. Got to spend to boost the economy.

What utter nonsense, and it explains why the world is in the terrible mess it is now.

The best possible situation is to have a strong currency, which makes citizens wealthier compared to weak currency nations as well as keeps prices of imports low, and an economy strong and productive enough to withstand the challenges of a strong currency.

Think: Switzerland

However University profs seem to think Venezuela is a better model.

And hundreds of millions of people seem to believe them despite all the evidence to the contrary.

*shakes head*

#137 damifino on 12.15.16 at 10:29 am

#128 Leo Trollstoy

I’ll believe a crash in Toronto real estate when I see it.
—————————-

In Vancouver, we are seers and believers.

#138 BornInTheUSA on 12.15.16 at 10:30 am

I am reading a lot about how higher interest rates and a stronger US dollar creates problems for American economy. Do you see this creating problems for the economy to keep growing?

#139 InvestorsFriend on 12.15.16 at 10:37 am

Tony on Predictions

#121 Tony on 12.15.16 at 3:31 am said to me:

Re: #71 InvestorsFriend on 12.14.16 at 9:16 pm

“Good luck with that prediction, the dead cat bounce from the year 2012 is officially over. The big conglomerates and syndicates paying all cash thinking they picked the bottom of the residential real estate market are very sadly mistaken. The American real estate market has been and still is in a downtrend since late 2006.”

********************************************
We will see if my prediction that U.S. home prices will continue to rise somewhat in 2017 despite the interest rate increase does any better than Tony’s epic fail where he stated he would short Teck in September or any of his other 1000 or so posts over the past few years predicting the stock market would fall precipitously.

#140 InvestorsFriend on 12.15.16 at 10:44 am

Real versus Financial Assets

A doomer disagreed with me as follows:

#124 DoomandGloomer on 12.15.16 at 7:00 am
#86 InvestorsFriend

“If you buy up all the units in a REIT (that owns only shopping malls) and own them all yourself then the financial asset becomes a real asset, right?”
——————————————————————-

Wrong.

It’s still a financial asset.

You have the logic of a flea.

*****************************************
Really? If I buy up all the units of a REIT that owns only shopping malls and I then own all the shopping malls, that is a financial asset?

So does any real estate count as a real asset? Please explain.

I would have thought the answer might be that yes the shopping malls are a real asset if you control them but a financial asset if you merely own a little piece as a REIT unit holder, as a silent partner.

Anyhow, beyond your house and personal use assets, are not all assets basically financial assets. If you buy gold to make a profit why is that a real asset any more than shares in a bank bought to make a profit? Both could rise or fall.

Personally, I certainly will not discriminate against financial assets. I love them, and they have mostly loved me back.

#141 InvestorsFriend on 12.15.16 at 10:52 am

Canadian Manufacturing Sales Down in October

http://www.statcan.gc.ca/daily-quotidien/161215/dq161215a-eng.htm

Sales down in most sectors… Lower dollar not yet providing the hoped for benefits…

#142 Tkid on 12.15.16 at 11:08 am

Garth, if preferred shares do well in raisimg rate environments, why is cpd doing so well while pff is getting the atuffing kicked outta it?

#143 boonerator on 12.15.16 at 11:35 am

122 NoName on 12.15.16 at 3:50 am
on the American Dream.
Thanks for this,
Miles Corak at the University of Ottawa has been on the case on this for years. Turns out, if you want your kids to do better than, you live in Finland or other unlikely place. Unlikely to Americans I mean.
“The OECD (2011a, p. 40) has gone so far as to state that rising income inequality “can stifle upward social
mobility, making it harder for talented and hard-working people to get the rewards they deserve. Intergenerational earnings mobility is low in countries with high inequality such as Italy, the United Kingdom, and the United States, and much higher in the Nordic countries, where income is distributed more
evenly.””
from the abstract at
http://ftp.iza.org/dp7520.pdf

#144 YVR update on 12.15.16 at 11:40 am

#137 damifino on 12.15.16 at 10:29 am
#128 Leo Trollstoy

I’ll believe a crash in Toronto real estate when I see it.
—————————-

In Vancouver, we are seers and believers.

————-

Prices haven’t crashed. Sales have. But so has inventory. At record lows.

Prices in the suburbs up 40% in 2 years. As much as we’d like prices to go down, let’s not distort reality.

#145 The Technical Analyst on 12.15.16 at 11:49 am

FOR THE FINANCIALY CHALLENGED:

https://pbs.twimg.com/media/CzuvzuyWIAAo-bU.jpg:large

This is for those who are even thinking of buying into this overheated US market. Technicals are your friend.

#146 Rexx Rock on 12.15.16 at 11:57 am

Dow 20,000 and TSX at all time highs.This truly reflects both countries are in strong economic growth and will continue to do so.The stats are there and confidence levels are high.Great gains for 2017 are coming and both Canadians and Americans are reaping the rewards of great leadership of their countries.

#147 Leo Trollstoy on 12.15.16 at 12:16 pm

And so I think a 60 cent loonie is entirely possible by end of next year.

Bold call.

I think Poloz will try and keep close to the Fed. Our GDP came in strong. The CAD will stay around here.

#148 Leo Trollstoy on 12.15.16 at 12:20 pm

I enjoy reading bsant. Just wanna give credit where credit is due

#149 Leo Trollstoy on 12.15.16 at 12:20 pm

And traderJim.

#150 Happy Housing Crash Everyone! on 12.15.16 at 1:18 pm

Sales have stalled in the GTA . Sorry realtors its true. Happy Housing Crash Everyone! :-)

#151 jess on 12.15.16 at 1:22 pm

9 InvestorsFriend on 12.14.16 at 10:21 p

Taking away Pensions for crimes
…demanding bribes from developers in return for favourable planning decisions etc…The Independent Commission Against Corruption had announced an investigation and the story was front page news.

http://www.smh.com.au/nsw/rise-and-fall-of-eddie-obeid-the-minister-to-whom-labor-turned-a-blind-eye-20161215-gtbts7.html

#152 jess on 12.15.16 at 1:28 pm

Fed Warns of Vulnerabilities Building in Commercial Real Estate …
http://www.bloomberg.com/…/fed-warns-of-vulnerabilities-building-in-commercial-real-est...
Jun 21, 2016 – Valuations in commercial real estate “appear increasingly vulnerable to … Strong U.S. bank capital positions contributed to the resilience of the..

======

Bill Black: White Collar Crime Will Have a Field Day Under Trump
Posted on December 15, 2016 by Yves Smith

In this Real News Network segment, Bill Black describes why elite banksters will have a free hand if Trump gets his appointees through. Although Black focuses here on just departed Goldmanite Gary Cohn, the Democrats ought to put up a pitched battle over another Goldman alum, Steve Mnuchin, Trump’s Treasury Secretary nominee. Mnuchin is unqualified (the areas he worked in at Goldman would have given him little in the way of exposure to regulatory and compliance matters) and has been a predatory mortgage servicing profiteer.

….
heavily influenced by Goldman Sachs and Wall Street than he alluded to during his campaign. In fact, he criticized Hillary Clinton for being the Wall Street candidate. Bill, what do you make of all of this?

BILL BLACK: Well, he not only criticized her for being the Wall Street candidate, he ran an ad in which he said he was running against Wall Street. And the picture he flashed in the ad was the CEO, Lloyd Blankfein of Goldman Sachs, who was supposed epitomize everything that was wrong. So, as you know, I hang out and teach primarily in Kansas City, Missouri, and the then-president of the Federal Reserve, a very blunt-spoken guy, and a Conservative, told a small group of us — on the record — that for the last 30 years, whatever party’s in power has held an auction and auctioned off to the highest bidder on Wall Street, the position of Treasury Secretary. And that for the last 20 years overwhelmingly the winner of that auction is Goldman Sachs. So Goldman Sachs, again, has been chosen to run Treasury.

http://www.nakedcapitalism.com/2016/12/bill-black-white-collar-crime-will-have-a-field-day-under-trump.html

#153 Penny Henny on 12.15.16 at 1:30 pm

Garth are you the Roger Babson of todays Canadian Housing Market?

#154 bdwy sktrn on 12.15.16 at 1:31 pm

breaking – christy to lend 5% for down payment for first timers in BC

#155 bdwy sktrn on 12.15.16 at 1:33 pm

cbc

The B.C. government is offering to help first-time homebuyers cover the cost of a mortgage down payment with an interest-free loan.

The B.C. Home Owner Mortgage and Equity Partnership program will provide a maximum of $37,500 — or up to 5 per cent of the purchase price — with a 25-year loan that is interest-free and payment-free for the first five years.

“We believe every British Columbian deserves a place to call home,” said Premier Christy Clark in a statement on Thursday.

#156 jess on 12.15.16 at 1:33 pm

SHARMINI PERIES: And you thought you were having fun with the last administration, I can’t wait to see what you take up with this one. Now, you were speaking about family keeping it close and now we know that the person that brought Cohn to Trump is his son-in-law Jared Kushner — and who, I must add, is a real estate magnate himself. And so, with all of these connections, one of the reasons that he was brought to Trump’s attention was because of his public/private partnership proposal that he had written up. What’s in that, what’s so scary about it, Bill?

BILL BLACK: Oh, well, nothing scary if you’re the private part. laughs It’s guaranteed enormous amounts of money where the government fronts the money and you get the profits. It’s completely outrageous. It’s a really bad way to do stimulus. And, again, these people are picked, not because they know anything about economics. In fact, any C heads often don’t know particularly about economics. Even Larry Summers, who was Obama’s first NEC head was not picked because of his knowledge of economics, but because, of course, he was Rubin’s protégé. So this is more, it’ll be great for Goldman’s customers. By the way, Gary Cohn, as a result of — and you have to love the euphemism — “beginning public service,” will be able to sell his Goldman shares and have them tax-deferred, the gain. And the gain, if he sells right now, is going to be an estimated 209 million bucks. So everybody’s gonna win — except, of course, the public.

#157 For those about to flop... on 12.15.16 at 1:37 pm

#139 InvestorsFriend on 12.15.16 at 10:37 am
Tony on Predictions

#121 Tony on 12.15.16 at 3:31 am said to me:

Re: #71 InvestorsFriend on 12.14.16 at 9:16 pm

“Good luck with that prediction, the dead cat bounce from the year 2012 is officially over. The big conglomerates and syndicates paying all cash thinking they picked the bottom of the residential real estate market are very sadly mistaken. The American real estate market has been and still is in a downtrend since late 2006.”

********************************************
We will see if my prediction that U.S. home prices will continue to rise somewhat in 2017 despite the interest rate increase does any better than Tony’s epic fail where he stated he would short Teck in September or any of his other 1000 or so posts over the past few years predicting the stock market would fall precipitously.

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

Hey Shawn ,give Tony”two term” Balony a break.

He did correctly predict that Obama would not win the 2016 election…

M42BC

#158 Ace Goodheart on 12.15.16 at 1:42 pm

RE: #143 boonerator:

“Turns out, if you want your kids to do better than, you live in Finland or other unlikely place. Unlikely to Americans I mean.”

They told us the same thing when I was growing up. First time I heard this was from my 4th grade teacher in 1982: “likely most of you will never do as well as your parents”.

Flash forward 34 years later, I earn around 250K, wife earns just under 70, we own a house and a cottage and a rental building, have lots of cash in the markets….parents were a draftsman and a part time day care teacher. Most either of them ever earned was around 60K.

I say they are full of crap. There is no way Europe compares to NA in terms of opportunities. Doesn’t come close. Go to Finland and find out how many of them own their houses. They all rent (of course on this board, that would probably be taken as a good thing).

With North America, if you want to go out and work for someone, you are likely going to get squashed. That is not how it is done here. If you want to succeed here there are two methods:

1. Join a profession and get ticketed in something

2. Operate a business

You can combine 1 and 2. Working for someone else with a degree or two is not going to help you.

#159 BC on 12.15.16 at 1:49 pm

DELETED

#160 Johnny d on 12.15.16 at 1:50 pm

B.C. to lend $37,500 interest free down payment to first time home buyers.

This crap will never end.

#161 For those about to flop... on 12.15.16 at 1:51 pm

For those people that are pretending that there is nothing going on in Vancouver might want to check out my hood.

Almost a third have had price reductions,sizeable too,some 100k at a time ….no bites.

Just for the people in Toronto and the like I will tell you where this is happening.

Robson and Granville streets are considered the centre of downtown Vancouver.

I live 7 kilometres from there,and this is happening in my hood.We are not taking way out in the boonies.

I wouldn’t be surprised if we have less than 5 sales in this area in December…

M42BC

https://www.zolo.ca/vancouver-real-estate/fraser-ve/trends

#162 Euro observer on 12.15.16 at 2:02 pm

Increasing USD interest rates will drive investments in US.

Nobody will invest in Canada. Don’t underestimate BOC. It’s deeply contused and incompetent leadership is absolutely capable of keeping rates low and even driving them further down thus completely destroying the CAD.

We have capital outflows already. This will accelerate.
Producing chips for US will not be the economy we wish for.

Canadian rates at some point will go up dispute BOC idiotic policies. I am sure Poloz will get good job at IMF or the world bank, was he not on the board of BIS?
The guy should be fired immediately.

Yellen is a master speaker compared to him.

#163 Sylvain on 12.15.16 at 2:05 pm

Interest free down payment for 5 years in BC for first time home buyer.

http://www.cbc.ca/news/canada/british-columbia/b-c-offers-interest-free-loans-up-to-37-500-to-first-time-homebuyers-1.3897832

#164 Smartalox on 12.15.16 at 2:12 pm

Breaking News: BC Government offering interest-free loans of $37,500 to help first time buyers cover the down payment costs to buy Real Estate.

The intention of the program is to assist people who can afford the mortgage payments on a new home but are challenged to make the down payment.

The province will start accepting applications for the program on Jan. 16, 2017.

Homebuyers will pay no monthly interest or principal payments over the first five years as long as the home remains their principal residence.

After the first five years, homebuyers begin making monthly payments at current interest rates.

http://www.cbc.ca/news/canada/british-columbia/interest-free-home-loans-bc-1.3897832

I guess that Liberal party lackey Bob Rennie has lots of unsold inventory to move!

#165 Sonny on 12.15.16 at 2:23 pm

Pre-election vote buying with taxpayer money!

Unbelievable!

================================
B.C. offers interest-free loans up to $37,500 to first-time homebuyers

http://www.cbc.ca/news/canada/british-columbia/interest-free-home-loans-bc-1.3897832

#166 Suede on 12.15.16 at 2:25 pm

Christy wants to give you money free for 5 years!

http://vancouversun.com/news/local-news/b-c-government-offers-down-payment-loans-to-first-time-homebuyers

Then you’ll pay dearly when rates are much higher.

#167 Craig on 12.15.16 at 2:42 pm

Re #146 Rexx Rock

TSX all time closing high in August 2014 was 15,625.73. We’re not there yet. Also re: great leadership in Canada . America is booming and are not. With the weak dollar we have, the discrepancy shouldn’t be nearly as bad as it is. T2 should spend much more time on jobs growth and less time on selfies and social banter in my opinion .

#168 traderJim on 12.15.16 at 2:51 pm

#149 Leo

It’s pretty easy to make a bold call as an anonymous person online.

Of course no one knows where the loonie will be a year from now, but I just think it’s possible it would touch 60 cents.

I am long USD assets so effectively very short the loonie. I have my money where my mouth is,

But I confess I bought a few CAD calls today, and will probably buy more as the loonie declines.

I’d like to think I can time things and trade in and out getting most of the loonie decline.

Easier said than done…if I see the loonie in the mid 60’s I would cover all my USD exposure.

#169 BC Game Changer on 12.15.16 at 2:53 pm

As some have posted on here, what the government giveth the government can taketh away.

While the BC government gave the gift of the BC foreign buyer’s tax which pushed the market downwards, it has now, just in time for the spring, given the gift of new down payment loans for houses up to $750,000 – which will push the prices back up and up and up!!!

http://vancouversun.com/news/local-news/b-c-government-offers-down-payment-loans-to-first-time-homebuyers

A game changer indeed – as it gives those most susceptible to FOMO and the uninformed about the ‘pending correction/crash’ the means to keep the party going!

Sorry renters, as many have noted, there is too much invested in RE in the major provinces to have it fall to market forces.

#170 Blacksheep on 12.15.16 at 2:57 pm

Member when I said, ‘dont fight the system when it comes to it’s only golden goose, RE’?

Here…you…go….

http://www.ctvnews.ca/business/b-c-offers-five-year-interest-free-down-payment-loans-to-first-time-buyers-1.3205119

#171 Millenial on 12.15.16 at 3:02 pm

“Three. Wow.”

LOL. Let your jaw drop when they actually do it. If equities start crashing in the new year due to earnings recession or a realization that Trump might not be able to do the things he says, don’t expect a bunch of rate hikes.

But clearly Garth’s investing principles are pretty reasonable no matter what happens. Be diversified; he’s absolutely right. I’d have a little more respect if part of his allocations included 5% precious metals and 10% cash, but I digress.

Things are so screwed up these days nobody knows where anything is going.

Don’t be wasteful.

The cash weighting should be 5%, PM weighing is zero. Thank goodness. Gold lost $30 an ounce today, $200 in the last month and $800 over the past five years. — Garth

#172 YVRPeasant on 12.15.16 at 3:07 pm

Good news everyone! Christy Clark is making it easier for first-time homebuyers in BC to get into debt!

http://www.cbc.ca/news/canada/british-columbia/interest-free-home-loans-bc-1.3897832

(runs for cover as Garth’s head explodes)

#173 ohnoohnohono on 12.15.16 at 3:20 pm

Oh no!
http://www.cnbc.com/2016/12/15/the-dow-may-be-getting-frothy-as-a-market-signal-flashes-20-year-high.html

Time to sell?

#174 Nemesis on 12.15.16 at 3:29 pm

#ElectionGameChangers?… #YouReadItHereFirst,Or… #There’sAnElectionNextYear,Right?…

[CBC] – B.C. offers interest-free loans up to $37,500 to first-time homebuyers

…”The B.C. government is offering to help first-time homebuyers cover the cost of a mortgage down payment with an interest-free loan.

The B.C. Home Owner Mortgage and Equity Partnership program will provide a maximum of $37,500 — or up to 5 per cent of the purchase price — with a 25-year loan that is interest-free and payment-free for the first five years.

“The dream of home ownership must remain in the grasp of the middle class here in British Columbia,” said Premier Christy Clark.

The intention of the program is to assist people who can afford the mortgage payments on a new home but are challenged to make the down payment.

The province will start accepting applications for the program on Jan. 16, 2017.”…

http://www.cbc.ca/news/canada/british-columbia/interest-free-home-loans-bc-1.3897832

#175 Nemesis on 12.15.16 at 3:40 pm

#InOtherNewsBC…

[CBC] – MSP hikes will hit over 500,000 B.C. families in the new year

…”Over 500,000 B.C. families will be hit with MSP increase in the new year, says NDP leader John Horgan.

Starting Jan. 1, couples with an annual household income over $45,000 will see their annual health premiums rise by an additional $168 per year — or an extra $14 per month — as MSP changes implemented by the B.C. Liberals take effect.

Horgan charges the provincial government has been disingenuous about changes to MSP premiums announced earlier this year.”…

http://www.cbc.ca/news/canada/british-columbia/msp-hikes-will-hit-over-500-000-b-c-families-in-the-new-year-1.3896495

#176 Ace Goodheart on 12.15.16 at 3:58 pm

RE: #170 Black Sheep:

Member when I said, ‘dont fight the system when it comes to it’s only golden goose, RE’?

Here…you…go….

http://www.ctvnews.ca/business/b-c-offers-five-year-interest-free-down-payment-loans-to-first-time-buyers-1.3205119

Brilliant. More debt. This is all that people need. More of an incentive to be forever engulfed in debt up to your eyeballs.

Makes you wonder whether anyone realizes how f’d a person’s life gets when the live to work and pay off mountains of debt. When the debt will remain with them for 25 or 30 years. When the amounts are so astronomical that the indebted person cannot even envision a time when they might actually pay things off.

This is no way to live.

#177 Snowboid on 12.15.16 at 4:24 pm

#121 Tony on 12.15.16 at 3:31 am…

“…The American real estate market has been and still is in a downtrend since late 2006…”

Not here in the land of sun and sand (okay it’s cloudy today but still about 22C)!

We have had a few offers on our Phoenix area home, but the best one was only 90% more than what we paid six years ago.

We are holding out for awhile hoping the CAD will still fall, but are now a bit worried about Yellens’ rate hike – it’s amazing how many retired 65+ buyers down here still need mortgages.

RE forecasts are calling for a 7% rise in prices here in Phoenix during 2017 – and new construction hasn’t slowed a bit – in fact a new 6500 home subdivision just northwest of us was announced last week!

#178 45north on 12.15.16 at 5:13 pm

Last of the Boomers: What I don’t get is why there is so little in the media on this epic event.

donno it’s epic but the media don’t see it.

#179 Entrepreneur on 12.15.16 at 5:23 pm

That is so sad to pathetic about the interest-free home loans. That is like telling someone they can drive the vehicle even when drunk.

How about jobs? Jobs keeps families together as Christy Clark informs us with her ad. Oh, like the jobs she sent overseas like the ships, lumber, etc. I guess it helps the families in another country but not us.

#32 firebird…I believe “Brexit and Trump showed the world how the civilized how to survive” but not T2, off the wall here. Google Jim Sanford, free international trades and trade, find the difference.

#133 bdwy sktrn…yesterday blog I should have said “chartered accountant.

When an individual cannot function normally in a community, and when there is many that have that same problem, time for a new leader. We need people to work and function, not beat them down.

#180 Tony on 12.15.16 at 6:57 pm

Re: #162 Euro observer on 12.15.16 at 2:02 pm

Poloz should have been fired eons ago.

#181 Tony on 12.15.16 at 7:05 pm

Re: #157 For those about to flop… on 12.15.16 at 1:37 pm

Teck has already fallen 20 percent from its peak and will keep falling. Give it time it’ll drop to 5 dollars Canadian a share. The people that followed my advice on Nvidia saw that stock go 5 fold. The smart money is shifting from Nvidia into Advanced Micro Devices. Will boldly go out and state if the NASDAQ stays above the 2,800 level AMD will hit fifty dollars a share in the next 30 months.

#182 canali on 12.16.16 at 5:20 pm

”New study finds a majority of British Columbians plan on moving.”

http://www.cknw.com/2016/12/16/new-study-casts-doubt-on-tourism-pitch-that-b-c-is-the-place-on-earth/