Next time, duck

Once there were three. Then there were two. Now but one.

There’s a lesson in the demise of two-thirds of Canada’s bubbly real estate markets. A few actually. First, any asset which swings too far above the mean will eventually swing back. Guaranteed. Second, you don’t need interest rates spiking to drive a stake through housing’s heart. Third, your idiot brother-in-law who says he’s made a fortune on his house and is therefore an investing guru, just hit some dumb luck. So that means, four, there are darker times ahead for real estate as the speculators and amateur landlords are hollowed out of the market. Fifth, no place (and I’m talkin’ to you, GTA) is immune.

The numbers out of Vancouver this week are stark. Here’s the chart.

As this blog said last summer, the YVR market peaked in March of 2016, months before the provincial government brought in the Chinese Dudes tax, the feds introduced the Millennial-killing Moister Stress Test or the city lost its way and said vacant houses would be taxed. Because of insane speculation plus real estate horniness on a grand scale, local prices were dancing high above local incomes for several years, forcing families to borrow excessive amounts. It was only a matter of time before the wobbling tower of excess tipped.

The actions of crazed politicians just pushed things along a little, and here we now are. Sales last month fell 39.4% year/year. Detached home deals have collapsed 52%, while condo sales are 25% lower and attached property transactions have given up 44%. The benchmark price for detached homes (still an insane $1.483 million) fell almost 2% in a single month, and houses in many hoods now cost 25% less than they did ten months ago.

At the same time listings are extremely few and far between, since nobody can afford to move. What an unhealthy situation. Worse, locals just got their latest property assessments – on which municipal tax assessments are based – and since they reflect values of seven months ago, they’ve skyrocketed by up to 40%. Ouch.

These are the twin legacies of a real estate market gone bad: property tax hell, and a debt overhang that can take years, decades even, to get out from under. Makes you wonder – what were people thinking? No asset class in history has ever gone vertical, without a plunge. Why would houses in Van be different?

Meanwhile, there’s Calgary. A doubling in the price of oil in the past year has not rescued that real estate market, because speculation, greed and cowboy arrogance (as opposed to West Coast delusion) created so much long-term damage. Sales last month were 15% below the 10-year average, coming atop a year when overall sales plunged 26% from the year before.

So when you combine 2014 and 2015, the contraction basically rolls the market back to the lowest sales levels since we all crawled out of the GFC. Says the local board’s fetching chief economist: “There was a dramatic fall in 2015, and the additional fall in 2016 is keeping sales at levels that are well below our long-term averages.” This has resulted in a price decline of about 4%, with detached houses falling through the $500,000 mark. It may not seem that severe, given the sales plunge, but this is not the bottom.

The problem in Cowtown is not oil, but jobs. The unemployment rate has jumped past the 10% mark, and until oil adds another twenty bucks a barrel (or more) nobody expects a big change. Of course, we also have declining or stagnant markets in Edmonton, Winnipeg, Saskatoon, Regina, plus all of Atlantic Canada. It’s estimated that 70% of Canada’s markets are going nowhere – and mortgage rates have not even yet started to swell.

Now, there’s nothing inherently wrong about owning a house, or wanting to. You gotta live somewhere, after all. But when residential real estate turns into an investment commodity, rife with speculation, excessive leverage and unbridled greed, it always blows up. And every single time, people are surprised.

So let’s end this with blog dog Jeremy, shaking his head in the Lower Mainland.

“I’m sure I’m not alone when I say that my holidays were filled dealing with relatives boasting about how much money they have made in real estate in BC. This year I was exposed to my brother and his wife (mostly his wife) constantly talking about how much their house has gone up in value in the last three years since they bought it, how smart they were, and how it was the best financial decision of their lives.

“Here’s the story. My brother is married and has a 2 year old son, with another on the way, and they bought a house in a bad part of a suburb of Vancouver. He and his wife both have government jobs, but the wife is a temp employee and due to recent government restructuring may be laid off within the next 6 months. To my knowledge they have no savings and no investments.

“They bought the house for $450,000 three years ago with 5% down and my sister-in-law was in my face most of the Christmas dinner about how much “equity” they have in their home. I think that I must have heard her say the word “equity” about 20 times. She also went around to my cousins and had the same conversation about “equity” and how they all should have got into the market when they did.

“I thought this was all over until in response to my Happy New Year’s text my brother told me that BC Assessments are now out and he has made a quarter million in one year! (His house went from $508,000 to $750,000, which I admit is an impressive gain).

“I know you are not a psychologist, nor do you teach etiquette classes on the side. However, do you have any advice on how to deal with family and friends who spout this nonsense ad nauseam?”

Easy, Jer. Send him here. We have a few suggestions.


#1 Randy on 01.04.17 at 6:29 pm

The future for property taxes is ugly

#2 TurnerNation on 01.04.17 at 6:30 pm

Worst performing US listed ETFs of 2016.

(Nigeria has an ETF? I never got the email…)

#3 pathcontrolmonk on 01.04.17 at 6:30 pm

You would think recent restrictions by the PRC on capital outflows would alarm the geniuses in YVR, but no, just more hubris.

#4 Victoria Real Estate Update on 01.04.17 at 6:31 pm


As I predicted in the last 6 months, it wouldn’t be long before we would see sales of detached houses fall below year-ago levels across Greater Victoria.

December’s 10% year-over-year sales decline highlights the falling sales trend that began somewhere around April of 2016.

It was an easy and obvious prediction to make.

The second part of that prediction was that prices would begin falling (the bottom will be deep) as the correction process moves to the next stage in Victoria.

Periods of unusually low inventory are typically followed by periods of unusually high inventory. It’s part of the inflation / deflation cycle of a housing bubble.


It’s an alarming trend.

However, the realtors at the local board refuse to talk about it. Apparently they are incapable of seeing obvious trends that clearly point to a changed market. A changed market, that is, which will result in much lower house prices across Greater Victoria.

2016’s dramatic April to December sales drop of 69% was significantly higher than in 2015 (44%) and in 2014 (50%).


Instead of talking about this obvious and important trend, the local board chose to talk about Victoria’s record-breaking sales year, which mostly had to do with what went on before the area’s dramatic sales downtrend set in.

The realtors at the local board are, apparently, incapable of understanding the huge sales-boosting impact of 2016’s record-low 5-year mortgage rates (in the 2% range).

To put things in perspective, rates were in the 10% range in 1991.

When put into proper perspective, sales in 2016 needed to be at least twice as high (100%) as in 1991 in order to talk about comparable demand. 13% doesn’t cut it.

Other important factors were left out of the local board’s analysis. They didn’t mention that Greater Victoria’s population has increased significantly since 1991. Victoria has more houses, condos, townhouses, etc. than it had a full quarter century ago.

More houses = more sales.

It’s why there are a lot more sales in Toronto each month (a much higher population and more houses) than in tiny Victoria.


No asset bubble in history has had the type of happy ending that Canadian economists talk about when referring to Canada’s housing market.

Whether you consider BRE-X, the dot-com bubble, Nortel, Canadian housing markets in the 1980s (Victoria, Vancouver, Edmonton and Calgary), housing markets around the world (in Japan, Greece, Spain, Ireland, the US, etc.), or any other asset bubble, there is no example to point to that ended in a fairy tale, controlled, safe, soft landing.

It hasn’t happened anywhere at any time and Canadian real estate won’t be the first bubble in history to have a happy ending.

Markets corrections are nasty when bubbles are allowed to form. Canadians have plenty to learn about risk in the years ahead.

#5 pathcontrolmonk on 01.04.17 at 6:36 pm

Correction: One friend of mine who bought a $2 mil duplex a half mile down the street from YVR’s junkie paradise, recently told me that he expects to live in his shared SFH for 10 years. 3 months prior, he told me he would flip it within a year.

#6 dw on 01.04.17 at 6:38 pm

Why no one talks about Kelowna? My assessment went up 90 grand….I want to sell!

#7 AJ on 01.04.17 at 6:38 pm

My two cents. Easy come, easy go. Who talks about money with family???? Good luck. That’s hard and gross.

#8 Damifino on 01.04.17 at 6:42 pm

“…my brother told me that BC Assessments are now out and he has made a quarter million in one year!”

Nope… hasn’t made a dime yet.

#9 Smartalox on 01.04.17 at 6:42 pm

Here’s what I love:

All the people who were on here yesterday griping about income taxes as ‘government confiscated wealth’ or ‘government theft’, but not a peep about soaring housing values pegged at 52-week highs, being used to calculate their property taxes.

Now of course, in Vancouver, if you’re over 60, you can apply to have your over-inflated property taxes deferred (including the 1% opiate crisis surcharge) until you sell that over-inflated property.

Of course, if the value of the property goes up or down, the multi-year totals of taxes deferred still have to be paid.

Just think of it as the BC government’s own little ‘CHIP Reverse Mortgage’ plan!

#10 bill on 01.04.17 at 6:42 pm

guess he didnt see that coming …..

#11 Golfman on 01.04.17 at 6:45 pm

Sounds like they have to flaunt their presumed financial intelligence to compensate for other shortfalls and yet they have absolutely nothing until they sell it.
I would bet that they are so short-sighted that they will ride this out thinking that house prices will come back and in a 2-3 years you’ll be hearing no end of whining and crying at mortgage renewal time.
Greed can be such slap in the face sometimes.

#12 Alice on 01.04.17 at 6:45 pm

Condo flippers around Vancouver are in for the crap storm of the century. Most of the new construction isn’t even built and Realtors are calling it a ghost city already.

#13 Dave on 01.04.17 at 6:46 pm

I spoke to a few realtors in Vancouver and all eyes are on the Chinese New Year. “This will relaunch the real estate market into new heights” he said. “Current slow down is seasonal and due to cold snowy weather.”
There is still plenty of emotion that things will rise, perhaps a few bumps from Ms.Yellen will temper the excitement.

#14 AGuyInVancouver on 01.04.17 at 6:47 pm

I’d be interested in hearing opinions on why Calgary prices haven’t collapsed completely, given the terrible state of the oil industry and job market. A 4% decline is pretty minimal given the economic conditions.

#15 Bill Grable on 01.04.17 at 6:49 pm

This echoes your post, Mr. Turner.
“Property prices have climbed to dangerous levels in several advanced economies, raising the risk of massive price falls if markets overheat, according to the Organisation for Economic Co-operation and Development (OECD).

Catherine Mann, the OECD’s chief economist, said the think-tank was monitoring “vulnerabilities in asset markets” closely amid predictions of higher inflation and the prospect of diverging monetary policies next year.

Ms Mann said a “number of countries”, including Canada and Sweden, had “very high” commercial and residential property prices that were “not consistent with a stable real estate market”.


#16 The Greater Cauliflower on 01.04.17 at 6:49 pm

Equity, Equity, Equity

Just kidding Jeremy, (sort of)

#17 CL on 01.04.17 at 6:49 pm

I know you’ve already said the BoC won’t be easing rates again and I would agree with that. I did read something today that made some sense believe it or not (hard to find good reading these days) but it made mention the BoC would not be wise to cut rates with Trump calling out currency manipulators. I tend to agree with this. Made sense.

Which means that OMG people that have drank the cool aid in big mortgages are in bigger trouble if this plays out that way. I understand the bond market and note bond yields have swelled along with my preferred ETF price (yay) and with what I’m seeing inflation in the US and elsewhere (even England!) except here is on the way which aligns with the Fed raising rates several times this year. Canuck real estate (and the overall economy) is in for an even rougher ride (as you’ve mentioned and many obviously agree with) I think especially if the BoC can’t drop rates even if they want to. This could be the final nail in the coffin unless more Christy Clarks pop up and start offering provincial taxpayer dollars for free loans for one last? Hurrah.

Should people be worried about Canada in general? This could be painful for even the prudent and responsible. I see nothing positive for Canada and I’ve never experienced such a negative outlook here in all of my years on this planet. It’s quite concerning.

#18 Canadian unemployed on 01.04.17 at 6:51 pm

They should sell.

#19 Debt's Dark Embrace on 01.04.17 at 6:53 pm

You ask ” why would houses in Van be different? ”
It’s the drugs Garth, they have great drugs in Van.

#20 Smartalox on 01.04.17 at 6:53 pm

Also: had some friends over for drinks during the holidays. Middle-aged couple, with a teenager in private school. Probably over-extended. During the obligatory Real Estate Conversation portion of the evening, Mrs. Friend complained loudly about how they’d been to the bank to get ‘an extended line of credit’ based on the recently-assessed value of their home.

Turns out their home is on leasehold land, so despite those massive gains in valuation of their property on paper, NO CREDIT FOR YOU! Even with 70 years left on the 99-year, city-held lease. A quick glance from Mr. Friend, and the conversation ended abruptly.

Let this be a lesson to those paper millionaires in Vancouver: just because the taxation agency says your home was worth a lot eight months ago, it doesn’t mean that the banks (or the market, for that matter) will concur.

#21 Adrian D'Atri-Guiran on 01.04.17 at 6:54 pm

Housing market is pooched. Taking entire Canadian economy with it. I would ride an inverse ETF of the TSX like: Hoizons HXD, if it wasn’t for the volatility loss of holding an inverse ETF of anything long term.

Garth you got any suggestions on how to profit of the RE crash? (besides selling your house, cause i don’t own one)

#22 jay on 01.04.17 at 6:57 pm

Vancouver house price’s are even falling in China.

#23 Victoria Real Estate Update on 01.04.17 at 6:59 pm

@ Jeremy

Below is a little challenge you could consider giving your brother’s wife next time.

She claims it was because they were smart that they took on a mortgage 3 years ago in Vancouver.

Ask her exactly what market fundamentals they considered in making their decision to “buy” at that time.

Before you do that, be sure to read up on price to income and price to rent ratios, as well as where household debt levels in Canada are compared to historical levels, the same with homeownership rates, real estate investment levels as percent of GDP in Canada, etc.

Garth talks about these things sometimes.

If they were smart and informed about the housing market like they claim to be, wouldn’t they have considered these basic market fundamentals before taking on a massive mortgage?

It sounds like they were another example of a couple whose uninformed buying decision (that went against fundamentals) was bailed out by today’s record-low rates and lax lending standards. They’re bragging as though they’re brilliant and know a lot about the housing market. However, in reality, dumb luck is all it can be attributed to.

Update us in 2 years. It will be interesting to hear if they’re still bragging about equity.

#24 trexx on 01.04.17 at 7:01 pm

Well, there is still Toronto.

#25 Canadian unemployed on 01.04.17 at 7:06 pm

> He and his wife both have government jobs

No surprise there.

#26 jay on 01.04.17 at 7:08 pm

Now we’re running out of salt as well as land in Vancouver.

#27 TurnerNation on 01.04.17 at 7:10 pm

I spoke at length with someone from Nigeria. Now he works at Raptors and runs bball charity:

Apparently still corrupted and dangerous place it is. Surprised the oligarchs cannot corner and lift their stock market.

#28 LL on 01.04.17 at 7:11 pm

….His house went from $508,000 to $750,000…..

Annual tax cost probably more!

#29 Rich Louis on 01.04.17 at 7:12 pm

TFSA are great – but isn’t the RESP the best deal out there? Using the Government’s money free?


#30 Victor V on 01.04.17 at 7:16 pm

“The actions of crazed politicians just pushed things along a little, and here we now are. Sales last month fell 39.4% year/year.”


Last month, residential property sales totalled 1,714, a 39.4 per cent decrease from the 2,827 homes sold in December 2015.

Correction: A previous version said home prices in Metro Vancouver in December slid by 17.8 per cent compared to the same month the previous year.


Gotta love seeing these correction notices in mainstream news. One can only hope the correct stat hits the newsprint edition.

#31 Nonplused on 01.04.17 at 7:16 pm

The impact on Alberta is understated by the 10% unemployment number. A great many of the people released were “early retired” and probably won’t re-enter the workforce. Sure, they have money to live on, but they won’t be buying any bigger houses any time soon.

I find the “employment participation rate” a better indicator of how the economy is doing than the “unemployment rate”. The “unemployment rate” only tells you how many people qualify for EI, whether working or collecting. Those people not working and not collecting are only captured in the participation rate. They will go back to participating when their money runs out.

The good news is we’ll have a lot more Uber drivers so it’ll be a lot easier to get a ride.

#32 barnz0rz on 01.04.17 at 7:17 pm

BIL is trying to sell his mother’s townhouse in LM after she passed. Asssesment came in for 2017 at $226K, up from $181K. Some insane person paid $295K for one of these townhomes last year. None of the other ones in the complex that sold last year went for above $220K. BIL says he won’t take less than $275K. Riiiiiiight…..

#33 Ex-Cowtown on 01.04.17 at 7:25 pm

Let’s do some math:

$750,000/$508,000 = 47% increase. Impressive!!!

But that was at the peak which BC is using (naturally!!) to calculate your taxes.

So let’s take off 25%, leaving you with 75%, which is likely what the house is worth TODAY and trending down, not up.

$750,000 X 0.75 = $562,500 . Not bad, still a 10.7% return.

Take off RE fees and your left with $543,000. which is a very modest 7% return. And dropping.

With prices dropping at 2% per month, the bragged about 47% gain turns into a net loss by Easter. And that ain’t no April Fool joke.

Math is hard.

#34 Fenton Cheng on 01.04.17 at 7:25 pm

Garth, or anybody else,

I am attempting to find reliable data on cap rates for Greater Vancouver single family homes, currently, and through time. One would think that this information would have been compiled by somebody, but I can’t seem to find anything.

I completely understand how one needs to take cap rates with a grain of salt, and how one can’t, say, compare the cap rate of a home in West Vancouver with the cap rate of a house in West Seattle, and come to any hard and fast conclusions. Nevertheless, I have seen much anecdotal evidence suggesting that SFH cap rates are hovering around the insane 2% level right now in Vancouver, which would make this pretty much the lowest cap rate environment for residential real estate anywhere in North America at any time in modern history. I’ve got to think that either rents double or SFH prices get cut in half (or some combination of the two) in Vancouver to get back to some sort of sustainable equilibrium.

If anyone can point me in the right direction, I would very much appreciate it.

Fenton Juo-Wei Cheng

#35 Nonplused on 01.04.17 at 7:29 pm

Oh and how to answer Jeremy’s family? You can’t when they are sitting on paper gains. Do you know how many people were told to bail out of Bre-X and Nortel, and RIM for that matter? How many did?

There is something about how the market functions that most people just won’t capitalize on gains while thy have the chance. Not talking about Garth’s balanced portfolio I mean more like when you get a windfall and the horse just hasn’t got anywhere left to run.

Tesla would be a good current example but who is selling? They won’t until Toyota proves to the market the Prius was a better idea after all and costs much less. And that will happen. At least with a plug in hybrid you can keep driving when you run out of batteries even if you do most of your driving on the batteries, and it’s cheaper. So, why buy a Tesla when you can get a plug in hybrid? Once people figure that out Tesla has to develop a gas engine which they don’t have, and the barrier to entry is fairly high. They will likely end up having to buy a drive train from Mitsubishi or someone like that.

Bit of a departure but my point is you can’t change a “winner’s” mind even if the writing is on the wall.

#36 Fed-up on 01.04.17 at 7:34 pm


Every market in this meat locker of a country, is STILL insanely over-valued. Without a 50% + correction, EVERY major city is still beyond bubbly. Just because the price gains whither or stop all together, it doesn’t mean that we have been proven right. A puny 4% drop (I know, it’s not the bottom) in Calgary is a joke when prices have more than doubled in the past decade, while the Alberta economy has been creamed I might add . When we see 5-10% pull backs in the stock markets, we are told that these are healthy so let’s not get cute and act like a bunch realtards here, please.

Southern Ontario makes up over a third of Canada’s population. When we see prices there, revert back to the historic average, then we may be on to something. Whether that happens in a year or a decade or at all, is a complete mystery. Until then, all bets are off.

The vast majority of home buyers in the past 15 years, still laughing at these valuations. Prices may flatten, they may crash or they may continue to go up. Most on this blog have been predicting a sharp correction or reversion for almost a decade.

We may all be dead at a ripe old age before we see sanity set in.

#37 George on 01.04.17 at 7:36 pm

Prices in Vancouver are so bloated that the decline so far from a buyer’s perspective is meaningless and the longer we have such a small amount of inventory on the market-the longer prices will take to decline significantly.

Other than for family, the only reason anyone would move to Calgary is for a good paying job. Now that those are far and few between, you will see fewer people moving into the city and the young engineers who have been laid off in the last few years, may finally have to face the fact that because their packages have ran out, they may have to move to another city for a job. Most of the big projects have been put on hold, and the majors aren’t going to get suckered into sinking their capital into a huge project on a temporary uptic in prices, especially when all the fracking operations in the states can ramp up so much faster, and this will drive the price down again. Furthermore, we all know the Opec agreement won’t hold and some of these countries will cheat. So I wouldn’t be too anxious to buy in Calgary right now.

#38 d'Edmonton on 01.04.17 at 7:37 pm

“I know you are not a psychologist, nor do you teach etiquette classes on the side. However, do you have any advice on how to deal with family and friends who spout this nonsense ad nauseam?”
In my experience, it has indeed been a humbling experience to smile, congratulate them on their gain and yet to gently reply ‘It’s our choice to rent for now’ without showing emotion when questioned about when we are going to buy.

We never talk about RE being in a bubble but point out to possible job loss and the rising cost of living as reasons for us not buying. They surely think we are losers and chicken littles. Such possible events do not daunt them.

This will not end well. We need the personal conviction to stay the course when everyone around us is doing otherwise.

#39 Brett in Calgary on 01.04.17 at 7:45 pm

I can think of several:

1) The home is the last asset sold, it takes time for people to get to that level of desperation

2) Many who lost there jobs were contract workers, which likely means they were renters

3) Extended EI and severance keeps people afloat

4) The belief that this downturn is just temporary, Calgarians are used to boom-bust and are resilient/hopeful

#14 AGuyInVancouver on 01.04.17 at 6:47 pm

I’d be interested in hearing opinions on why Calgary prices haven’t collapsed completely, given the terrible state of the oil industry and job market. A 4% decline is pretty minimal given the economic conditions.

#40 I don't know on 01.04.17 at 7:47 pm

Jeremy, ask them why they ignored Garth’s advice to not buy.

The advice is always to buy what you can afford. — Garth

#41 the Jaguar on 01.04.17 at 7:51 pm

@ #14 A guy in Vancouver:

Why the slow sticky slide in Calgary? The city economy, while more diversified these days is still largely the home of oil company head or branch offices and when times are good they have very deep pockets and pay extremely well. Huge bonus pay and salaries. So after a long run of good times many who lost their jobs had savings to rely on. The prairie mentality is different than in some parts of the country where you see more acceptance of assets being leveraged. Prairie people love their toys, but they like them paid off. Conversely for those who don’t fit into that neat category the popularity of Heloc’s to finance homes explains a lot. It’s nothing but an ATM on your house, so if you lose your job you draw on lines of credit to pay other creditors. Robbing Peter to pay Paul. Behind those drawn window shades the desperate are hoping the Saudi cartel can convince everyone to tighten supply, but it isn’t working. While some jobs and projects may come back it will probably be in the long term, and budgets will be heavily scrutinized. Big oil doesn’t want the unseemly press associated with mass layoffs again. All their attention on image protection must be focused on looking environmentally responsible. That’s expensive. Oil and gas engineers, geophysicists, geologists, landmen, and even the bean counters in these companies all specialize in their fields in the area of oil and gas. Accountants here don’t do payroll stuff, they are oil and gas production accountants. Which leads to ask where do they go if there are no jobs in Calgary? The other big canadian cities which offer good services and quality of life don’t have those job offerings. If they are mobile they can consider the US or an international posting, but not so easy when the spouse has a job they don’t want to leave or the kiddies like their local school.
So many are hunkered down, praying for the resurrection of their industry to the big oil and gas god in the sky. ” Please Lord. Give me another boom and I promise not to piss it all away this time”.
Is it just another ‘cycle’ or true disruption? Guess we’ll find out this year. The rubber should be hitting the road as money runs out and interest rates rise.

#42 KoolAid on 01.04.17 at 7:52 pm

Sorry Garth, wrong for 20years, likely wrong for the next 20. No need to worry about the Canadian housing market, easy to re-regulate our way out of lower prices when need be with the stroke of a pen. Mortgage interest deductability against income tax can push property values through to new heights, property tax too, talk about to big to fail, real estate collapses so do our banks, our economy. Those with a long term view will find the path is paved with equity, equity, equity.

Interest deductibility is a fiscal impossibility. Banks will not collapse if houses return to affordable levels. Pumpers like you have done serious damage. — Garth

#43 Ret on 01.04.17 at 8:01 pm

Builders in the GTA from what I can see, are cranking out houses like crazy. the demand appears to be unlimited.

Developments in Milton and along Dundas (Highway #5) in north Burlington and Oakville come to mind but a jaunt to Niagara falls this week was an eye opener.

One large developer is building 900-1100 homes. About half of these homes are completed. What is the underlying economic basis for such huge developments in Niagara Falls?

Large scale building and land servicing is on going in Hamilton (along Garner Rd. and Rymal Rd. E.) and in Brantford.

The buyers are getting financing one way or the other or these large tracts of houses would not be be being built in so many communities.

The economic fundamentals don’t justify the building that I am seeing in almost every city and town.

#44 Mean Gene on 01.04.17 at 8:04 pm

People who brag about their real estate gains have no class.

#45 Brian Ripley on 01.04.17 at 8:05 pm

I have updated Vancouver and Calgary housing charts

Realty check in Vancouver
Trump l’oeil in Calgary

#46 Alice on 01.04.17 at 8:06 pm

@ #26 jay

Retailers just couldn’t afford the inventory of salt with the rents.

#47 Carlyle on 01.04.17 at 8:07 pm

AGuyInVancouver on 01.04.17 at 6:47 pm
I’d be interested in hearing opinions on why Calgary prices haven’t collapsed completely, given the terrible state of the oil industry and job market. A 4% decline is pretty minimal given the economic conditions. – – –

Severance pay, EI, a working spouse, and borrowing huge amounts of money from family, friends and credit cards.

Believe me … I work in Alberta with income support. Some of the folks applying are mortgaged to the hilt, cards maxed out, family and friends goodwill tapped out, severance and EI done.

If I had a Nickle for every oilfield worker, every machine operator coming in having not worked for over a year and the financial support systems (severance , EI, family and friend loans, and maxed credit).

I had one guy who lost his job 15 months ago and blew through 260,000 dollar retirement package PLUS another 30k on credit. Couldn’t get EI because they had calculated his severance to last 3 months more than it did.


But since coming to Alberta I’ve learned that people here live cheque to cheque no matter what salary. Be it 40k a year or 120k.

Severance and EI is a one to two year crutch and for many one that is about to call as the unemployment continues to soar here.

#48 Victor V on 01.04.17 at 8:09 pm

A shocking new report quietly released by the federal government admits that their finances could collapse in the coming decades if politicians don’t make responsible choices.

Two days before Christmas, when most politicians and their staffers had long left their offices for the holiday break, the finance department released — without fanfare or wide notice — a surprising update on long-term economic and fiscal projections.

The report warns that lower than expected growth combined with higher program spending “would be sufficient to put at risk the fiscal sustainability of the federal government.”

#49 Michael King on 01.04.17 at 8:10 pm

Some of my fellow Lower Mainlanders continue to act like idiots. Jeremy’s brother is crowing about his assessment but that number does not mean that his property will actually sell for that. Our Kitsilano condo came in at $366,700 last year and the new assessment is $447,700. Absolute rubbish. An identical unit one floor below was taken off the market in the fall after being listed for months. The final and lowered price was $449,000! Anyone who believes their assessment value is delusional.

#50 Funky on 01.04.17 at 8:22 pm

Is this the primordial ooze you spoke of in your last post??

#51 Debtslavecreator on 01.04.17 at 8:32 pm

The RE horror show is still top of the first inning
By late summer 2018 we might be down 15-20 in TO and 30-35 in Vancouver from the highs – yet the typical Canadian homeDebtRenter whose got a healthy 6 figure mortgage at 2.5-3 will see the following by 2020:
-mortgage payments rise sharply as 5 yr fixed mtgs go to 4-5 = a lot less disposable cash
-utilities up 20-30% with many user fees up 50-100% from 2016
-for anyone with less than 25% equity a request for either a pay down of the mortgage owing or an extra increase in mortgage payment amount to keep the amortization and LTV acceptable
-sharp rise in unemployment with higher late Payments hurting credit scores of more and more people which further adds to the rate at renewal time IF they are offered a renewal

Historic credit bubbles NEVER end in soft landings
The economic (sovereign debt crisis), social and political impact will be extraordinary – all of it deserved as so many among us have chosen to make bad choices
That said, once we pass this in 5 yrs or so we have a good chance of enjoying a real boom

#52 What to say Jeremy on 01.04.17 at 8:39 pm

“Mrs. Equity” has not made a cent as she has not monetized.

The assessed value is just that. Their home is worth what it sells for.

She can sell to monetize and wish her good luck with selling her home (per Garth’s chart) and prices continue to drop precipitously.

To monetize she could do a HELOC (worth doing now before prices drop even more and if they do not have a large mortgage = 80% of appraised value less the mortgage amount). 22% of Canadian homeowner’s have one, join the crowd. If she can’t repay the loan, she can lose her house.

A rental suite (since they have few savings) and Jeremy, if I read between the lines, reads like East Van is where they bought…good luck with the rental clientele in that area.

Same BS I used to hear in late 70s, early 80s Calgary. Give it until mid year and then ask her how her equity is doing.

Ask at least 20 times.


#53 Digby Ditherman on 01.04.17 at 8:39 pm

Dear Smug, Blowhard Equity-Princess:

Equity, shmequity. Its all air.

Real Estate, like a very bald, over-inflated tire feels really buff … that is until you hit an unexpected object … well kinda like a bank ‘freak-out.’ Commonly experienced as your classic “credit freeze.” This predictable and looming equity flatuence is most predictably “pricked” by higher interest rates. Hmmm … which is happening now.

We suggest, Princess, when eating crow, consume while still frozen … because it tastes better.

You got nothing princess …. until you sell.

#54 Barb on 01.04.17 at 8:43 pm

Jeremy, tell your brother that the increased assessment to $750,000 will likely cost him ~$4,000 more in property taxes.

And that’s if–a big IF–the city doesn’t also increase their mill rates.

Or maybe jot down the address of the nearest food bank for him.

#55 Keith in Calgary on 01.04.17 at 8:43 pm

Here is a Calgary reality check that you can cash.

The CREB stats are cherry picked and manipulated to present the best possible PR front to the public…..these people are crooks, plain and simple. A 4% price drop is not the truth, it is more like 10%+ this year, and 20% since 2015………..if not more.

I just sold my father’s home at a listed price of 10% “LESS” than the cheapest comp in his neighbourhood, and took 6% off the asking price to close the deal. It sold in 2 weeks and everything else looks like it is still for sale at the inflated prices from before.

You figure it out.

#56 Polls R Phake on 01.04.17 at 8:46 pm

And you lefty socialists that need crying rooms thought Trump running for president was funny:

#57 Context on 01.04.17 at 8:59 pm

#34 Fenton Cheng:- Forget about cap rates as its an endless road to nowhere. What is your detailed end goal to be accomplished with facts?

#58 Vancouver Dudes on 01.04.17 at 9:02 pm


#59 PGer on 01.04.17 at 9:04 pm

This is like some doofus bragging about their tech stock holdings at the top of the bubble, just before it all crashed. Temporary gains mean nothing unless they are cashed in.

I have only 15% of my net worth in a paid-for house, and that’s about all the house I want (the rest pays me dividends and other income at least).

#60 Andrew Woburn on 01.04.17 at 9:15 pm

I just checked out a property we used to own in West Van which we sold for land value in 2011. The land was then assessed at $900K but we held out for $1.3 million. Last year the lot portion was assessed at $1.6 million.

The 2017 (land only) assessment is for $2.4 million, a one year increase that is almost equal to the entire assessment in 2011.

However BC properties are assessed as at July 1st so the “2017” assessments reflect pretty much the 2016 market peak rather than current reality. I doubt much of this blip will show up in the 2018 figure.

This also shows the flaw in the assessment system. As listings dry up and fewer and fewer properties sell at insanely inflated prices, all properties are assumed to have increased in value. This of course is the guiding principle behind an old fashioned stock market pump and dump.

#61 45north on 01.04.17 at 9:16 pm

Jeremy: I thought this was all over until in response to my Happy New Year’s text my brother told me that BC Assessments are now out and he has made a quarter million in one year! (His house went from $508,000 to $750,000, which I admit is an impressive gain)

the largest drop in sales was from June to July so valuations were set just as sales fell through the floor!

The problem is Jeremy’s brother is going to be severely disappointed if and when he goes to sell his house. Not just the brother but pretty much every single property owner in Vancouver! Ross Kay says that by May 2017, people are going to realize that they can’t get anywhere close to what they were thinking. Just in time for the provincial election!

Basically your brother needs to know what the $750,000 on his assessment really means. Set up a one-on-one session with Ross Kay. Offer to pay for the session.

#62 Another Albertan on 01.04.17 at 9:26 pm

Comments on AB real estate…

A close friend is negotiating some business financing with Alberta Treasury Branch. His ATB contact indicated 3 months ago they had nearly 6000 non-performing mortgages.

This friend’s uncle is highly-placed in the real estate world. His comments were that a national bank (possibly the green one) had 25% of the mortgages issued in the last 3 years in Edmonton and points north were non-performing. This is the same bank that purportedly would give a 4-month mortgage holiday if you came in with fresh EI paperwork.

The banks really, really, really do not want to have to take over defaulted housing. They are doing everything possible to continue to extend credit terms to their customers in the hope that the economy will turn positive before people are completely out of money.

Another colleague’s family have a number of restaurants operations in southern Alberta. They are predicting that 10 restaurants in Calgary will go black before the end of January. On NYE, a number of popular Calgary restos were sitting mostly empty. I had zero issues getting reservations through December for end-of-year client entertainment.

The next 6 months will be critical for many households in Alberta. The elastic bands are stretched to their maximum right now.

Everyone else’s mileage may vary.

#63 Okanagan Man on 01.04.17 at 9:28 pm


As always nice selective stats. You didn’t mention anything about the huge year over year market increase in Victoria property values. Of course not sustainable and maybe even a peak but the fact is market has raged on while you continue to try and convince everyone otherwise.

#64 Grapes on 01.04.17 at 9:28 pm

Hey Garth,
With vacancy rates and unemployment high across the Prairies, What are your thoughts on purchasing an apartment complex to rent out? Buy low and hold for the long term.

#65 Smoking Man on 01.04.17 at 9:29 pm


Trending on twitter. An autistic white kid trump supporter, kidnapped and terrorized by BLM

Raging all over the web. Not one MSM report thus far.

Had it been white kids kidnapping a autistic black kid. You would have wall to wall coverage on MSM

What is MSM goal hear?

I’m perplexed.

#66 Leo Trollstoy on 01.04.17 at 9:44 pm

Builders in the GTA from what I can see, are cranking out houses like crazy. the demand appears to be unlimited.

This is true. Toronto is the last major Canadian city where real estate prices are still going up

#67 B.O.B. on 01.04.17 at 9:46 pm

None of the guys I work with were bragging about their BC property assessments; only heard complaints of being too high.
We all know this market’s gone sour, tax hikes become especially bitter when they can’t be covered by equity gains.

#68 will on 01.04.17 at 9:48 pm

#20 Smartalox

“Let this be a lesson to those paper millionaires in Vancouver: just because the taxation agency says your home was worth a lot eight months ago, it doesn’t mean that the banks (or the market, for that matter) will concur.”

Couldn’t agree more. And maybe more certainty of taxes going up on such appraisal than willingness of buyers to agree with it.

#69 Liaod Fu King on 01.04.17 at 9:57 pm

Fenton, I have read that Seattle cap rates are closer to 6% but I don’t have a verifiable source unfortunately.

#70 Vancouver Dudes on 01.04.17 at 10:04 pm

Why deleted.
Is there no end to your insecurities you censorship nancy ????

Bigots get the boot. — Garth

#71 daveyboy on 01.04.17 at 10:15 pm

My preferred shares are kicking ass that G.T.

#72 Must Read on 01.04.17 at 10:16 pm

“Did Christy Clark Pull a Too-Fast PR Stunt on LNG?
Woodfibre LNG announcement ‘misleading,’ says Squamish Nation chief”

Talk about making up Fake News it seems that BC Politicians are famous for how to misled and tell half truths. Every inch of the article has a twist and turn. Just jaw dropping.

#73 Vancouver Dudes on 01.04.17 at 10:19 pm


#74 WUL on 01.04.17 at 10:19 pm

My fellow Calgarians will have seen a recent flurry of articles in the Herald about the upcoming boom in Grande Prairie, AB as the frackers swarm to the Montney Formation with WTI at $53. I visited the stats page of the GP real estate cabal. It sets out all the datums in graphs. December is not available yet. The 10 pictures are worth 10,000 words in explaining the wild swings of a Black Gold economy. I’m envious. The rent for a 2 bedder there (pop. 68,000) is less than that of a bachelor apartment here in Ft. Mac.

#75 Smoking Man on 01.04.17 at 10:27 pm

Been saying for years.

Globalists can only win if we’re all fighting with each other. Saw the whole thing unfold on Nictonite.

But we can read each other’s minds up there.
Here it will lead to tyranny. …

Humanity needs opposing and balanced opinions or some evil prick will get all the power and kill you all.

Dr Smoking Man
PhD Herdonomics

#76 Smoking Man on 01.04.17 at 10:34 pm

If the entire population started to support trump , I would shift left.

Balance bitches.

People got to be keeper in check.. just a tiny notch above wild animals.

Humans can hide behind a good sales pitch.
But your all primate animals.

Dr Smoking Man
PhD Herdonomics
Planet Nictonite. Dristict 3

#77 triplenet on 01.04.17 at 10:37 pm

#34 Fenton Cheng
In real estate analysis there is no such thing as a SFD cap rate. Get over it.
#49 Micheal King
The assessment valuation date is July 1, 2016.
Get over it.

#78 Smoking Man on 01.04.17 at 10:52 pm

Back yard tunes.

I missed 4 dead lines for my report back to Nictonite. No work ethic , why I’m the commander of the mission , no idea. Bastards up stairs are hounding me for an excel sheet.

What do I tell them in my report? So my kind don’t wipe them out.

Humanity is ?

Fortunately for humanity, got good at bull shitting in my 57 years of observing these beasts.

#79 WUL on 01.04.17 at 10:57 pm

#62 Another Albertan:

Re: Empty Calgary Restaurants

I was in the Stampede City Dec. 16 – Jan. 1. Went for lunch on the 30th at Saltlik. The three of us were the only diners in the steakhouse.

#80 Self Directed on 01.04.17 at 10:57 pm

#48 Victor V on 01.04.17 at 8:09 pm

A shocking new report quietly released by the federal government admits that their finances could collapse in the coming decades if politicians don’t make responsible choices.
Nice find. It’s a concern, but not for this generation…

#81 Smoking Man on 01.04.17 at 11:00 pm

#82 IHCTD9 on 01.04.17 at 11:03 pm

#38 d’Edmonton on 01.04.17 at 7:37 pm
In my experience, it has indeed been a humbling experience to smile, congratulate them on their gain and yet to gently reply ‘It’s our choice to rent for now’ without showing emotion when questioned about when we are going to buy.


Jer, do like this guy^. You should not let yourself get pissed at their euphoria, nor should you care what they think of your decisions. Focus on your own household and make straight paths for yourself.

Who knows, they may end up being right, and make a few hundred grand 20-30 years down the road – but you’ll be sitting on a much bigger pile by then. And if it turns out you are right, they will crash and burn – and secretly know you were right all along. Then it will be their turn to bite lips – and you can be sure they will!

Resisting emotions like these keeps extended families talking to each other and builds character.

#83 Smoking Man on 01.04.17 at 11:04 pm

Ear buds.

#84 DON on 01.04.17 at 11:23 pm

Okanagan Man on 01.04.17 at 9:28 pm


As always nice selective stats. You didn’t mention anything about the huge year over year market increase in Victoria property values. Of course not sustainable and maybe even a peak but the fact is market has raged on while you continue to try and convince everyone otherwise.

I take it you skipped reading tonight’s blog and went right to attacking VREU?

Hey wanna buy a tulip bulb?

#85 Renter's Revenge! on 01.04.17 at 11:31 pm

Sticky house prices = growing bank dividends

Keep ’em comin’!

#86 Grantmi on 01.04.17 at 11:32 pm

Same with the burbs in BC too! falling off the cliff. Outside the greater Vancouver area… where folks can possibly afford a home. (or not)


only a matter of time for prices to follow.

#87 Ben on 01.04.17 at 11:52 pm

I would love to see a Garth response to this…..

He thinks that not prioritizing homeownership is “the single biggest mistake millennials are making.”

#88 Adam on 01.04.17 at 11:53 pm

Re, Cap Rates in YVR #34 Fenton Cheng

Fenton, I rent a house in North Van for $3,100 per month. Landlord bought it Feb, 2015 for $1.2 million. Gross cap rate is 3.1%. Once you deduct property taxes, insurance, maintenance, etc. Net Cap rate is about 2.2%. The assessed value has gone up this year to $1.475 million though my rent is still the same so with that number Gross cap is 2.5% and net cap is about 1.8%.

Previously I rented a house in West Van for $4,000/month which the owner bought for $1.7 million in 2013. 2.8% gross cap rate then but that house is now assessed over $3.4 million. Double what he paid less than four years ago.

#89 Guillaume on 01.05.17 at 12:02 am

Higher assessment doesn’t mean that taxes will go up the same way ? If local taxes go up 15% as did the assessment this year, that would be hard to justify…..

#90 Self Directed on 01.05.17 at 12:04 am

Why are REIT ETFs climbing so fast all of a sudden? If the Canadian economy is looking at tougher times ahead, should REITS be declining instead?

#91 Tony on 01.05.17 at 12:06 am

Re: #14 AGuyInVancouver on 01.04.17 at 6:47 pm

Ask anyone who has sold or tried to sell a house in Calgary recently. All of them will tell you the same thing, home prices on the resale market have fallen 20 to 25 percent from the October 2014 peak.

#92 chelsea on 01.05.17 at 12:22 am

I also hear from family members who own homes. Boasting how much their home’s have spirited up from last year. Yes, it does get tiresome. Although we rent, and have for over 12 years now, saved diligently and invested wisely (I hope). We are looking to buy a nice, reasonably priced home/land for our retirement. Just remember, most home owners are up to their neck in debt, thinking they are rich, but in realty very poor. Funny, thing though just because they think they own a home… it is uncanny, the bank owns you, until you pay the mortgage off if ever, then the government owns you.

Really, in life, you own NOTHING….


#93 millenial82 on 01.05.17 at 12:34 am

Many suggestions here for sure, none of which they will have any part of today. That’s fine, eventually they will eat crowe. Who cares as long as you are making the right decisions and looking after #1.

#94 Metaxa on 01.05.17 at 12:53 am

Canada plays the USA for all the marbles Thursday at 7:30 pm Metamucil timezone time.

Colour vs color.
Neighbour vs neighbor
T-tweet vs T2

Lets get national, cheer the boys on as they give 100%, play a north-south game and stick to the plan.

You know what is nice about the Juniors?
Cuthbert, Ferraro and no Grapes.

Go, Canada, go!

#95 Vancouver Dudes on 01.05.17 at 12:53 am


#96 PawPatrol on 01.05.17 at 12:58 am

If I ever feel like I’m trying to jump on a moving train to get in a house then I’m doing it wrong. I won’t buy until I can take my time to make a good decision, and I know this is possible because I watched my parents buy several detached homes and commercial properties in the LM as I was a kid, there was no FOMO then, no bidding wars. There has to be a peace inside of yourself about the market you’re in, and it has to have nothing to do with “buy now buy never”. It’s buy when you see reasonable prices. Right now in the lower mainland, yeah not yet in my humble opinion.

#97 G_Man on 01.05.17 at 1:18 am

Garth, I hope you live a long time because I really enjoy your blog!

#98 Stock picker on 01.05.17 at 1:57 am

Hah…..the only people who use the words ‘home equity’ are the loan sharks and the rubes. There is no ‘equity’ in a non fungible asset. I foresee a huge run on KD.

#99 I'm stupid on 01.05.17 at 2:28 am

The point is that what someone thinks something is worth and what it’s actually worth can be drastically different. Until a home is sold the true value is undetermined especially in Canada where the various Realestate boards manipulate numbers. A 50% return in one year for a home in a terrible neighbourhood in the suburbs, sounds like your sister in law is trying to compensate for how poor she feels for living in a bad part of town.

#100 mark on 01.05.17 at 4:32 am

I was watching Global BC last night, all these bozos moaning about their assessments. Of course it would be all that amount and more if they were trying to sell.

#101 TurnerNation on 01.05.17 at 7:16 am

To the fake femminst trolls here and T2 lovers.
Why not protest this change which will affect women, children.
We live in a 2nd World country right, paying 50-60% our income, which is thefted away to private corps and overseas black holes (“climate change” and aid funding.)
Clearly the Canadian middle class family must be destroyed. We are a huge threat to the corrupted system.

“Toronto District School Board trustee Jennifer Story is helping to round up parents and daycare operators to voice concerns over a proposed $4.1-million funding cut that could translate into higher child-care costs.”

#102 pBrasseur on 01.05.17 at 7:50 am

Happy new year to all!

Suggestion for you Garth

One of these days write a post on Registered disability Savings Plan (RDSP)

A RDSP is sort of a RRSP for handicapped people eligible for the disability tax credit , but instead of getting a tax break you get subsidies from the federal government. Up to a certain amount the government will more than match every dollar contributed and there other amounts given on top of that. The total can grow very rapidely. You can invest retroactively going back to 2008 I believe.

The other great think about it is that money in a RDSP will not in any way affect other benefits the person may have, such as welfare.

Unfortunately this very generous program is not well known, even in financial advisor circles, I encourage everyone here who may have a kid or a close one who qualifies to look it up. But a post by you Garth would definitely help visibility for this great program!

#103 Wrk.dover on 01.05.17 at 8:09 am

With out naming names and places, we visited a childhood friend of my wife a decade ago in a small provincial capital, where the husband had an 8th floor job at a bank working directly with big businesses. In one conversation, he interrupted to ask me what an aquifer was, and in another where I was ranting about the state of the economy he asked what a Ponzi Scheme was. This was one year before Madoff was outed.

Any how he has recently retired and moved to another province where he just paid top buck for another big box house because they don’t want to downsize just yet.

Don’t these people even get memo’s?

#104 pBrasseur on 01.05.17 at 8:32 am

The GOP quietly ditching the mortgage interest deduction by rendering it in practice useless

The journalist does not like it, but it makes perfect economic sense, no wonder markets are extatic!

#105 The Wet Coast on 01.05.17 at 8:45 am

There were 0 houses sold in New Westminster in the last 30 days. Coquitlam and Richmond were almost as bad. I know, I know it was the snow.

#106 Ace Goodheart on 01.05.17 at 8:46 am

RE: “I thought this was all over until in response to my Happy New Year’s text my brother told me that BC Assessments are now out and he has made a quarter million in one year! (His house went from $508,000 to $750,000, which I admit is an impressive gain).

Wait till he sees his new property tax bill. Real estate. The only investment that you have to pay to hold onto. At least my stocks either pay dividends, or they are just free to hold for capital gains.

#107 down and out on 01.05.17 at 8:51 am

Garth and #9 Smartalox, how long before we see heirs in BC being left with a greater tax bill than house is worth .Example age 60 defer property taxes till 90 let house fall in repair Yikes.

#108 TurnerNation on 01.05.17 at 9:00 am

Got gold? Oops wrong blog.
Thanks again Tony for JNUG.US idea I’ve been trading in and out long. It might see double digits as a final top.

I visit this blog seeking alpha with zero hedge.

#109 maxx on 01.05.17 at 9:34 am

#1 Randy on 01.04.17 at 6:29 pm

“The future for property taxes is ugly”

I believe that it is.
Here is an article from The Economist dated 2013:
The reason I chose it is that global re taxes have been on the radar for a long time and developed countries particularly have seen marked increases in all taxes related to re, which I noticed in 2003, when the condo we owned suffered a 37% municipal tax increase, thanks to an MPAC “assessment”.
Of course, seeking answers only resulted in unbridled, unrelenting stonewalling. So we sold, at a handsome profit, and as much as we’d like to return to ON, with the hideous and crippling tax and energy rates (ON voted the libs in!), today, we wouldn’t dream of considering it.
Everyone is aware of the “tagging” of almost every single property in Canada. You know, those little blue street number tags that spread like wildfire around 2006. They remind me of the tags clipped to the ears of cattle and at the time I remember feeling that it felt invasive, given that we had a sign which very clearly indicated our street address. OUR cottage had been inventoried by the municipality, to my mind, in an effort to make certain that they didn’t miss a crumb, and hey presto! our taxes went up sharply soon after.

So yeah, I think more re tax drama is on the horizon.

#110 TurnerNation on 01.05.17 at 9:52 am

Haha Boomers know there is no replacement for displacement. Enjoy your mid life crisis Corvettes.
Richer than we think.

From IE newsletter:

“Canadians bought vehicles in record numbers last year, driven by consumers who bought SUVs, pickup trucks and high-end models such as Jaguars and Porsches, DesRosiers Automotive Consultants said Wednesday.

“Boomers have worked hard all their lives,” DesRosiers said. “They’re retiring in record numbers. The kids are gone, the college costs are gone, the housing costs are paid for and they’re treating themselves to vehicles. Nice vehicles.”

But the era of soaring auto sales — 2015 was also record year —may be coming to an end as interest rates are expected to rise, he said.

“We think that the market has peaked,” DesRosiers said. “Interest rates are likely to go up and most autos are bought with debt.”

#111 Londoner on 01.05.17 at 10:07 am

So GTA homes sales and prices are increasing despite higher rates and a slew of government policy changes on mortgage lending? Clearly there is something else going on in this market which means that most buyers are not impacted by these changes. Either there is a growing shadow banking industry of private lenders (willing to extend financing over and above traditional loans) or there is an increasing supply of buyers who don’t rely as much on financing and can navigate around mortgage rates and lending rules (e.g. bank of mum & dad, foreign buyers). Greed and fear are only part of the equation. There must be new opportunities created to capitalize on those emotions.

#112 maxx on 01.05.17 at 10:14 am

#13 Dave on 01.04.17 at 6:46 pm

“I spoke to a few realtors in Vancouver and all eyes are on the Chinese New Year. “This will relaunch the real estate market into new heights” he said. “Current slow down is seasonal and due to cold snowy weather.”
There is still plenty of emotion that things will rise, perhaps a few bumps from Ms.Yellen will temper the excitement.”

That’s what realtards mostly are: emotion.
Realtards are feeling the change, so expect a doubling-down on their bs pabulum. Our largest demographic stratum is spreading the word that they are not so certain that an owned address is such a great idea, given the employment insecurity challenges/opportunities abroad landscape as well as stupid, realtard-stoked pricing.
Flexibility is becoming mighty attractive.

Rate rises, despite what realtards and agenda-driven FIRE proponents bray, will restore value to money with economies inevitably returning to robust health.

Get ALL of society back in the spending game; so much of it is now shopping second-hand, and my gems are now becoming thin on the ground! :-)

#113 Smoking Man on 01.05.17 at 10:16 am

500 peer reviewed papers saying Man Made Warming is BS.

Read and weep Bottoms_Up

#114 Londoner on 01.05.17 at 10:40 am

The other thing I don’t see mentioned is the lack of supply of SFHs in the GTA. And I don’t mean lack of sales inventory (which is clearly an issue). Is there an issue with the volume of new SFH developments in the GTA which is impacting the demand?

#115 newjackshanty on 01.05.17 at 10:41 am

#12 Alice on 01.04.17 at 6:45 pm

Condo flippers around Vancouver are in for the crap storm of the century. Most of the new construction isn’t even built and Realtors are calling it a ghost city already.

Excellent post…just wait until the Bangkok-style ghost towers appear….these abandoned projects from the 80s cost more to tear down than it is worth so they exist as a statement to stupidity

#116 Renter's Revenge! on 01.05.17 at 10:44 am

#103 Ace Goodheart on 01.05.17 at 8:46 am
Wait till he sees his new property tax bill. Real estate. The only investment that you have to pay to hold onto.


Reminds me of this thought experiment of what the worst possible investment would look like:

#117 rainclouds on 01.05.17 at 10:52 am

Just checked the assessment of the condo I’m renting for $2200 per Mo.

$ 857,000

Price to rent ratio 32.46

Not too worried anybody is going to buy it soon for investment…………

#118 igby on 01.05.17 at 10:53 am

Moved to White Rock in 2001. For most of the the last 15 years B.C. assessments have significantly lagged sale prices. Basically the same for the whole lower mainland. Looks like peak prices are now behind us. Likely we now have peak assessments and will see new sale prices lagging assessments going forward.

We sold our detached home in Dec 2015 and moved to a condo close by. The new assessment on our old house is up 54%, the condo 10.5% This difference will be reflected in our new property tax bill. How much will have to wait and see. Glad to have sold when we did.

#119 Samantha on 01.05.17 at 11:02 am

Toronto still going strong –

Detached homes in 416 have give-or-take doubled in the last 5 years. This means it will take a 50% correction in the most expensive segment of the GTA market, to get back to Jan 2012 levels. Chances of such a severe correction happening – slim to none.

The correction I see will be a max 30% for detached houses in good 416 neighborhoods, which will wipe out 18-24 months of gains. This will put underwater folks who got in during that period with a small down payment.

The problem however is for the people sitting on the sidelines for many years now, because they clearly missed the train. I was one of those once, and I honestly thought that the GTA pricing was insane back in 2010…

If you can’t afford a house in Toronto, well, then you can’t afford it. Change your plans. Move. Adapt. It’s only a house. — Garth

#120 rainclouds on 01.05.17 at 11:03 am

#100 W Dover

No the Banksters dont hire the brightest tools in the shed. For a reason.

Just prior to xmas, my Sister helped a friend who was “promoted” to some middling position at (the Bank with the Lion) move from a Provincial Capitol that starts with H and ends with fax To the large Provincial Capitol in Ontario. Sold her HOUSE and moved into a newly purchased DT CONDO.

[email protected] is completely clueless.

The carnage cant come soon enough…

#121 Stock picker on 01.05.17 at 11:11 am

Vancouvers real estate millionaires are fighting over free salt…..yeah….that’s where we ant to reside…..among ‘the millionaires’ who in reality can’t afford a trip to the hardware store but they’ll punch out a fireman to get at the free salt.

#122 Victor V on 01.05.17 at 11:20 am

Picture this: you place a deposit on a pre-construction townhouse, only to discover that the developer is drowning in debt and your money and future home are both gone. It happened to 200 Toronto buyers.

#123 Context on 01.05.17 at 11:23 am

The average home price in the GTA soared to $730,472 states the MSM. Yet, as of January 5, 2017 the average listed asking price in the City of Toronto is $554,651 so draw your own conclusions as the stats are telling us something.

#124 Samantha on 01.05.17 at 11:24 am

If you can’t afford a house in Toronto, well, then you can’t afford it. Change your plans. Move. Adapt. It’s only a house. — Garth


I never said that I don’t own a house, nor did I say I cannot afford it. I was merely commenting that many folks missed the train, by sitting on the sidelines.

Most were on the sidelines because they couldn’t afford to buy when they joined the sidelines, and were waiting for a price collapse. Once again, if you don’t have the money, don’t try. — Garth

#125 Context on 01.05.17 at 11:49 am

The average listed asking price as at January 5, 2017 known as downtown Toronto or the immediate core area is $572,439 for example which is composed mainly of condo properties; again draw your own conclusions versus the MSM average home prices in the GTA of $730,472.

#126 Alberta Ed on 01.05.17 at 11:54 am

The Calgary market won’t be helped by a hapless government which just introduced a carbon tax.

#127 Shortymac on 01.05.17 at 12:33 pm

All I can say is, next time just don’t bring it up, mixing family and money sours both. Just let them talk.

Also, a lot of people think that Real Estate is “safe” and it’s going to take a crash for them to rethink this. Even otherwise very intelligent people get hung up on real estate, I tried talking to a friend of mine about this who recently bought a house for 600k in brampton! Beforehand he was living rent-free at his parents! Wife wanted her own place with baby #2 on the way.

I’m just glad I listened to Garth and didn’t jump in, I’m getting back on my feet after some health issues and bouts of unemployment and will focus on paying down debt and investing my old pensions as my new year resolutions.

If we get lucky I’ll afford a reasonable place in a few years within the rule of 90, if not we’ll rent and stay liquid. No big deal, we’ll take it one day at a time.

#128 hope & ruin on 01.05.17 at 12:36 pm

#4 Victoria Real Estate Update on 01.04.17 at 6:31 pm
Apparently they are incapable of seeing obvious trends

Lol Irony.

#129 Mattl on 01.05.17 at 12:57 pm

His brother is right, that likely is the best financial decision they have made. They payments on 450k are in line with rents and by the time they are collecting their 6 figure DB pensions the house will be paid off. And that house will likely never drop below 450k, and by the time they retire will be closer to 1mm than 500k.

But I guess they would have been better off renting the past 3 years, and the next 27, dumping 600k into rent payments? If they had followed the advice here 3 years ago they would not be in better financial shape as they likely rent would have sucked up what they spend on their mortage, and with DB they don’t need a few mil like a shrub like me that works private sector.

That said, they sound obnoxious and they better like where they are living because if they have to move then I take back the aboce. If they stay put and can do general maintenance on a house – not very hard – then this will play out well for then.

#130 NoName on 01.05.17 at 1:25 pm

#107 TurnerNation on 01.05.17 at 9:52 am

Last year, very good incentives buy year end, employee pricing, all kind of credits and 0% financing as many months you want, longer i remember seeing was [email protected]% or [email protected]%…

and that no replacement for displacement, nor quite right, revs, revs and more revs is replacment for displacement.

i recommend watching hole video video or skip to 8:40 and watch from there.

#131 oncebittwiceshy on 01.05.17 at 1:37 pm

Ben on 01.04.17 at 11:52 pm
I would love to see a Garth response to this…..

Yes Ben, there are millions of millennials in the States still thankful for similar advice back in 2006. I imagine they are also trying to buy Bach’s latest book so they can crawl out from their underwater mortgages.

The number of people that become millionaires (not just paper millionaires) by flipping real estate are probably equal to the number of people that become millionaires in Vegas.

#132 Rational Optimist on 01.05.17 at 1:44 pm

9 Smartalox on 01.04.17 at 6:42 pm

“Now of course, in Vancouver, if you’re over 60, you can apply to have your over-inflated property taxes deferred (including the 1% opiate crisis surcharge) until you sell that over-inflated property.”

I assumed you were making a really clever joke, and duly laughed at your wit, but then decided to search for the surcharge just in case. And sure enough… Truth is stranger than fiction!

Your line about the City of Vancouver reverse mortgage plan was also great.

#133 Grey Dog on 01.05.17 at 1:47 pm

Metaxa GO CANADA GO!!!
Hubby and I bought tickets for Toronto series, the Cdn juniors barely showed up all last week, the game against USA last week was embarrassing!

However, yesterday’s game against Sweden was exiting, hopefully they will enter tonight’s game with the same frame of mind. Those American boys have been good throughout the entire tournament! It will be an excellent game tonight 7:30…Go Canada Go!

Garth, thanks for getting the concept of TFSA going years ago, but if I save for 30 years, I’ll be 92…Does TFSA have to go through probate (a) if spouse is alive? (B) if spouse has passed on and I leave it to Community Dog Pound?

#134 Context on 01.05.17 at 1:54 pm

#111 Londoner: The logical answer is yes, as the Greater Fools are rushing to the suburbs to buy other than condos which in some cases might not be the best solution going forward.

#135 RentYVR on 01.05.17 at 2:00 pm

I too have heard boasting about all the YVR real estate gains people have made in recent years. Of course, these gains are only paper gains until you sell. In contrast, many of my stocks and all of my bonds pay me on a regular basis (in addition to the paper gains they generate). And they cost me next to nothing to maintain.

#136 Capt. Serious on 01.05.17 at 2:05 pm

I have lived in every standard type of housing at one point or another. From basements, to shared student houses, to shared apartment, to shared townhouse, to solo apartment, to solo condo, to townhouse, to house, I’ve lived in all of em and owned the latter two. If you’re going to spend the money to buy something, buy a house, and only if you can really afford to. Rent anything else. The hassles of shared walls are not worth owning. I know, you can get bad neighbors in SFD too, but at least they’re a little physically separated from you.

#137 jess on 01.05.17 at 2:33 pm

“cognitive illusion”

..”psychologist Daniel Kahneman, winner of a Nobel economics prize, are devastating to the beliefs that financial high-fliers entertain about themselves(1). He discovered that their apparent success is a cognitive illusion.

The Self-Attribution Fallacy

#138 Just checked the assessment on 01.05.17 at 2:42 pm

#114 rainclouds
Just checked the assessment of the condo I’m renting


How do you do that? Is this public information?

#139 brett on 01.05.17 at 2:47 pm

Happily renting in Calgary after 3 plus years. Don’t really miss the other 35 or so years of home ownership.

Unemployment still high and will remain high for at least another 18 months. Packages and UI have/are running out. Charitable donations of all kinds are down, down, down.

Downtown office vacancy is just under 30 percent.

Going south for 2 months next week. Will we buy in 2017? Only if the right deal comes along. People are still coming to grips with market realities and their disappearing equity. Denial still exists but it is becoming less common.

#140 For those about to flop... on 01.05.17 at 2:53 pm

About a 5 minute walk from the drug epicentre in Vancouver, these guys are trying to get close to 5 million for the penthouse in a recently renovated but still 100 year old building in the worst part of town.

It has been reduced nearly a million since the summer and they were trying to get $16 million for the whole/hole building…


#141 For those about to flop... on 01.05.17 at 3:00 pm

I might as well go all in and post this as well.

After you fish the icicles out of your rooftop pool you can have a cocktail whilst looking over your balcony at someone overdosing on fentanyl…


#142 Polls R Phake on 01.05.17 at 3:24 pm

#110 Smoking Man on 01.05.17 at 10:16 am
500 peer reviewed papers saying Man Made Warming is BS.

Read and weep Bottoms_Up

Once the general public realizes that these “95% of scientists” are all Govt employees (universities included) the jig will be up. And the fact that 60% of the world’s land mass being below zero does not hurt.

#143 For those about to flop... on 01.05.17 at 3:46 pm

Hey NoName,did you notice that a guy by the name of Rich Louis has the exact same GAP code as you?

This blog is a Mecca for 40 year old guys from Ontario trying to figure out what’s going on in life.

TurnerNation had that code last year and you guys inherited it.

He’s 41 now and I’m 42 obviously ,so I guess now is as good a time as any to remind you guys to respect your elders…


#144 DM in C on 01.05.17 at 3:50 pm

Property assessment day in Calgary. Just checked ours — down 3.6%

Interesting times in AB

#145 Smartalox on 01.05.17 at 4:01 pm

Re: Vancouver Property Tax Deferral for owners over 60.

It looks like my post at #9 might stand some correction. After I posted, I saw this:

It looks as though, once your home is valued above $1.2M, you no longer qualify for property tax relief. The recent sky-high property value hikes may mean that a lot of elderly, fixed-income home-owners will have to pay this year’s property taxes, after all.

In Vancouver, nearly a third (33%) of all detached houses qualified for the program last year, but Landcor’s new data show the runaway assessments now mean only 2.5 per cent of these homes are under $1.2-million. Last year, 65 per cent of all types of residential real estate in the city were under that threshold, but that proportion drops to just under 50 per cent using 2017 assessment data.

Rising home prices put more pressure on elderly owners living on fixed incomes, Mr. Nielsen said.

“So many houses jumped above that [$1.2-million mark], I think the government should take a second look at this homeowner’s grant and make some adjustments for people who just can’t afford it.”

Tax assessments are due by July 5th, 5% penalty on the unpaid balance after that.

Look for listings to pop in Q2 and Q3!

#146 polite my arse canadians on 01.05.17 at 4:05 pm

Meanwhile in la-la land a.k.a. as Vancouver, millionaire home owners fighting for….., wait for it, …. FREE SALT! How about getting of the couch and shovel the snow as soon as it falls instead of hoping for a rain to wash it off? Help elderly neighbours while at it? Too cheap to buy salt? Oh, stores ran out of salt? How about getting some in September/October in anticipation of the coming “global warming” lol What a bunch of IDIOTS!!! I hope those videos are shown around the world so that anyone who had a slightest doubt (after watching the RE bubble) that Canadians are stupid will make up their mind once and for all. These people are a disgrace to humanity.

It brings back the images from 2010 of poor Haitians orderly lining up for a drinking water after the catastrophic earthquake that killed over 300K people. Imagine the big one heating here.

#147 For those about to flop... on 01.05.17 at 4:14 pm

Hey Smartie,look at what has happened to my Father in law.

They have a $1.8 million assessed house with less than 100k in savings.

2013 $950k
2014 $ 980k
2015 $1,160m
2016 $1,40m

2017 assessment just came in at 1.84million, so like you said two years ago they could’ve got help but after I pointed out that the could defer ,they refused anyway…


#148 jess on 01.05.17 at 4:15 pm

The tax foreclosure crisis in Detroit is so dire that local activists compare it to Hurricane Katrina, calling it a “hurricane without water.”
How Community Land Trusts Can Fix Detroit’s Foreclosure Mess
Thursday, January 05, 2017 By Abigail Savitch-Lew, YES! Magazine | Report

“Travick’s was one of 60,000 properties — nearly one out of every six in Detroit — to face tax foreclosure in 2015. Under Michigan’s tax law, each county must foreclose any property that is behind on taxes for at least three years. Many of these properties are then sold at a public auction.

There are several reasons why Detroit faces such high rates of tax foreclosure. Detroit buildings have been overassessed using outdated property values, resulting in excessively high tax bills. In addition, though the city offers a poverty exemption based on income, many are unaware of the tax break or have difficulty obtaining it. Furthermore, with some properties selling for as little as $1,000, the Detroit housing market attracts unscrupulous investors who purchase homes, milk tenants for rent, then simply walk away from their properties…..

from 2015
Monday, February 23, 2015 By Patrick Sheehan, | News Analysis

#149 Context on 01.05.17 at 4:21 pm

#133 Capt. Serious:- I know the nightmare of a shared wall and never again. I purchased a beautiful end townhouse with no mortgage to worry about. While I was relaxing in the recreation room night after night would get a phone call from the old woman next door at 9:00 PM. She was trying to sleep and I needed to turn my TV down or she was going to call the cops, and it only had a 14 inch screen in the basement.

#150 Context on 01.05.17 at 4:35 pm

There is a second part to this shared wall nonsense. A month later the RCMP were at my door doing a normal security check on my neighbour woman next door and wanted to ask me character questions about her. I told the lady officer knew nothing about her at all. I had enough and listed the property for sale and moved into a nice apartment.

#151 TCContrarian on 01.05.17 at 5:05 pm

“…do you have any advice on how to deal with family and friends who spout this nonsense ad nauseam?”

As per Rick Rule (who made millions and then lost it all in the 70’s- early ’80s resource market):

“I confused a bull market for brains”…

So, guess who’s confusing “a bull market for brains”? :-)

#152 Self Directed >> GoldCorp on 01.05.17 at 5:11 pm

GoldCorp… did anyone see this coming?

Up over 3 bucks since Dec 15th (+20%)

#153 bdwy sktrn on 01.05.17 at 5:24 pm

and i thought everything would be moist and green when i got back – salt wars instead! should have stayed in the tropics for a few more weeks it seems.

fwiw – east coast mexico(mayan riveria) is 2x the cost of the west coast. much nicer water though.

i see a couple listings missing in the hood. no new listings or price drops yet.


#154 rainclouds on 01.05.17 at 5:28 pm


Go to BC Assessment
plug in any address

#155 Metaxa on 01.05.17 at 5:31 pm

@ #135 Just…

#114 rainclouds
Just checked the assessment of the condo I’m renting
How do you do that? Is this public information?

BC is totally online. Type in an address, you can look at recent sales history, neighbouring properties, lots of stuff.

Fun little time waster.

#156 Self Directed on 01.05.17 at 5:38 pm

Rising home prices put more pressure on elderly owners living on fixed incomes…

This is a GOOD THING, PEOPLE! A tax increase for a senior is a great incentive to sell the house and move into a nice safe condo somewhere. Listings rise, and prices fall.

#157 Bank of Millenial on 01.05.17 at 6:00 pm

#2 TurnerNation – you mean you haven’t recieved the “I am a Nigerian Prince email yet”? How have you been so lucky!

#158 Pharmboi on 01.05.17 at 7:10 pm

To Jeremy, you must remember that, “The one who laughs last laughs best”, and never provide unsolicited advice, especially to those close to you. Nobody appreciates a smart alec who says, “I told you so”.

I have people in my peer group who ask why I don’t go ahead and plunk money down on a downpayment, and my answer is that it’s just not the right time in my personal life. Nobody can refute that. When they tell me it makes a great investment, I tell them my money is already invested wisely and give a nice smile.

Suppose your peers are curious, then direct them to a site that goes over the basics of couch potato portfolios. The soon to be Mrs. and I treat each other for romantic dinners on the town, go on real vacations (not all-inclusive resorts), and enjoy the fruits of a very liquid cash flow. Some in my group are already seeing the light, just haven’t gotten around to asking the right questions yet.

#159 Sevyn on 01.05.17 at 10:29 pm

This is crazy!!! Please read!

It was a $2.5 million house listed for $1.5 million to generate a bidding war. Don’t be so naive. — Garth

#160 Vellasamy Naidu on 01.06.17 at 2:26 pm

So, Garth, you say

“Worse, locals just got their latest property assessments – on which municipal tax assessments are based – and since they reflect values of seven months ago, they’ve skyrocketed by up to 40%. Ouch.

These are the twin legacies of a real estate market gone bad: property tax hell, and a debt overhang…”

But property taxes do not go up automatically as assessments increase, at least not in Vancouver. I don’t know about Toronto. Taxes are based on city needs, and are calculated through the mill rate and assessed property value. You know that, but many of your readers do not seem to know it. Could you address this in a future column of this pathetic, but fascinating, blog.

I give you my own example. We bought a condo in Vancouver in 2013. Our taxes are a combination of city taxes and provincial education taxes.

Year Assessment Total tax Vancouver city tax
2013 $1,390,000 $5034 (not available to me)
2014 1,437,000 5286 $2655
2015 1,489,000 5264 2635
2016 1,580,000 5002 2467

Amazing, for the past three years assessment has gone up while Vancouver taxes have gone down. Where is the “property tax hell?” Looks more like purgatory to me.

I understand how taxes are assessed. The point is the higher the assessment, mill rates have to decrease to maintain equal revenue. I guarantee you they will not fall at the same ratio. — Garth