Bad choices

David’s a prairie moister. He’s 24, makes $46,000 a year (“I have great job security”) has three grand in his chequing account and $32,000 in a TFSA. Dave lives with his parents in Winnipeg, because “we both want me to save as much money as possible”

Not bad for a kid. But all that liquid wealth is burning a hole.

“I was saving for a house until a co-worker mentioned your blog about 5 months ago and now I am torn apart between renting and buying a house for $250,000. I have excel sheets of scenarios going on with different interest rates for a $250,000 home and have concluded that the money lost in the home (interest, property tax, home insurance, utilities) is equivalent to renting for $1000/month. I get it that prices will go down in Vancouver and Toronto but what about Winnipeg and other similar cities. Should I buy the $250,000 home when I have saved enough money or should I move out and rent after I saved roughly $50,000 and wait for housing prices to fall? Will they decrease significantly? If I buy, the house might go up or down in value and if I rent I would make approximately 3.5% in my TFSA on that $40,000-$50,000.”

Is this the only nation on the planet where hormonal kids dream of real estate? And run Excel spreadsheets on mortgage rate scenarios? What happened to buying a Fat Boy and chasing the horizon?

“Why,” I responded, “is a 24-year-old single guy obsessed with buying a house?”

And he replied thusly: “I think I am obsessed with not throwing money away. I would live in an apartment in a heartbeat knowing that houses in Winnipeg will not increase by 2-4% in value per year (as my relatives believe they will increase in value). I am just playing with numbers and seeing where I lose / gain money over 5-20 years.”

First, Davey boy, buying a $250,000 house in the Peg without CMHC’s premium will take a down of $50,000, plus $5,000 in closing costs. The mortgage monthly will be $920, which turns into $1,350 with property tax and insurance. Add in the lost investment gains on the downpayment (at 6%) and the cost of the house is about $1,600 – without utilities, improvements or repairs. Meanwhile a one-bedder in Winnipeg (a nice one) goes for just $899 – and it’s cat-friendly! (I just know you have a cat.)

In other words, the premium for owning over renting is $700 a month – which is 25% of your entire net income of $33,600 a year, and enough to brim the TFSA annually. So for anyone obsessed with not throwing money away, it’s a no-brainer. Hate to break it to you kid, but your parents are wrong. (There may not be an Easter bunny, either, dude. Just a heads up.)

Why would a moister want to buy a house in Winnipeg, take on a big mortgage and Hoover his investment account in the process? To get a capital gain, of course, using leverage to create wealth you could never achieve through saving and investing. But, wait. Prices in prime hoods like Fort Garry, East Fort Garry, West Fort Garry, Fort Richmond, Waverley Heights, Wildwood and University Heights were actually lower in 2016 than the year before – off an average 3.1%. That’s not huge, Dave. But when you’ve bought a property with 80% leverage, it wipes out more than a quarter of your equity. Ouch. Plus you’re paying double what that swishy, cat-coddling apartment costs.

However, this post isn’t really about Winnipeg. Thank God. It’s about the social delusion that keeps people making bad decisions. Unless you’re in specific markets at certain times, residential real estate isn’t all it’s cracked up to be. Especially now.

For example, last month a stunning 1,500 newly-built condos were sitting empty across Calgary, 800 of which are high-rise units. It’s the worst vacancy rate in 15 years, getting badder by the month. Back in 2014 the market was hot, buyers were plentiful and builders revved up. Now those units are coming on stream when the economy’s turned, rates are rising, mortgage rules tightening, and buyers gone.

As an agent said to local media: “I’ve had people that have bought not one, but two or three of these, hoping to flip them or to rent them out, and where they really got caught is the rental market. They were planning on having rentals cover their investment in these and it’s not working out at all.”

Finally, anyone who thinks southern Ontario is immune from shocks should get used to a new world that begins this Friday at noon. On Monday the Trumpinator warned German car companies (like BMW) they will face a withering border tax on vehicles entering the US for sale.

“If you want to build cars in the world, then I wish you all the best,” he said. “You can build cars for the United States, but for every car that comes to the USA, you will pay 35% tax.”

First Mexico. Now Germany Is Canada immune? Are you kidding? Last week a Trump spokesguy made that one clear. No way. But over 75% of our exports go to America, accounting for 30% of our GDP. Half of that is cars.

The world’s largest economy is now led by a 19th Century protectionist with a Twitter account. You want advice, Davey? Go for the Harley.

189 comments ↓

#1 Smokinghood on 01.16.17 at 5:42 pm

First time poster…interesting blog, as for trump he’s right. Americans should stick together. Why buy crap in China when it can be made in the USA?

#2 pll25 on 01.16.17 at 5:44 pm

Funny, I’m in the exact same situation as him, but I’m in Quebec… another unsure market. Although housing lost about 2% in my city… Will rent for a year or two and see after.

#3 Fed-up on 01.16.17 at 5:46 pm

I don’t think it’s a fair comparison. If he paid the $1,350 per month he’d be living in a home and not a one-bedroom apartment. It would also afford him the possibility of being able to rent a finished basement or an upper floor to mitigate those costs.

But what do I know?

#4 RentYVR on 01.16.17 at 5:53 pm

Yup, Canada’s economic outlook ain’t looking good. Goodbye any hope for a BoC rate hike in 2017!.

Nobody expects one. — Garth

#5 Bill Grable on 01.16.17 at 5:58 pm

I keep thinking the upcoming Coronation of Donald Trump is nothing but a horrible nightmare, (sort of like trying to afford living in Vancouver), and I will awake and be able to say “It was all a dream”. Well, Bobby Ewing aside (look it up) – this is all unfolding and it’s making me very skittish.

This man is downright terrifying.

Mr. Turner doesn’t pull any punches. He has been warning you to be storm ready for 5 years.
If you haven’t put a ‘reef in the mainsail’, do so NOW.

#6 paininthecash on 01.16.17 at 5:59 pm

Garth,

Any young’uns from the Peg should be called Frozen Moisters….or slushees or sumpin similah.

BTW great article on cash here, comparing simple saving to its uses as a hedge against risk.

http://www.zerohedge.com/news/2017-01-16/real-value-cash

#7 mitzerboy aka queencitykidd on 01.16.17 at 6:07 pm

The world’s largest economy is now led by a 19th Century protectionist with a Twitter account. You want advice, Davey? Go for the Harley.

atta-boy trumpski
let er buck
git er done

#8 Dmno on 01.16.17 at 6:08 pm

Is that Jesus on top of that dryer?

#9 suburban coyote and pup on 01.16.17 at 6:09 pm

for wilE Toronto #85 from yesterday.

Listen to PennyHenny re comfree… I sold my infill lot in Burlington last month, didn’t even need to hit Treb. Just comfree and some coyote trickster magic ;)

Take some time and really do the research to understand your property,the neighbourhood and fair market value. I spent a year educating myself with the data and the invaluable eyes on the ground with respect to local builders, development costs and understanding my buyer demographic.

Use a good real estate lawyer ( I had one and the land planner, both invaluable).

I was thrilled to negotiate with my buyer and pleased with the terms of the deal: win win all around.

I had considered utilizing a real estate agent; interviewed a dozen and was generally astounded by their lack of knowledge about my sort of situation(severing a lot) and lacklustre responses to my questions.Nonetheless, they all felt qualified to handle the listing and grab 5%.

It pays to understand your neighbourhood and what you are selling; also to have a thick hide, sense of humour, and not be overly emotional. You are in the drivers seat!

Onf51

#10 Lulu on 01.16.17 at 6:14 pm

I’m waiting for the British pound to plunge further once Ms May kick start the Brexit momentum.

Next hot spot beside the GTA is the Georgian Bay Wasaga Beach area, Starbuck is gonna open a new location in the 45th street in WB, buy buy buy buy in and around the beach… Ah!!! It’s a beach life!

#11 Doug t on 01.16.17 at 6:16 pm

Trump is being set up – the real power people allowed his win so that when TSHTF they can step right in and smoothly transition to a full on police state system.
Get your popcorn ready.

#12 bell b on 01.16.17 at 6:17 pm

British empire was created by colonizing other countries and stealing their resources including slavery around the World.
Globalization is interest of few individuals and corporations, same as British empire.
Trump will create fair business practises and end this corporate exploit using free movement of investment and labour.

#13 HAM R Us on 01.16.17 at 6:21 pm

Getting ready for trade war! Do not waste a crisis.

– Short Auto parts: MG, LNR, MRE. They are crashing down hard!

– Load up your shorts on The biggest Grand Dady short: AAPL. Half of it’s revenue will go up in one smoke. Sorry, I mean one Twitter!!!

#14 Theo on 01.16.17 at 6:21 pm

You remarked once (more than once) to never bet against the United States. Have you reconsidered that position now? Is the long term outlook for the USA more grim than you thought 1-2 years ago?

No. — Garth

#15 Ernie on 01.16.17 at 6:26 pm

Ya Dave go for the Harley!!

#16 AB Boxster on 01.16.17 at 6:27 pm

But, but , but CBC radio said today that Calgary home prices had gone up since last year. How could they be wrong?

Talked to an acquaintence recently whose young son had been laid off in the Calgary area for about 6 months. He had just recently found work again. Had about 40K saved by living working and living at home.
Parents were encouraging him to buy a house. WTF!

My advice for young kids.
Don’t buy a house until you are married, and only then if both of you are working. Only buy if you can carry the mortgage with one of your spouses income.

That means you can carry the mortgage on one income alone, but you have 2 incomes coming in, and only if you can afford the monthly payment based upon an amortization of 17 years.
If you have to amortize more than 17 years to afford it, either buy a cheaper house or save for a bigger downpayment.
25 year amorts on a house will kill you in interest costs.

So with 2 incomes, at least 1 income is available for savings in TFSA or RRSP. And if you have a kid or two, or one spouse loses their job, you may just be able to keep your house, if you have saved enough to keep you from bankruptcy before you are re-employed.

Why would a single person would ever want to buy a house anyways?
Young couples looking to start a family- understandable.
Singles. Makes no sense whatsoever.

#17 Dan.t on 01.16.17 at 6:29 pm

haha, ja go for the Harley. The world is changing. Housing has been a free lunch ( in economic terms- kind of, leveraged to the tits in a rising market) the last 15 years. Buy and just simply do nothing and enjoy massive gains while others stress and push themselves to the limits to get in on the action.

Anyone in BC or GTA or any remotely overpriced city would think 250k is nothing, of course, they have gifted money, banks offering alternative, BC gov offering incentives, and they are screwed either way, or they think they can simply buy and reap future profits but like any “stupid” market, it will eventually it will change.

Could you imagine someone from BC writing in and asking if I should buy a house for 250k. Sad but he economics and wages are the same in many provinces.

What is the big deal about paying 900 to 1000 a month to rent a cool place, move if you need to and enjoy life. Oh, right, it’s Canada, you are a huge loser and you are just throwing your money away…

I wish more Canadians would travel and actually spend time in other unbelievable, European, Asian and South American cities so they realise what a crappy deal they are actually getting for what they are paying for.

But Davey, if you are the up and coming generation, I think we will all be saved, because, you crunching the numbers shows so much more responsibility and financial insight than 80% of the population (stats don’t lie- ask the real estate board).

Live your life, experience things, then go to one of the 4-5 major banks and get enslaved:-)

#18 Darryl on 01.16.17 at 6:43 pm

I would say that if he plans to stay in Winnipeg why not buy a $250,000.00 house . He has a stable job . He’s young . He will go up in salary as he seems like smart guy and a hard worker . How much could it loose ? It will come back in value one day and it’s not a huge risk. Pay it off ASAP and then invest .
GTA area though ? Forget it .

#19 Marx on 01.16.17 at 6:50 pm

A nice 1 bedroom in Winnipeg for $900. LOL!. What are you smoking?
That add for the rental that you linked is on Young street. That is NOT in a nice neighborhood. That a street is in the news for shootings and all sorts of crime regularly.

A nice one bedroom in a safe and good neighborhood will run you $1100-1200 plus.

#20 Victor V on 01.16.17 at 6:51 pm

Magna shares fall as BMO warns Trump’s border tax could ‘wreak havoc’ on partsmakers

http://www.bnn.ca/magna-shares-fall-as-bmo-warns-trump-s-border-tax-could-wreak-havoc-on-partsmakers-1.651256

#21 joe calgary on 01.16.17 at 6:54 pm

Lambo in garage – check
TFSA topped up contribution – check
RRSP rainy day fund tax offsetting – check
Portfolio balanced for the quarter – check
Lint trap in dryer empty – check

#22 An uncomfortable truth on 01.16.17 at 6:54 pm

As a dual citizen I voted for Trump just to make elitists like you squirm, Garth. The Davos crew is being put on notice! Canada will be fine. Canada’s elites better take notice because this is a global phenomenon.

Kid should buy a house and get a cat. What’s the point of having a dog in a place with -50 degree weather or hoarding money to die alone and childless? Be alive while you’re alive. The government will have no choice but to bail the plebes this time around. Suspender snapping Porsche pilots got bailed last time, trust me the plebes will get their turn too.

#23 Frank on 01.16.17 at 6:55 pm

You just compared renting a 1BR apartment to buying a house.

Sure, a kid making $40K should probably live in the apartment but what if a family of 4 making $200K with fully stocked RRSPs and TFSAs asked you the same question? Would you tell them to live in a 1BR?

There’s a point where it makes sense to buy.

Unless you’re in specific markets at certain times, residential real estate isn’t all it’s cracked up to be. Especially now.

So Canada any time in the last 60 years up until now has been a good buy.

That said there’s a good argument to wait and see today but none of it is based on this post. We’ve very likely seen rates bottom out in the US and possibly in Canada plus there’s the aforementioned Trump factor.

However rents are rising in cities where housing prices are, check today’s story on Toronto. So if you’re hoping to get out of your parents basement, you’re screwed no matter which route you take.

#24 Blair on 01.16.17 at 6:56 pm

Hey Dave,

Delete the spreadsheet and take the apt that Garth suggested. It’s worth it and comes with fancy furniture. The landlord is probably a moister or landlord virgin and overdid it with the renos to build the apartment only to rent at a cheap rate. Take advantage of it.

There’s way more to owning than mortgage and taxes. Way more.

#25 I'm stupid on 01.16.17 at 6:57 pm

I think Trump is bluffing, how can he expect to tax German cars going into the US without having American cars going into Europe getting taxed? Unless no one else noticed the majority of large companies are American. He’s just a bully in a school yard that hasn’t been punched in the face yet by a stronger kid!

#26 suburban coyote and pup on 01.16.17 at 6:59 pm

Garth, is there a ghost in the machine with the comment section tonight? I posted about an hour ago, there were 3 and now says zero.

Onf51

#27 ronh on 01.16.17 at 6:59 pm

Didn’t we have an “autopac”, I think is/was called?
Or did nafta wipe that out?

#28 Alice on 01.16.17 at 6:59 pm

It’s finally happening Garth, pop the champagne.

https://betterdwelling.com/city/toronto/detached-homes-give-toronto-real-estate-the-largest-downtick-in-a-year/

#29 harley on 01.16.17 at 7:01 pm

You want advice, Davey? Go for the Harley.

Yeah, that’s great American product.

Garth could not recommend you a Canadian equivalent, because the local supporters of globalism think that Canada’s economy is only good to export natural resources, make OEM parts for real brand owners, who tend to reside in the US, Germany, Japan.

A little bit of protectionism could have made the Canadian economy more balanced, the weight of globalist economic ideology in Canadian economic policy is like real estate in the holdings of average Canadian Joe.

#30 ME Here on 01.16.17 at 7:04 pm

I wonder if that washing machine is a Samsung…

#31 Ian on 01.16.17 at 7:05 pm

Don’t know about comparing a 250k house (assuming that’s what it was, didn’t say condo) to a basement suite, even a nice one.

#32 John of Grant on 01.16.17 at 7:06 pm

Using the below calculator, his break even over 30 years would be about 2.65% price appreciation per year (assuming a 1200/month rental). All depends on where his view on the future is. Might want to wait for a correction and put the odds more in his favour.

http://www.getsmarteraboutmoney.ca/tools-and-calculators/buy-or-rent-calculator/buy-or-rent-calculator.aspx#.WH1e3fkrJEa

#33 good job with the savings! on 01.16.17 at 7:15 pm

keep in mind young man that the 6 % yr investment gains that Garth is quoting is an AVERAGE. It does not mean that in 2017 your savings will grow at 6%. In fact, you may lose money for calender yr in 2017–just as many balnced portfolios did in 2015. No guarantee short term.. just as there is no guarantee that local real estate prices will inflate/deflate short term

Correction: a balanced portfolio did not lose money in 2015. But Winnipeg real estate did last year — Garth

#34 David McDonald on 01.16.17 at 7:16 pm

I have recommended Garth’s blog twice in the last two weeks with the promise that it’s educational and fun to read. Garth came through again with this blog.

Garth’s right; it’s a big wonderful world out there and you only live once. I realized late in life that if you are on beach in a hot place the people around you are likely speaking Spanish. My solution: hola from Chile.

#35 Capt. Serious on 01.16.17 at 7:16 pm

Well, comparing a one bedroom apartment to a house isn’t cricket. If you compare renting, say, a 3 bedroom house to buying a house then we’re comparing apples.

However, the upshot here is actually that at 24 you should prefer mobility to owning a house. Rent a place, spend less on furniture and upkeep, enjoy life. If you have no definite need to buy a house, it really doesn’t make sense to get one.

#36 Robert on 01.16.17 at 7:20 pm

And in lower mainland news, today kicks off Christy’s new first time homebuyers loan program.

Translation: The rental my wife, young child, and myself are currently occupying is going on the market. I wonder how many other renters will soon be in the same boat.

https://twitter.com/christyclarkbc/status/821144744709550080

#37 Mike on 01.16.17 at 7:23 pm

Canadians are rich with high incomes and salaries

Whatever happens property prices wont “crash”. Never.

#38 joblo on 01.16.17 at 7:25 pm

Remember buy USA made when you can!

#39 Danger Dan on 01.16.17 at 7:25 pm

I still don’t get why some think renting is somehow throwing money away, yet don’t seem to have any issue with the thought of paying the bank interest on a six-figure loan for the next twenty years.

#40 Keith in Calgary on 01.16.17 at 7:27 pm

http://www.cbc.ca/news/business/trump-canada-auto-sector-1.3935222

Trump spokesman Sean Spicer said: “When a company that’s in the U.S. moves to a place, whether it’s Canada or Mexico, or any other country seeking to put U.S. workers at a disadvantage,” then the incoming U.S. president “is going to do everything he can to deter that.”

I guess if a US company was to close and then MOVE a factory to Canada they might have an issue to deal with, but, suggesting that existing production, because it is currently taking place in Canada, is going to be subject to duties is……….ahem………fake news.

Better be careful Garth, the deeper you keep digging your hole the more likely you are to have it collapse in on top of you.

#41 ulsterman on 01.16.17 at 7:34 pm

The is that a guy like David will rent the apartment and spend the rest of his monthly income having fun. He may start off thinking he’ll diligently invest the savings from renting v owning in his TFSA, but if he’s like most people his age he’ll blow it. The house purchase will mean he’s mortgage free before he’s 50. If he does nothing else sensible with his money in his life this will provide him with a good amount of security. Garth, your advice is good, but i bet he wouldn’t follow through with the savings if he followed your suggestions.

#42 Cmac on 01.16.17 at 7:34 pm

C’mon Garth,

You can give better advice than that. Davey is a 24-year old kid in Winnipeg. He’s not in Vancouver or Toronto. The fact that he is even reading this blog and asking questions indicates that he’s got a brain on his shoulders. The question you should ask is: “Have you ever thought about renting out a room or two to your friends?” At 500 bucks a pop you are looking at a potential of $12,000/year. Forget capital gains and write off your interest and utilities. Within 2-years Dave will have broken even with a potential 10% drop. Slide that into your excel sheet and see how it looks, and stress test your numbers. Interest is low. Houses are high. But, time is money.

C

#43 Luc on 01.16.17 at 7:38 pm

Maybe Dave should invest and become one of the 1.7 million millionaires in Canada or one of the 31 million millionaires around the world… http://www.ctvnews.ca/business/stark-inequality-oxfam-says-8-men-as-rich-as-half-the-world-1.3242693

#44 jay on 01.16.17 at 7:39 pm

It’s to bad for David he doesn’t live in B.C. he could get his Gov loan for $37,500 starting today. http://ca.reuters.com/article/businessNews/idCAKBN1502GM

#45 Polls R Phake on 01.16.17 at 7:47 pm

The Trump bashing continues. The Clintons are still walking the streets, although they are now shutting down their illegal foundation. And now its T2 who is the new Pay to Play guy:

http://conspiracy-cafe.blogspot.ca/2017/01/trudeaus-trip-to-aga-khans-private.html

#46 robert james on 01.16.17 at 7:59 pm

#5 Bill Grable Speaking of bad choices ,,, I think that Trump should seriously consider finding Jesus in the near future.. Somehow I don`t think that the religious nut bars in the US are going to be pleased with him if all this “pee” talk is true.. Getting peed on by hookers is one thing but certainly not by Russian hookers I should think..

#47 Pete on 01.16.17 at 8:00 pm

‘Smokinghood on 01.16.17 at 5:42 pm
First time poster…interesting blog, as for trump he’s right. Americans should stick together. Why buy crap in China when it can be made in the USA?’
————————————————
Why? Because they can’t afford stuff made in U.S.A. The loss of US manufacturing should never have been allowed to happen in the first place, but it is too late now.
The trickle-up wealth increase from returning manufacturing to US shores won’t be able to happen quickly enough to allow the US citizens to be able to afford their own products. The idea is noble but the belief that it can simply be imposed upon the nation is a pipe dream. Chinese products are slave-wage products. Americans can’t afford to have everything made in the US. Dollar stores become twenty-dollar stores overnight.
Unions, wage laws, and reluctance of the people to accept a lower standard of living will prevent this from working out.
However, a major financial crash is in the works anyway. The US dollar will become nearly worthless (no longer world-reserve). Americans will have to make things in their own country because others won’t accept US currency as payment. Trump knows this and is trying to get a head start on the societal restructuring which will be necessary if the US is to survive at all.

#48 groovin123 on 01.16.17 at 8:00 pm

Davie boy, this is a no brainer.

BUY that $250,000 house. Get yourself a good roomate to split the cost as a renter and run a great “Animal House.” Do not let a girlfriend move in. Enjoy!

#49 Ex-Van on 01.16.17 at 8:05 pm

I suppose it’s human nature to believe that the place where you live is more special than anywhere else. I personally find it useful to read the analysis from outside Canada. While they might often note, for example, that there is definitely Chinese money influencing prices in Vancouver, I have yet to read a non-Canadian analyst put forward the idea that economic fundamentals support a >1m average SFH valuation in Vancouver.

I’ve enjoyed reading the list below of pre-2008 articles by US pundits who believed that the US was not in a housing bubble. The specifics are a little different from the current state of things in Canada – there’s no yellow peril talk of invading Chinese hordes, for example – but the psychology is much the same as what’s currently infected Canada. Americans believed that low supply, continued low interest rates, and good ol’ American economic exceptionalism meant that houses would continue to go up.

Canadians believe in a kind of Canadian exceptionalism too. For us, it is the idea that our economic prudence, risk aversion, and the cosmopolitanism of our beautiful cities makes us immune from any kind of collapse in housing demand. This of course is complete horseshit.

Some quality quotes here, but you’ll need to hit archive.org to retrieve some 404’d links.
Here’s what some genius said about the LA market before an inflation-adjusted drop of 50% from the 2007 peak. Sound familiar?

“no-growth and slow-growth restrictions continue to constrain supply. The inventory of unsold new homes is at a historical low. In past cycles, an eight-month inventory was a bellwether that triggered a drop in housing construction. Today it is four months. We have fewer unsold new homes on the market today than we had in 1978.”

http://economicsofcontempt.blogspot.com/2008/07/official-list-of-punditsexperts-who.html

#50 NEVER GIVE UP on 01.16.17 at 8:05 pm

Trump is just showing his opening bid.

He knows he wont get all he wants.

If our negotiators have any balls, then they need to inform their negotiators that for every penny in tax they add to Canadian goods we will reciprocate with taxes on US made goods.

To make it simple someone could write a program that shows Trump a menu of places to tax. Then for the program to register the tax he must choose a reciprocal tax for an American industry. Each choice should inform the number of estimated jobs lost.

Trump has the world off balance because he has Trailer Trash manners. He is as unpredictable as “Lizard Lick Towing Actors”.

He thinks it will serve him well. It will if we send in servile weak kneed negotiators.

We better be sure to get hard ass negotiators like Jimmy Pattison. Someone Trump would respect.

It won’t help if we let our politicians get out of control with USA bashing when we don’t get our way.

As an expert haggler in Asian bazaars, I can tell you that the other party will only be satisfied when they reach your NO answer. If you go to Yes too quickly they feel there is still money left on the table and will continue to push for more.
No Canadian learns this in Canada.

#51 Nonplused on 01.16.17 at 8:08 pm

Harley’s are expensive these days with the Canadian dollar in the sewer. Might have to get a Vespa.

Speaking of bad choices,

One thing you haven’t commented on Garth is what Alberta’s new Carbon Tax (the tax on everything) might do to the housing market. It is substantial. Right now at $1.011 per GJ as compared to the natural gas itself witch costs less than $3.00 per GJ, it represents at least a 33% increase in heating costs (not counting transport). The effect on electric bills will be higher because electric generation is not as efficient as your home furnace (at least anything built after 1980). Transportation expenses are also going up. And next year the Carbon Tax goes up another 50%, from $20/tonne to $30/tonne. It is the most significant tax increase Alberta has ever seen and it targets exactly the people who are barely paying their mortgages now.

If it were accompanied by a significant decrease in other taxes so it could be said to be revenue neutral, then I would say sure, it’s aimed at changing behavior by encouraging conservation, but it’s not. It’s accompanied by dramatic increases in most other taxes as well, also aimed mostly at people who are paying mortgages.

I believe it will cause a mass exodus of jobs and people over the long term, significantly damage household finances, and thus cause a serious surplus of vacant homes, which should put strong downward pressure on the housing market, possibly causing a reinforcing loop.

Here is the other bullcrap about the Carbon Tax: The rebates. What pure vote buying PR crap. They should be thrown in jail for this obvious attempt to buy votes. For example, my young impressionable daughter got her first “Carbon Rebate” for $100 this month. She’ll get $400 per year. But she doesn’t pay for any of her “carbon consumption”, her mother and I pay for almost all of it, and we don’t get any rebates. What is the point of taxing parents so you can give free money to their children? If she needs $400 I already give it to her. It’s pure unadulterated vote buying targeted at students. Or a payoff to the constituents that provided the NDP with the largest support, the basement dwelling millennials. It’s pure evil.

I’ve already commented how the changes Nutley is forcing on the electric grid are going to cause havoc, but for those who missed it the move to shut down coal before it’s time and switch to wind, solar and natural gas are going to double or triple capital costs, destabilize both the power and the gas distribution systems, reduce exports and thus net provincial income, and probably double power prices. This also can’t be good for either household finances or the job market. It is another pure evil.

All over plant food. If the plant food really did cause a 0.3% change in global temperature over the last 100 years as claimed so far we seem to be doing ok and I think we can survive another 0.3% increase before the end of the fossil fuel age.

(For those who missed how to do the % change in temperature calculation you don’t start with the freezing point of water as the divider, you start with the temperature the planet would be without the greenhouse effect. Cold like the moon. What they are doing with the stats is just simply alarmist, comparing the 1 degree increase to the earth’s average temperature. That would be like comparing an inch to the “8” in “24 foot 8 inches” arbitrarily when the tape measure is 25 feet long. Also note I am not denying that CO2 is a green house gas, but so is nitrogen and we aren’t getting all bent out of shape because that accounts for 80% of the atmosphere. CO2 can’t even be measured as a percent without a lot of decimals, it is a trace gas. It is measured in parts per million and there aren’t very many of those.

So for those who want to know how to properly make a forecast of how much the earth will warm due to fossil fuels, it’s gone up 1 degree since the start of the fossil fuel era, and we are half way through the fossil fuels. Therefore if we manage to burn them all we should end up at 2 degrees warmer. Probably not a bad idea if you live in Canada and there is no gas left to heat your house. That day is probably 100 years away but there is now way to argue it isn’t coming. Speculation that there will be an uncontrolled feedback loop is just simply that there was no uncontrolled feedback loop when the earth had much more CO2 in the atmosphere than it will have when we run out of economically recoverable fossil fuels.)

#52 Self Directed on 01.16.17 at 8:08 pm

Funny how folks in Quebec and Winnipeg (non-bubbly markets) are worried about 2 or 3% pull backs in housing. I guess affordability peaked in those markets as well.

In Vancouver, we need A MINIMUM 30% correction in SFD bottom price points (in Poco, coquitlam, pitt meadows, etc…) before it’s within reach again.

#53 Ace Goodheart on 01.16.17 at 8:08 pm

Actually what Trump said is that if German automakers build cars in Mexico and ship them to the USA, they would pay 35% tax.

The Germans responded that they build cars for the world, not just for the USA and they will build them in Mexico if they please to do so.

Trump asked why there are not that many American built cars in Germany, but lots of German built cars in America. The Germans responded that if the Americans wanted Germans to buy more American cars, they should build better cars.

It’s a funny situation. I guess Americans better get used to expensive, inferior quality products being the only thing they can buy (unless they can afford the heavily taxed “good stuff”)

#54 Renter's Revenge! on 01.16.17 at 8:09 pm

Can we really consider Canada a first world country when the majority of its inhabitants are still obsessing about one of the three basic needs (food, shelter and clothing)?

There’s a lot more pyramid to climb after that in Maslow’s hierarchy of needs:

https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs

Get some shelter (rent or buy, whatever) and get on with your life!

#55 palebird on 01.16.17 at 8:09 pm

#25 I think Trump is bluffing, how can he expect to tax German cars going into the US without having American cars going into Europe getting taxed?

What American cars going into Europe?? Ever been there..I think not..American cars are junk

#56 Terry on 01.16.17 at 8:10 pm

“However, this post isn’t really about Winnipeg. Thank God. It’s about the social delusion that keeps people making bad decisions.”

Personally …………. I blame the Liberals!

#57 Entrepreneur on 01.16.17 at 8:11 pm

So, Canada should start making plants/refiners here and never say can’t.

Trump warned us awhile back so no surprise. People need work, not social assistance. But other countries seem to have no problem for work shortage.

Watched the Dragon Den but not anymore. Some people had good ideas but turned away. Dragon Den is only interested in making huge profits. Not really with it with today standards.

As for Kevin O’Leary: Thought he was good at first but he does lack environmental issues. I know the news said that Trump does not believe in climate change but he was a longtime democrat (and he talked to Al Core).

Wonder how many other flip flops Mark Carney did in the past. Maybe like the low interest rate, like everyone around told him to raise it.

#100 westcdn…we r ready too and for the worse. You have to be really out-of-touch with reality to do what our leaders r doing.

Trump is trying to correct it but it might be too late so not all Trumps responsibility so far. This mess that U.S.A. is in, Canada is in it too. Remember, the States are our biggest trading partner so I think Canada has to correct or add more taxes or a revolution in the making.

#58 Peter on 01.16.17 at 8:11 pm

#25

>I think Trump is bluffing, how can he expect to tax German cars going into the US without having American cars going into Europe getting taxed?

Because of the monumental trade deficit that exists between the US and Germany?

They have far more to lose than the American car makers stand to lose.

#59 the Jaguar on 01.16.17 at 8:12 pm

Apparently a group called “Bikers for Trump”, some 5000 strong are on their way to Washington to protect Trump from protesters. He does have his supporters. The guy isn’t dull. Every day some sacred cow is being blown apart in Yosemite Sam fashion. Pow! Pow! Pow! What entertainment! If there is a mad rush to the exits Canada just might benefit. Two months have gone by since his surprise election. Time to stop the shock, awe, and beaking off about whether he should be the POTUS. He is. Our efforts are better focused on how to profit from it all.
On the subject of rent versus own it’s amusing to read some of the blog comments about the disgrace of renting. Renters are in the drivers seat in Calgary. As fate would have it many of those big concrete towers all splashed on the scene at the same time. How can renting granite with a view with no responsibility be wrong? Freedom, discretionary income, and watching the real estate debacle unfold. Seems like the cat bird seat to me… As rates rise mortgages come due for renewal and in some households the impact will be keenly felt. As Connie Francis once sang, ” Who’s Sorry Now”?

#60 MF on 01.16.17 at 8:16 pm

Trump keeps nailing it. Best thing to happen to the US (and the western world) in a long while.

“Trump calls Brexit great, says he predicts the EU will collapse and doesn’t care about it’s unity, says the migrant policy was a mistake”.

Just lol @ the EU. Trump is right, it’s a complete failure.

http://www.cbc.ca/news/world/trump-europe-interviews-1.3937212

#25 I’m stupid on 01.16.17 at 6:57 pm

How dare a western leader stand up for the people of his own country! How awful.

#22 An uncomfortable truth on 01.16.17 at 6:54 pm

Good job (seriously).

MF

#61 Metaxa on 01.16.17 at 8:18 pm

I have two bikes for sale. Perhaps Dave could enjoy one of them?

A 2006 Harley FXDI Dyna Super Glide with 51,565 km that is very extensively and tastefully done both cosmetically and mechanically.

And a 1972 Norton Commando, all numbers matching, 1070 miles, spent its life til I acquired it (at 14 miles) on display on the mezzanine of Bow Cycle in Calgary.

While both are definitely not trailer Queens, they have been ridden like the gems they are…with love and care. These are not clapped out kid’s bikes.

Reason for selling: I need more cash to bump up my down payment on the house I want to buy for my kids.
(I kid, I kid)

#62 Polls R Phake on 01.16.17 at 8:22 pm

#29 harley on 01.16.17 at 7:01 pm
You want advice, Davey? Go for the Harley.

Yeah, that’s great American product.

Garth could not recommend you a Canadian equivalent, because the local supporters of globalism think that Canada’s economy is only good to export natural resources, make OEM parts for real brand owners, who tend to reside in the US, Germany, Japan.

A little bit of protectionism could have made the Canadian economy more balanced, the weight of globalist economic ideology in Canadian economic policy is like real estate in the holdings of average Canadian Joe.

_____________________________________________

Canada’s GDP is made up of three things:

1. Resources
2. Govt
3. Real Estate

All of which are unsustainable and will make 2019 a shoe in for O’Leary with all the damage that has been done over the last 45 years of Libs and Cons.

#63 CL on 01.16.17 at 8:23 pm

“What happened to buying a Fat Boy and chasing the horizon?”

that ended in the 90’s with GenXer’s.

Don’t be fooled by the auto talk. It is not that easy to make a complete car in the US and it will never be especially within a 4 or 8 year term. This threat has happened before in the US in years gone by and did not materialize. Besides, nobody is packing up, laying off US workers and moving to Canada for God’s sakes!!. They’re laying off Canadian workers and leaving Canada for Mexico!!

And to add, NAFTA is not a Canadian’s friend. Why do we pay high gas prices when we have all the oil and refineries right here at home? because of NAFTA. We cannot sell our oil to ourselves at below “market” prices due to NAFTA. Mexico did not sign on to this but we did. higher gas prices equals more tax revenue for government, forget the people and it benefits the US already so to re-negotiate it is nonsensical for the US. The only major issue is we are very weak right now in government. THAT’S more of a worry than Trump.

Do you think Americans want higher prices for everything? that’s exactly what will happen. They are a consumer based economy and they cannot afford to have consumers pull back spending and they will when higher prices hit regardless of wage increases. Many parts makers have substantial operations in the US and Magna for example is literally expanding existing operations in South Carolina? right now.

To add, don’t be fooled by the new shale oil “boom” everyone is expecting. Without going in to specifics, a refinery is not a one size fits all. Oil is different from every field and requires different processing conditions that the Gulf is not configured for. Shale (light oil) is building up in Cushing because there is no market for it. The US needs Saudi and Canadian oil for blending and processing reasons. It is not going anywhere. Saudi imports to the US have always been increasing even through the crash. Why wold they approve the Keystone pipeline if they do not need the oil?? exactly. The oil market is very complex so is processing. What people read in sensational articles is not reality as usual. There will be no price spike but no massive drop either.

Don’t think Trump will get away with anything without a worldwide trade war. That will help nobody including the US.

#64 John on 01.16.17 at 8:24 pm

#19 Marx
“That add for the rental that you linked is on Young street. That is NOT in a nice neighborhood. That a street is in the news for shootings and all sorts of crime regularly.”

Sorry but 85 Young street is a great neighbourhood and perfectly safe for a 24 year old man. Just a 2 minute walk to the legislative buildings, parks and the river walkway. 5 minutes over the bridge and you’re in Osborne Village. You can bus or bike to get anywhere. I’ve rented in the neighbourhood for the last 8 years with no issues.

I relate to David though. I’m also looking into buying in the $250,000 range but I like watching my investments grow too much and can’t seem to part with the required downpayment ;)

#65 Warren - the lagging indicator on 01.16.17 at 8:25 pm

I assume in general, the most bright and talented people migrate to federal positions and it seems they have to fight policies set at a provincial level by the not so cream of the crop. My question is does the fed recognize that it is battling polices set at the provincial level and thus overshoot at the onset in this recognition or do they work in synchronicity and buffer and moderate each other. For example did the Federal government overdo the rules set out to moderate the debt and housing bubble in Canada or did they know they could allow Christy Clark for example to increase the housing tax rebate thingy or that interest and payment free loan they did to allow more moisters as you would say, into housing debt hell, in order to moderate the effects of their initial policy. I guess what I am really asking is how independent are these two hierarchical entities. Garth surely knows the answer if only I could pull him away from pissing on the poor Donald for a moment.

#66 Damifino on 01.16.17 at 8:26 pm

#5 Bill Grable

If Trump scares you so bad you might try reading some commentaries by Conrad Black or Rex Murphy. You may not like either one of those guys (and I wouldn’t blame you for that) but they’re not stupid guys and they don’t see Trump as a monster.

But in my view… yeah… he’s a monster.

#67 Bring back the Auto Pact on 01.16.17 at 8:42 pm

We all know free trade is a scam for the elite to exploit the working class by paying them less and less as we race to the bottom. End result,8 men in the world hold HALF the worlds wealth. Now what can Canada do? Reinstate the Auto pact where car companies have to build one car for every car they sell in Canada or face TARIFFS . You want into the Canadian market then that’s what you’ll have to do. T2 has to have some balls like trump. Trump unlike the other criminal politicians has lots and lots of money. I believe he is mainly doing this to create a legacy . Trump knows free trade is good but the free trade of current is a scam to rob the middle class and turn them into working poor. I don’t believe Trump will target Canada since I believe he sees Canada as fellow good old boys and we’ll be welcomed to the club. Everyone else doen’tfall into that category except for Britain and we can see he is on their side. Britain , Canada and US all part of same club and so Canada need not worry. If I was T2,Tariffs for every car company except American made cars. It’s time to make North America great again and Trumps way is the way to go.

#68 Barb on 01.16.17 at 8:44 pm

I give the kid credit for doing the scenario calculations.

Most 24 year olds whittle away time at the gym…or the bar.

Attaboy, Dave.

#69 conan on 01.16.17 at 8:49 pm

I think the markets are going to sell off as soon as the Orange King puts on his crown. Maybe give back half of what we gained when Trump first won the election.

Yawn, I know, predicto was two weeks ago.

#70 Good old boys club on 01.16.17 at 8:58 pm

Trump is a good old boy and Canada and Britain fall into this category. You can see that Trump never once targeted Canada and has reached out to help Britain with a smooth brexit. T2 needs to do the same in Canada. US car companies exempt but EVERYONE else must pay. T2 you know what you have to do.

#71 Self Directed on 01.16.17 at 8:59 pm

#19 Marx on 01.16.17 at 6:50 pm

A nice 1 bedroom in Winnipeg for $900. LOL!. What are you smoking?
That add for the rental that you linked is on Young street. That is NOT in a nice neighborhood. That a street is in the news for shootings and all sorts of crime regularly.

A nice one bedroom in a safe and good neighborhood will run you $1100-1200 plus.
…………………………………………………..
Nope! At that price… 2 bedrooms, brand new. Yes, it’s transcona, but it’s safe. Anywhere in Winnipeg is a 30 minute commute. Everyone has a car.

https://www.broadstreet.ca/property/132/EdgewoodPlace/

#72 Self Directed on 01.16.17 at 9:09 pm

#37 Mike on 01.16.17 at 7:23 pm

Canadians are rich with high incomes and salaries

Whatever happens property prices wont “crash”. Never.
………………………………………..
High Income Mike! Welcome Back! So you’re a 100 year housing bull… probably 25 years old? You’re learning.

Hey! If 20% of home owners in GVRD default on their mortgages next year, but 80% do not (but lose a ton of equity), do the 20% call it a “crash”?

#73 common sense on 01.16.17 at 9:10 pm

When did Freedom First change his handle to Groovin123?

Davey lad..keep your options open boy…

Stay house free and enjoy….

Only marry if you want kids….

#74 Post 33, Garth you misread on 01.16.17 at 9:10 pm

I said 2015. And I also said MANY balanced portfolios lost money in 2015

Again , point being the 6% investment you quoted is AN
AVERAGE . :). Making sure the kid understands this

In 2015 a balanced portfolio did not lose money. Pretty sure most children understand averages. — Garth

#75 $250,000? on 01.16.17 at 9:18 pm

That’s peanuts . Sounds like you’re fiscal conservative – if your heart is set on ownership , go for it .

look for a property with a finished basement and has a separate entrance . Rent the basement – use your head

Good luck

#76 Show me the Money on 01.16.17 at 9:19 pm

“However, this post isn’t really about Winnipeg. Thank God. It’s about the social delusion that keeps people making bad decisions. Unless you’re in specific markets at certain times, residential real estate isn’t all it’s cracked up to be. Especially now.”

Garth does this apply to Calgary now or do you or anybody think the market will continue to fall? I would like to buy when the time is right but have no problem renting for now.

#77 not 1st on 01.16.17 at 9:23 pm

#29 harley on 01.16.17 at 7:01 pm

You want advice, Davey? Go for the Harley.

Yeah, that’s great American product.

———–

Harley Davidson took TARP money in 2009. Not as sound a company as you might think.

#78 TurnerNation on 01.16.17 at 9:24 pm

No man this is best use of his TFSA. Talk them down to 32k. It’s wintertime.
“There’s no replacement for displacement”

http://www.kijiji.ca/v-classic-cars/winnipeg/1969-pontiac-firebird-2dr-hardtop-350/1205429034?

“Rare find. 1969 Pontiac Firebird. 350cuin Number matching motor, Automatic. Factory a/c car. ..This firebird has gone thru a full restoration. “

#79 JMS on 01.16.17 at 9:28 pm

#64 John

I agree, that is a safe and convenient area of town, and that apartment is inexpensive. Actually, this whole city has relatively inexpensive apartments. I’m currently renting a beautiful 1150 square foot place on River in a great heritage apartment for…. $1150 a month. Given that this includes heat (which is, of course, a big deal in Winnipeg), this is a steal of a deal.

House rentals in this city are, however, ridiculous. The number of amateur flipper-lords seem to be growing every day. I was recently looking at a small 700 sq foot (!!) house north of Portage with an asking price of $1500 per month plus utilities. The fellow trying to rent it told me that he currently owned 8 similar houses in the neighborhood. Anecdotal, of course, but I’m sure that there are many like him. Having said that, I’ve been keeping an eye on Kijiji and there have been reductions in asking rents in many hoods.

Anyhow, my spouse and I make good coin for this town (above $120k) and I’m not buying. I like our current digs and, as John indicated, I like watching my portfolio grow. Besides, I’m still not sure if I want to stay in this city for the rest of my professional career, and the potential mobility that comes with renting is most definitely worth something.

#80 stage1dave on 01.16.17 at 9:36 pm

I’m starting to think that if you want a “made in Canada” alternative to an import, you’d better build it in yer garage…out of components that were manufactured somewhere else, of course.

On a brighter note, and as a break in the “buy a Harley” adage, had the pleasure of working the Triumph Bonneville “bobber” debut at a local dealership last wednesday nite (and even for an aging metalhead like myself the music was too damned loud) but a very cool bike; designers have really worked some vintage cool into that rear swingarm/seat/fender area.

More power than the 1100 or T-120, and affordable at around 15K. They sold 5 of ’em in less than 4 hrs.

(Not as cool as a low mileage 72 Norton Commando, btw; but still cool haha)

#81 Brian Johnson on 01.16.17 at 9:40 pm

I love it when Garth picks on Winnipeg. Good on him too to name drop “fat boys”.

#82 Smoking Man on 01.16.17 at 9:41 pm

4 days to go.

https://youtu.be/WQgcKI7oTws

#83 hope & ruin on 01.16.17 at 9:42 pm

Trump’s tariffs threat and protectionist plans are all talk. It’s just a negotiating tactic and he has spent the last year telling us what a great negotiatior he is. Heavy trade barriers/tariffs = recession (Trump’s not an idiot) and he will not oversee a major recession.

@ HAM R Us

I disagree about shorting auto parts manufacturers. It’s like making decisions based on what g. Soro’s says, all sleight of hand.

#84 mtl_one on 01.16.17 at 9:43 pm

#8 Dmno

Is that Jesus on top of that dryer?

Lol! Looks to be….with Boba Fett to his right.

#85 Irish Stew on 01.16.17 at 9:50 pm

Canada has very little NEW investment in its auto industry.
Trump is fighting against NEW plants being built (Ford’s in Queretaro, FCA in SLP and BMW’s new plant).

He cannot expect the auto companies to reinvest and abandon current plants. BMW has their largest plant globally in Spartanburg, SC.

If he wants to hate – hate on KIA – they do very little in North America.

#86 I'm stupid on 01.16.17 at 9:51 pm

#55 palebird

What American cars going into Europe?? Ever been there..I think not..American cars are junk

Jaguar, Land Rover owned by ford
Opel owned by Gm
Fiat owned by Chrysler

I guess you’re not bright enough to know it’s the same players just different names!

#87 LEINAD on 01.16.17 at 9:54 pm

Put down as little as possible on the house make sure it has an apartment in it…and read about how to fix things yourself…don’t waste your money on depreciating assets….drinking and eating out….rinse and repeat over and over one good deal at a time…by the time your 60 you will be a multimillionaire…..take off your tin foil hat….and get a girl friend…start investing in hard assets…hard assets keep their value as the dollar becomes worth-less

#88 I'm stupid on 01.16.17 at 9:56 pm

#58 Peter

You’re correct that Germany has much more to lose as an individual country than the US. But if Trump starts a trade war with Germany, Canada, Mexico, China etc etc eventually the US economy will suffer.

#89 WileE Toronto on 01.16.17 at 10:03 pm

@9 suburban coyote and pup

Thank you for replying, good advice,

I have thick skin , a sense of humour and I am not shooting for the moon.

I will pay to get on MLS , do some painting , cleaning , gardening and try to be transparent. Since I will still be a neighbor, that stuff is important to me. Also hoping my tenants will stay but it won’t be up to me.

Take care,

M46ON

#90 Mattl on 01.16.17 at 10:07 pm

How is a 1 bedroom apartment comparable to full house? He can rent a room or two and cover his mortage completely. And why do these rent versus own calculations never factor in future value of the home. So its an absolute given that his tfsa will grow at 6 percent net of fee’s? But the value of his home will remain static? And how can you not account for future years when the home is paid off? Will he really be better off entering the market in ten years having dumped 150k into rent as opposed to buying the 250k home?

Kid buy the home, put a renter or two into it, invest the rental income and by the time you are 45 you will be mortage free on a 300k plus home AND have solid savings. No brainer.

But he’s still in Winnipeg twenty years later. What a plan. — Garth

#91 Smoking Man on 01.16.17 at 10:14 pm

Trump talks to aliens. Not shiting here. Its in the bank.That’s why he’s still alive and hasn’t been JFK’d

Globalists and drown pilots. Soon to be extinct.

Dr Smoking Man
PhD Herdonomics

#92 WUL on 01.16.17 at 10:15 pm

The number crunching on David’s decision on buying a house is easy and leads inexorably to renting. But what are his interests and goals?

– rebuild a 1972 Chevy stepside (yum) to take to the show n shine – buy the house.

– build fine chairs and tables with quarter sawn oak – buy the house.

– a potter’s wheel and kiln – buy the house.

#93 Canadians on 01.16.17 at 10:16 pm

Just don’t end up like Canadians

https://beta.theglobeandmail.com/globe-investor/personal-finance/household-finances/why-canadians-cant-stop-borrowing/article33627676/?ref=http://www.theglobeandmail.com&service=mobile

#94 Self Directed on 01.16.17 at 10:17 pm

Maclean’s presents its third annual chartstravaganza to help make sense of the Canadian economy in the year ahead – 70 charts every Canadian should watch in 2017

http://www.macleans.ca/economy/economicanalysis/75-charts-every-canadian-should-watch-in-2017/

Check out chart… “Canada can’t shake off the slowth”

#95 Self Directed on 01.16.17 at 10:20 pm

Homeowner help is great, but advocate says renters need a hand, too

http://www.cbc.ca/news/canada/british-columbia/vancouver-rentals-b-c-1.3933834

“It would be [a solution] if we were doing it every year. Statistically, that’s kind of what we should’ve been doing for a long time,” he said. “But we just went 30 years without building any private market rental housing and 20 plus years without building any social housing. Now we’re looking at it saying, ‘I wonder why there aren’t enough rooms for anybody now?'”

#96 common sense on 01.16.17 at 10:22 pm

bump 2

#97 Smoking Man on 01.16.17 at 10:24 pm

Vince Gilligan

A writer with a work ethic. I’m ten times better.
But I hate work.

See the difference .

#98 MJ on 01.16.17 at 10:30 pm

Things here in Calgary are getting worse. Lots of condos for sale. The new condo developments are trying to rent out the units instead of selling them.

One of my colleagues from work had to reduced her rent on her rental property by $250.00 a month as the renters asked for a reduction. They now have to subsidize that mortgage payment while paying for the one that they are currently living in. She is not happy about it.

Check these out:

https://www.realtor.ca/Residential/Single-Family/17651096/302-636-MEREDITH-RD-NE-BridgelandRiverside-Calgary-Alberta-T2E5A6-BridgelandRiverside

Listed for $179,900
ASSESSED FROM CITY $234,500 LOWEST 2 BEDROOM 1 BATH IN AREATHE SELLERS WILL SUBSIDIZE THE CONDO FEES $200.00 A MONTH FOR 36 MONTHS** PAYMENTS SUBJECT TO CHANGE

This property assessed at $363,00 – listed at $499,900
https://www.realtor.ca/Residential/Single-Family/17496325/413-4-AV-NE-Crescent-Heights-Calgary-Alberta-T2E0J6-Crescent-Heights

Not a good time to be selling that’s for sure!

#99 TCContrarian on 01.16.17 at 10:30 pm

#13 HAM R Us on 01.16.17 at 6:21 pm

Getting ready for trade war! Do not waste a crisis.
– Short Auto parts: MG, LNR, MRE. They are crashing down hard!
– Load up your shorts on The biggest Grand Dady short: AAPL. Half of it’s revenue will go up in one smoke. Sorry, I mean one Twitter!!!
**********************************************

Interesting! Already short the Apple and looking to add this week. Thanks for the other ideas!

TCC

#100 InvestorsFriend on 01.16.17 at 10:32 pm

(DON’T) Tax Me, I’m Mega Rich

Investors tend to support the idea that capital gains on stocks should not be taxed until realized in cash and then only at half the tax rate that applies to income from wages.

And that dividends should be taxed favorably.

And that TFSAs should exist and RRSPs too.

It is viewed that this favorable tax treatment is needed to encourage investment which creates jobs and also it encourages people to save for their old age.

All good arguments.

But when is enough enough?

Should David Thomson and Galen Weston be allowed to use this favorable tax system (and a lot of business smarts) to amass wealth equal to the totality of the bottom third of the population of Canada? And should they also be able to pass this fortune on the their descendants?

I mean has the favorable tax on income (and wealth) from investing gone to far? Will it spark a revolution at some point?

#101 Fish on 01.16.17 at 10:35 pm

any body can buy a house, but how many people have a Harley, go for the Harley, much more fun, and a good investment I feel!!

#102 Chico on 01.16.17 at 10:47 pm

However, this post isn’t really about Winnipeg. Thank God.

While living in Winnipeg over a 15 year period, people from the center of the universe, would ask me where I was from, and I would say Winnipeg. The most common response from them was…”I flew over there once.”

The stupidity of the comment always made me laugh and none of these incredibly insulated people ever understood the absurdity of what they were saying.

Fast forward to a year ago in the Halifax airport. The plane is delayed and I tell the previous story about Torontonian’s navel gazing ways, and the lady from Toronto who hears the story doesn’t laugh like the other listeners, she says…”well who would want to visit there anyway?”

The rest of us have a good chuckle, albeit more of an internal thing as we wouldn’t want her to feel like a buffoon.

It’s amazing how a huge group of people can be so conditioned to make a blind decision about a place they’ve never visited. Slag the Peg all you want, but at least do it after you’ve been there.
Not you Garth, you’ve been everywhere ;)

#103 rknusa on 01.16.17 at 10:50 pm

re: #82 Smoking Man on 01.16.17 at 9:41 pm
4 days to go.

https://youtu.be/WQgcKI7oTws

you are one big joke Doctor

what an idiot, this guy adds nothing to the conversation and just uses this site to promote his own insanity

LOSER

#104 KoolAid on 01.16.17 at 10:57 pm

Tough choice for young David.

Consider researching the properties closest to the largest Universities in Winnipeg, if vancancy rates and prices offer a decent return it may combine an effective long term investment with ability to live in while providing tax efficiency against income.

But why does a single, 24-year-old male need a house and a mortgage? Too many people here have lost their way. — Garth

#105 Populism on 01.16.17 at 11:02 pm

The fact that 8 men owns half of the wealth of this entire planet has much more to do with “populism” than Trump.

http://hosted.ap.org/dynamic/stories/E/EU_DAVOS_INEQUALITY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2017-01-15-19-02-51

One of them is Mark Zuckerberg.

I don’t use Facebook, so I can not judge the value for human society that makes this CEO the 6th wealthiest man.

I do know though that Facebook in charge of deciding what news is fake or not is an insane idea, even by German historical measures, under various “isms”.

Even if Zuckerberg was not one of the eight wealthiest men.

But that’s exactly what is going to happen, the service is planned to be rolled out in Germany, before the coming elections.

https://www.ft.com/content/75796bce-d9dd-11e6-944b-e7eb37a6aa8e

Clearly, Trump is not even needed to create populism.

#106 };-) aka Devil's Advocate on 01.16.17 at 11:08 pm

Maybe.

The best way to predict the future is to track the past.

If this were 5, 10, 15, 20… years ago and you knew then what you know today what would you do?

#107 No Mercy on 01.16.17 at 11:08 pm

Badder ….

It took me for a spin.

It is slang.

“Worst” would have been proper English.

But I’m sure Garth knows that and was talking to the commoners out there.

#108 };-) aka Devil's Advocate on 01.16.17 at 11:11 pm

Of course we’d all buy Apple…

That’s not what I’m talking about and you know it. Generally speaking with respect to the financial advice above…

#109 Pegger on 01.16.17 at 11:11 pm

Thanks for the piece on a more ‘typical’ place (i.e. not Vancouver or Toronto). Please post more like it.

I’m 34 and in Winnipeg and rent a house with 2 roommates, paying only $525/month rent. That means I’ve saved up a nice down payment (about $100,000).

I’ve done the math (I also have spreadsheets) on what’s a better deal and, even in Winnipeg, renting is better than owning. The market already seems to be turning in Winnipeg, but since I like not having to fix things myself when the roof or water heater etc. go (my landlord is good), I’m waiting to see what the mortgage changes do.

That said…Young truly is one of Winnipeg’s stabbier streets (e.g. http://winnipeg.ctvnews.ca/one-person-in-critical-condition-after-young-street-stabbing-1.2634798 ).

Dave, don’t rent that place.

#110 For those about to flop... on 01.16.17 at 11:13 pm

This block of land is assessed at 354k.

Didn’t stop this guy trying to sell it for 17 million.

Coquitlam had already overtaken Richmond as the city with the biggest reductions in Greater Vancouver, but now this 5.2 million dollar reduction has distorted all the numbers.

Then again ,as I pointed out the other day there are 5 million dollar houses out Richmond that are asking 20 million,so I guess it will even its self out.

You guys gotta lay off the Snuff…

M42BC

4300 Oliver Road Coquitlam

Oct 18:$17,000,000
Jan 16: $11,800,000
Change: – 5200000.00 -31%

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzWTMzWg==

#111 Bad choices - MASHDEX on 01.16.17 at 11:26 pm

[…] Read more here:: http://www.greaterfool.ca/2017/01/16/bad-decisions-3/ […]

#112 NOTHING SURPRISES on 01.16.17 at 11:51 pm

On Jan 20th. the U.S. will have Czar Donald the 1st. !!
and
Within 100 days will have started to bring back hundreds of thousands of $25-$30 per hour jobs + benefits in manufacturing and coal mining.

People keep the faith!!
He said he will and you know his word is his bond.

#113 Linda on 01.16.17 at 11:53 pm

Whatever else one might say about buying a house, one thing it does do is enforce investment. The bank doesn’t care about your issues – it wants the mortgage payments & will do what it can to ‘help’ you to pay them for as long as possible.

What I wonder is, just how many renters actually save the money they would otherwise be paying to purchase/maintain a property by putting it into investments, TFSA’s, RRSP’s or just plain cash? Also, just how many renters have ‘extra’ money at the end of the month that they didn’t spend on something else? Logically if renting is so much less expensive than buying, we should have a lot more people who have oodles of money salted away. It would be interesting to have a survey of renters & find out how many of them fall in the ‘less than $3,000 in the bank’; ‘live paycheque to paycheque; ‘have not saved for retirement’ & other such categories.

#114 anoldwrinklycrinkly on 01.16.17 at 11:54 pm

Gotta Love Milenials http://bit.ly/2epGV7D

#115 jay on 01.16.17 at 11:57 pm

https://i.reddituploads.com/7278c61a533b413282ad549beeeaa1dd?fit=max&h=1536&w=1536&s=005d79840f7655f9793975bf7c670134 Garth, if this chart correct we should increase immigration to bring house price lower.

#116 WUL on 01.17.17 at 12:15 am

Grotesquery. Calgary oil billionaire selling bungalow.

Look at the pics and videos.

http://www.calgarysun.com/2017/01/16/calgary-millionaires-mansion-up-for-sale-for-99-million

#117 Pete on 01.17.17 at 12:23 am

Don’t buy a Harley. They’re a nice bike but an Indian is much nicer. Also, Indian Motorcycle Co. is offering twice the length of warranty that Harley Davidson is offering I’ve heard. I saw a lot of Indians here in Southern Quebec this past summer.

#118 Barb on 01.17.17 at 12:27 am

#78 Turner Nation

“Rare find. 1969 Pontiac Firebird. 350cuin Number matching motor, Automatic. Factory a/c car. ..This firebird has gone thru a full restoration. “

——————————————————

That was my first car, bought in 1970 for $4,200 at dealer near Lougheed Mall. $4 gas filled the tank.
Wondered why the speedometer went to 160, tried it on a rare day when freeway was empty…chickened out at 120. Drove it sensibly after.

Sold it 7 years later to an Aussie for AU2,500 cash.

The car in the linked ad is an awful yellow, surely not a 1969 Pontiac colour…mine was what I termed army truck green.

Seems we all remember our first…everything.

#119 For those about to flop... on 01.17.17 at 12:38 am

The guys constantly flipping this place are doing a really good job at helping the realtor pay his monthly bills.

It has already been flipped twice since May of last year and was put back on the market almost instantly each time.

May, sold for 358k

August,sold for 395k

Now these guys are stuck with it trying to make a quick buck, but for the time being in musical chairs, the music has stopped…

M42BC

703-1188 Howe Street, Vancouver

Oct 24:$499,888
Jan 16: $469,900
Change: – $30,000

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwNDE1TA==

#120 Rgeezie on 01.17.17 at 12:56 am

#86 I’m stupid on 01.16.17 at 9:51 pm
#55 palebird

What American cars going into Europe?? Ever been there..I think not..American cars are junk

Jaguar, Land Rover owned by ford
Opel owned by Gm
Fiat owned by Chrysler

I guess you’re not bright enough to know it’s the same players just different names!
***************************
@ #86 I’m Stupid appropriate username !

Jaguar Land Rover is owned by Tata
Chrysler is owned by Fiat
You got one right – Opel is a subsidiary of GM

#121 d'Edmonton on 01.17.17 at 1:01 am

Jaguar, Land Rover owned by ford
Opel owned by Gm
Fiat owned by Chrysler

I guess you’re not bright enough to know it’s the same players just different names!
—————————————

Look it up.
Jaguar and Land Rover are owned by Tata Motors.
Chrysler is owned by Fiat, not the other way round.

#122 Ponzius Pilatus on 01.17.17 at 1:19 am

Trump pretty much assured Merkels reelection.
Nobody messes with Germany’s Auto Industry.

#123 Tony on 01.17.17 at 1:25 am

Sounds like the perfect time to short Magna International. Many have just put in big bets short the stock market in America. If there was ever a time to be short its now.

#124 d'Edmonton on 01.17.17 at 1:26 am

But why does a single, 24-year-old male need a house and a mortgage? Too many people here have lost their way. — Garth
————————————

Most get that it makes sense for a single person to buy a Cruze rather than an Explorer. But a house – go for it! Just ignore the costs of ‘ownership’ hiding in plain sight. Renting is for losers.

#125 Tony on 01.17.17 at 1:31 am

Re: #104 KoolAid on 01.16.17 at 10:57 pm

An easy decision, Vancouver is tanking and that’s spilling over to all the surrounding areas. The GTA is one of the worst accidents waiting to happen on Earth. The decision couldn’t be more simple… rent because rents fall when property values fall.

#126 Ponzius Pilatus on 01.17.17 at 1:33 am

http://www.spiegel.de/wirtschaft/soziales/bild-1130266-1095266.html

#127 jane24 on 01.17.17 at 2:04 am

I am also waiting for the British £ to hit the basement. Maybe today. Then I can cash in some Cdn RSSPs and bring the bucks home to England. Time for a cruise. If there is one thing i have learned in 60 years, it is that there is always a win just maybe not the one you thought it would be!!

#128 Stock Picker on 01.17.17 at 2:39 am

Trump will make America great again…no doubt…..and except for the idiots who think they can selfie themselves through a negotiation with Trumps people….bum hugs and all….or expect that throwing a hiss fit crying jag…..insisting she’s too nice for cheddar sharp Walloons to question over the Walloons stand on cheese….only an idiot doesn’t see that Trumps people haven’t been picked for their knee pads……these guys that are coming are real sharks….no surrender…no quarter kind of people…..and like Ghenghis Khan flinging familiar severed heads over the walls of besieged cities to motivate those inside….Trump has publicly given Canada a “heads up” (scuse the pun) at what is coming with his Mexico announcements on cars and part factories.

Meanwhile Mr Mumbles doesn’t get it….he still thinks Obama is coming over for kisses and tail plugs. Our PM is openly berating Trump…as if he’s testing material for the Samantha Bee show. Little Ts an idiot if he thinks a crying jag is going to creat a pass from the Trump people. Canada literally has nothing to offer the Americans….and Junior playing global spokesman for Obamas failed climate legacy is going to have us all wearing short streets and trolling the streets for nickels and dime bags.

Btw…..I gave my kid $50 grand after graduation….he’s in drillers….doubled his money at twenty eight….no real estate….he’s shacked up with a lady who pays super cheap…..a chip off the old block.

#129 DON on 01.17.17 at 2:47 am

Dave. you are 24 my friend, travel and get a good perspective on how other cultures live and operate. Adventure lad. If you want to buy a house watch the movie money pit before hand.

Queue Holly Weed…it is time to recycle the money pit movie for a new generation – they can now relate.

Dave…seriously, travel. Backpack and learn.

#130 Eaglebay on 01.17.17 at 4:37 am

#86 I’m stupid on 01.16.17 at 9:51 pm

“Jaguar, Land Rover owned by ford
Opel owned by Gm
Fiat owned by Chrysler

I guess you’re not bright enough to know it’s the same players just different names!”

Jaguar, Land Rover owns by Tata Motors, India.
Opel sold by GM a long time ago.
Chrysler owned by Fiat.
Maybe you should get your facts straight?

#131 added value on 01.17.17 at 6:26 am

#103 rknusa on 01.16.17 at 10:50 pm

re: #82 Smoking Man on 01.16.17 at 9:41 pm
4 days to go.

https://youtu.be/WQgcKI7oTws

you are one big joke Doctor

what an idiot, this guy adds nothing to the conversation and just uses this site to promote his own insanity

LOSER

You must be new here.

This “idiot” had the best track record here last year for predicting what would happen.

His early calls were regularly labelled “joker”, “insane” until they turned into reality.

Go lookup the archive.

Now do share your calls, how the future is going to play out.

A year from now we will see who is what.

#132 Smoking Man on 01.17.17 at 6:44 am

re: #82 Smoking Man on 01.16.17 at 9:41 pm
4 days to go.

https://youtu.be/WQgcKI7oTws

you are one big joke Doctor

what an idiot, this guy adds nothing to the conversation and just uses this site to promote his own insanity

LOSER
………..

Yeah?

Ear this one sunshine.
https://youtu.be/3nWK_WC0FfA

#133 Ace Goodheart on 01.17.17 at 7:05 am

“But why does a single, 24-year-old male need a house and a mortgage? Too many people here have lost their way. — Garth”

True. Why does he even need an apartment? When I was that age I rented a room with a bunch of room mates. We had a great time. 24 is the time to socialize and party and enjoy life, travel, have lots of experiences. Not the time to be chained to a 200K mortgage or an apartment lease. Really have to think about these things in context to see what people are actually saying. He is planning to live alone in a large house, with a huge debt attached to it and spend all his time working. Likely his days off will be spent renovating and repairing the house. Why in the world would a 24 year old want to do that?

Go on some party cruises. See the world. Book a contiki tour. Have some fun with your life. Sheesh…..

#134 fancy_pants on 01.17.17 at 7:58 am

But of course inflation will incredibly be under 2% again this year. wink wink. get out of cash and buy tangible assets. scour kijiji for deals. We are guaranteed either:

1. inflation (but fudge the numbers)
2. increased interest rates

obvious to most what the peckerettes are going to do. RE will remain sticky while cauliflower goes to $10 a head. some little pecker is rolling in his grave.

#135 Pharmboi on 01.17.17 at 8:00 am

If you’re young,single, and ambitious, renting gives so much more flexibility. That house is really an anchor keeping you in the same spot, whereas renting allows one to have mobility in the working world. it’s already a one-up on the others trying to vie for the same job. Too many people seem to forget about freedom of movement these days.

#136 pBrasseur on 01.17.17 at 8:36 am

#127 jane24

I am also waiting for the British £ to hit the basement.

You maybe right but that doesn’t make you smart. Very bad idea to bet on currencies and interest rates.

#137 Ace Goodheart on 01.17.17 at 8:57 am

RE: #127 jane24:

“I am also waiting for the British £ to hit the basement. Maybe today. Then I can cash in some Cdn RSSPs and bring the bucks home to England. Time for a cruise. If there is one thing i have learned in 60 years, it is that there is always a win just maybe not the one you thought it would be!!”

Very true. Stock picking is like gardening. If something looks like it is dying or drying up, you add water. You don’t water stuff that is growing like mad, you hold off.

Same with stocks. Pick the dogs, the ones that look beaten up, unloved, the unpopular ones. Vet them first of course, run their metrics, but if it looks good and if it has taken a beating, that is the one you want.

#138 Johnny Boy on 01.17.17 at 9:09 am

#131 added value on 01.17.17 at 6:26 am

#103 rknusa on 01.16.17 at 10:50 pm

re: #82 Smoking Man on 01.16.17 at 9:41 pm
4 days to go.

https://youtu.be/WQgcKI7oTws

you are one big joke Doctor
what an idiot, this guy adds nothing to the conversation and just uses this site to promote his own insanity
LOSER

You must be new here.
This “idiot” had the best track record here last year for predicting what would happen.
His early calls were regularly labelled “joker”, “insane” until they turned into reality.
Go lookup the archive.
Now do share your calls, how the future is going to play out.
A year from now we will see who is what.
………………………………………………………………
For gods sake any idiot could call the election, its fifty/fifty you a-hole. This is the one thing I will give Smoking dude, that he is all in with Trump. Smoking Man is a whole hearted believer in this guy with his smoke and mirrors. He is another disenfranchised, middle aged, angry white male who is unemployed. Go check to see what segment of America he tapped into.

#139 To Be Fair on 01.17.17 at 9:28 am

Hey, big fan, long time reader. Just had two comments on your calculation of the cost of a mortgage in the scenario you outlined here.

1. You include principal repayment (about $450) in the mortgage cost, yes it is a cash outflow, but not an economic outflow, and I’d argue it isn’t fair to include it when comparing to rent.

2. You include the opportunity cost of the $50K cash at 6%, but to make a fair comparison you need to account for capital gains made on the equity in the home. Over a long period of time certainly equities have a higher CAGR than real estate, but the spread must be closer to 2-3% (assuming something like 5.5% CAGR for real estate).

Adjusting for those, the cost of buying seems to be on par with a $1000 rental, in that market at least. I’d still rather rent – hate cutting grass.

To be fairer: (a) the debt is floating rate, which means it resets at least every five years, and will become more costly. The principal repayment you reference is temporary and cannot be factored into long-term calcs. (b) Assuming 2-3% real gains in real estate values in a secondary Canadian market with stagnant growth after a long period of appreciation is fiction. The main question, as I keep asking, is why does a 24-year-old single kid covet a financial shackle? I think he’s brainwashed (like most people here). — Garth

#140 traderJim on 01.17.17 at 9:30 am

Another one of my predictions come true: People are starting to say Winterpeg is nice. (yes, I have been to Winterpeg, in the summer, unfortunately, too many times)

Well I guess compared to Detroit it’s ok.

And it has ‘The Forks’. You could spend 15 minutes enjoying that.

Oh wait, you do get to see the Northern Lights a lot, I knew there must be something good about that place. (As long as the giant swarms of mosquitoes in the summer didn’t kill you first)

#141 Prairieboy43 on 01.17.17 at 9:50 am

Stay away from Victory motorcycle.
http://www.forbes.com/sites/jasonfogelson/2017/01/11/polaris-industries-kills-off-victory-motorcycles/#677e708c221b

Fatboys are nice. Overrated. Winnipeg, nice city. Flatter than Regina. The lakes north of city are fantastic. Stop in Gimli for a Drink. Hudderite colonies in the area, innovative farm operations.
PB43

Sent from my iPad

#142 jumgti on 01.17.17 at 9:50 am

#5 Bill Grable on 01.16.17 at 5:58 pm

I keep thinking the upcoming Coronation of Donald Trump is nothing but a horrible nightmare, (sort of like trying to afford living in Vancouver), and I will awake and be able to say “It was all a dream”. Well, Bobby Ewing aside (look it up) – this is all unfolding and it’s making me very skittish.

This man is downright terrifying.”

For god’s sake, get yourself together……and grow a set of nads while yer at it!

#143 jumgti on 01.17.17 at 9:52 am

#10 Lulu on 01.16.17 at 6:14 pm

I’m waiting for the British pound to plunge further once Ms May kick start the Brexit momentum.

Next hot spot beside the GTA is the Georgian Bay Wasaga Beach area, Starbuck is gonna open a new location in the 45th street in WB, buy buy buy buy in and around the beach… Ah!!! It’s a beach life!”

Fantastic place Wasaga….for around 6 weeks per year!

#144 InvestorsFriend on 01.17.17 at 10:03 am

Investment Tax Policy

Further to my comment at 100. What if instead of a 50% tax rate on capital gains, we provided a tax refund (say 25%) on new shares issued by corporations and then taxed capital gains fully? That would encourage money flowing to businesses rather than encouraging investors to merely trade shares with each other at ever higher prices.

The entire tax system needs a complete overhaul?

#145 Smoking Man on 01.17.17 at 10:14 am

#138 Johnny Boy on 01.17.17 at 9:09 am
#131 added value on 01.17.17 at 6:26 am

#103 rknusa on 01.16.17 at 10:50 pm

re: #82 Smoking Man on 01.16.17 at 9:41 pm
4 days to go.

https://youtu.be/WQgcKI7oTws

you are one big joke Doctor
what an idiot, this guy adds nothing to the conversation and just uses this site to promote his own insanity
LOSER

You must be new here.
This “idiot” had the best track record here last year for predicting what would happen.
His early calls were regularly labelled “joker”, “insane” until they turned into reality.
Go lookup the archive.
Now do share your calls, how the future is going to play out.
A year from now we will see who is what.
………………………………………………………………
For gods sake any idiot could call the election, its fifty/fifty you a-hole. This is the one thing I will give Smoking dude, that he is all in with Trump. Smoking Man is a whole hearted believer in this guy with his smoke and mirrors. He is another disenfranchised, middle aged, angry white male who is unemployed. Go check to see what segment of America he tapped into.
……

Johnny Boy

I’m thrilled my daily contributions here give your life, meaning and purpose. A reason to go on.
Did you buy my book yet?

Carry On….

#146 Penny Henny on 01.17.17 at 10:34 am

yo Davey!
Buy the house fix the basement and get a tenant.
Maybe also rent a room to a buddy.
Do this for five years and you’ll be laughing.
Trust me.

M51ON

#147 Free trade a FRAUD on 01.17.17 at 10:38 am

Trump does it again proving free trade is a greedy elite scheme. The vested interests crying via their media outlets to hopefully brainwash you into not waking up to the fraud called free trade.

http://www.theglobeandmail.com/report-on-business/international-business/us-business/general-motors-to-announce-1-billion-in-us-investment/article33643393/

#148 Bat Flipper on 01.17.17 at 10:56 am

ZERO DOWN MORTGAGES ARE BACK!

Well, not really, insurers are just taking all the equity if you put 5% down payment. They are jacking insurer rates. So you will need to pay a 4% premium + tax which is close enough to 5 for me.

http://www.cbc.ca/news/business/cmhc-mortgage-insurance-1.3938943

Not only that, but they also jacked the rates for those putting 20% down payment. Another crushing blow for the mortgage broker industry.

They justify it as saying it will only add 5 bucks a month to the payments. LOL

#149 CMHC Premiums Raised on 01.17.17 at 10:56 am

Pad those coffers!

http://business.financialpost.com/personal-finance/mortgages-real-estate/mortgage-insurance-premiums-on-the-rise-at-cmhc-now-as-high-as-4-5-of-value

#150 Shortymac on 01.17.17 at 10:58 am

What a lot of posters don’t realize is that he is living at parents for no or little rent.

I would stay in that situation for another year or so and max out all my TFSAs and RRSPs. When you finally settle down your future self will thank you!

I started doing both back when I was 18 and it saved my butt on numerous occasions.

#151 Ace Goodheart on 01.17.17 at 11:01 am

Other problem the 24 year old has in terms of buying this house, is that besides Toronto, markets have peaked. He is buying at the top.

Likely in the next 10 years or so house prices are going down. So if he doesn’t anticipate needing a house in the next ten years, probably he shouldn’t bother.

His parents more than likely bought their house in the 50s for about $5000.00 and they have rode the price up to the current value. So they figure buy in because prices always go up.

However in the 50s governments were borrowing, particularly in the USA, to run a never ending war on the entire world using borrowed cash. A lot of that cash flowed north and we had quite a bit of prosperity as a result. We actually ran a socialist country for 60 years off of USA government military borrowing and spending, through selling our products down South, to people who were earning their incomes off of the USA military industrial complex.

That is not going to happen again in our lifetimes. The USA of the future is a protectionist state, heavily in debt, with no ability to fund any more major wars, trying to revive its dead domestic industrial base using tariffs and taxes. We are not going to see the sort of run up in house prices that our parents saw.

#152 jumgti on 01.17.17 at 11:12 am

Garth

Oh to be sat on a Harley at Portage and Main in mid-January in my snowmobile suit….is it possible to put chains on fatboy’s tires???

#153 CMHC on 01.17.17 at 11:14 am

“Over all, the changes will preserve competition in the mortgage loan insurance industry and contribute to financial stability.” Riiiiight…

https://beta.theglobeandmail.com/real-estate/the-market/cmhc-to-hike-mortgage-premiums-in-march/article33643562/?ref=http://www.theglobeandmail.com&campaign_id=A100&service=mobile

#154 InvestorsFriend on 01.17.17 at 11:19 am

Taxes on Investment Income

It is said that we tax investment income at far lower rates than income from wages to encourage investment so that companies have money to employ people and grow the economy.

But wait, dividends take money OUT of corporate coffers. Hard for a company to make new investments with that money! So why should dividends be taxed favorably? Yes, I know about the theory that the corporation has already paid taxes on the earnings. That seems logical maybe when applied to a small business. Not sure about the logic for a huge business. (Do Royal Bank share owners effectively pay a portion of Royal bank’s corporate taxes? maybe…)

#155 maxx on 01.17.17 at 11:39 am

#18 Darryl on 01.16.17 at 6:43 pm

I’d wait it out (low risk as prices are dropping), accumulate a larger down payment and buy in North River Heights, north of Corydon. Most are character homes that virtually sell like hot cakes (sold ours in 24 hours), but you need to be patient and quick when a good one comes up.

#156 Gregor Samsa on 01.17.17 at 11:42 am

Studies show that people are now switching jobs something like 10 times or more over a career, and most people go through at least one major career change. What are the odds all of those jobs will be within an easy drive (or better yet walk) of your house? How about 0.000%? A house is the ultimate ball and chain, arguably even more-so than the other kind of ball and chain. If you are married with kids and have a relatively stable job and boring life, then having a house makes perfect sense.

But if you are young, male, and single, buying a home is like cutting off your own you-know-what and throwing it away.

Instead, you should set up your own slick bachelor pad. Small apartments are cheap, easy to clean, and will afford you freedom of mobility. The money you save that would have been absorbed by home ownership costs can instead be invested in yourself to travel the world, fund higher education, pursue hobbies, and build a nestegg.

What very few people factor into the “throwing money away on a house” debate is that there are actually TWO ways to live for “free” in a house:
1) Buy a house and spend 30 soul crushing years paying it off.
2) Build up an investment portfolio that will pay you $1000 or more a month, thus paying your rent.

Arguably, #2 can be achieved faster, and when you get there, you can drop cash on any house you want.

#157 Smartalox on 01.17.17 at 11:47 am

CMHC Premiums going up starting March 17th.

https://beta.theglobeandmail.com/real-estate/the-market/cmhc-to-hike-mortgage-premiums-in-march/article33643562/?ref=http://www.theglobeandmail.com&service=mobile

Don’t know about the other links, but the Globe article includes a handy graphic to make it clear how much more you’ll pay:

On $850k, 5yr term @2.94% and 25yr amortization:

With 15% to 19.99% down: another $39.96 per month. Or $480 per year. Or $2400 added up front to the mortgage.

But never mind the totals, they’re just abstract numbers.

You Millennials just keep focusing on the monthlies.

#158 Oh the horror! on 01.17.17 at 11:59 am

http://www.theglobeandmail.com/real-estate/the-market/cmhc-to-hike-mortgage-premiums-in-march/article33643562/

#159 Ole Doberman on 01.17.17 at 12:03 pm

I think deep down Lewenza is a closet Trump supporter:

http://www.bnn.ca/trump-s-tongue-twisted-on-dollar-jobs-portfolio-manager-1.652068

#160 soost on 01.17.17 at 12:16 pm

Totally de-railing side-note: Why is the competition bureau taking such a long time to address the TREB appeal on Sold Data? Are they just buying Realtors another month on their Audi leases?

Hoping this gets addressed in a post soon

#161 Braj on 01.17.17 at 12:21 pm

#86 I’m stupid on 01.16.17 at 9:51 pm
#55 palebird

What American cars going into Europe?? Ever been there..I think not..American cars are junk

Jaguar, Land Rover owned by ford
Opel owned by Gm
Fiat owned by Chrysler

I guess you’re not bright enough to know it’s the same players just different names!

You’re right, you are stupid.

#162 Ogopogo on 01.17.17 at 12:27 pm

The Bearded One writes:

“last month a stunning 1,500 newly-built condos were sitting empty across Calgary, 800 of which are high-rise units. It’s the worst vacancy rate in 15 years, getting badder by the month. Back in 2014 the market was hot, buyers were plentiful and builders revved up. Now those units are coming on stream when the economy’s turned, rates are rising, mortgage rules tightening, and buyers gone.”

It seems like yesterday (2014) when hordes of cocky, arrogant Calgarians would flood the comments section taunting Garth and those of us who have been around long enough to know that the Cowbubble couldn’t possibly last. Where are these precious snowflakes now? As always, the cowards scamper like a gelded steed at the Stampede.

As I like to say, it’s going to get bad in Alberta before it gets… worse, much worse.

#163 Alice on 01.17.17 at 12:30 pm

People have been pretty silent about free-trade fraud for a while. Apparently Chinese-subsidized aluminum gets snuck into Mexico, and manufactured into cars – and the cars get moved into the US and Canada tariff free.

http://fortune.com/2016/09/09/chinese-aluminum-giant-is-tied-to-a-2-billion-mystery-mexican-stockpile/

#164 Econ Iron Worker on 01.17.17 at 12:34 pm

Those rental condo’s in Calgary; my mental count of trades people up north who I knew bought property to rent out is 8 (in contrast I remember 2 guys in stocks/gold). 1 guy had like 10 properties. These are all trades people and I know the guy with 10 isn’t working as a tradesman right now.

Most of them were Calgary or Fort Mac.

They’re hurtin’.

#165 Renter's Revenge! on 01.17.17 at 12:49 pm

InvestorsFriend:

Canadians are already overtaxed, and you’re arguing that investors aren’t paying their fair share? Sheesh, give it a rest, man. How about an argument that governments should slim down and operate more efficiently so taxes on earned income and sales can be reduced? Wouldn’t that help the economy too? More money left over in people’s accounts to spend or invest as they want, rather than what the government says they want?

I believe the poster has previously declared he enjoys a defined-benefit (government) pension plan and placed all his own investments inside RRSPs, where he is unable to take advantage of the capital gains tax break and dividend tax credit. Naked self-interest, perhaps? — Garth

#166 Adam Smith on 01.17.17 at 1:25 pm

@71 Self Directed

“A nice one bedroom in a safe and good neighborhood will run you $1100-1200 plus.”

I just moved out of a decent two-bedroom on Wellington Crescent that we were paying $1075 for. If you have a bit of a patience and don’t seem like a degenerate then you can find something pretty cheap.

#167 Polls R Phake on 01.17.17 at 1:44 pm

#165 Renter’s Revenge! on 01.17.17 at 12:49 pm
InvestorsFriend:

Canadians are already overtaxed, and you’re arguing that investors aren’t paying their fair share? Sheesh, give it a rest, man. How about an argument that governments should slim down and operate more efficiently so taxes on earned income and sales can be reduced? Wouldn’t that help the economy too? More money left over in people’s accounts to spend or invest as they want, rather than what the government says they want?
____________________________________________

HAHAHAHAHAHHA – funniest post ever – mostly because the tape worm parasite called government will never “slim down”.

#168 ccc on 01.17.17 at 1:45 pm

David,
Listen to Garth. Love your parents as they obviously love you back but avoid their house buying advice. There will always be time to toss yourself into the hands of lenders. After all that is the industry that has grown the most in so-called “rich” North america. Invest your money and be diligent that way. Why in the world would you want to put all your wealth in a non-liquid asset that will take all your savings and leave you 200K leveraged? And open your eyes because all those mortgage contracts allow the lender to claim 100% of the loan at any time. Yikes! I’m not sure what you think the purpose of life is but my personal experience is
to have as much control as possible over my day-to-day existence and spend as much time as I can with the people that matter most.
Turn off the noise, stick to well-grounded principles and sail away without looking back. Good luck.

#169 Polls R Phake on 01.17.17 at 1:52 pm

#161 Braj on 01.17.17 at 12:21 pm
#86 I’m stupid on 01.16.17 at 9:51 pm
#55 palebird

What American cars going into Europe?? Ever been there..I think not..American cars are junk

Jaguar, Land Rover owned by ford
Opel owned by Gm
Fiat owned by Chrysler

I guess you’re not bright enough to know it’s the same players just different names!
________________________________________

Actually Jag and LR have been owned by Tata Motors of India for ten years.

#170 Johnny Boy on 01.17.17 at 2:07 pm

DELETED

#171 AGuyInVancouver on 01.17.17 at 2:07 pm

#25 I’m stupid, American cars going to Europe? Europeans are too smart to buy overweight American cars. The amount of US built cars in Europe is a literal handful, and part of that mix are the BMW & MB SUVs built in the USA. American car makers are lazy, they’ve been peddling the same basic hefty product for years: in the 70’s it was a full size sedan, in the 90’s and SUV and now its the pickup tuck. Big heavy and slothful.

#172 yeg_guy on 01.17.17 at 2:13 pm

@155 Smartalox

Thanks for the link. I’m confused though. The more skin you have in the game, the higher CMHC premium you pay? If that’s the case, bring back 0% down and charge no CMHC. Sarcasm off. Can this Ponzi scheme end already?

#173 Johnny Boy on 01.17.17 at 2:17 pm

#145 Smoking Man on 01.17.17 at 10:14 am
#138 Johnny Boy on 01.17.17 at 9:09 am
#131 added value on 01.17.17 at 6:26 am
#103 rknusa on 01.16.17 at 10:50 pm
re: #82 Smoking Man on 01.16.17 at 9:41 pm
4 days to go.
https://youtu.be/WQgcKI7oTws
you are one big joke Doctor
what an idiot, this guy adds nothing to the conversation and just uses this site to promote his own insanity
LOSER
For gods sake any idiot could call the election, its fifty/fifty you a-hole. This is the one thing I will give Smoking dude, that he is all in with Trump. Smoking Man is a whole hearted believer in this guy with his smoke and mirrors. He is another disenfranchised, middle aged, angry white male who is unemployed. Go check to see what segment of America he tapped into.
……
Johnny Boy
I’m thrilled my daily contributions here give your life, meaning and purpose. A reason to go on.
Did you buy my book yet?
Carry On….
________________________________________
Sorry no time for your fiction. The best Fiction I ever read was Nineteen Eighty Four by George Orwell. Besides I am more of a F Scott Fitzgerald fan and a James Joyce fan. Let me know when you pen something similar to them.
Carry On………………

#174 For those about to flop... on 01.17.17 at 2:43 pm

These guys will most likely take a loss or have to hold on to this one for a while.

They paid 1.4m at the peak of the market in May 2016

Houses like this one are currently going for in-between 1,2/1.3m.

Only 3 houses were sold in this neighborhood in the last 2 months,making it one of the coldest neighborhoods to be making a flip.

It’s raining pretty good in Vancouver at the moment but Mark Madryga is forecasting some Pink Snow to be falling on this residence pretty soon…

3406 Mons Drive, Vancouver

Oct 15:$1,628,000
Jan 16: $1,549,000
Change: -$ 79,000.00 -5%

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMlhIVg==

#175 jess on 01.17.17 at 3:07 pm

fake residency

…”An investigation by the BBC’s File On 4 has found immigration advisers, lawyers and accountants were involved, with people paying up to £25,000 each to secure the required paperwork.

Detective Superintendent Stephen Courage, from the Garda National Immigration Bureau, explained how the fraudsters were making the “staggering” profits.

“The facilitator will quite often set up a company, of which you will either be an owner or a director,” he told the BBC.

“They will also create a work history for you.

“They will create payslips, they will open bank accounts, and also pay nominal tax so when the immigration service receives an application to exercise EU treaty rights, they will look at the paperwork and on the face of it, it will appear that you have a life in Ireland.

“The people we are coming across in our investigations are often from a professional background, whether it be in law or accounting, these are white-collar criminals.

http://www.independent.ie/irish-news/multimillion-euro-scam-allowing-immigrants-to-set-up-fake-lives-in-ireland-35373491.html

#176 Luke on 01.17.17 at 3:07 pm

Just be glad you don’t live in Victoria, BC where a very ‘average’ home listed for $699k just went for $950k after the sellers had to sort through 28 unconditional offers. There is nothing to buy here so we are in for another frenetic market in BC’s capital. Want to come here? ‘Bring Cash’ because that’s what ‘BC’ stands for.
Property link:
http://www.cathytravis.ca/properties?id=373016

#177 Milly on 01.17.17 at 3:56 pm

I heard a rumor from an accountant that T2 plans on removing the TFSA entirely. Is there any truth to this? I’d seriously hope not…

Get a new accountant. — Garth

#178 Euro observer on 01.17.17 at 4:03 pm

https://ca.finance.yahoo.com/news/student-debt-crisis-spurring-growth-of-sugar-babies-in-canadian-universities-report-163528970.html

Imagine what they will do for a house.

If 25 k in average student loan at graduation justifies 200 k student members of seekingarrangement.com a house will justify 40 sugar daddies at the same time.

Insane.

#179 looking frwd to friday on 01.17.17 at 4:04 pm

Just heard on the radio that according to current pollsTrump’s approval rate is at 44% only. Are those the same polls that predicted land-slide victory for Clinton? lol @ the Canadian MSM regurgitating this BS.

In other news – BC just crowned first 40 (or was it 60?) fools that applied for the tax-payer sponsored downpayment handout. Oh man May 9th can’t come soon enough.

#180 OMERS on 01.17.17 at 4:04 pm

I agree a 24 year old wanting to get tied down to a house, dude go travel the world and I agree on the Harley, owning my motorcycle and being able to ride keeps life in balance, a huge stress reliever. 24 wanting to own a house. Keep saving and investing.

#181 Euro observer on 01.17.17 at 4:18 pm

Justifying million dollars shacks

https://www.seekingarrangement.com/Canada/

Student debt has reached more than a billion dollars in Canada. Finding a way to manage student debt is a problem for most graduates; as such, students have developed a new solution: Sugar daddies.

THOUSANDS OF CANADIAN STUDENTS SEEK SUGAR DADDIES!

Millions of students are looking for another way to get out from underneath student loan debt. Based on the latest figures, the percentage of students with loan debt is greater than those employed in a full-time job with their degree.

Student tuition has seen a steady rise, as well as enrollment, which has increased. Becoming a Sugar Sugar can help you avoid becoming another statistic.

WHY SUFFER WITH STUDENT DEBT?

A person with a degree is likely to make more, and going to school is a financial burden that every student needs help with. But debt isn’t the only problem students face; underemployment is a very real epidemic for students with student loan debt. According to recent numbers, underemployment is close to 50%, which means that students are not only accruing more debt, but they also have no realistic means of paying it off.

THE RELIEF IS HERE: SEEKINGARRANGEMENT

In 2016 alone, more than one million students around the world (an eleven percent increase) registered on SeekingArrangement to find some relief from tuition, student loan debt, and other college-related costs. Finding the right sugar daddy can help a sugar baby manage student loan debt.

#182 InvestorsFriend on 01.17.17 at 4:19 pm

The OPPOSITE of self interest:

#165 Renter’s Revenge! on 01.17.17 at 12:49 pm
InvestorsFriend:

Canadians are already overtaxed, and you’re arguing that investors aren’t paying their fair share? Sheesh, give it a rest, man. How about an argument that governments should slim down and operate more efficiently so taxes on earned income and sales can be reduced? Wouldn’t that help the economy too? More money left over in people’s accounts to spend or invest as they want, rather than what the government says they want?

I believe the poster has previously declared he enjoys a defined-benefit (government) pension plan and placed all his own investments inside RRSPs, where he is unable to take advantage of the capital gains tax break and dividend tax credit. Naked self-interest, perhaps? — Garth

**************************************
Renters Revenge, yes, governments sometimes waste money. I was merely pointing out the enormous tax advantages that investors have in comparison to those earning only wages.

As to Garth’s comment, True, I collect a government defined benefit pension plan. Freedom 55 as a matter of fact.

True, MOST (but not all) of my investments are in an RRSPs. But completely false that I cannot take advantage of the lower tax on capital gains and dividends. I have explained the math many times that my 60% or so share of my RRSP (my cost net of the approximate 40% tax refund) is growing tax free and the so-called tax on withdrawal is only the government taking back its 40% share. Last I checked zero tax is better than the favorable tax on capital gains or dividends. This is perhaps why advisors would normally suggest RRSP investments be utilized before taxable accounts.

I have substantial taxable investments in addition to the RRSPs, TSFA, RESP.

My comments on the (too) favorable taxation of investors are totally against my self interest. I even mentioned the existence of RRSP as part of the way that investors are lightly taxed.

I have never written a word on this site that I did not believe to be true, whether it was in my self interest or not.

I suppose being accused of self-interest is not a great insult (sort of like being accused of being human) but the fact is that my comments were totally against my self interest in this case.

#183 jess on 01.17.17 at 4:50 pm

I wonder if the health minister read this:

The 21st Century Cures Act
According to Adam Gaffney December 14, 2016, it was has been lauded as a bipartisan success. It’s actually the result of a long war on drug regulation.
read more @https://newrepublic.com/article/139328/congress-just-quietly-handed-drug-companies-dangerous-victory

He writes:
“Consider, for instance, two recent studies of new cancer drugs. The first—published a year ago in JAMA Internal Medicine by Chul Kim and Vinay Prasad—looked at cancer drugs approved by the FDA on the basis of “surrogate endpoints” between 2008 and 2012.
http://jamanetwork.com/journals/jamainternalmedicine/article-abstract/2463590

“Endpoints” is a term for outcomes: Hard clinical endpoints refer to outcomes such as survival, where the benefit to the patient is unambiguous. Surrogate endpoints, however, refer to metrics like the change in the size of a tumor on a CT scan. Though a shrinking tumor logically sounds like a good outcome, it is only meaningful if it actually translates into an improvement that an individual actually experiences, like a longer life or a better life. Often, however, that’s not the case: New therapies can change numbers without improving our actual health. This is what Kim and Prasad found: Of the 36 drugs approved on the basis of surrogate endpoints, at least half had no demonstrated benefit.”
Perhaps they had other benefits? Or perhaps not.

https://jamanetwork.com/journals/jamainternalmedicine/article-abstract/2589085
In late November, Tracy Rupp and Diana Zuckerman in the same journal examined these 18 drugs, and found that not only did they not improve survival, but only one had evidence that it improved quality of life (the others lacked data or had no effect, negative effects, or mixed effects). Despite this lack of benefit for either the quantity or quality of life, they note, the FDA withdrew approval for only one drug. Those drugs that either didn’t improve or actually worsened quality of life continue to be sold at an average price of $87,922 per year. Not a bad return for a basically useless drug.”

#184 Prominion on 01.17.17 at 5:17 pm

Sold my two year old, 97 Walkscore, 1 BR Kensington condo in Calgary last month for about a 2.5% loss once brokerage and GST were balanced…was renting for $2000 mnth and was cash flow neutral, could not get any takers at $1650 mnth…I’m damn glad it sold (thanks, Walkscore), wished I’d sold it 18 months ago.

#185 Good grief ... on 01.17.17 at 5:30 pm

That poor kid would be traumatized if he read this comments section.

‘Buying is like cutting your arm off…’

Lol . Where do these people come from ?

It’s a $250,000 a house , he has the money for over 20% , rates are fantastically low (unlike the years they were double digits ). He can generate an income from it by renting 1 or even 2 floors as he is single and doesn’t need a lot of space

Make the call that’s right for you kid.

#186 Scott on 01.17.17 at 5:32 pm

@ #176 Luke on 01.17.17 at 3:07 pm

They’re doing that in Toronto too. They lower the price, and because of the blind bidding, single-bid process people massively overbid.

#187 I'm stupid on 01.17.17 at 5:41 pm

I’ll admit I got a few car makers wrong. Jaguar and Land Rover are no longer under Ford and fiat owns Chrysler. The point I was trying to make is that starting a trade war will hurt the US. Trump is making threats and will probably get some concessions but he won’t start a full trade war with the rest of the world.

#188 hm9p9 on 01.18.17 at 11:26 am

I suppose a Harley is better than a clapped-out Camaro.

http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/

#189 Brokerizer on 01.18.17 at 4:30 pm

CPD and ZPR saved me from bad investment ideas taken from BNN. Thank you preferred shares.

So condos in Montreal are in a clear sellers’ market. LesAffaires has a cute map that shows this. And the “Ville de Quebec” sees flat prices for single family houses and less sales.