Ch-ch-ch-changes

When BeeMo’s chief egghead Doug Porter said days ago the Toronto housing market was “dangerously detached” from economic fundamentals, he echoed a favourite theme of this omniscient blog. Acknowledgment is the first step to redemption. There’s hope for Bay Street economists yet.

For those who try not to think with their pants, the next step is cashing out of an asset class that is insane, unsustainable and, yes, dangerous. This was the advice offered here to delusional, house-lusty Vancouverites in the past, which most of them ignored. Too bad.

The stumbling block to pocketing the biggest, tax-free capital gain of one’s entire life seems to boil down to five emotional words: “But where will we live?” This has been complicated lately because a tight housing market – no supply and lots of demand – has spilled over into rentals, where there are bidding wars for GTA units that are actually habitable. Moreover, lots of people who have owned houses for decades just can’t stomach being tenants. It’s silly, illogical and cultural, but so real.

“We used to think that way,” says Cheryl, a new retiree who wrote me on the weekend. “At first we were totally freaked at the thought of selling, and then when the place went fast in this insane bidding war we even more freaked about having to rent.”

By the way. Cheryl and Dan’s house in the northern end of the GTA sold in days with seven offers and for $120,000 over asking. Suddenly they had $1.6 million – which was $1.35 million more than they had the day before.

But they were homeless. What now? Try to find a rental where the dog could join them? That eliminated about six in ten candidate places. Try to stuff thirty years of life into a 700-foot condo in a downtown building full of hipsters, bicycles and pizza odours? No way. And what about the process itself of renting? With the need to cough up a credit score, personal history, rental application and references, they felt like second-class citizens begging for shelter. So demeaning.

“Here we were,” she says, “millionaires. And we felt like garbage.”

So there you go. This is why the average 905 detached costs a million and a nice semi in a good 416 hood goes for $2 million or more. There’s a 10-day supply of detached houses across all of the GTA, with constant demand resulting in bidding wars and historic prices every time a rare listing pops up. The once-in-a-generation opportunity to cash in on a tax-free boodle of money is not being taken – even by retired people with no kids or jobs – because selling, buying again or finding a rental scares the poop out of them. Sad.

Let’s get to the next chapter, and find out what C&D did.

“What we decided to do,” Cheryl added, “was to follow our boy.” The kid’s enrolled in a BA program at Dal. And since Dalhousie University is in Halifax, that’s where they thought they’d begin the search for a place where people can realistically afford to live without crippling debt or stuffing a million into a property and then having to worry about retiring on CPP. By the time the search was over, they’d found a property on an acre on the sea about a 30-minute drive from the nearest big shopping centre. Century house, restored, three bedrooms, two baths, garage, little barn, oceanfront access, all-in, $380,000. (Kind of like this one.)

So now they had a house, paid for, and $1.2 million. Invested in a balanced, diversified, low-vol but robust portfolio, they expect to average 6% a year after all fees, for an income of $6,000 a month. And when it’s paid out to them largely as return of capital, the income is non-reportable, not boosting them out of their rock-bottom tax bracket. That keeps the dividend and capital gains taxes in the ditch. So they have it all. A house. No debts. Six grand a month. Low taxes. And there’s still $1.2 million sitting there.

“Here comes the suck-up part (I know you demand every email contain one),” Cheryl wisely concludes. “Without your ‘pathetic’ blog none of this would have happened. We’d still be sitting in that boring suburban house with no pensions and a couple of hundred grand in RRSPs staring at retirement and wondering how we were going to pay for property taxes, or a new roof or our son’s next degree. Now we have it all.”

Plus some snow, of course. The first bad storm of the season hit a few days ago. But this week it will be ten degrees. And I hear they even have the Internet in NS.

The moral: Don’t be afraid of cashing out of an asset at the top. Even when it’s your house. But neither should you fear change. The alternative could be way worse.

171 comments ↓

#1 FlyingDodo on 02.21.17 at 5:42 pm

Which is why, despite being a young engineer I would not want to move to Toronto even with higher earning opportunities. Say what you want about Ottawa, at least renting is affordable and the traffic is not as rage-inducing. Plus Montreal is not too far if I want to have *more* fun.

#2 Deplorable Communications on 02.21.17 at 5:50 pm

Hope they don’t need an anesthesiologist….

#3 Lulu on 02.21.17 at 5:57 pm

Exactly!! Cash in now and move somewhere else where housing is affordable and you can invest the rest for your retirement, even you have to relocate for your job, still a good risk you are ahead of the game. You have a paid off new house in an affordable town/city and invest the rest of the windfall. Start a new job in your new location, much much better than just stay with the status quo afraid the change. Life is full of changes, embrace it and live with it. Be brave and be smart!

#4 Damifino on 02.21.17 at 5:57 pm

Re: Feeling second class when seeking a rental.

The landlord of the first rental I had after selling my last house came to that house (before the closing) to interview me. I had no references because I’d been an owner for 25 years. He saw no problem.

In the next rental (at which I still live) I simply supplied documentation to the manager proving my net worth. Again, no problem at all.

Everyone should give this ‘second class’ thing a try. I’m still enjoying it very much.

#5 Self Directed on 02.21.17 at 6:00 pm

$1.2 million. Invested in a balanced, diversified, low-vol but robust portfolio, they expect to average 6% a year after all fees, for an income of $6,000 a month. And when it’s paid out to them largely as return of capital, the income is non-reportable, not boosting them out of their rock-bottom tax bracket. That keeps the dividend and capital gains taxes in the ditch.
………………………………………………………

Someone please explain to me “…paid out to them largely as return of capital”.

How is earning $72K per year (6K per month) not taxed? You can’t stuff all 1.2 Million in registered accounts.

There is zero tax on taking a portion of your own capital back each month, thus staying (in this case) in a near-zero tax bracket. Portfolio gains (dividends, capital gains) are taxed based on one’s marginal rate, so for C&D it’s a pittance. — Garth

#6 Freedom First on 02.21.17 at 6:06 pm

Right on Garth. Truly a freedom first story.

And C&D know they couldn’t have done it without you. Cool.

Lesson for today: Everyone should have good “go to people”, as I like to call mine. Most people refer to them as “mentors”. They can even be pathetic Blog writers.

I myself always have 3-5 respected “go to guys” at all times. Also have at least one respected female “go to gal” at all times for their valued female slant on things I want a female point of view on.

Means getting rid of EGO and accepting that life is much easier when the burden is shared with the right people.

Also, I am proud to be one of the “go to guys” for others. Male and female.

Big factor in being able to enjoy a freedom first lifestyle.

My only job was to pick the right people. And listen to them before making a decision. I wouldn’t be where I am without them.

#1
Freedom First
Master of Freedomonics

#7 dontcallmeshirley on 02.21.17 at 6:08 pm

“….paid out to them largely as a return if capital…still $1.2 million sitting there”

True enough, but allocation as ROC reduces their cost base, which sets up a larger capital gain on disposition?

No it does not. A widely-held myth. — Garth

#8 rainclouds on 02.21.17 at 6:13 pm

1.8m, a pension, and a Nova Scotian renting in DT VANDELUSIONAL WTF am I doing?

When we bailed from the Burnaby Bung the future perspective landlords pretty much pushed everyone aside to sign us up. We had no problem renting.

Downsizing was interesting and resulted in a storage rental till I realized the rent would buy the crap I was storing. Craigslist became my friend.

Figure I could buy a NS prop and a Florida place for cheaper than the 850 Sq ft condo in Yaletown and still have a million plus pension.

Gonna stay on the left coast just to see how this shakes out…..

#9 genbizx on 02.21.17 at 6:17 pm

bro in law won’t sell in east toronto….house looks like a large shed, has a big lot for t.o.. a knockdown winner would probably bid up to 1mill…but ya, “where would we live….” how do i convince him?

#10 Paully on 02.21.17 at 6:18 pm

Since this is primarily a dog blog, it is very worth noting that “no-pet” clauses are 100% illegal when renting in Ontario. You want to have pets on your rental? Even if you have a no pet clause in your lease, go right ahead!

#11 Wrk.dover on 02.21.17 at 6:19 pm

Cheryl and Dan: welcome back to the 90’s.

#12 MF on 02.21.17 at 6:32 pm

And for the rest of us trying to make a life in the GTA with our family and jobs here? My meagre 100k portfolio doesn’t pay off enough to “cover rent” on a decent dwelling and what do I do when kids come into the picture? I guess people are stuck?

MF

#13 Frank on 02.21.17 at 6:32 pm

Their kid finishes his degree in 4 years. What if they realize they don’t like it there when he’s gone?

They’ll be somewhere after leaving 30 years of friendships and family behind.

Their call but seems short sighted.

#14 boopsie on 02.21.17 at 6:35 pm

#2 Deplorable
Any small city that has hospitals, universities, and govt. is a great place to retire. Pensioners keep the economy robust, and the housing is varied enough. Think London, ON or the Hammer.

#15 Roial1 on 02.21.17 at 6:37 pm

It never stops amazing me at how “stuck to the city “so many of the posters seem to be. “Oh dog Martha is there really life out there?????

Hey Stupids! It (the world) does not stop at the city limits.

In fact life is much easier away from the noise and stink.

I am sending this post from Buenos Aries where we are vacationing ,this time.
Our balanced portfolio (thank you Garth) and quiet lifestyle give us the time and resources to do as we want.

So stay in the stuffy, stinky , expensive, old city. It’s your retirement.

#16 earthboundmisfit on 02.21.17 at 6:44 pm

Seven months of winter! 365 – 24/7 wind.

#17 IHCTD9 on 02.21.17 at 6:46 pm

Median total income in Halifax – $78,870.00
Median total income in Toronto – $75,270.00

Statscan 2014
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil107a-eng.htm

Sure if you’re a superstar at what you do, the GTA is the place to be. But if you’re a regular schmo, you won’t do any better in the GTA, surely not enough to cover the expense and aggravation.

#18 Scared on 02.21.17 at 6:49 pm

Help! I think I should feel well-off but am constantly feeling insecure over our financial situation. My wife and I are 30 years old and do not own a house (cannot afford one in Toronto). We have a child on the way and almost $300,000 (mostly in cash). I know I should invest it all in a balanced portfolio, but I just live in a state of fear. I think I’m in a good spot financially, but since I don’t own a house (like all my friends) I feel like I’m behind as I’m not building any equity!

#19 Cici on 02.21.17 at 6:50 pm

Ahhh, I am so JEALOUS of those retirees…one day I wish to be exactly where they are!! Good for you C&D, and hope you enjoy a long, healthy and prosperous retirement ;-)

#20 Fortuna on 02.21.17 at 6:52 pm

I did not think it was possible to have a portfolio yielding 6% (as yield, dividend or interest payments) without crazy risky high yield investments. Especially a globally balanced portfolio.

So please stop saying you can get $6000 a month without depleting your capitol or explain how this can be done? Or is selling shares part of the plan?

I know I am probably not the first to post that comment – but humour me and answer it here so I don’t have to go looking. After all I am a lazy deplorable – but not a moister!

#21 Fortuna on 02.21.17 at 6:58 pm

Ok I see I am even more lazy then I thought as I had not read the other comments. But I still don’t understand how you can reply on that income over the long haul. 4% rule is the SWR no? Doesn’t this deplete the portfolio?

#22 not yet on 02.21.17 at 7:00 pm

why not sell your much sought after house with a clause
in the agreement that it be rented back to you at some
pittance of an amount until you no longer want or need the residence.
if they don’t buy you are in the same position as before the
offer to sell, if they do buy you have that same home to live in only someone else must maintain it and you’ve got $$$$$$$$$$$$$$ in investments.
simple, no?

#23 Long-Time Lurker on 02.21.17 at 7:06 pm

Thanks, respondents to my critique request yesterday.

Western nations could go back to a gold standard –if they had any. (Hee hee.). What I hear is that Red China is buying up all the gold for when the world decides to axe the US dollar as the world reserve currency. They want their renmenbi to be one of the accepted world currencies of the future.

Yes, the debtors are still legally culpable. That’s why their credit ratings would be ruined. I was thinking that if all the mortgage debt got written off by the banks, it wouldn’t hurt their bottom line much because of fractional reserve banking. Money (debt) outta nothing, baby!

#24 Yanniel on 02.21.17 at 7:10 pm

What about the surprises (nastinesses) the new Liberal budged might bring for investors?

Will their 1.2million be enough then?

I guess this was the best (only?) solution for them, but I wouldn’t laugh loud just yet.

#25 S.Bby on 02.21.17 at 7:11 pm

Acquaintances of ours sold late last year and walked away with 2.1 million cash. What did they do? Bought a 1/2 duplex for 1.6 million. I guess it’s hard to shake that “owner” mindset. At least they now have half a million to party with.

#26 crowdedelevatorfartz on 02.21.17 at 7:12 pm

@#16 earthboundostrich
“Seven months of winter! 365 – 24/7 wind.”
*******************************************
Nova Scotia?
Please.
But it describes Calgary to a tee.

#27 For those about to flop... on 02.21.17 at 7:12 pm

I put this one up the other day for the daytime crew, but I will put it up again for the nighttime crew since a couple of people yesterday were discussing how much population affects inventions and innovation

America is the world leader with 3 million patents in the last forty years.

The state of Pennsylvania has had the same amount of patents in the last 40 years as Canada

124 thousand…

M42BC

https://howmuch.net

#28 Tulips on 02.21.17 at 7:14 pm

I think we messed up the rule of 90.

We’re in our early 30’s and sold our home which we were outgrowing in the Vancouver suburbs two years ago. We were convinced that residential real estate was a bad investment and about to get worse. We could have bought the bigger house we were working toward and met the rule of 90, but we put the $170k ($100k windfall gain) in our balanced/diversified portfolio which on average has done well enough to normally satisfy anyone. We set forth with a plan to buy our next place after a few years of renting a decent but not ideal home and saving up.

But it turned out there was nothing normal about the market we ditched. We missed out on the biggest run-up in history leaving us feeling like we accidentally threw away a winning lottery ticket. We’re patiently waiting for normalcy to come back but it’s becoming hard to be patient or even believe that normal will return. Over the past months the suburb prices haven’t seen much retreat, and certainly nothing close to enough to cover the gains we missed out on. That’s despite having no maintenance or property tax and all the other stuff that makes renting so much cheaper than owning.

We currently cannot afford to buy back the house we sold, let alone the one we really wanted and could have afforded two years back. That is unless we want to give up our disciplined approach to finances or go all in and blow up the rule of 90. We’re now renting a much smaller place than we’d hoped to live in to try save as much as possible for our next buy, whenever that may finally be feasible. My suggestion is this – the rule of 90 should not only be considered as a rule for the maximum proportion of your net worth in real estate. If you plan to buy into a market at some point in the medium range future, perhaps it’s worth hedging your position against escalating prices in that market by buying or keeping some percentage of your net worth in that market to not get too far below the rule of 90. Any thoughts? Am I loosing it?

#29 Smoking Man on 02.21.17 at 7:14 pm

Good post Garth.

But Halifax? Seriously?

Canada needs an island in the Caribbean where good dogs go to die. That will put a shit load of housing inventory on the market as boomers will run away in droves for sunshine and be ride of the lonny left milinabrats.

#30 Pete from St. Cesaire on 02.21.17 at 7:15 pm

Since this is primarily a dog blog, it is very worth noting that “no-pet” clauses are 100% illegal when renting in Ontario.
————————————————–
When we were looking to rent our place here, one landlord told us she had a ‘no tarantulas’ policy. We asked why she would bother specifying that. She explained. We got out of there quickly.

#31 rainclouds on 02.21.17 at 7:16 pm

#16 Seven months of winter! 365 – 24/7 wind.

Data? Didn’t think so….ever been there? Nope? U live where?

Yea OK, Aside from Snowmageddon last week (A record, no army required)

Avg High/lows compare favourably with everywhere but (SouthWest corner BC)

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/phys08b-eng.htm

#32 When Will They Raise Rates? on 02.21.17 at 7:17 pm

Same story with the in-laws. Their house in Richmond Hill is now over $2.5M and they won’t even think of selling. They “like where they live”.

But then again, I was telling them to sell $1M ago when the house was at $1.5M – and I thought they were crazy… Good thing they didn’t listen to me then!

#33 Wrk.dover on 02.21.17 at 7:24 pm

#20 Fortuna on 02.21.17 at 6:52 pm
I did not think it was possible to have a portfolio yielding 6% (as yield, dividend or interest payments) without crazy risky high yield investments. Especially a globally balanced portfolio.

So please stop saying you can get $6000 a month without depleting your capitol or explain how this can be done? Or is selling shares part of the plan?

I know I am probably not the first to post that comment – but humour me and answer it here so I don’t have to go looking. After all I am a lazy deplorable – but not a moister!

———————————————–

Cheryl and Dan don’t need a return, they can’t spend that much in the time they have left. What is with the obsession of having cake left over?

#34 Deplorable branch davidian on 02.21.17 at 7:26 pm

#29 Smoking Man on 02.21.17 at 7:14 pm
Good post Garth.

But Halifax? Seriously?

Canada needs an island in the Caribbean where good dogs go to die. That will put a shit load of housing inventory on the market as boomers will run away in droves for sunshine and be ride of the lonny left milinabrats.

..
How’s your new house in Ecuador? Is the helli pad cool?

#35 When Will They Raise Rates? on 02.21.17 at 7:29 pm

#13 Frank on 02.21.17 at 6:32 pm

Their kid finishes his degree in 4 years. What if they realize they don’t like it there when he’s gone?

They’ll be somewhere after leaving 30 years of friendships and family behind.

Their call but seems short sighted.
—————-

^ This.

A cheap house is not worth the isolation IMO. For me and my wife at least, that would be a terrible trade off. At the end of the day, $ is not the be all and end all… But to each his own.

#36 traderJim on 02.21.17 at 7:29 pm

Great story.

I don’t know why more people don’t do this?

I’ve lived in 6 or 7 cities all over the world, and my only regret is that I didn’t leave Toronto sooner and experience more.

There will always be somewhere in the world where you can live well and inexpensively.

Who doesn’t want to go live in the South of France or Tuscany for a couple of years? Completely affordable, especially if you just sold your 7 figure home for cash.

What are people waiting for?

#37 palpha on 02.21.17 at 7:36 pm

Fake news Anesthesiologist!

Apologies for only commenting today about yesterdays fake news on the Anesthesiologist. I should know because I too am a Anesthesiologist. The vast majority of anesthesiologists make about $350,000 or less for a 50 hour work week and thats before any overheads like malpractice insurance, disability and life insurance etc. Of course we dont have any extended health plans, dental benefits or pensions like all government employees. I have known a few Anesthesiologists who make $600,000 but they work 12 to 14 hour days seven days a week.

Do the math on this fake anesthesiologist:

Finish high school at age 18, then 4 year basic science degree followed by 4 years in med school and $250,000 of debt at this stage. Then another 5 years of Anesthesia residency ( where you do get paid about $50,000 py which amounts to about to $7 per hour at most). So she’s at least 31 by the time she’s done her training. The vast majority of students dont get into med school straight away either so the above scenario is an absolute minimum.

Then 3 years later at age 34 including some maternity leave she has paid her house made $100,000 in upgrades and saved another $1.3 m in a balanced diversified portfolio.

Only way this is possible is with the bank of mom and dad and if she never goes out , drives a 10 year old corolla and eats craft dinner every night and works 12 hour days. If in fact she’s in this category my advice is to wake up and smell the roses. Your children dont care if you have >$1m in the bank. They care if you were there for their birthday party.

I have had a number of plumbers in my house and I can assure you their bill has been more than my anesthetic fees per hour billed.

Of course an easy solution is to import cheap anesthesia providers from 3rd world countries. Thats certainly a option if its your teenager having surgery and you hate them. If you have serious medical conditions I suggest you ask your Anesthesiologist if they have the FRCPC designation which means they are Fellows of the Royal College of Physicians. Its the only way you know they have passed a rigorous national exam.

#38 soost on 02.21.17 at 7:37 pm

Envious at the story, and the listing made my 30-something heart cry.

Angry at our mayor who this week, said the market was HEALTHY! (https://www.bnn.ca/toronto-mayor-john-tory-rejects-bmo-s-bubble-claim-argues-housing-market-is-healthy-1.673655)

I’m sure the pedigree of Sun Life and Tory’s (and his cronies) has no vested interest in Real Property

#39 Gasbag Boomer on 02.21.17 at 7:37 pm

#3Lulu

If you are young enough, +1.

#40 ERichard on 02.21.17 at 7:38 pm

Good CBC article see below for Lunenburg County trying to get working age people instead of the profiled retired couple. Our province like BC wants to market real estate to retirees, then complain about how much they are costing the provincial health budget.

http://www.cbc.ca/news/canada/nova-scotia/cross-canada-tour-lunenburg-county-group-1.3992938

#41 Tulips Response on 02.21.17 at 7:38 pm

We are going through the exact situation you describe. Sometimes I feel like kicking myself for “selling to early” and not buying another property we were looking at, that now I could barley afford. It is frustrating for sure, but we need to be patient and hopefully it will pay off. Some days I feel like I am losing it too, our only difference is we are in Toronto and the market hasn’t even started to correct. However, I guess it’s better to have sold too early, than too late (at least this is what I tell myself to keep me from going nuts) – but it only works half the time! Good luck Tulips!

#42 Blacksheep on 02.21.17 at 7:39 pm

First hand experience here.

Was out of the market from 2009 to almost 2014. We were on 5 acres in big farm house for very reasonable rent.

Renting sucks big time. Your life is on hold.

Owned 15 years previous to this an you do get treated like a ‘renter’ class, even when the landlord knew why we were renting (waiting for crash ) and could buy RE anytime we wanted.

You need multi millions or change markets like these folks did. If you stay in the same expensive area, it will suck.

Halifax? ya right, born in Van and the only direction I would consider is due south for warmer locals.

Worst off, the market can still (and did me) go and against you as there is no guarantees.

#43 common sense on 02.21.17 at 7:41 pm

#29 Smoking Man

Make everyone happy and have JT buy Guantanamo from the Americans for a few of us snow bound bastards…

#44 ROC on 02.21.17 at 7:41 pm

There is zero tax on taking a portion of your own capital back each month, thus staying (in this case) in a near-zero tax bracket.

===

How does “taking a portion of your own capital back each month” work?

How do you take back your own capital, which I assume is an investment in the portfolio?

How fast will their capital and ROI dry up with $72K per year withdrawal?

It won’t, obviously, since withdrawals are replaced with tax-efficient growth. Jeez, I need more crayons… — Garth

#45 Catalyst on 02.21.17 at 7:42 pm

Poor kid thought he was escaping the parents, haha. JK.

Garth, who are some low cost advisors that I can point my Mom to. She has $500k after retiring and selling her house and put it all in mutual funds at [email protected] Most low cost advisors seem to want clients north of $1 million in investable assets. Is it worth it to do mutuals at the bank if the client is not investment savy and it seems like they are a decent mix of safe/growth stuff?

#46 S.Bby on 02.21.17 at 7:43 pm

#28 Tulips
Burnaby prices are down 20% and still dropping; currently at early 2015 levels and nothing much is selling in detached housing.

#47 dosouth on 02.21.17 at 7:43 pm

Good for this couple but unfortunately for them – wrong coast. We paid almost the same and are staring at coastal mountains, the ocean and no snow….oh well don’t be afraid of change.

Sort of like this one here….

That’s funny. I’ve spoken in Nanaimo often in the winter. Snow every time. — Garth

#48 When Will They Raise Rates? on 02.21.17 at 7:44 pm

Forgot to mention:

#32 When Will They Raise Rates? on 02.21.17 at 7:17 pm

was in response to:

#9 genbizx on 02.21.17 at 6:17 pm

#49 Ronaldo on 02.21.17 at 7:44 pm

Best story yet. Three cheers for C & D. Very wise move.

#50 For those about to flop... on 02.21.17 at 7:50 pm

Pink Snow falling in Surrey.

These guys paid 725k for this one in June 2016 and are now fighting to get their money back…

M42BC

9228 148a st , Surrey

Oct 17:$769,000
Feb 20: $748,000
Change: – 21000.00 -3%

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA3ODk4Qg==

#51 Tulip Timing on 02.21.17 at 7:51 pm

Got off the North Vancouver elevator in June. Bought waterfront south of Nanaimo in place of what we had for a third of the selling price, a larger home, and a newer home. Turns out to be great timing. North Vancouver is down 10% and Nanaimo is up 15%. Tulips are beautiful next to water.

#52 For those about to flop... on 02.21.17 at 7:59 pm

Pink Snow falling in Burnaby.

These guys are in a similar boat as the last guys, having shelled out $760k for this duplex in Feb 2016.

The bloated 2016 assessment only came in at 777k ,so someone is going to have to really love it so these guys can roughly break even…

M42BC

4916 Norfolk Street, Burnaby

Dec 5:$835,000
Feb 20: $799,000
Change: – 36000.00 -4%

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

#53 Tulips on 02.21.17 at 8:05 pm

#41 Tulips Response

Thanks – good luck to you too. Funny thing is that we’re on a trajectory of investment savings that will give us a very comfy retirement by 55 if we never buy. But the stuff #42 Blacksheep is saying is so true too and it gets tiresome being labelled.

#46 S.Bby

Langley/Surrey is holding much stronger than Vanc/Bby it seems, at least in terms of percentage price drops. I thought there would always be a discount to the Fraser Valley compared to Greater Van. And I thought bubbles implode from the outside-in usually, but it seems there are still hoards of Vancouverites crossing the Port Mann in search of our low cost $950K houses with a 50 minute commute.

#54 crossbordershopper on 02.21.17 at 8:06 pm

i was not blessed like a lot of people to be smart enough to be a sleep doctor, i guess i can blame my mom, but she was a good person, i shouldnt complain.
like millions of people we are greatful that when we need to go to the hospital to get help smart, educated, and yes well paid people are looking after me,
are they overpaid, dont know or care, all i know is i have a good healthcare and i dont pay, and in the end, thats all that matters to the millions of the 99%.
they complain just like all of us, we complain over which cookies to buy, they complain on which colour their new car is, just rich people problems, as i always say.

#55 Ronaldo on 02.21.17 at 8:11 pm

”That’s funny. I’ve spoken in Nanaimo often in the winter. Snow every time. — Garth”

No snow the previous three winters. Maybe time you paid us a visit. I was at your last speech. No snow.

#56 dosouth on 02.21.17 at 8:12 pm

“Sort of like this one here….

“That’s funny. I’ve spoken in Nanaimo often in the winter. Snow every time. — Garth”

Sorry I stand corrected, every 5 years or so you get a couple days of snow so we have something to stare at on the mountain tops. Today’s temp.. 12C and sunny – no snow to be found…..except on the mountain tops.

Same as TO. Halifax should be 12 on Sunday. You are not special, just provincial. — Garth

#57 Ronaldo on 02.21.17 at 8:15 pm

#51 Tulip Timing on 02.21.17 at 7:51 pm

Got off the North Vancouver elevator in June. Bought waterfront south of Nanaimo in place of what we had for a third of the selling price, a larger home, and a newer home. Turns out to be great timing. North Vancouver is down 10% and Nanaimo is up 15%. Tulips are beautiful next to water.
—————————————————————-
Good for you. Smart move. Ain’t it great here?

#58 dr. talc on 02.21.17 at 8:19 pm

a song for the dawgs suffering CN Tower envy-

https://www.youtube.com/watch?v=yafYSW_Q_E4

We Hate Toronto – Classic Rock 101 – Twisted Tunes

#59 Joe2.0 on 02.21.17 at 8:21 pm

DELETED

#60 'Pocketing the biggest tsx-free capital gains ...' on 02.21.17 at 8:22 pm

Sorry , not selling

As it turns out , looks like it’s the renters that will end up screwed . Hoping …perhaps even praying ..the housing market crashes . Fast forward 5 yrs and they are still talking the same talk , feels like 2012…:)

#61 Matt G on 02.21.17 at 8:22 pm

Garth, can you elaborate on why the
‘return of capital, the income is non-reportable’? I thought that if somebody had 1.2 million in a non-registered account that they would be paying capital tax gains at 50% when they take money out?

Thanks for clearing this up

#62 aa3 on 02.21.17 at 8:27 pm

$350,000 seems fairly reasonable for a full time anesthesiologist in Toronto. Considering the length of time in school with no earnings, lack of any benefits or long term guarantees.

#63 For those about to flop... on 02.21.17 at 8:31 pm

Some people seem confused as to what areas in Greater Vancouver are still doing well and which are suffering…

M42BC

City and Price Growth
#1
Pitt Meadows
28.2%

#2
North Vancouver
7.5%

#3
Maple Ridge
2.4%

#4
Richmond
0.8%

#5
Coquitlam
-0.5%

#6
Port Moody
-0.6%

#7
Burnaby
-2.0%

#8
Vancouver
-7.9%

#9
Port Coquitlam
-8.0%

#10
Delta
-8.2%

#11
Langley
-8.5%

#12
West Vancouver
-9.8%

#13
New Westminster
-9.9%

#14
White Rock
-10.8%

#15
Surrey
-11.5%

The number shows the change in the average sold price.
Note: +/- change calculated year-over-year

#64 Harry Butt on 02.21.17 at 8:31 pm

No fixed address: How I became a 32-year-old couch surfer

https://ca.news.yahoo.com/no-fixed-address-became-32-100000805.html

#65 cramar on 02.21.17 at 8:34 pm

Congratulations Cheryl. Smart decisions. But if moving to Halifax floats your boat, so be it. Too wet, windy, cold, and far too much snow for me! I like it where it is warm and housing is also cheap. Prediction here is for 19 degrees and sunny tomorrow. We will see. I’d rather be in the 2nd warmest spot in Canada (after southern BC), with 1/10 the housing cost! No brainer. Life is good at the 42nd parallel.

#66 bring_it_on on 02.21.17 at 8:40 pm

I understand the desire to move to a medium-sized city that has some amenities, i.e. the ocean, boating, good restaurants. Halifax would be very high on my list, and have visited many times. It is not over-run with a huge
in-flux of people, does not have problems with HAM bidding houses to the stratosphere, and other ills that have befallen Vancouver. My wife and I had a chance to get jobs there in 2004, and still kick ourselves that we did not take it… afraid of the change…. I fully expect we will do a similar exit out of this city when we retire in less than a decade….

#67 Walter Safety on 02.21.17 at 8:55 pm

My mom was walking with my MD specialist cousin last summer when mom met a nurse friend who explained with overtime she made 130k. Later my MD cousin said she should have been a nurse.
I found my cousins numbers online , with office and staff of 5 , -the nurse I’m sure has a higher hourly rate.
You can’t do surgery without disclosure , you can’t have disclosure if the patient doesn’t understand the language so staff have to schedule a grandchild in with grandma from Delhi.
That’s just one example for clueless people who don’t understand gross and net income.
Btw the Rate my Doctor site shows she is a outstanding doctor from the patient point of view. Caring costs .
If you subsidize something you get more of it that alone will tell you that it is not timely caring treatment that is being subsidized in Canada.

#68 Alex on 02.21.17 at 8:56 pm

#7 dontcallmeshirley

“True enough, but allocation as ROC reduces their cost base, which sets up a larger capital gain on disposition?”

I would think this depends on how you blend it out as ROC vs. capital gains + dividends. Obviously if you took 100% ROC it would cause a larger tax bill down the line, but you’d never do that.

You’d at least take capital gains and dividends up to the basic personal amount (for two people) plus whatever deductions you have available. When you consider that the first 45k (each) is taxed at a fairly low rate, you can blend down the ROC even more and still have a very low average income tax rate.

Besides that, if we’re talking about retirement, you can probably draw down capital slowly enough that by the time you run out of it, it’s a moot point anyway. Any way you slice it, you can get away with paying a pittance in taxes.

Of course, I’m an engineer, not a finance guy, so someone correct me if I’m wrong here.

You are wrong. — Garth

#69 Wrk.dover on 02.21.17 at 9:05 pm

Plumbers expensive? When I was building my house, I picked up the Sunset Book Of Plumbing on a revolving rack at the drug store, took it home and plumbed my house with it as my sole reference…decades before the internet.

Weeks later a friend, also building asked if I had a plumber referral, I gave him the two minute soldering lesson and sent him home with the book.

He returned the book in six days, with his house then fully plumbed from the roof stack to the septic and well hookups.

1981 23% interest rates made us do things like this, but million dollar price tags don’t motivate do it your selfers back to the country much at all.

#70 MF on 02.21.17 at 9:07 pm

#62 aa3 on 02.21.17 at 8:27 pm

Oh please.

Tons of people with PHD’s working at starbucks.

Time in school has not meant anything since 1980. Nobody cares.

Try again.

MF

#71 @Sleepy Doc last post yesterday on 02.21.17 at 9:09 pm

About the doc that was featured yesterday;

The last comment yesterday from the doc says that she went to school for 7 years paid and then got paid an average wage for 5 years of further training. Now doc, do you really believe that you’re worth 600K and do you acknowledge that there is a shortage of doctors because true profession itself tries to restrict supply?

And you wrote:

“Hope that fills in the missing pieces. And don’t worry, if you happen to need an emergency c-section to save your baby’s life I won’t give you a Walmart anesthetic or steal from your wallet while you’re sleeping.”

Does this imply that poor people steal? Less ethics? I’d like to debate that one.

#72 joe socks on 02.21.17 at 9:18 pm

sell the house in GTA and move to Halifax?

why not just move to Negril? have you seen the beach?
you guys are talking about 12 degrees.. I just got back from 31 degrees and a whole lot of chicken and curried goat.
the water wont make you sick like mex or Dominican. and theres always nice people that can sell you ganj and lobster.

by the way.. it’s not called a bbq.. its called a jerk pan

#73 rainclouds on 02.21.17 at 9:19 pm

#55

Drove from Nanaimo to Comox last weekend. White all the way. 2ft in Parksville. Buddy needed a bobcat to clear a small driveway. Took an hour. Trees down everywhere. A mess.

Question: why does everyone on the peoples republic of Vancouver island work under the table …………..but vote NDP

The upside? Pod of killer whales hunting at Bowen island on the way home.Almost made me forget how much the ferry cost……

#74 Fearful Renter on 02.21.17 at 9:20 pm

I think this blog makes me more fearful than confident. Albeit more informed, which feels less empowering since I’m a late 30s family of 3 who rents in Vancity.

Since I moved here I’ve kept renting (with confidence for the past 5 years reading this blog) because I thought I was in a better position.

Now I could’ve bought in and at least doubled my equity on a condo.

However, now I’m nearly doubling my rent.

I’m paying home ownership prices to rent a crap hole in Vandelusional.

$1900 for a subterranean basement unit. Yuck.

So we’re moving to GTA next month (which is gearing up to be as ugly in a few years).

I fear I need to buy in there as if I don’t, then there TOO we’ll miss the boat and be spending 2K on a crap rental which keeps going up and up.

Depressing.

#75 bdwy sktrn on 02.21.17 at 9:29 pm

new listing
2068 GRANT STREET, Vancouver, British Columbia
$1,899,000
https://www.realtor.ca/Residential/Single-Family/17826090/2068-GRANT-STREET-Vancouver-British-Columbia-V5L2Z3
———————–
good street – standard lot – east van (bad part of town) – decent/nice old house.

i know this couple and their dog. he’s been there for a long time.

the last two (single storey) local sales were 1.7 and 1.5.

this is a two storey.
these never broke the 2m mark at the highs. still not to far off eh?

#76 Envious Renter on 02.21.17 at 9:32 pm

Great story, but in order to achieve this, C&D had to have their house in the first place. Today, people who are renting, and never owned, are squeezed both ways: rents are getting high such that there isn’t enough left for retirement savings, and by never owning there will be no monster tax-free windfall later in life. And rents will surely get higher as prices get higher and more people need to rent, and even more so when rates go up so the landlord need to cover a larger mortgage payment. In the end, as a renter, no matter what happens in the market I cover the cost of the landlord.
I don’t feel like a second class citizen at all, but it is frustrating to live in a place where I need to always tell the kids why we can’t have pets, or put new lights in, or take the carpet out (or put one in) etc etc. Not to mention being forced to move out of a house your kids grew to love. Renting is good freedom, at the times in your life when freedom is what you seek. But renting is also having no solid roots, and at some periods in life (having young kids) roots is what you need.
I’m happy for C&D, and jealous of a future I doubt I can ever have.

#77 bdwy sktrn on 02.21.17 at 9:37 pm

. You are not special, just provincial. — Garth
——————————
NS is provincial.

BC is a crown jewel.

#78 liquidincalgary on 02.21.17 at 9:38 pm

@ not yet on 02.21.17 at 7:00 pm
why not sell your much sought after house with a clause
in the agreement that it be rented back to you at some
pittance of an amount until you no longer want or need the residence.

======================================

why go through the PITA of a Reverse Mortgage?

#79 bdwy sktrn on 02.21.17 at 9:39 pm

and if it really gets up to +12 in lovely NS every day for the next 3 weeks the 5′ of new snow might just melt away!

meanwhile we are golfing.

How can so many people miss the point? — Garth

#80 Deano on 02.21.17 at 9:44 pm

Hey all, we have a great country here. Our weather from coast to coast is generally not that great in the winter if you don’t like rain, cold, and snow. If you are happy where you are great, if not, move. I’m glad to hear that they took their windfall and moved to a place that allows them to retire comfortably. Why slam the place they moved to? Their son is attending university there, who knows he may end up working in Halifax when he graduates. It appears all good for them, excellent. I live not too far from them, all in all not a bad spot in which to live. However, it’s all about family. My son and granddaughter live in Alberta. I may decide to move there to be near them. Woo scary, it’s colder there generally than NS. Not a problem, Arizona and southern Cal are a few hours away when I need to warm up a spell. By the way I used to live in Tsawwassen, BC many years ago so I know it is a little warmer than NS in the winter, even Nanaimo is too. But that place was not for me…family was not there..
Let’s compare Nanaimo for the next 5 days.
https://weather.gc.ca/city/pages/bc-20_metric_e.html
Now Halifax:
https://weather.gc.ca/city/pages/ns-19_metric_e.html
Not a big difference is there, of course it’s only a five day sampling.
I have not been to Naniamo, but one day soon (summer of course) I hope to pass through it on a bicycle trip I plan to take. Victoria – Naniamo – Port Hardy – Prince Rupert – Terrace – Prince George – Jasper – Banff – Calgary. Should be epic.

#81 slippery cricket on 02.21.17 at 9:49 pm

man…wish I had a house to sell in T.O.That would be a no brainer to sell and move. So many great places to live. Absolutely N.S. would be on the list.

#82 For those about to flop.. on 02.21.17 at 9:50 pm

WULLY ,when I want to make sure Trackie is giving you the right advice I watch an episode of Gold Rush.

If this correction keeps going in Vancouver some of these homeowners are going to need a dozer for the Pink Snow.

I have been so busy looking at all the potential carnage I forgot to thank Freedom and LP for their kind messages the other day.

Thanks guys…

M42BC

M42BC

#83 cjones on 02.21.17 at 10:04 pm

An interesting perspective:
http://wolfstreet.com/2017/02/20/why-toronto-and-other-cities-inflate-housing-bubbles-to-the-bitter-end/

#84 data on 02.21.17 at 10:07 pm

The whole story is based on someone buying a house and making a boat load of cash in a blog post telling people to stay away from buying houses! Good luck with that Garth.

Buying now in the bubble markets is nuts. Selling now is genius. What part of that don’t you understand? — Garth

#85 Baa on 02.21.17 at 10:08 pm

I too would really like to understand it better ‘… they expect to average 6% a year after all fees, for an income of $6,000 a month. And when it’s paid out to them largely as return of capital, the income is non-reportable,…’. It’s the mechanics of how setting it up. Please, where can I learn about this?

I have explained it often. Get an advisor. — Garth

#86 Frank Blood on 02.21.17 at 10:14 pm

Re #29 Smoking man. “Canada needs an island in the Caribbean where good dogs go to die. That will put a shit load of housing inventory on the market as boomers will run away in droves for sunshine and be ride of the lonny left milinabrats”
I agree… Resurrect the Turks and Caicos bill to join Canada. If not organize a coup and take it over.

#87 Ellen paczkowski on 02.21.17 at 10:17 pm

Was all over town today and Nanaimo didn’t get above +8. The last of the snowbanks are melting. Tried to go for a hike yesterday at the base of the Mtns, near town, but too much snow. Garth is right.
Spent three weeks in January in PEI a few years ago – weather was nicer than this January in Nanaimo. And two weeks in Victoria last July and the temp never got over 21. Whitehorse was warmer.
So get over the weather. As for not moving because they’ll be leaving their friends behind . .. don’t you think they could make new friends? Nova Scotians are the friendliest people in Canada (next to Nanaimo residents, of course).

#88 Canada leading the free world on 02.21.17 at 10:26 pm

According to New York Times columnist, who won two Pulitzers.

https://www.nytimes.com/2017/02/04/opinion/sunday/canada-leading-the-free-world.html-world.html

#89 Uncle Jim on 02.21.17 at 10:28 pm

Sold in Hamilton, paid cash in Welland.
Sure is nice not having to worry about keeping my job, and having time for the other things in life.

#90 WUL on 02.21.17 at 10:28 pm

FLOP:

IMHO the advice provided here by IHCTD9 should be taken to the bank and my hardscrabble retirement will be based upon it. Cash out of YYC and head to the boondocks. Self reliance.

When my Granny wanted to express contempt and disdain for a man, she would say “He cannot hit the same spot twice with an axe.”

I can and I can hand sharpen the axe beforehand. My failing eyesight has dampened my marksmanship with a rifle however.

#91 Paul on 02.21.17 at 10:30 pm

#83 Baa
Get an advisor.

Sounds like a relestate agent after telling his relatives how houses sell for the umpteenth time.
Go find an agent !!

#92 VIT on 02.21.17 at 10:37 pm

Its hard to sell house in Toronto because prices grow 20% a year so if I sell today and rent for a year I have to pay $200000 more for the same house year later . Thats only thing that stops me from selling . Its hard to catch a top or bottom in a stock market , but usually before market tops we have a parabolic moves 30-50%. I remember In Orlando FL 2007-2008 prices jumped 40% in a single year . Same happened in Vancouver last spring . So 15-20% increase in GTA doesn’t make it as a top . So patiently waiting .

Van prices did not increase 40% in a year. You will know the peak when you see it in the rear view. Good luck then. Bulls make money. Bears do, too. Pigs get slaughtered. — Garth

#93 Al on 02.21.17 at 10:37 pm

“#27 For those about to flop

I put this one up the other day for the daytime crew, but I will put it up again for the nighttime crew since a couple of people yesterday were discussing how much population affects inventions and innovation

America is the world leader with 3 million patents in the last forty years.

The state of Pennsylvania has had the same amount of patents in the last 40 years as Canada

124 thousand…

M42BC

https://howmuch.net

Those are US patents only. This is the source material: https://www.uspto.gov/web/offices/ac/ido/oeip/taf/cst_all.htm

Not surprising that a disproportionate number of patents issued by the US patent office are from….. the USA! This reference is kinda useless for drawing the conclusion that USA is a WORLD innovation leader. All countries have their own patent registration system. These millions of patents registered in patent jurisdictions other than the USA throughout the globe are unaccounted for in the referenced article.

#94 gwcanuck on 02.21.17 at 10:50 pm

A blog post explaining ROC would cut the comment volume down by about 20% tonight.

#95 aa3 on 02.21.17 at 11:06 pm

On why Vancouver Island votes NDP.. it is because virtually everyone in a middle class or better job in the region, works for the government.

At one time there was significant private industry on Vancouver Island, involving fishing, mining, forestry. In their day those industries paid good money, lots of jobs, full benefits, opportunities for people to create their own businesses starting as contractors.

Today those industries still exist in the region, but the products are cheap commodities competing against countries like Gabon and Burma, and machinery has mainly replaced the workers.

What is left is government jobs. Out of the 20 largest employers in the Victoria metro, 19 are government. Of the 10 largest private employers in the region, 9 are minimum wage retail corporations.

#96 Bottoms_Up on 02.21.17 at 11:28 pm

#74 Fearful Renter on 02.21.17 at 9:20 pm
————————–::
Too late, today you will get crap in the GTA for $1900:

https://www.google.ca/amp/www.cbc.ca/amp/1.3953905

#97 IHCTD9 on 02.21.17 at 11:39 pm

#76 Envious Renter on 02.21.17 at 9:32 pm
—-

Move out of the city to small town outside commuting radius. You and your S.O. go out and get any job that pays at least minimum wage. Go to bank and get approved. Go buy house.

If you have not done this, that’s because there is a reason to stay in the big city that trumps your desire for home ownership.

You have options – choose.

#98 Powder_hound86 on 02.21.17 at 11:39 pm

Funny Garth is against timing markets, except for real estate. That one he thinks he has a crystal ball on.

At least he acknowledged some of the realities of renting though. You often times have to give up your dog if you want to rent near your job. The real culprit is cheap money

#99 theDood on 02.21.17 at 11:50 pm

Don’t understand anyone who’d sit on a windfall property with the prospect of pocketing 7 figures because they’re “scared” they won’t be able to find a place to live. Why would anyone consider living in Canada with a couple mil in your pocket? There’s a big beautiful world out there with lots of places to live! Grab some kahunas and take the plunge – Thailand, Malaysia, Panama, Jamaica, Cyprus, Portugal, Spain, Malta, Italy……..shall I go on..?

What’s the obsession with living here anyway? We over pay for everything, have sh_tty weather most of the year, are taxed into oblivion (for what? I couldn’t tell you). Way, way, way, over-rated if you ask me.

Sell it, park it safely, and take a “rest of your life” holiday. You can rent a nice 2 bedroom bungalow in Hua-Hin with pool, marble floors, outdoor kitchen w/built in bbq, sunshine all year round, maid service twice weekly for cheap……oh, and if you miss your family, fly them out two or three times a year for a kick-ass vacation! You could see hot-dogs on the beach if you get bored!

#100 IHCTD9 on 02.22.17 at 12:07 am

Hey WUL:

#117 IHCTD9 on 02.21.17 at 11:02 am

In case you missed it :)

#101 Foreign Capital In BC on 02.22.17 at 12:13 am

Uh oh VREU, it looks like you will have to eat crow again.

I have repeatedly pointed out that foreign capital has targeted Victoria and the surrounding communities.

You liked to cite the 0.68% foreign buyers stat of 2015 saying there is no influence – while I point out that foreign buyers are now over 4.7% – a seven fold increase in 2016.

And guess what happened to prices in the economically stagnant government town – prices up 20% in one year.

Gee, no correlation right? I mean the Victoria economy just just be booming like Fort Mac a few years ago, and everyone just found out about those supercool things called low interest rates right?

Well, even the Finance Minister has noted that foreign capital is influencing the Victoria market and the provincial government is ‘watching’. That assessment is on the data they are now keeping – not some realtor dodgy number.

Checkmate VREU….don’t bring up your drivel about a collapse around the corner again.

Check mate…

#102 Squish on 02.22.17 at 12:14 am

Problem is, everyone I know buying in now (or in the last couple of years) thinks this is exactly what’s going to happen for them, even though they are dramatically overpaying (major understatement).

Circumstances are bizarre and abnormal these days. Anyone cashing out right now, is -obviously- cashing out at the expense of the greater fool who’s buying. It’s a somewhat generational transfer of wealth, and I know a lot of people who will pay dearly for buying into this dream at the wrong time. I’m happy for these two and their comfortable retirement, but I’m afraid for the buyers who made it possible.

#103 IHCTD9 on 02.22.17 at 12:18 am

#82 For those about to flop.. on 02.21.17 at 9:50 pm

If this correction keeps going in Vancouver some of these homeowners are going to need a dozer for the Pink Snow.
——-

Hey Flop, I do pink snow. $50.00/hr CASH.

Maybe we can work out a little commission deal? You direct me to the fading house flips, I’ll take care of the rest.

If WUL can get his old man’s TD-6 going we might have enough on the go to start influencing policy out your way.

#104 Self Directed on 02.22.17 at 12:20 am

Ronaldo and dosouth…. you are way too sensitive about Nanaimo comments and apparently allergic to snow. You realize you live in Canada, right? It snows everywhere in Canada.

Also, there are no comparable houses in Nanaimo under 400k.

#105 Craven Moorehead on 02.22.17 at 12:21 am

Sold my house in the GTA 3 yrs ago, moved to Niagara region, bought a new bungalow for 220k, retired early. Every second day while walking the dog I meet people who have relocated from the GTA, now house prices here are going up as more and more GTAers see the value.
Still close to family in 905/416, Daily GO service by 2022, cheap gas in Buffalo, wineries, cheap golfing, fruit stands, no traffic jams, good entertainent, good restaurants, NHL hockey without breaking the bank, and the beauty of Niagara Falls minutes away, my quality of life has improved dramatically

#106 solo604 on 02.22.17 at 12:26 am

What’s with all these anecdotal posts suggesting that Maritime winters are as mild as the west coast?

Halifax is a beautiful city, but the ave. temp is zero or below for 1/3 of the year. Averages matter, not some cherry-picked day. Because your grandfather smoked till 90 doesn’t prove that cigarettes are good for you.

And yes, you can move into any small town in the middle of nowhere for cheap. But then you’re living in a small town in the middle of nowhere. Good thing they have the internet, because they’re cultural wastelands. And good luck finding decent medical care, especially in an emergency when you need it most. And so on.

The voice of ignorance. — Garth

#107 cd on 02.22.17 at 12:29 am

Your story today is totally my neighbour. She sold her toronto house, moved to south western ontario, where she got a cheap condo and a really expensive car. She’s older and in early retirement. Now all she does all day is watch awful movies and samples the worst things from the baddest restaurants.

#108 Ponzius Pilatus on 02.22.17 at 12:42 am

# 146——————————-
Absolutely, the Canadian health care system with one single prime care provider/the family doctor, combined with the waiting times is a total joke.
It is inferior to any system out there including to the US one, but hey, Canadians are happy (dying) with it,
—————
Completely agree.

#109 Ponzius Pilatus on 02.22.17 at 12:43 am

Garth, a Bowie fan.
Who would have known?

#110 saraya grewal on 02.22.17 at 12:46 am

Comment #88 – Canada leading……
We are a great country, but we are very small (luckily have lots of space) and do not live in close proximity to any countries with refugees (preventing large rapid inflows of people). In addition, we are known as country where you can evade taxes and launder money.
We are a progressive country but we can’t really compare ourselves to other countries especially the United States, since we have such a small population.

#111 Ponzius Pilatus on 02.22.17 at 12:47 am

#16 earthboundmisfit on 02.21.17 at 6:44 pm
Seven months of winter! 365 – 24/7 wind.
—————-
You got it friend.
And the world highest Re prices.
Go figure.

#112 Greg on 02.22.17 at 1:07 am

#18 Scared:

Seems like you’ve built $300,000 of equity, which is more than your goofy friends.

#113 mousey on 02.22.17 at 1:09 am

Dear Scared,
So you are 30 with a kid on the way, no house and $300g’s in the bank. Ok, you can stop worrying right now. Your welcome. At 30, I had just graduated from law school, zero dollars in the bank, just shacked up with the boyfriend, no kids. Fast forward 27 years and though not “rich” we are comfortable, hubby (same boyfriend) retired, the only kid in university, 3 cats and generally ok. Still practicing and hubby adjusting to housewife duties. I think you are ahead of the game so relax and take the wife out for dinner already.

#114 I Don't Know on 02.22.17 at 1:16 am

“For those who try not to think with their pants, the next step is cashing out of an asset class that is insane, unsustainable and, yes, dangerous.” – Garth

————————————————————–

Garth, you’ve been saying this for years. You certainly are consistent.

And correct. — Garth

#115 Willdaman on 02.22.17 at 1:35 am

#85 Baa
I too would really like to understand it better ‘… they expect to average 6% a year after all fees, for an income of $6,000 a month. And when it’s paid out to them largely as return of capital, the income is non-reportable,…’. It’s the mechanics of how setting it up. Please, where can I learn about this?

I have explained it often. Get an advisor. — Garth

————–

Not sure this has actually been spelled out anywhere (advisors don’t want to give away all the secret sauce!)
but one way these things are set up is to set up the balanced portfolio but keep a chunk in cash. Pay out distributions, interest, and dividends as they roll in, then top up these outflows to the desired 6% level by drawing from the cash pool (this is the return of capital part for which there is zero tax). Replenish the cash pool by selling the growth stuff at opportune times.

This is geared towards those that need the monthly income with less concern about keeping principal intact, but ideally the growth part of the portfolio would be sufficient to keep the cash portion topped up.

I’m not an advisor, this is based on random stuff I like to read.

#116 Chaddywack on 02.22.17 at 2:01 am

Cash Flow Negative.

Here’s a beauty in East Van….sold for $1.2 Mil in November. Now it’s listed for rent at $3,800 a month. With a 20% downpayment the mortgage would be a lot higher than that and the guy won’t get $3,800 a month in that hood…….

I don’t get it……I guess a flood of rental properties is great in Vancouver though.

https://vancouver.craigslist.ca/van/apa/6008549572.html

#117 Alex on 02.22.17 at 7:04 am

what’s that rule of 90 ?

seriously, having 90% of your ur net worth in personal real state is plain ludicrous.

my ideal % would be max 10%-15% on retirement day.

a house is not liquid, is a huge pain when divorce happens, needs to be taken care of, etc.

reality is that a lot of people who are owning a house in Canada at the moment should have been renting and not fall for the I need to own one because my friends, family or whatever own one.

#118 T. on 02.22.17 at 7:59 am

***How can so many people miss the point? — Garth***

Not only that, how can so many people have this mistaken view about Nova Scotia weather? I grew up in NS, now live in Ontario, and would much prefer the shorter winter and milder temperature on the coast instead of the minus 20-30. There’s the occasional big snow dump, but it doesn’t last, and it’s no big deal.

#119 OMERS on 02.22.17 at 8:00 am

What she just did sell high and move somewhere on a coast with no mortgage, $6000 coming in through investments and 1.2 mil in the bank…..Ya that’s my dream right there….I can picture it!

#120 OMERS on 02.22.17 at 8:08 am

#3 LuLu- Exactly life is full of changes….My Philosophy is…The 3 C’s of Life….Choice, Chance and Change…..You Must Make A Choice To Take A Chance Or Your Life Will Never Change!!!

#121 Reply to #76 Envious Renter on 02.22.17 at 8:10 am

Make sure that you’re not paying more rent than you have to. British Columbia, Manitoba, Prince Edward Island, and, to some extent, Ontario have rent controls, while many other provinces have restrictions on frequency and/or notification of rent increases. Check out your province’s residential tenancy act.

#122 crowdedelevatorfartz on 02.22.17 at 8:23 am

@#79 bdwy sktrn

“meanwhile we are golfing…..”
********************************************

Really?

I seem to have noticed all the golf courses were closed for most of Dec and Jan in the GVRD due to ….snow and then that pesky snow storm in Feb that was the icing on the cake.
After the torrential tee time cancelling rain last week I popped into the pro shop/driving range to see how things were going.
The city staff were VERY happy to be back at work.

#123 MF on 02.22.17 at 8:27 am

#121 Reply to #76 Envious Renter on 02.22.17 at 8:10 am

Most of it only applies to dedicated rental buildings built before 1991 here in Ontario.

If I am correct, the Ontario government at the time responded to the previous warnings of rent increases/housing bubble by instituting the rent controls. What happened was the developers stopped buildings rental buildings and voila now we have our condo bubble here in the GTA.

Majority of us renting these condos have zero recourse. Hence the desire to buy and not have to answer to some amateur clown who put 5% down on an overpriced shoe box.

MF

#124 crowdedelevatorfartz on 02.22.17 at 8:29 am

I’ve watched the weather temps across Canada for years and Halifax and Vancouver have very similar temps with rain….something about the ocean I suspect.
Halifax seems to get about 5 major snow dumps a winter( kinda like Van this year?). The winters there have been definitely getting milder ….but every 10 years or so its “pay back” time and they get hammered with snow.
Small price for the location, the price, the people and the lack of traffic.

#125 MF on 02.22.17 at 8:45 am

#108 Ponzius Pilatus on 02.22.17 at 12:42 am

In all honesty, every time I have used the health care system I have received good treatment. Waiting times exist yes, but that’s because of triage (in general).

I’m only 33 so I have not really used it for anything too serious and I hope I don’t have to until I am 90 years old.

#102 Squish on 02.22.17 at 12:14 am

Huge transfer of wealth, but what are we supposed to do? If we rent forever, the rent takes up so much of our disposable income we never get a chance to save for retirement/investing. Trust me when I say the disdain of having a landlord is real. I know I feel it.

MF

#126 T. on 02.22.17 at 8:47 am

***Hey all, we have a great country here. Our weather from coast to coast is generally not that great in the winter if you don’t like rain, cold, and snow. If you are happy where you are great, if not, move. I’m glad to hear that they took their windfall and moved to a place that allows them to retire comfortably***

Seriously, what a relief of a comment, great attitude, you can always tell someone who’s content when they have the ability to be happy for other people.

Canadians squabbling over which part of this tundra is the “best” is absurd. Funny memory I have: when we first moved to Ontario, from NS, we weren’t that happy about having to move, and we inadvertently offended some new friends (which I didn’t realize until afterwards) with our talk of how much *obviously* better it was where we came from. Nowadays I realize there’s something good about every place.

#127 MF on 02.22.17 at 8:52 am

#99 theDood on 02.21.17 at 11:50 pm

Because everyone knows those countries are living a lie. Sure you will be a millionaire and live like a king for a few years in a place like Thailand, but during he next coup d’etat watch the locals who make 3 cents an hour come for your naive Canadian head that’s in the sand. And if not that, then the next natural disaster will provide too much excitement, forcing you to run back to boring, bland, safe in Canada.

The European countries you mention are on the verge of socialist collapse in the failed EU and are a ticking time bomb. I work with tons of Italians who fled the garbage that is the EU.

Our taxes are high but everyone the western world complains about their taxes being high. The price of stability?

MF

#128 traderJim on 02.22.17 at 9:56 am

#99 the Dood and #127 MF

MF there is a little bit of truth to what you say, most of the cheap countries to live in are cheap because they have problems.

But it’s not nearly as bad as you suggest.

The idea that you could not see a coup coming or that the next day all foreignors’ heads would be on the chopping block is pretty hyperbolic.

Any visitor could easily get to an airport (money talks) and get out well before real trouble.

BTW, when was the last coup in Italy? Or any of the countries mentioned for that matter?

When I have lived in foreign countries the locals often are bewildered as they would love to switch places and go to live and work in Canada.

But the essential distinction here is that we expats are talking about having a $6,000/month income without having to work.

And we are just visiting, renting, not tied down.

The idea that it’s too scary to travel or live in other countries when you have the means to do so, and do it really well, and beat the Canadian winter, is pretty wussy.

I do think that it’s very smart advice to not BUY in any third world country. Don’t get tied down. Because there is truth to the idea that these countries generally have socialist governments that make any kind of investment a really, really bad idea.

But it does lead to some adventurous places to live well, as long as you don’t have to work or try to run a business. It’s for retired folks only (or backpackers).

#129 Tony on 02.22.17 at 10:39 am

Re: #20 Fortuna on 02.21.17 at 6:52 pm

Exactly 6 percent is a pipedream. If 6 percent were so simple the entire debt of the world could be paid off in a short time with hundreds of trillions of dollars surplus a few years after that. I just laugh when I read something like that. Fact is for every winner there’s a loser and in a zero sum economy just equaling inflation on a yearly return over time would be a miracle. That in a nutshell is why the world is so far in debt… hucksters promising the uneducated pie in the sky returns on their money.

Average return on a balanced, diversified portfolio over last seven years: 6.5%. Last year, 8.5%. Facts are facts. — Garth

#130 DodgedBullet on 02.22.17 at 10:47 am

Hey Garth,

did you catch this opinion?

*The Real Reason You Cant Afford a Home.*

“The amount of global capital — or “financial assets” — available to invest is rising much more rapidly than actual economic growth. Five years later, there’s so much capital available that investors don’t know what to do with it all. They’re pouring it into investments like real estate. The result is sky-high prices”

https://thetyee.ca/Opinion/2017/02/20/Real-Reason-Cannot-Afford-Home/

DB.

#131 Pablo ElDiablo on 02.22.17 at 10:52 am

I’ve never understood the lure of the GTA. Vancouver with the coastline and mountains I get. Almost any major city in the US with its robust economy, I get.

Toronto with it’s crappy weather and frankly 2nd rate economy – not so much. But the way I hear my neighbors talk it up is close to delusional.

#132 data on 02.22.17 at 10:57 am

The whole story is based on someone buying a house and making a boat load of cash in a blog post telling people to stay away from buying houses! Good luck with that Garth.

Buying now in the bubble markets is nuts. Selling now is genius. What part of that don’t you understand? — Garth

Have we not heard that before on the blog for sometime? – Genius to sell? The fact of the matter is home ownership density is very high, so plenty of folks are making cash…if they had not done so (become a homeowner where it may have seemed genius to sell – btw, this is not stocks) then what would they have today? The avg person maynot be able to affod the avg home, however with low rates and no margin calls, they can and will continue to do so..it’s hard to watch your friends get rich and piss away rent…that is what you are missing and folks simply cannot get that with stocks.

1) Borrow money, Buy House, Live in it, No Margin Call (very very low volatility)
2) Borrow money , Buy Stocks, Pay Rent, Margin Call (market volatility > home volatility)

What don’t you get about those two choices above Garth? That’ all you need to focus on , I understand you are telling people to go from 1 to 2, but you NEED 1 to go 2. At the moment, people are going from 2 to 1

#133 aa3 on 02.22.17 at 11:02 am

The simplest plans are usually the best. Sell your suburban house in big city Canada, that you thought was a normal house, but it turns out is a mansion. Take some of the proceeds and buy in small town Canada, ideally near the border.

Then when the freezing cold and snow comes, head south to the sun and sand states in flyover country.

#134 IHCTD9 on 02.22.17 at 11:12 am

I know a talented guy doing machine work out of his 30’x30′ garage 50 feet from his house. 1 CNC VBM, and 1 CNC lathe, plus the usual assortment of manual mills and drill presses etc. Guy makes 100-150K a year, side deals are off the charts, might average a couple days work per week. Parts can and do go via courier – he could move to the Yukon and still do this work and essentially make the same coin. His wife has a decent government job, I’d guess household income on a good year would be 230K. Everything is paid for, he’s about 55.

Guy has a beautiful house, built himself on 80 acres 15 minutes north of the 401. probably 30-40 acres worth of mature hardwood forest. It’s just bloody beautiful up there. He’s got a brand new compact 4×4 tractor to help with forest and land maintenance as well as firewood.

Kids – think about your options…

#135 Ole Doberman on 02.22.17 at 11:14 am

Looks like RE in Norway getting boost from capital flows – wonder if Toronto is experiencing the same, at least to an extent:

https://www.armstrongeconomics.com/international-news/europes-current-economy/norway-insane-property-boom-or-capital-flight-from-eurozone/

Calgary might be too, would explain the explosion in rental properties but not a big drop off in RE costs to buy

#136 James on 02.22.17 at 11:17 am

#34 Deplorable branch davidian on 02.21.17 at 7:26 pm

#29 Smoking Man on 02.21.17 at 7:14 pm
Good post Garth.

But Halifax? Seriously?

Canada needs an island in the Caribbean where good dogs go to die. That will put a shit load of housing inventory on the market as boomers will run away in droves for sunshine and be ride of the lonny left milinabrats.

………………………..
How’s your new house in Ecuador? Is the helli pad cool?
________________________________________
Ha Smoking Man never left Cuba, one week vacay, back to Shlong Branch with the rest of the deplorables. He would be eaten alive in Ecuador. Even though it is a fairly safe area to retire he could never assimilate into such a rich culture.

#137 cramar on 02.22.17 at 11:21 am

#124 crowdedelevatorfartz on 02.22.17 at 8:29 am

I’ve watched the weather temps across Canada for years and Halifax and Vancouver have very similar temps with rain….something about the ocean I suspect.
Halifax seems to get about 5 major snow dumps a winter( kinda like Van this year?). The winters there have been definitely getting milder ….but every 10 years or so its “pay back” time and they get hammered with snow.
Small price for the location, the price, the people and the lack of traffic.

————–

Location and people are subjective. Price, traffic, and snow are measurable and quantifiable.

If someone prefers Naniamo over Halifax (or vice versa) for subjective reasons that is fine. But some things are measurable.

I chose to live in a place where instead of 5 major dumps a year, there is a major dump every 5 years! But it depends on how you define it. Is “major” 10 cm or 40, or . . .? The recent dump for Halifax might be every 10-20 years here, if ever.

Traffic is not a problem, but I avoid the 10 minute rush hours. Major hospital.

Price is totally quantifiable. A 3-BR brick bungalow with attached garage on a 9000 sq ft lot can still be bought for $200k or under. But this will be the last year for it. Prices are noticeably moving up.

There are advantages to living at the same latitude as Northern California. I’m going biking.

#138 James on 02.22.17 at 11:25 am

Try to stuff thirty years of life into a 700-foot condo in a downtown building full of hipsters, bicycles and pizza odours? No way. And what about the process itself of renting? With the need to cough up a credit score, personal history, rental application and references, they felt like second-class citizens begging for shelter. So demeaning. They made a smart move. The best thing they could have done for sure.
Whats wrong with Halifax? These guys have it made. Stable area to live, their investment will carry them to the end ,plus,plus. Climate, meh its Canada!
Plus they never have to deal with pollution, traffic and the sub par transit system that doesn’t work.
BTW Doesn’t Garth have a property in Lunenburg NS? He must know something that we don’t, whats in your wallet?

#139 Dirty Socks on 02.22.17 at 11:27 am

Today’s blog just rocked!! Awesome on both C&D – I get the apprehension thing – our vision is to sell our home which is currently fully paid off (currently living 1 hour north of Toronto) and relocating to our fair Eastern shores. Though our time horizon is more in the area of 6-12 years as we have a 11 year old daughter who is our priority and we have her private High school already envisioned that is just minutes away from our current residence – once she skips off to University in perusing a career as a veterinarian I think we will get the green light to uproot.

Just dreaming of relocating to NS and wish C&D all the best!! Thanks Garth for doing what you do –

When my cash flow gets to the point of needing a professional, I’ll surely be giving Garth a call! (That’s if the old man is still kicking around)

#140 James on 02.22.17 at 11:30 am

Just googled Garth Tunrer and Lunenburg and there it is.
I’m sold, this town sounds great.

https://www.youtube.com/watch?v=zqQJKj7qzL0

Full disclosure: I was paid nothing for being in that vid. Not even a lobster dinner. Cheapos. — Garth

#141 rainclouds on 02.22.17 at 11:32 am

Cultural diversity, snow shovels, music, Halifax, (note NO coats required in the making of this :-)

https://thetyee.ca/Video/2017/02/20/Bhangra-Snow-Shovelers/

On another note.

If housing did get to a point where it was correctly priced. Would it make sense to keep the capitol in the balanced portfolio, and use the profits every year to pay it off over a few years as opposed to paying it out initially?

#142 Ronaldo on 02.22.17 at 11:42 am

#104 Self Directed on 02.22.17 at 12:20 am

Ronaldo and dosouth…. you are way too sensitive about Nanaimo comments and apparently allergic to snow. You realize you live in Canada, right? It snows everywhere in Canada.

Also, there are no comparable houses in Nanaimo under 400k.
——————————————————————
Allergic to snow? Now that is funny. I was raised on a farm in northern Saskatchewan from the mid 40’s, moved to northern BC late 50’s where temperatures reached into the minus 40’s for days on end and so much snow that many days we were snowed in until the rotary plows arrived to clear snow from the roads. We went to school (2 miles) in caboose or open sleigh. Schools didn’t close when we got 6 inches of snow like they do here in Nanaimo nor when temperatures went to 30 below or more and that was not celsius. Snowbanks on each side of the road up to 8′ high. I’m 70 years old, have been skiing for 60 years. Was a ski jumper in my early years. Retired to Nanaimo 1.5 years ago from the Okanagan having also lived on the north coast where average rainfall was 110 inches per year. Great skiing at Mt. Washington. Not as good as other places like Big White or Silver Star but good enough for me. Allergic to snow? LOL

Actually, you can still get very nice homes in Nanaimo for under $400,000.

#143 When Will They Raise Rates? on 02.22.17 at 11:53 am

MSNBC Anchor: “Our Job” Is To “Control Exactly What People Think”

https://www.youtube.com/watch?v=quU_Tbv96Wk

#fakenews

#144 For those about to flop... on 02.22.17 at 11:54 am

Pink Snow falling in Richmond.

These guys are looking to bail on this flip and hopefully find the next fool to pay their transaction costs for them.

They paid 2.225m for this 89 build in Scorching heat of January 2016.

I bet a lot of people that went nuts on real estate last winter had now wished we had the same amount of snow as this year to put a dampener on their house horniness…

M42BC

4611 Pendlebury Road, Richmond

Dec 1:$2,498,800
Feb 21: $2,388,000
Change: – 110800.00 -4%

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA1WFBDWA==

#145 IHCTD9 on 02.22.17 at 11:58 am

My B.I.L. lives 2 hrs north of the 401 well above #7. He has two seasonal jobs that probably don’t add up to much over 35K per year. He’s not highly educated. He’s about 40. Because he was such a solid employee and all around good guy, one of his fairly wealthy bosses gave him a 2 acre building lot on the edge of a small quintessential northern Ontario lake – for free.

Buddy spent a good chunk of the next 6 years sawing down trees, milling them into timbers, chiseling in the mortise and tenon joints, and assembling all of it into a house.

The timber was free, the equipment borrowed, the labour extensive. But today, he lives in a knockout 1200 sf timber frame “cottage” sitting on the edge of a granite rimmed lake surrounded by spruce and sugar maple. Soaring cathedral ceilings with widows right to the peak. Work progressed as the ability to source or purchase materials was available. It’s still not totally finished, but he’s a good 95% of the way there.

So do the math. He and his new wife work seasonal/semi part-time, and perhaps drag in a paltry 65-70K per year combined. But: no mortgage, waterfront property taxes at $1500.00/yr, free wood heat, DSL is available, no lawn to cut. Anyone driving by would assume they’re pretty well off.

Their accommodations are disproportionately lavish when compared to their paltry income, same goes for their overall standard of living. Lifestyle points are high, costs are very low for same.

Kids, think outside the box…

#146 Damifino on 02.22.17 at 12:00 pm

#125 MF

I’m only 33 so I have not really used it for anything too serious and I hope I don’t have to until I am 90 years old.
——————————————

If you are of average health with no self-destructive habits you should be thinking of 60 as the age where your use of the system will become fairly significant.

The symptoms you sloughed off easily before then begin to develop real ‘staying power’. Maladies that sorted themselves out in days will instead take weeks.

That tough young heart you took for granted all those years will start doing unexpected things. It will scare the hell out of you. In most cases they will be benign signs of age, but they’ll unnerve you nonetheless.

A large piece of a back a molar will crack off with no warning. The crown will be $1000 bucks or more. Here’s a hint: Take impeccable care of your teeth. Floss every day and hit them hard with a proper electric tooth brush every night, no exceptions. Make that your dental plan. Make it so your dental hygienist complements your stellar oral management whenever you visit. You will be very glad you did so the long run.

And don’t take stupid chances with your hips and knees. They are fantastic devices, but once you bung one of them up, they tend of stay that way. Especially after the age of 50. As Kurt Vonnegut once said “Take care of you knees, you’re really going to miss them when they’re gone”.

I’m 66 and have been very lucky in the genetic pool. I am also the furthest thing from a risk taker. Regardless, I feel like I’m walking through a mine field. I have friends with multiple forms of cancer, heart valve issues, pacemakers, balance problems, hearing problems, memory loss, osteoporosis, and… well you get the idea.

The human animal and brain is a marvel to behold but has an ‘arc of robustness’. Congratulations, at 33, you are probably at he top of that arc. I was there once too. I am double your age and still feel pretty damn good most days. But my sincere message to you is to take nothing for granted.

#147 Nuke on 02.22.17 at 12:18 pm

neighbour selling downtown TO TH, 2.1-2.2 million is the going rate. about 500% increase from purchase price around 1990.

#148 Hairhead on 02.22.17 at 12:19 pm

Update: My VCR friends sold their 1.5 blocks west of main 1990 house on a 32′ lot for $2.6mill. Bought a house, 1990 build on a 34′ lot 5feet longer than their previous house, same sq. ft (2500), another bathroom. $1.7mill. Why? Because it was 1.7 km east. That’s all. That’s what East Van does to prices, takes them down about a million.

I asked why he wouldn’t just bank the 1.7 mill and take the $100,000 per year returns. “What?”, he said, “And pay someone else’s mortgage?”

I said, why buy at peak. He snorts, “Real estate will NEVER go down!” And he didn’t want to talk after that.

People is crazy.

#149 IHCTD9 on 02.22.17 at 12:31 pm

#140 James on 02.22.17 at 11:30 am
Just googled Garth Tunrer and Lunenburg and there it is.
I’m sold, this town sounds great.

https://www.youtube.com/watch?v=zqQJKj7qzL0

Full disclosure: I was paid nothing for being in that vid. Not even a lobster dinner. Cheapos. — Garth
______

Nice! Is that long dock not where they keep the Bluenose replica? Been a long time since I was out there. I remember some of the old restored houses acting as B+B’s – beautiful! Some of the other east coast homes were cool as heck. Super old, simple, and built like a bunker to hold up during the nasty storms.

That vid was worth at least 1 complimentary lobster dinner.

#150 Shawn on 02.22.17 at 1:25 pm

Pref shares (CPD, ZPR) on the move! What is this forcasting…? Rising interest rates.

#151 Starbucks on 02.22.17 at 1:26 pm

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#152 ccc on 02.22.17 at 1:45 pm

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#153 Interstellar Star Stuff on 02.22.17 at 1:47 pm

https://www.youtube.com/watch?v=bnKFaAS30X8

I’m selling and moving to one these planets.. stunning discovery!

#154 Rainclouds on 02.22.17 at 2:30 pm

#137 cramer .

Means nothing

Yarmouth NS from a latitude perspective is roughly 1 hour north of the California Oregon Border

Halifax @ 44.6488° N, 63.5752° W is SOUTH of Portland Oregon 45.5231° N, 122.6765° W

#155 Stephen Shaw on 02.22.17 at 2:31 pm

Average return on a balanced, diversified portfolio over last seven years: 6.5%. Last year, 8.5%. Facts are facts. — Garth

Yup but from market lows of 2008-09, ZIRP (not QE) created artificial price discovery.
https://fred.stlouisfed.org/series/EXCSRESNS shows where most QE went and is only now ‘trickling’ out. There is no Trump bump, it’s this vast liquidity.
During the financial crisis the opposite happened, killing the weak sister sub-prime.

Portfolios which are balanced and diversified are just that – holding a broad range of assets over disparate areas, with both growth and fixed income components. Don’t invest if you’re scared. But don’t dis those who have, and are doing well, year after year. — Garth

#156 solo604 on 02.22.17 at 2:56 pm

The voice of ignorance

Just a drive-by ad hominem, really?

I grew up in small towns. Sure the people are friendly, as long as you’re mostly like them, but they tend to be intolerant of difference. Also, I’m looking for more culture than that provided by a Tim Hortons. Has all that changed in small towns because of the internet? If so, great, but it wasn’t my experience.

My mention of Halifax’s ave. temps was from a website showing historical temps. Is it wrong? Or have ave. temps increased in recent decades? If so, great.

I still have older relatives living in small towns, and now that they’re experiencing the medical issues that come with advanced age, they’re having great difficulty getting good medical care. And that has not changed.

I don’t have a problem being wrong. When I get better information, I change my mind. What do you do, sir?

Halifax is not a small town. Google harder. Or get on a plane. — Garth

#157 Centre Wing on 02.22.17 at 3:17 pm

C & D aren’t the only ones doing this. Plenty of other retiring boomers are doing the smart thing and selling their million dollar shacks and coming down to the north shore of Lake Erie and paying cash for a sparkling new $350-400k build. Small town living and easy access to surrounding southern Ontario cities.
Of course, this is contributing to rising prices even in our neck of the woods.

#158 Reasonfirst on 02.22.17 at 3:22 pm

If you can sell a house fast and at a high price, why not look for the rental first and then sell.

#159 boonerator on 02.22.17 at 3:44 pm

Re: #20 Fortuna on 02.21.17 at 6:52 pm

Exactly 6 percent is a pipedream.
————————————————

Really?
If you don’t want to do the work of managing it yourself, RBC and others will give you 4,5 or 6% a year from mutual funds, depending on how much risk you can tolerate.

the MER sucks but if your better half is apprehensive about self-management, it is a small price to pay for a guaranteed monthly payout and peace of mind.

I have the 6.5% one. After the bad year of 2015 on the TSX, the payout dropped .35% or so. Hardly financial armageddon.

#160 Daveyboy on 02.22.17 at 4:41 pm

Good for those two. So many nice places to live in Canada. Being free is what’s most important. No worries, no stress.

#161 Dan on 02.22.17 at 5:01 pm

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#162 acdel on 02.22.17 at 5:01 pm

Dam Garth, this was my plan all along; now the secret is out! Way to go! :)

Good Blog!

#163 Mike in Edm on 02.22.17 at 5:05 pm

C&D’s story is one that amazes me… As in, why don’t more ppl do that?! If I all of a sudden could become a milllionaire, guess what? I sure as heck wouldn’t be living in Toronto, Vancouver, Edmonton, Calgary, etc. Sell and live in some ski resort town, or on a beach in the Caribbean. Yeah you’re kids will see you… Probably even more because now you’re living somewhere they want to visit and not just a suburb.

#164 sorry Toronto on 02.22.17 at 5:06 pm

You’ll have to rent . Or buys miles away and commute .Or buy a condo (ergo a 400 sq foot box ) for $450,000

Ship has sailed .Toronto joins New York, London. …

#165 Dan on 02.22.17 at 5:12 pm

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#166 cramar on 02.22.17 at 5:12 pm

#154 Rainclouds on 02.22.17 at 2:30 pm

#137 cramer .

Means nothing

Yarmouth NS from a latitude perspective is roughly 1 hour north of the California Oregon Border

Halifax @ 44.6488° N, 63.5752° W is SOUTH of Portland Oregon 45.5231° N, 122.6765° W

———————

Means lots if comparing apples to apples.

Calif. border is at 42°.

NS gets a lots of poor weather because it is on routes of the major eastward-moving storms, even though Yarmouth latitude is almost identical to Toronto.

#167 Dan on 02.22.17 at 5:14 pm

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#168 Mike in Edm on 02.22.17 at 5:24 pm

#135 Ole Doberman on 02.22.17 at 11:14 am
Looks like RE in Norway getting boost from capital flows – wonder if Toronto is experiencing the same, at least to an extent:

https://www.armstrongeconomics.com/international-news/europes-current-economy/norway-insane-property-boom-or-capital-flight-from-eurozone/

Calgary might be too, would explain the explosion in rental properties but not a big drop off in RE costs to buy

**********************

There’s a ton of rental properties in Calgary because no one can sell their home at break-even. I have literally dozens of friends that are now landlords. All of them hate it, but would rather rent out their places and even subsidize the renters, and end up with a negative cash flow every month rather than taking a lump-sum loss on the property.

I guess it sort of makes sense financially b/c most people can afford to fork over a few hundred $ per month, but I doubt many could fork over something like $25k. Goes on the same principle of financing a car.

#169 South Etobicoke Trump Campaign Field HQ on 02.22.17 at 5:37 pm

This is a great solution and the retiring class should really follow the couple in this story. It’s a dream to retire in the east, those communities are great and hospitable, and this would also inject much needed capital into those economies.

The GTA is a land of misery and despair where everyone sacrifices SO much, for SO little in return, a veneer of “good living”.

#170 Rentin on 02.23.17 at 1:09 am

It is much warmer in Novascotia than here in Vancouver. Snows much more here too. We had snow for two months this winter. This is typical.

Make sure you tell everyone!!!! I need home buyers to leave Vancouver!!!!

#171 Alice on 02.23.17 at 5:15 pm

@ #17 IHCTD9 on 02.21.17 at 6:46 pm

Same with most cities. Mediocrity is mediocrity across the country.