Parabolic

Spring, 2017. Ah, rutting season. The saps are flowing. Molting and moaning everywhere. Twenty-one degrees in the Big Smoke. Warm zephyrs virtually coast-to-coast. House lust is on the rise along with the temps and the collective anxiety of our leaders. And the next two or three months may prove to be critical times for you and your real estate wealth.

First, we’re entering the horniest time of the year in an already-aroused state – at least in the one remaining puddle of froth in the nation. GTA prices are ridiculous, according to the local realtor stats. In real, on-the-street terms, they’re insane. Raymond told me yesterday about his $540,000 house (bought in 2009) which sold last week for $2.1 million. “Ugly, 1980s subdivision thing with a garage stuck on the front,” he says. “I did nothing to it for years.” Typical. Values have suddenly gone parabolic. A house bought 20 months ago in the northern burbs for $1.7 million was just sold for $2.8 million – by people who ended up sitting across from me, giggling.

“Talk about your greater fool,” Luigi said. “We just met him. And his fool wife.”

This is reminiscent of Vancouver exactly a year ago when, in the final stages of the orgiastic eruption of hormonal and speculative excess, the market went vertical before it croaked. Within months, sales of detached homes were plunging, buyers recoiling from fanciful prices and conditions set up for the coup de grace – the Chinese Dudes tax.

Could the pattern be repeating in the GTA (and now, all of southern Ontario), or is it different there? Silly question. It’s never different. People just believe it to be so, until it isn’t.

Supporting this pathetic blog’s oft-trashed position (do not put all your eggs in the RE basket) is Sun Life chief investment officer Sadiq Adatia who this week told the hated BNN network: “If you look at Vancouver, we’ve already seen the bubble burst there. A lot of people think it’s just the foreign players and that tax that came through, but it actually started before the tax actually got implemented. So, what we’re seeing is probably a further extension of that downturn as result of the foreign tax.”

As for Toronto, same story. Only a matter of time, says Adatia – echoing virtually all major economists. Off a cliff, baby…

“Eventually we are going to see this market kind of stop and then come off a cliff,” he said. “The longer we stay in this run-up, the bigger the downturn is going to be. Toronto for many years had been an under-valued real estate market. The difference is, though, that we’ve moved up so significantly in a short amount of time. And so, what will likely happen is that we’ll start seeing selling pressure down the road, we’ll see sales coming off. Right now demand is still there but demand is slowly coming off.”

What could be the catalyst?

A foreign buyer tax, maybe. While TPTB have so far dismissed the idea (along with the realtors, of course) it keeps bubbling up, with widespread support among Toronto city council members. This is still a definite possibility after the shocking price appreciation of late. Also possible are further actions from Ottawa, driven by Wild Bill Morneau (who lives in a $5 million house just off Bayview), the man who last October tried to slow down the train with a series of reforms, including the Moister Stress Test. Apparently, they didn’t work.

Then we have the Fed to worry about. While another rate hike in a couple of weeks at the March meeting is still a long shot, the odds of central bank action in the US are growing weekly. Count on at least two increases in 2017, and potentially three. Then three more in 2018. And, yes, the Bank of Canada will be unable to resist for too long. There’s no viable economic scenario now being floated in which the cost of money does not rise, for which you can heap thanks on the shoulders of the new Inflation President. His pro-business, pro-growth, trade-restricting policies are guaranteed to increase wages, prices, the US$, markets and rates.

Finally, real estate rutters should also be a tad worried about our own glorious leader. The Trudeau assault on rich people – already manifested in a special tax bracket – has apparently just started. By upping capital gains, diddling with dividends and bringing in a corporation-bashing Doctor Tax, Ottawa is ramming it to the very people who are out there buying $2-5 million houses, and keeping the market juices flowing.

Or, maybe it’s just a subtle combination of some of these factors, combined with the fact nervous bankers have started to pull back credit in a country with $2 trillion in outstanding personal debt, stagnant incomes, and more house porn than the rest of the planet combined.

We won’t know until it’s happened. But I don’t think Luigi cares. There’s no wiping the smile off that dude’s face.

182 comments ↓

#1 Mr Happy on 02.23.17 at 5:02 pm

I got that same smile…been wearing it since last Spring!

#2 Nemesis on 02.23.17 at 5:08 pm

“Spring, 2017. Ah, rutting season.” – VernalGT

#EspeciallyInSweden,Or… #PutDownThoseTools… #It’sTimeForYourSexBreak…

[NYT] – A Paid Hour a Week for Sex? Swedish Town Considers It

…”Sweden is already celebrated for its generous welfare state, including 480 days of paid parental leave, universal health care and a common ritual of coffee and pastry, known as fika, which is considered sacrosanct.

Per-Erik Muskos, a 42-year-old councilman from the northern town of Overtornea, wants to add to those benefits, by offering the municipality’s 550 employees the right to subsidized sex. In introducing his proposal this week, he told fellow members of the town council that it would give a nudge to the dwindling local population, add spice to aging marriages and improve employee morale.”…

https://nyti.ms/2mc8iIv

#3 neo on 02.23.17 at 5:10 pm

Garth,

Sadiq mentioned he expects a 10-15% total decline not a 35% correction like the US. Prices are rising 3% a month so 10-15% is like 6 months ago prices. Hardly off a cliff. Dude comes off a little bit pregnant in his analysis.

#4 Alice on 02.23.17 at 5:13 pm

First-time buyers are hitting up the bank of mom and dad more often.

https://betterdwelling.com/first-time-canadian-real-estate-buyers-are-making-record-down-payments/

#5 Alex on 02.23.17 at 5:14 pm

with all what’s coming, still unsure about what to do about my fixed revenue portion of my portfolio. Yes preferred shares, some short term government bonds etf… but I have great difficulty buying medium length bonds etf.. can’t pull the trigger any more..so what else ??

#6 };-) aka Devil's Advocate on 02.23.17 at 5:14 pm

I know what you meant by “parabolic” but feel I must warn you as I was berated by one of your readers for using that same descriptor. They made a point of explaining something to do with “Parabolic coordinates are a two-dimensional orthogonal coordinate system in which the coordinate lines are confocal parabolas.”

I think that reader might also go under the guise of “Gammar Cop”.

Just giving you a heads up… I’m sure they are still out there.

Screw him, as have you so shall I continue to use that descriptor.

#7 The Wet One on 02.23.17 at 5:19 pm

Whew.

Time for a smoke!

I had a great time. Did you?

;-)

#8 Daniel on 02.23.17 at 5:24 pm

First one on the comments, hopefully!
The party will keep going until it can’t.
It’s one crazy ride that we are all on, a story to tell the young kids one day.

#9 Penny Henny on 02.23.17 at 5:26 pm

the new Inflation President. His pro-business, pro-growth, trade-restricting policies are guaranteed to increase wages, prices, the US$, markets and rates.-GT

……………………..

The bastard!

#10 Centre Wing on 02.23.17 at 5:29 pm

And I still here those radio ads from the TREB touting how safe an investment real estate is. It’s gonna be entertaining!

#11 Penny Henny on 02.23.17 at 5:29 pm

We won’t know until it’s happened. But I don’t think Luigi cares. There’s no wiping the smile off that dude’s face.-GT

……………………………….
The names have been changed to protect the innocent.

Guys named Luigi never sell property. They buy and hold.
Uppa, uppa, uppa

Not the shrewd ones. — Garth

#12 Sebee on 02.23.17 at 5:30 pm

It’s still all a giant scam. Few houses go up like crazy, then we call 30% drop from there back to early 2016 prices, which were already nuts and not underpinned by reality. Eveyone thinks we had the correction we were waiting for, like in B.C. Millions for pile of sheet houses in Canada because we’re short on land? Remind me please which is the 2nd biggest country on the planet?

You keep padding yourself on the back that B.C. has crashed Garth as you predicted, but it just rolled back a year or two of insanity. Last I checked fundamentallas weren’t underpinning things back then either. And last I checked half mill gets you a lovely house where the snow don’t snow with millions to spare so you can visit snow 2 weeks in December.

#13 Seattlelight on 02.23.17 at 5:31 pm

I remember as a kid taking a shortcut through the Bridal Path and my mom telling me that they were “million dollar homes.” The home next to my parents’ house sold for 1.5 million this week.

– A millenial

#14 Rick Fast on 02.23.17 at 5:39 pm

GTA down by 30% in 2018!

#15 Ronaldo on 02.23.17 at 5:40 pm

With the new rules effective this tax season on principal residences, there are going to be some very surprised people who sold last year and realized a huge capital gain to find out that if they had a rental suite or business office in the home, that they may have to come up with a very large cheque for CRA for the portion of the home that will be excluded from the capital gains free rule. Usually 25% or greater depending on the amount of space used for the rental or business office.
For example if they realized a gain of 1 million on the sale and 30% of the home was rental suite, $300,000 of that would be taxable capital gains. So at 50% of that at top tax bracket, big money to CRA. Hope they allowed for it. Makes me wonder if there is really any advantage to having a rental suite in the home if what you take in is just going to be given back to the Gov when it comes time to sell. Something to think about.

#16 Ponzius Pilatus on 02.23.17 at 5:45 pm

I go down there all the time. If you’re doing an AI resort (which 99% of Canucks do) you don’t need to know a lick of Spanish. The company you book with will have English speaking reps that will get you from the airport to the hotel, and they will have a rep stationed at the hotel during your stay. All the bar tenders, restaurant staff, front desk, etc speak English. Half of the people staying at the resorts are Canadian to boot. Excursions – the guides all speak fluent English. You’re totally covered.
————
So you’re travelling to a foreign country so you can meet other Canadians..
What’s the point?

#17 Ponzius Pilatus on 02.23.17 at 5:47 pm

Yeah, it’s tulip time.
But it won’t be pretty.

#18 Sebee on 02.23.17 at 5:48 pm

Oh, did you guys see how H&R Block is advertising having IBM Watson assist their agents with your taxes? How long do you think before it’s just Watson, no agents? I’m calling 2 years from now.
After all, if it can replace Japanese speaking Insurance agents and adjustors, taxes ought to be a breeze.

Before 2020 things will get super exciting. Between Level 4 self driving cars killing taxi and Uber driver jobs, delivery driver jobs, school bus driver jobs, etc. costing hundred of thousands of jobs, and IBM Watson taking over call centers and service jobs handling support, customer service, even sales prospecting – and in any language, it will be brutal for employment. Every time I’m at starbucks I wonder why I just can’t press 3 buttons and get my coffee quicker. All that name asking….just hand me the caffeine! McDonald’s is already well on that path.

I can’t wait to learn who oh who will be paying millions for houses just with automated cars and Wilson widely deployed, never mind the full automation of factories, fast food, service jobs.

Garth, you talk about Boomers who will free up homes as they kick it, but put it together with what’s coming in automation in short few years and the impact it will have on jobs and that light some see in the tunel is not a freight train, but two freight trains in a row, fully loaded each with 6 engines pulling full speed! That’s gonna be one heck of a wreck.

#19 Unmmmm on 02.23.17 at 6:02 pm

Let’s not forget the TREB anti-competition appeal decision coming up which will screw Prices up for sure.

#20 Penny Henny on 02.23.17 at 6:03 pm

#14 Rick Fast on 02.23.17 at 5:39 pm
GTA down by 30% in 2018!

……..

If you are talking about quality of live then totally possible.
If you meant prices, then sorry not happening.

#21 Penny Henny on 02.23.17 at 6:07 pm

Quality of LIFE, not live.

SM moment.

#22 Lulu on 02.23.17 at 6:09 pm

Well… here is the update of the semi shack in Lesileville 28 Harriet finally found a fool to pay for it and sold price is a whopping 530k, unbelievable!! Good Luck with that.

Another one a bit far out in Innisfil
https://www.realtor.ca/Residential/Single-Family/17808550/2140-WILLARD-AV-INNISFIL-Ontario-L9S2C2

This one was sold less than 2 years ago for 150k and buyer did absolutely nothing to it and now back on the market for more than double of what he/she paid… Amazing, no wonder we don’t have anything left beside housing. Very very sad! And I’m sure there are all over the GTA and it spreads all the way north to the Nickle Town. Can you believe it?

#23 zee on 02.23.17 at 6:12 pm

Hey

Sadiq has no credibility. He says going off a cliff but at the same time he expects prices to drop 10-15 percent. That will take prices to last fall. Hardly a correction and not a off the cliff situation at all.

why did you not mention this?

15% would be a start, not an end. — Garth

#24 Unmmmm on 02.23.17 at 6:15 pm

Another factor is a recession coming from industry moving to the US and Canadians losing their jobs. Canada is no longer competitive relative to the US an all the Trump changes coming.

I predict a Great Recession.

#25 common sense on 02.23.17 at 6:18 pm

Fed 1 and done in 2017..Donnie wants the USD lower and the Repubs want to keep the 20 TRILLION debt manageable…HA!

Anyone as shocked as I was with the weak retail numbers for December….HA!

#26 Melvin on 02.23.17 at 6:21 pm

#15 – should be a non event unless previously claimed Cca on the property. Unless they’re changing that ruling somehow.

#27 common sense on 02.23.17 at 6:23 pm

#24 Ummmm

Hate to tell you but we have never really left the last one.

The next one will have a big D in front of it.

#28 Felix on 02.23.17 at 6:25 pm

That dog looks very confused, because he has just met someone much smarter than himself.

The ball.

#29 Victor V on 02.23.17 at 6:28 pm

OPINION: Wake up, Toronto, to your housing crisis

http://www.theglobeandmail.com/opinion/wake-up-toronto-to-your-housing-crisis/article34122980/?arc404=true

The situation in Toronto should be angering everyone, including people who already have homes and are seeing their personal worth multiply. (Your kids are screwed.) The city and metropolitan area is already the least affordable market in the country. The prices being asked for homes bear absolutely no relation to what people earn, or the annual raises they may be getting.

January delivered a 22-per-cent, year-over-year increase in property prices. The real estate association is suggesting they could go up as much as 16 per cent this year. More supply is not bringing prices down. The people who already have homes – which includes most politicians – seem content to sit idly by while this madness continues.

Political leaders in the province should be ashamed of themselves for having so little regard for those less fortunate than themselves. There is a crisis occurring in Toronto and to sit back and just watch it unfold is unconscionable.

#30 TA on 02.23.17 at 6:37 pm

“who last October tried to slow down the train with a series is reforms, including the Moister Stress Test. Apparently, they didn’t work.”
……………………………..
Well, they seemed to have had an impact everywhere but Toronto. Further measures may cause chaos in the rest of the country.

An Ontario specific measure would be better.

#31 Millenial on 02.23.17 at 6:40 pm

There won’t be a rate hike by the Fed in March – i can taste it in my mouth that they won’t.

#32 $540,000 then sold for ... on 02.23.17 at 6:48 pm

Over $2,000,000?

Wow.

Sometimes just better to be lucky than good. Kudos to the chap , enjoy the cash

#33 take_a_guess on 02.23.17 at 6:49 pm

This fire damaged house is listed at $499k
10 NINETEENTH Street , Toronto, Ontario

If it sells for >$700k, then it’s true the market’s nuts.
What’s your guess?

#34 Alberta Guy on 02.23.17 at 6:51 pm

An automation tax is the only answer…

#35 When Will They Raise Rates? on 02.23.17 at 6:52 pm

This is reminiscent of Vancouver exactly a year ago when, in the final stages of the orgiastic eruption of hormonal and speculative excess, the market went vertical before it croaked.

^ This.

It’s the classic parabolic rise right before the bubble bursts.

#36 When Will They Raise Rates? on 02.23.17 at 6:54 pm

No catalyst needed. The parabolic rise is the catalyst.

Now the dumb money is piling in, soon to be left holding the bag.

#37 Joe Schmoe on 02.23.17 at 6:55 pm

I was trying to pay off the last smidgens of mortgage today.

The Bank was aghast!…all sorts of scrambling/looking for managers etc.

The manager came to the front and started flogging GICs.

I didn’t bite on the GIC

But they did talk me into a credit card limit increase. Mostly as I just wanted to leave.

Ironically, our credit cards (3 personal and one corporate) now have a bigger cumulative limit than the mortgage balance was this morning.

I will call tomorrow and cut the limits in half again…you have to do that every 6 months as they automatically give you more credit if you are somehow able to pay your bill off.

We live in a debt driven society. Curious on how this ends up. Glad I will be on the sidelines.

#38 Vancouver Review on 02.23.17 at 6:56 pm

Feb 23rd, 2017 Daily Video Review of Vancouver Real Estate Housing Bubble News and items from Twitter #VanRE https://youtu.be/EqFXG_k140E

#39 Dan.t on 02.23.17 at 7:02 pm

Seriously, can someone answer me who is paying 2.1 million for (from the sounds of it) a very average house that if it were based on average household income, is probably worth about 400k.

But not in Canada, worth a cool 2.1 million. Do Canadians know what you can buy all around the world for 1 million dollars?

I guess that Canadians really are super rich. Obviously who ever paid 2.1 million for the house has it and it’s not an issue. I guess the average house price of about 600-800k in BC is not that bad since people seem to have the money to buy them. I guess one bedroom apartments for 400k (+taxes and strata) around Greater Vancouver area is also not so bad or not really that expensive to BC residents.

I must be really out of touch with what people are making and how much money BC locals and Toronto locals actually have. To me, it looks like money is no object. Must be nice.

One last point, everyone must be super happy that houses and the cost of shelter is super high otherwise there would be some sort of outcry or some sort of action taken to make shelter more affordable and in line with average household incomes.

Or it is that people coming from outside Canada pushing prices way up. Canada should have restrictions on foreign ownership.

#40 neo on 02.23.17 at 7:09 pm

15% would be a start, not an end. — Garth

He said that would be the end. The reporter specifically drew parallels to US downturn of 35%.

It won’t be. — Garth

#41 westcdn on 02.23.17 at 7:16 pm

My oldest daughter who is living in the US put me onto the Donald speaking at half speed.

https://www.bing.com/videos/search?q=slow+motion+trump+talking&view=detail&mid=FF40213E5C0B7893441AFF40213E5C0B7893441A&FORM=VIRE

As she said, he really does look and sound like the old drunk at the bar.

#42 Shane on 02.23.17 at 7:18 pm

How many years have we been hearing the same tune? Yet real estate goes higher. Until we acknowledge foreign money, we here will continue to be wrong.

Echoes of YVR. So cute. — Garth

#43 mike from mtl on 02.23.17 at 7:22 pm

FED may move in march perhaps not, doesn’t matter. Mr. BoC said himself to not be influenced by their policies. What better way to achieve currency depreciation than doing absolutely nothing?

Fully stand by my earlier ‘bet’ BoC never raises until mid-late 2020s maybe 2030.

Real inflation is probably 5-10% I’d guess but by their crooked 1%-ish numbers, they’ve made themselves quite clear.

The BoC will certainly move by 2018 or perhaps by the end of 2017. In any case, it’s irrelevant to fixed mortgage rates which are set by the bond market. — Garth

#44 Nonplused on 02.23.17 at 7:27 pm

If I read that correctly and did my maths correctly that first house appreciated by something like 18.5% per year (compounded). If that isn’t hyper-inflation I don’t know what is. Hyper-inflation doesn’t usually end in a correction, it ends in a crash or an abandonment of the currency system. Since it’s unlikely they will abandon the currency….

Some will say “it isn’t hyper-inflation, it’s limited to just houses”. Ya but houses are most of what most people own. Single largest expense. Most expensive thing they will ever buy even if they have a 50 foot sail boat. And a Porsche. Even if you add the sail boat and a few Porsches together, you are just buying the house for the original $540,000, and that’s a nice boat. For the sale price, you are looking at a power yacht and a few Porsches. And all for a bunch of 2×6’s, mud & paper (drywall), tar & paper (shingles) and chip board? We’ve gone insane.

When the helium comes out of this balloon there are going to be a lot of disappointed kids.

#45 The Guy who played the role in that thing on 02.23.17 at 7:35 pm

Animal agnostic here (alergic to everything unfortunately), but this seemed like something the steerage section would enjoy https://imgur.com/gallery/ns5QW

#46 Waiting Frustratedly on 02.23.17 at 7:39 pm

Check out these 2 bedroom towns in the Niagara region, 2 others sold recently, one in August 2016 for $355K, another in December 2016 for $357K. Now these are listed at $409K and $449K. Where are people coming up with these prices?! Completely detached from reality.

https://www.realtor.ca/Residential/Single-Family/17828776/39—8-HEMLOCK-Way-GRIMSBY-Ontario-L3M0B5

https://www.realtor.ca/Residential/Single-Family/17829517/22-HEMLOCK-Way-Grimsby-Ontario-L3M0A7

#47 Toronto on 02.23.17 at 7:40 pm

Affordable housing has sailed . Even a 30% correction doesn’t bring housing numbers in line with incomes . Sad what has happened .

Certainly owners won the game

#48 this on 02.23.17 at 7:41 pm

What you right Garth, is what I felt believed in 2008, then 2009, and 2010, and 2011…

and in 2015 I thought this is it, this is crazy
and in 2016 I thought so again
and here we all are in 2017

It would take years of 15% decline before we are back to normal. That 2.1m house won’t be worth 540K for another…. 9 years. Is that what we’re predicting?

The market will do what the market will do. Buy if you can afford. Don’t if you can’t. — Garth

#49 Pierre on 02.23.17 at 7:46 pm

It doesn’t make any sense. Roosh V, Toronto Guy, Dimitri, Mystery, ToMen Unite, & others claim that Toronto is one of the worst cities not only because they can’t get laid in T.O. due to the terrible reputation of the women, but there is a covert form of Gender Warfare in T.O.

Let me provide you with one example—If you opened up a business & a female student from those elitist downtown universities accuse you of sexism because your job position required a Bachelors Degree in STEM & not Social work or Gender Issues, don’t be surprised if you’re receiving a court order from the Human Rights of Tribunal accused of discrimination against females living in Bay view in a 5 million dollar home like Morneau.

That brings another thing aside from the terrible reputation of females living in Toronto.

Wasn’t it Morneau who publicly announced that Millennials should work for free? Or was it Poloz who announced that Canadians should be content with a 50-cent Loonie & paying over $7.00 for one crown of cauliflower while he debases our currency to increase exports for his cronies?

Did Morneau successfully encourage the ~5,000 licensed and UN-licensed brothels in Toronto to “work for free”, or is he fearful that a pimp would reply to working for free? (YES, Toronto is terrible for dating that there is on average a place where sex is sold in every street corner).

If Toronto is a city where Millenials are encouraged to work for free, while the terrible reputation of the female inhabitants DISCOURAGE the purchase of detached homes, it doesn’t make any sense as to why there are Greater Fools paying over $1,000,000 for real estate in Toronto?

You really have to be a Greater Fool to spend that amount of cash to impress females in Toronto who would rather see you die than to even talk with you, that is, after taking away your overpriced home in Toronto & spending the proceeds on sex tourism in some 3rd world country where sex crime laws are not enforced on female tourists who prey on little poor children….

#50 TurnerNation on 02.23.17 at 7:46 pm

Luigi? Selling his house? (I’m shocked. )

Anyway nice continued move in commodities today. Something’s up.

#51 crowdedelevatorfartz on 02.23.17 at 7:48 pm

@#4 02/22/17
The Totally Biased, Highly Irrelevant, Irrational Observer
*******************************************

You are joking, right?

#52 crowdedelevatorfartz on 02.23.17 at 7:49 pm

@#28 Felix

That was very “catty” of you.

#53 bring_it_on on 02.23.17 at 7:54 pm

#39 Dan t

Seriously, can someone answer me who is paying 2.1 million for (from the sounds of it) a very average house that if it were based on average household income, is probably worth about 400k.

Or it is that people coming from outside Canada pushing prices way up. Canada should have restrictions on foreign ownership.

—————————————–

There are scant few local people in Vancouver who can afford >2.5Million houses based on local salary, or for those who are not lucky to have huge trustfunds. On the entire west side of Vancouver you still can barely find a rundown SFH for less than 2.5Milll; and the west side of Vancouver is a LARGE AREA of the city. This segment of the market, which ha galloped along for a decade, was driven largely by foreign buyers, and went parabolic last winter. The 15% tax on foreign purchasers has “frozen” this high end part of the market, and there are very few sales (I have the sales stats from our realtor for each month starting from last September ). I don’t believe a word of the statement that the market was going to self-correct before the tax (talk to Davidoff at UBC). The condo market at the low end is driven more by local buyers and keeps chugging along. There is little desire on the part of Gov’t in Canada to systematically check who is bidding up the high end of the market (>2Mill) in Toronto to stratospheric levels (i.e foreign capital). They are happy receiving the transfer taxes, are perfectly fine that the housing stock is being played like pieces on a monopoly board, and could care less about the severe negative impact on the city for local people who are shut out of this game in trying to raise their families. They need to put in a 15% foreign buyer tax in Toronto (and in my view in ALL of CANADA). It would likely have the same impact as in Vancouver.

#54 Vancouver Dudes on 02.23.17 at 8:09 pm

The BoC will certainly move by 2018 or perhaps by the end of 2017. In any case, it’s irrelevant to fixed mortgage rates which are set by the bond market. — Garth

YEAH BUT WHO GOES FIXED ANYMORE?
THAT’S RIGHT,NOBODY.

Eight in ten new mortgages are fixed. — Garth

#55 Smoking Man on 02.23.17 at 8:14 pm

Marine Le Pen, in a landslide. EU is toast.
Bet Accordingly.

#56 Lobster Man on 02.23.17 at 8:14 pm

#15 Ronaldo,

You mentioned the 25% (or greater) rule in regard to rental suites/business office use etc……

Could you please reference this to a CRA publication/source.

Thank you.

#57 Paul on 02.23.17 at 8:18 pm

I don’t think there will be a crash so many buyer’s ‘I use that term loosely’ running after pie in the shy with very little cash. Just borrowing as much as possible signing offers back $100,000, $200,000 at a time like it was chump change. So when it slows down they will think properties are a bargain and keep buying. For awhile anyway.

#58 Emily One on 02.23.17 at 8:21 pm

DELETED

#59 too much money on 02.23.17 at 8:30 pm

There’s too much money sloshing around and chasing assets that grow much slower than the quantity of this money.
Huge increases in debts at all levels, never-ending QE in all official and unofficial forms, tremendous growth in Chinese manufacturing which makes business owners rich and hungry for investments outside their country.
This crazy growth in RE and other asset prices has a long way to go and will stop when the powers that be stop their dangerous play with monetary policies, but they can’t: a small slowdown in the growth of debt will crash the global system and end the way of life as we know it. The system is built to exist on the basis of perpetual growth of debt. Things look rosy for now, but underneath there’s trouble growing. Well, enjoy the fun while it lasts.

#60 common sense on 02.23.17 at 8:38 pm

#46 Waiting..

Further south by the border, the same. I also think no matter what as Go Transit will be in the area in 2018 and prices are low compared to Toronto, Hamilton even if there is a price drop, prices will be sticky down here.

#61 Cheap Houses on 02.23.17 at 8:41 pm

The denial of money laundering in Canada is incredible. Everyone around the world talks about real estate as a way to launder their money in Canada. Its talked about everywhere except the country its happening in.

#62 Harry Butt on 02.23.17 at 8:45 pm

Canada immigrates millionaires. We welcomed 8,000 last year.

https://ca.finance.yahoo.com/news/canada-received-8000-millionaire-migrants-in-2016-study-182750432.html

#63 Fuzzy Camel on 02.23.17 at 8:46 pm

Trump shooting his mouth off about how very soon we will be on a level playing field, new global currency, blah blah.

My guess as to how all this madness ends is EU collapses after Le Pen, Dude in Netherlands, then Germany all vote in Trump types. Once EU collapses I suspect 2008 will look tame in terms of market chaos.

Now this is a wild guess, but this housing bubble is global, albeit for once Canada has beat the rest of the world, but I think governments know very soon debts will soon vanish.

#64 Smoking Man on 02.23.17 at 8:47 pm

Luigi, you left 500k to 700k on the table, better to be safe than sorry unless if you got no Alien DNA.

2018 peak…

#65 Self Directed on 02.23.17 at 8:51 pm

I keep hearing how the bubble in Vancouver has burst. It simply isn’t true across all price points.

In fact, Garth, things could easily start back up again on the wet coast simply because:

1. money is cheaper than dirt
2. unemployment is low
3. naive economic optimism

Christy and the RE pumpers keep repeating the same messages across all channels, 24/7. The general themes? BC is the best… BC has the fastest growing economy… BC has programs for first time buyers, over and over and over. The Capital Direct ads featuring Bill Good are the worst. Could you use 600K? They must be working because they play it non-stop. I bet the Libs are paying for those also.

Flops Pink Snow reports have been good, but irrelevant to most because they are still too expensive for the average family. He has yet to find a 10-20% price decline on homes priced under a Million. That’s because there are plenty of stupid people eager to snap up anything they can afford with their monthly nut.

I’ve heard RE markets fall harder on the outer rings. Totally the opposite. Places like Mission, Abbotsford, Chilliwack, even Hope, all have assessments 100-200K higher for detached housing. These are all >2 hour commutes into Vancouver. Completely Unlivable Bedroom towns for most families.

I might have to do something realistic, like perhaps move to Winnipeg. Good schools, and cheaper housing and health care.

Don’t laugh…for under $300K, you can still get this.

#66 Poorgirl on 02.23.17 at 9:08 pm

#46 Waiting Frustratedly

-Those two examples you gave make me laugh. Selling new in 2009 for 209,900-215,000 and very poor quality stuff! Saw a few back in the day…baseboards/ quarter round applied very haphazardly, baseboards full of visible nail holes, squeaky floors, no washroom on main floor, rear balconies all jammed together. My six year old nephew could build a better home than that..

#67 When Will They Raise Rates? on 02.23.17 at 9:10 pm

#16 Ponzius Pilatus on 02.23.17 at 5:45 pm

I go down there all the time. If you’re doing an AI resort (which 99% of Canucks do) you don’t need to know a lick of Spanish. The company you book with will have English speaking reps that will get you from the airport to the hotel, and they will have a rep stationed at the hotel during your stay. All the bar tenders, restaurant staff, front desk, etc speak English. Half of the people staying at the resorts are Canadian to boot. Excursions – the guides all speak fluent English. You’re totally covered.
————
So you’re travelling to a foreign country so you can meet other Canadians..
What’s the point?
———

https://i.imgur.com/oijFN1m.jpg

#68 Leo Trollstoy on 02.23.17 at 9:13 pm

Toronto real estate prices aren’t going down any time soon.

The insanity will continue w boomer money for their kids. And there’s a LOT of boomer money in Toronto.

Personally I live in an old shack in willowdale and nothing sells for less than 1.5 unlesss it’s a condo

#69 Wrk.dover on 02.23.17 at 9:18 pm

#67 When Will They Raise Rates? on 02.23.17 at 9:10 pm
https://i.imgur.com/oijFN1m.jpg

—————————————————-

Nailed it, and if you fly 20 more minutes, they speak English mon, though the sand is not as pretty.

#70 When Will They Raise Rates? on 02.23.17 at 9:23 pm

#22 Lulu on 02.23.17 at 6:09 pm

Another one a bit far out in Innisfil
https://www.realtor.ca/Residential/Single-Family/17808550/2140-WILLARD-AV-INNISFIL-Ontario-L9S2C2

This one was sold less than 2 years ago for 150k and buyer did absolutely nothing to it and now back on the market for more than double of what he/she paid… Amazing, no wonder we don’t have anything left beside housing. Very very sad! And I’m sure there are all over the GTA and it spreads all the way north to the Nickle Town. Can you believe it?
———————-

Spreading like a virus.

#71 Rick on 02.23.17 at 9:27 pm

“There’s no viable economic scenario now being floated in which the cost of money does not rise, for which you can heap thanks on the shoulders of the new Inflation President.”
Wow! Still blaming Trump! Rates have to rise. They have been too low too long; artificially; and you know it.

#72 When Will They Raise Rates? on 02.23.17 at 9:38 pm

#59 too much money on 02.23.17 at 8:30 pm

There’s too much money sloshing around and chasing assets that grow much slower than the quantity of this money.
Huge increases in debts at all levels, never-ending QE in all official and unofficial forms, tremendous growth in Chinese manufacturing which makes business owners rich and hungry for investments outside their country.
This crazy growth in RE and other asset prices has a long way to go and will stop when the powers that be stop their dangerous play with monetary policies, but they can’t: a small slowdown in the growth of debt will crash the global system and end the way of life as we know it. The system is built to exist on the basis of perpetual growth of debt. Things look rosy for now, but underneath there’s trouble growing. Well, enjoy the fun while it lasts.
———–

And therein lies the crux of the problem.

Fortunately, there is a way to position yourself to take advantage of the inevitable…

#73 Toronto1 on 02.23.17 at 9:41 pm

shades of the 90’s going on in GTA right now. Speculators are going all in on RE at the moment.

the little elephant in the room is mortgage fraud that is reported to be in the 10-20% range- i bet its much higher then that amount (hence the big 5 moving away from those lines of business)

sure some people get help with down payments, but not enough to drive a market. even if we call mortgage fraud at 15%- if that part of the market goes, that huge potential for down ward pressure- factor in the new qualifying rules and that whacked (lets call it 10%) of buyers out. Not looking good.

There is a reason that Wild Bill is going to whack the capital gains on RE– a lot of money has been made, a lot of scheming going on to avoid taxes. CRA has up to 7 years to go back and ask for tax– hope some of these speculators put those profits aside.

Did you claim a part of your house as a business at any point in the past?, better pay up. ever rent out the basement to a tenant for cash? better hope they never claimed that on their income tax return. Changed your address to your spec home to avoid taxes? hope that you didnt forget to change your address on any other govt id like health cards, PAL, fishing licence or else you will pay up. fudged a couple of numbers or paid a broker to get some “paper” to qualify for a loan– better hope that CRA never finds it or else you will pay tax on that income etc.. the taxman is ruthless, when it comes to collecting, soon a lot of people will find out.

when you see crappy 1000-1500 sq foot houses going for 1-1.5 million plus- on a sq footage basis, the prices are insane compared to posh hoods in the US

#74 When Will They Raise Rates? on 02.23.17 at 9:46 pm

#65 Self Directed on 02.23.17 at 8:51 pm

I might have to do something realistic, like perhaps move to Winnipeg. Good schools, and cheaper housing and health care.

Don’t laugh…for under $300K, you can still get this.
———–

Sorry, I had to laugh. That? In Winnipeg? Don’t care if it was free. LOL!!!

#75 For those about to flop... on 02.23.17 at 9:46 pm

Hey Selfie ,check out this case.

Probably going to go to a developer,but if someone really wants a house in town for under a million.

Might have had a dramatic price drop just to get the competitive juices flowing.

The one I showed Keith on St Catherine’s a few weeks ago was much nicer .

They paid 1.1 …so it was basically 1 million for the block of land and 100k for the perfectly liveable house 6km from downtown.

Anyway,back on the Culloden house ….assessed at 1.37m asking 999k

Worth….300k…

M42BC

4519 Culloden Street, Vancouver

Dec 16:$1,399,000
Feb 21: $999,000
Change: – 400000.00 -29%

https://www.zolo.ca/vancouver-real-estate/4519-culloden-street

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

#76 When Will They Raise Rates? on 02.23.17 at 9:48 pm

Sincere apologies for the above post. I realize that was insensitive. (there’s no edit button once you hit submit)

#77 MARIO on 02.23.17 at 9:57 pm

I give up, Luigi’s selling shrums again and I don’t even have a brick wall to bash my head against!

#78 Dan on 02.23.17 at 9:57 pm

My comment is off topic but I would appreciate some advice on the following financial situation. I just received the letter outlining the comuted value of my (DB) pension from my previous employer. Part of it will go to a LIRA but there is a significant amount (about 85k) that will be handed as cash and hence taxable this for 2017 year. I will max my RRSP but I don’t have enough room to cover the entire amount. My plan is to contribute some of the left over to my wife’s RRSP but for this year (2016) as in 2017 her income will be significantly lower (mat leave). That means I would contribute to her RRSP before receiving the money as the deadline is soon. Is this the best solution? Thanks !

#79 DON on 02.23.17 at 10:16 pm

#101 DON on 02.23.17 at 9:56 pm

Who would of thought this could happen in a million + neighborhood. The gang wars are rising again. Be safe out there.

IHIT investigating homicide in Burnaby, B.C.
One person is in custody after the attack, which police say was not random

http://www.cbc.ca/news/canada/british-columbia/ihit-homicide-burnaby-1.3996998

and then here is the kicker:
Rate Hikes coming for ICBC due to the unfiscal prudence of the self-declared fiscal BC Liberal/Socred government.

http://www.cbc.ca/news/canada/british-columbia/crash-and-burn-icbc-goes-from-money-maker-to-deep-in-the-red-1.3995934
Crash and burn: ICBC goes from money-maker to deep in the red. The provincial auto insurance corporation is projecting an $800 million deficit

and Based on what Norm Farrell BC Hydro our crown jewel in in mega debt but still giving money to the gov to provide the appearance of surplus, and rates are rising as well. https://in-sights.ca/

and we wonder how Trump got in. And a lot believe the CREA party can continue until what average house prices are 3-5 million with a protectionist cycle upon us.

Geezus.

#80 I'm stupid on 02.23.17 at 10:17 pm

I just noticed something interesting… there are almost more places for rent on the mls than places for sale.

#81 When Will They Raise Rates? on 02.23.17 at 10:18 pm

#69 Wrk.dover on 02.23.17 at 9:18 pm

#67 When Will They Raise Rates? on 02.23.17 at 9:10 pm
https://i.imgur.com/oijFN1m.jpg

—————————————————-

Nailed it, and if you fly 20 more minutes, they speak English mon, though the sand is not as pretty.

————–

Yep. That’s Cayo Ensenachos in the pic BTW. There’s 2 spectacular beaches on the Cayo and only 1 resort. It’s our go-to spot for cheap 3-4 day weekend getaways… Wife can’t stomach Cuban food for a whole week. lol

We go elsewhere in the Caribbean for week-long stays mon. :)

#82 stage1dave on 02.23.17 at 10:20 pm

Wow, it looks like the pace is a-quickening…we’re either headed for a million-dollar workin’ man’s bungalow scenario or the mother of all RE crashes…

And on the PMO front, I noticed today that the prepay gas pumps are now taking LONGER to put the last $1.00 in the tank than the previous $14…which is what I bought to run around town today.

Is this some executives idea of: a) letting the plebs know how powerless they are? or b) hoping you’ll leave before completing the fill because the gas station really needs the money?

I also noticed that aggregate demand for gasoline in NA has fallen off a cliff, statistically speaking…down about 5-6% Y o Y. Been noticing these charts popping up since just after Christmas. Lots of chatter as to why this has happened, without mentioning the one major customer, well OK, THE major customer…numero uno in da world, and what they may or may not be doing lately…

Just where the hell are all those carrier battle groups, their support vessels, and all them F/A 18’s and Rhinos burnin’ 2500 lbs/hr? Don’t seem to be able to get much info on any of this, except the Vinson; apparently headed to SCS to “show the flag”.

It isn’t just me apparently; when asked a pointed question about lack of carrier deployments (well, actually about NO carrier deployments) during a press conference last month, a U.S. Navy spokesperson replied that “operational deployments are a matter of national security” or something to that effect. Go away, boys n girls; nuthin’ to see here…

Apparently, by the end of the year there wasn’t a single battle group at sea…anywhere…WTF? First time since WW II…Lotsa CT’s as to what may be goin’ on, but I’m more interested in the following:

What would a sustained 5-6% drop in gasoline consumption do to our resource-based export-dependant economy?

#83 John in Mtl on 02.23.17 at 10:21 pm

@#18 Sebee on 02.23.17 at 5:48 pm

Every time I’m at starbucks I wonder why I just can’t press 3 buttons and get my coffee quicker. All that name asking….just hand me the caffeine! McDonald’s is already well on that path.

I can’t wait to learn who oh who will be paying millions for houses just with automated cars and Wilson widely deployed, never mind the full automation of factories, fast food, service jobs.

What a sad, sad world it will be when all this automation replaces human interaction. What will everyone do, sit alone at home in front of their screens?

#84 Shortymac on 02.23.17 at 10:32 pm

How much of price drop would you predict Garth?

People poo-pooing the “only 30% drop isn’t a true correction”, that starter townhouse at 500k drops to 350k. Much better for families and young couples starting out in life.

The 700k slanted semi becomes 460k, the 1mil house becomes 700k. Much sanier.

As an aside, is don mills and Shepard a safe neighborhood? There are sane townhouse rentals there that I’m interested in.

#85 DON on 02.23.17 at 10:33 pm

#65 Self Directed on 02.23.17 at 8:51 pm

I keep hearing how the bubble in Vancouver has burst. It simply isn’t true across all price points.

In fact, Garth, things could easily start back up again on the wet coast simply because:

1. money is cheaper than dirt
2. unemployment is low
3. naive economic optimism

Christy and the RE pumpers keep repeating the same messages across all channels, 24/7. The general themes? BC is the best… BC has the fastest growing economy… BC has programs for first time buyers, over and over and over. The Capital Direct ads featuring Bill Good are the worst. Could you use 600K? They must be working because they play it non-stop. I bet the Libs are paying for those also.

Flops Pink Snow reports have been good, but irrelevant to most because they are still too expensive for the average family. He has yet to find a 10-20% price decline on homes priced under a Million. That’s because there are plenty of stupid people eager to snap up anything they can afford with their monthly nut.

I’ve heard RE markets fall harder on the outer rings. Totally the opposite. Places like Mission, Abbotsford, Chilliwack, even Hope, all have assessments 100-200K higher for detached housing. These are all >2 hour commutes into Vancouver. Completely Unlivable Bedroom towns for most families.

I might have to do something realistic, like perhaps move to Winnipeg. Good schools, and cheaper housing and health care.

Don’t laugh…for under $300K, you can still get this.
*******************

You need to dig a little deeper for one unemployment outside of the real estate bubble areas is rising significantly. The areas with low unemployment are due to real estate and real estate only. Outside the lower mainland and victoria jobs are hurting and ei and welfare rate are increasing.

Stop watching Global BC and listening to realtors. No home buyer program helps when prices are still high. Lot’s of ‘don’t have a million dollars’ people still in Van. Even the local chambers of commerce are raising the alarm bells are they can’t attract talent. Back to the 80s early 90’s brain drain. ebb and low.

Patience.

#86 Biggles on 02.23.17 at 10:34 pm

This is why the real estate market will continue its wild rise unabated. Canada must control foreign investment in real estate or it will do serious harm to its economy and denying it’s excistance is fools folly.

The amount of money flowing on to Canada’s shores and the Government has almost zero ability to track it is simply astounding. When your citizens can not afford to buy or rent a place to live then the larger economy will suffer long term damage. Canada is about to find out that being sweet innocent will have unintended consequences. If there is a property crises in a place across the Pacific (which is very likely ) it’s affect will arrive in Canada and it it’s affects will be felt longterm. However, for now it will continue unabated.

Cheers Biggles

https://www.google.ca/amp/s/www.thestar.com/amp/news/world/2016/12/23/canadas-real-estate-boom-a-chinese-perspective.html

#87 Happy Prairie guy on 02.23.17 at 10:34 pm

74 and 76 when will they raise rates. Thanks for the sorry. Winnipeg is a fine place to live and for cheap that house is on a great street at least it was when we lived on that street in the 80’s. After having the biggest mortgage ever in our eight houses from 07 to 13 just outside the GTA was pleased to buy retirement house an hour from Winnipeg for 119k. Rule of 90 works just fine for us.

#88 WUL on 02.23.17 at 10:36 pm

If you are an out of work professional Economist and a dullard, move to Alberta. You will find a job because there are only two numbers you need to look at. WTI and drilling rig mobilization are all you need to chart. No need to look at CREB numbers. Life is simple if you get prairie pragmatism. Conference Board of Canada says Athabasca will lead GDP growth this year. No kidding.

Where else? It is plain.

The recession is over. Not a V-shaped recovery. U-shaped with a long bottom line. We’ll take it.

#89 Victor V on 02.23.17 at 10:37 pm

Rising Canadian home prices make new regulations more likely: Poll

http://www.bnn.ca/rising-canadian-home-prices-make-new-regulations-more-likely-poll-1.679280

#90 Sebee on 02.23.17 at 10:53 pm

#81 John in Mtl,

Have you looked around? It’s already what is happening.

Don’t be afraid of automation, it is coming regardless if you like it or not. I didn’t even mention automation in trucking. Can you imagine how many jobs it will cost there? Millions. And the tech is in road testing for years already, just about ready to go. There are serious issues ahead. Buckle up.

#91 Sebee on 02.23.17 at 11:00 pm

I just looked it up. 3.5 million truckers in US. So let’s say 500k in Canada. Automation few short years away, probably by 2020. Wow.

#92 Mixed Bag on 02.23.17 at 11:11 pm

Luigi – is that Big Rider?

#93 cd on 02.23.17 at 11:21 pm

according to this one article…

odds of a March rate hike at 28%, the odds of a May move at 54% and June at 77%.

http://www.marketwatch.com/story/the-market-begins-to-catch-up-to-the-fed-on-rate-hike-views-2017-02-17

#94 Al on 02.23.17 at 11:23 pm

Can’t understand why people pay over a $1 million for plywood boxes on 25 by 100 ft lots in newly built subdivisions in the GTA.

#95 Sydneysider on 02.23.17 at 11:41 pm

#86 Biggles

…denying it’s excistance is fools folly…

If you want to be taken seriously you need to work on your spelling and punctuation.

#96 WUL on 02.23.17 at 11:51 pm

One more outlandish suggestion. Instead of trying to cool the RE markets, Gub’t should legislate to control the carnage which will soon occur. Were I PM, I would say “Vancouver & Toronto, you broke it, you own it.” Tough love. The idiocy in those two markets should not affect the beer drinking proletariat elsewhere (i.e. me). I’ll march on Queen’s Park and The Empress with a placard stapled to a hockey stick.

#97 HellYeah on 02.23.17 at 11:52 pm

#49 Pierre on 02.23.17 at 7:46 pm

…blah blah misogyny blah blah…

———-

Mr. Turner, I assume you left this crap comment up only because “Pierre” is basically dissing himself.

#98 jay on 02.24.17 at 12:06 am

Lets see Justin wiggle out of this one. http://www.msn.com/en-ca/money/markets/spoiling-for-canada-fight-us-dairies-push-for-trump-deal/ar-AAnhGz9?li=AAacUQk&ocid=spartanntp

#99 Entrepreneur on 02.24.17 at 12:22 am

I just feel sorry for the young people that bought a house and will be holding the debt bag. Youth are valuable to us and should be respected instead of treating them like pawns for profiting. Oh, that disrespect but oh, that glory. And don’t tell me this is free enterprise.

#100 Pete from St. Cesaire on 02.24.17 at 12:33 am

As for automation; I’d like to see school be delivered via the internet to the kids homes. No more wasting hours of their lives each day on school buses (cut that carbon footprint).
And think of how many people go into work just to sit behind a computer screen. Most of those jobs could be done from home.
They’re focusing the automation in the wrong direction first. Replacing the afore-mentioned jobs and commutes would do a lot to ease traffic jams, road-rage, fuel expenses, etc. Automating truck driving and parcel delivery will likely lead to many new and dangerous problems.
However, the old British saying “When the looms weave by themselves, man will be free” always resonates with me. Automation, bring it on.

#101 Mrs. Happy on 02.24.17 at 12:57 am

@ #1 Mr Happy
I got that same smile too after last summer.

#102 Ponzius Pilatus on 02.24.17 at 1:34 am

#63 Fuzzy Camel on 02.23.17 at 8:46 pm
Trump shooting his mouth off about how very soon we will be on a level playing field, new global currency, blah blah.
My guess as to how all this madness ends is EU collapses after Le Pen, Dude in Netherlands, then Germany all vote in Trump types. Once EU collapses I suspect 2008 will look tame in terms of market chaos.
-,—————–
Garth, can you please ban this ignorant idiot.
There is no Trump type politician in Germany having a chance to win the next election.
The race is between Merkel and Schulz both of them are basically middle ground politicians.
Jeez.

#103 Happy deleting on 02.24.17 at 1:37 am

I note that certain posts with specific terms are never posted here. Regardless, with every passing day, peoples eyes are opening. Hence Brexit, trump, and….

#104 Ponzius Pilatus on 02.24.17 at 1:39 am

Christy is shaking in her high heels.
If the spring RE market turns into a rout, she may be out of a job.
Not that’s anything wrong with that.

#105 Ponzius Pilatus on 02.24.17 at 1:46 am

#55 Smoking Man on 02.23.17 at 8:14 pm
Marine Le Pen, in a landslide. EU is toast.
Bet Accordingly.
————-
Obviously you must be sober, because your comment makes no sense.
Please stick to stuff you know, whatever it is.

#106 Ronaldo on 02.24.17 at 1:52 am

#56 Lobster Man on 02.23.17 at 8:14 pm

#15 Ronaldo,

You mentioned the 25% (or greater) rule in regard to rental suites/business office use etc……

Could you please reference this to a CRA publication/source.

Thank you.
—————————————————————-
Go to chapter 6 “Principal Residence” and the Example on page 43 in the link below. Of course not all situations are cut and dried so a call to CRA or your Accountant would be recommended.

http://www.cra-arc.gc.ca/E/pub/tg/t4037/t4037-16e.pdf

I know of individuals who had purchased in 2008 and sold recently and made a million dollar gain and put it all back into another home worth a million more not realizing that 1/3 of that gain may be taxable. A potentially serious financial situation for them whereby the entire amount or a large part of what they collected in rents and paid taxes on would be returned to the taxman as capital gains. For their sake, I hope I am wrong in my interpretation.

#107 willworkforpickles on 02.24.17 at 1:59 am

Enjoy it while it lasts while there’s still food.

#108 Security Team on 02.24.17 at 2:18 am

#41 westcdn

Terrible slander against a man who has accomplished way more than you ever will, whether you like him or hate him. Don’t pollute this fine blog with such nonsense. I wonder how you look at half speed? We will soon see.

#109 Chiveon on 02.24.17 at 2:29 am

great post uncle Gartholomew!

It’s going to be a very intersting 2-5 years during this destabilization period we see happing right now in Canada. What do you think is going to happen in Canada when the crisis happends uncle Garthy? Sure would be nice if we could get a dictator every 5 years to straighten out the country. do you agree? Would love to hear people’s comments. Thank you.

#110 hh on 02.24.17 at 2:37 am

#84 Shortymac

As an aside, is don mills and Shepard a safe neighborhood? There are sane townhouse rentals there that I’m interested in.

*******

The area is hit and miss. If you’re looking anywhere near the Peanut Plaza – then take a pass.

Steeles Ave to John Street along the Don Mills corridor is better, much better.

#111 neo on 02.24.17 at 6:39 am

#84 Shortymac on 02.23.17 at 10:32 pm
How much of price drop would you predict Garth?

People poo-pooing the “only 30% drop isn’t a true correction”, that starter townhouse at 500k drops to 350k. Much better for families and young couples starting out in life.

The 700k slanted semi becomes 460k, the 1mil house becomes 700k. Much sanier.

As an aside, is don mills and Shepard a safe neighborhood? There are sane townhouse rentals there that I’m interested in.

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

Townhouses in Milton are going for $700,000, even with a 30% correction they would still be half a million dollars.

Ten years ago they were being sold for half that. First time buyers now are taking out $500,000 to $600,000 mortgages on the same income people were making 10 years ago on a house that only cost $250,000.

#112 DoomandGloomer on 02.24.17 at 6:44 am

#91 Sebee

“Automation few short years away, probably by 2020.”
——————————————————————-

More like 2050.

It’ll take that long to work out the bugs that become apparent in real world situations.

Truck driving is still probably one of the most necessary jobs in our current economy.

#113 Ace Goodheart on 02.24.17 at 6:55 am

In most other major internationally known cities, a detached house is a toy for the super rich. Toronto probably is heading down that path (if it’s not already there). When I hear all this stuff about people not being able to afford to live in Toronto because they can’t buy a detached house, I just kind of laugh about it. Go to Seoul, New York, Paris, Berlin, basically any major international city, and try to purchase a detached house.

Most of the city dwelling world lives in apartments and condos.

#114 Mishuko on 02.24.17 at 7:32 am

I have successfully been able to get a loc above my gross income. Something is broken. I can say with a fair degree of confidence that things north of King city selling for shy of 1m this won’t end well.

#115 Mr Happy on 02.24.17 at 7:44 am

#4 Alice on 02.23.17 at 5:13 pm
First-time buyers are hitting up the bank of mom and dad more often.
—————————————————————

Another reason I am glad we chose to not have kids. ;)

#116 Mr Happy on 02.24.17 at 7:58 am

“I’ve heard RE markets fall harder on the outer rings. Totally the opposite. Places like Mission, Abbotsford, Chilliwack, even Hope, all have assessments 100-200K higher for detached housing.”

I sold last Spring at the peak in the Fraser Valley. It was a gong show bidding war. Made a fortune. Looking around the old neighbourhood now and it is crickets and prices have come down. Two months later my neighbour barely made asking price (I was 100k over) but he had to accept a very short close. He moved sooner than I did! Today…lower yet….

#117 maxx on 02.24.17 at 8:00 am

#25 common sense on 02.23.17 at 6:18 pm

“Anyone as shocked as I was with the weak retail numbers for December….HA!”

Nope. Shops and malls were mostly like mausoleums. Those stupid bank photos of indebted idiots carrying multiple candy-coloured bags on each arm were nowhere to be seen.

But second-hand shops and dollar stores were doing a brisk business.

Talking up the economy is such a boring farce- whatever msm barfs out, as Tony Roma in “Glengarry Glenross” said, “bet the other way”.

#118 T. on 02.24.17 at 8:08 am

***I’d like to see school be delivered via the internet to the kids homes***

I would too. This is essentially what my homeschooled kids get anyway, but the more we could break the power of the SJW factories, the better.

I’ve observed on the internet (as well as in real life, for example my buddy who drives a Tesla and thinks everybody else will be too within a few years) that there is a certain personality type that is gung-ho about the role technology will play in the future. I often think that these people are overly optimistic and fail to appreciate the obstacles and human inertia standing in the way. But no question that changes are coming, for both good and ill.

#119 crowdedelevatorfartz on 02.24.17 at 8:15 am

@#103 happy deleting
“I note that certain posts with specific terms are never posted here.”
++++++++++++++++++++++++++++++++++++

Well,
You can always cancel your subscription and slither over to Breibart News for a “Fake News” agenda of hate,spin, exnophobic hatred and,of course, the obigatory advertisements pumping the endless”end of days’ supplies you will need…..no agenda there
Gold teeth are so overrated.
Toilet paper baby.
The new currency of a world gone mad

#120 maxx on 02.24.17 at 8:22 am

#28 Felix on 02.23.17 at 6:25 pm

“That dog looks very confused, because he has just met someone much smarter than himself.

The ball.”

Careful. Beings that have the ball in play often have an expression of confusion- but only because they’re working on the next few moves ahead.
Confuse that at your peril.

#121 crowdedelevatorfartz on 02.24.17 at 8:28 am

@#105 Ponzi Pilates
“Please stick to stuff you know, whatever it is.”
********************************************
Actually Marine LePen is doing quite well in the polls.
her rhetoric has toned down from specifics( we will stop allowing muslims to emigrate) to generalities ( we must think hard about our immigration policies) .
A softer tone but spewing the same messages of hate. Her team watched how Trump rose to power and are reacting accordingly.
If she’s elected…all bets are off.

Please enlighten us with YOUR predictions for the future leader of France and the ramifications for the EU.

Sarkozy again? Francois Fillion? The man leading the polls until it was revealed he paid his wife over $850,000.00 in taxpayer money as his “assistant” over the past 25 years? And she can barely type?
The French voters have proven in poll after poll a majority dont like the EU and if a vote for LePen can shake up the status quo…..so be it.
Rage against the “democracy election money machine” isnt just a peculiar American disease….its everywhere….and growing

#122 Wrk.dover on 02.24.17 at 8:31 am

Off topic and a week late, Kevin o’Tumpy slammed the premier of NS for not wanting to lower corporate taxes and borrow yet more money for corporate gifts in the name of stimulating the dull NS economy. That game has been played ad nausium here with no success. We finally have a premier that grew up as one of seventeen children in a poor small town poor family, and Snowball in Boston thinks this provincial backwater needs to further borrow our way toward future prosperity…with out tax revenue to cover.

A sample of his federal platform obviously.

From what I read on wiki, k is a little man that had allegedly cooked some books and profitably sold a business…once…. so is considered the Messiah by Harperites for his business acumen.

It was a major problem when Ignatieff lived in Boston before running for PM, but not so much for this O’boy.

#123 crowdedelevatorfartz on 02.24.17 at 8:32 am

@#78 Dan
“I would appreciate some advice on the following financial situation….
++++++++++++++++++++++++++++++++++++

get a financial adviser?

#124 Victor V on 02.24.17 at 9:00 am

https://beta.theglobeandmail.com/news/british-columbia/nearly-all-detached-homes-in-vancouver-assessed-at-1-million-or-more/article34126250/?ref=http://www.theglobeandmail.com&service=mobile

Chris Lehane, Airbnb’s head of global policy and public affairs, said many homeowners in expensive markets such as Vancouver and Toronto garner rental income from a portion of their houses to help make mortgage payments.

“We fundamentally believe that we are a platform for the middle class,” he said in a recent interview. “We know that most of our folks are really using their primary homes and generating supplemental income.”

#125 pBrasseur on 02.24.17 at 9:06 am

By upping capital gains, diddling with dividends – Garth

Sticking to your guns hey? You speak as this was a sure thing, your credibility will drop faster than Marie-Antoinette’s head if it doesn’t happen!

Don’t blame me for the speculation. Every major accounting firm is quietly preparing their clients. Hopefully it will not come to pass. BTW, what a dumbass comment. — Garth

#126 Euro Observer on 02.24.17 at 9:23 am

Nothnig new in cuckoo’s land.

Houses sell for 15 times average before tax income in crappy suburbs, the ”center of the universe” Brampton (?!?) is more expensive than Long Island. Soon Mississauga will be more expensive than Malibu and Blue Mountain will be a ”better ski resort” than St. Moritz.

In the mind of the braindead.

I can’s stress enough on the need to move one’s investments and resouces as farther from this insanity as possible.

#127 Londoner on 02.24.17 at 9:43 am

Similar to London (UK), there is a housing affordability crisis in the GTA. Wether it’s young people looking to buy their first home or people looking to rent, the problem has been exacerbated by government policies. There’s no point in talking about greedy boomers / homeowners without mentioning the other half of the equation. Financial institutions in the mean time have capitalized on the situation.

#128 IHCTD9 on 02.24.17 at 9:49 am

As for automation; I’d like to see school be delivered via the internet to the kids homes. No more wasting hours of their lives each day on school buses (cut that carbon footprint).
________________________________________

That would start a nuclear war.

When the day comes, teachers, their Unions, and left wing politicians will all be seen through by not just us few, but by all.

I agree though, long overdue.

#129 The Wet Coast on 02.24.17 at 10:02 am

#18 Sebee on 02.23.17 at 5:48 pm

I couldn’t agree more with what you said.

I have spent my entire career automating human jobs. The technology was very clunky until very recently. No so much now. We are now in coming into the parabolic phase of the classic S curve take-up of technology. Watson will be better at many jobs than we are, including mine, Garths and T2’s. We are at the rise of machines, god help us.

#130 andrew t on 02.24.17 at 10:32 am

#49 Pierre on 02.23.17 at 7:46 pm
It doesn’t make any sense. Roosh V, Toronto Guy, Dimitri, Mystery, ToMen Unite, & others claim that Toronto is one of the worst cities not only because they can’t get laid in T.O. due to the terrible reputation of the women, but there is a covert form of Gender Warfare in T.O.


Duuuude. No wonder you’re getting nowhere with an attitude like that. Having a chip on your shoulder isn’t charming. Just go out, have fun, relax, smile, and before long someone will smile back. It’s not that hard to hook up. Being good looking does help, though.

#131 traderJim on 02.24.17 at 10:34 am

Seems pretty obvious that TO is the new Vancouver and that prices are going to go to (already at?) extremes this spring.

My question is: How long do we think it will last?

Is it a few month blip that will get so insane that they implement a Chinese dudes tax?

Or will it continue long enough that Bentley will open a showroom in Scarberia?

My thinking is that it will be far more extreme than expected and so will last only a short few months.

But no crash afterwards. Just a Vancouver like return to million dollar crack shacks instead of 2 million dollar crack shacks.

p.s. I don’t think Chinese dudes or dudettes are to blame, but Chinese capital flows, legit or otherwise, sure do seem to be playing a role. Along with suprime loans, easy credit and of course the main culprit low rates and massive liquidity provided by the central banks. (Because, you know, the economy is so bad that people can barely afford 2 million dollar bungalows anymore).

#132 Victor V on 02.24.17 at 10:36 am

Canada’s inflation rate spikes to two-year high as gas prices soar 20%, the biggest hike in six years

http://business.financialpost.com/news/economy/canadas-inflation-rate-spikes-to-two-year-high-as-gas-prices-soar-20-the-biggest-hike-in-six-years

#133 pBrasseur on 02.24.17 at 10:39 am

Garth #125 – That was just humor, I don’t seriously care about your credibility ;) At least you’re sticking your neck out (here we go again with the Guillotine thing…:-) that’s something!

As far as capital gains tax hike, you should always be prepared for politicians doing stupid things, I am. But I still think they won’t be that dumb, for the moment.

#134 Wrk.dover on 02.24.17 at 10:40 am

retail down, travel up?

40 flights a week total to D.R., Cuba, Mexico, Florida and Jamaica, from Halifax. At 225 average X 40 = 9000, Those jets will carry 1% of the NS population each week for the next six.

Flying elsewhere sunny requires going through TO or Montreal, and that is done too, even to the previously mentioned destinations.

Hfx departure page has a warning that the four hotel and the park and fly lots are full or almost so.

So? Money left over when not carrying super mortgages?

#135 IHCTD9 on 02.24.17 at 10:45 am

From what I read on wiki, k is a little man that had allegedly cooked some books and profitably sold a business…once…. so is considered the Messiah by Harperites for his business acumen.
____________________________________

Harper was the real deal, and probably the smartest politician Canada has ever had.

O’L is a hand grenade like Trump, except with less potential to do anything good, no Messiah. Brown is a waste of time. Conservatives are in the same predicament now as the Liberals were during the Harper era – no good leadership to be found.

I’m a disgruntled, knuckle dragging, neandercon these days. If I don’t get a pissed off asshole with credentials and a history that makes me believe it – I’m voting swan dive. I’ll vote Wynne, I’ll vote Trudeau, I don’t give a %$#@.

Canada needs an across the board top down management replacement. Every Department, every Ministry, every Institution. The CBC needs to be shut down, institutionalized PC culture needs to be turned on its head. Climate change policy needs a good castrating. The 3rd wave man hating lunatics and BLM’ers need their air time revoked.

O’Leary’s heart isn’t in it. Brown will say or do anything that might help his bank account.

Alas, the time draweth near when I can vote recklessly – and I will…

#136 Ronaldo on 02.24.17 at 10:51 am

#128 IHCTD9 on 02.24.17 at 9:49 am

As for automation; I’d like to see school be delivered via the internet to the kids homes. No more wasting hours of their lives each day on school buses (cut that carbon footprint).
________________________________________

That would start a nuclear war.

When the day comes, teachers, their Unions, and left wing politicians will all be seen through by not just us few, but by all.

I agree though, long overdue.
====================================
Totally agree, long, long overdue.

In 1981 I purchased the Radio Shack Model III 16k for my sons who were 8 and 9 at the time.
http://oldcomputers.net/trs80iii.html
This was before computers were in schools or even in government offices for that matter. At 10 years my eldest son enrolled in a night school course at the local college so that he could learn programming. He was tired of playing computer games. First they turned him down because of his age but being the persistent fellow that he was, they let him in. The teacher quickly realized how advanced he was and actually had him help her to coach other adult students. By the time they got to high school they were programing in BASIC. It was their choice, I never pushed it on them. They were far ahead of their time and reason for the awesome success today. Their ability to learn at a young age is phenomenal if allowed to. Schools are way behind the 8 ball.

#137 Shortymac on 02.24.17 at 11:08 am

#111 neo on 02.24.17 at 6:39 am
Townhouses in Milton are going for $700,000, even with a 30% correction they would still be half a million dollars.

Ten years ago they were being sold for half that. First time buyers now are taking out $500,000 to $600,000 mortgages on the same income people were making 10 years ago on a house that only cost $250,000.

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

I’d argue that outside of Toronto there would be a much larger hit because the gravy train from TO would be cut off.

I wouldn’t be surprised for a 50% correction there.

#138 Ronaldo on 02.24.17 at 11:08 am

Trudy is going after the wealthy tax cheaters.

http://app.tmxmoney.com/news/cpnews/article?locale=EN&newsid=TGB1457

#139 soost on 02.24.17 at 11:14 am

Toronto’s pandering mayor, who endorsed the Real Estate Market’s Health, really needs to have an inward look at his Mental Health.

#140 aa3 on 02.24.17 at 11:18 am

I think as Canada gets into increasing trouble, the way out will be to continually lower the value of the CAD$.

Like at a 50 cent CAD $, oil would be over $100 in CAD. In the tar sands much of the costs is labour which is priced in CAD $.

Likewise the pension obligations and the insane monthly cost of our public sector salaries(millions of people * above average incomes), are in CAD $. Cut the value of the CAD $ and you are cutting the real value of those monthly liabilities.

We’ve seen how moving from par to a 73 cents dollar really gave a boost to Alberta, Ontario & Quebec.

#141 paulo on 02.24.17 at 11:27 am

#91
automation, Everybody in the automotive industry and a few outsiders Google and Apple to name a few consider this to be the future and next golden opportunity. Mercedes Benz actually have fully automated transport trucks engaged in field tests right now in Europe

Cant help but mention the recent car advert from a well known Japanese luxury sedan builder, propositioning that i should buy one of there cars to be able to enjoy the experience of driving myself! , while i can. the add ends with the driver showing maybe 10 more years of
age, as he is riding in a autonomous automated vehicle.
it is a interesting prediction statement of what the near future holds,and by extension where the automakers are headed. i think these changes will happen far quicker than most believe.

#142 Barb on 02.24.17 at 11:39 am

Off topic, but there’s a petition against Tax on Tax (GST on Carbon Taxes):

Please Consider supporting this petition at:
https://petitions.parl.gc.ca/en/Petition/Details?Petition=e-713

e-713 (Tax system) 42nd Parliament
Petition to the Government of Canada
Whereas:
The Government of British Columbia instituted a carbon tax in 2008 and the federal government GST (currently at 5%) is still being charged on this carbon tax.
We, the undersigned, citizens of Canada, call upon the Government of Canada to eliminate the GST being charged on this or any other future carbon tax enacted by the provinces or territories.

Initiated by bob spiers from Vernon, British Columbia, on January 4, 2017, at 1:32 p.m. (EDT)
Sponsor Mel Arnold North Okanagan—Shuswap Conservative British Columbia

Open for signature : January 4, 2017, at 1:32 p.m. (EDT)
Closed for signature : May 4, 2017, at 1:32 p.m. (EDT)
Signatures (1280)
Province / Territory Signatures
Alberta 63
British Columbia 1146
Manitoba 12
New Brunswick 5
Newfoundland & Labrador 4
Nova Scotia 3
Nunavut 1
Ontario 34
Quebec 3
Saskatchewan 7
Other Countries 2 (citizens of Canada)

Please pass along the URL to your email contacts.

Thanks to T2, carbon taxes (and GST on carbon taxes) now apply to all Canadians.

Tax on tax.
Ludicrous!

#143 Euro Observer on 02.24.17 at 11:39 am

#131 traderJim on 02.24.17 at 10:34 am
…………………………

But no crash afterwards. Just a Vancouver like return to million dollar crack shacks instead of 2 million dollar crack shacks.

p.s. I don’t think Chinese dudes or dudettes are to blame, but Chinese capital flows, legit or otherwise, sure do seem to be playing a role. Along with suprime loans, easy credit and of course the main culprit low rates and massive liquidity provided by the central banks. (Because, you know, the economy is so bad that people can barely afford 2 million dollar bungalows anymore).

———————————

If you belive that Canada has the economy and people have the income to justify such house prices, sure.

To justify house ‘appreciation’ from 200 k to 1.2 mil in Mississauga in the last 14 years we need more than 15 % total increase in income before taxes (11 % after taxes) for that time period.

Just close CHMC and move the mortgages back to the banks as ther liability.

This thing with CHMC is much bigger than people or economists/bankers can even comprehend.

Because of it the economy has evolved to pure nonesense, hoouse flipping, banking and surrounding services is the key engine of the economy, if you remove it, we will become a third world country as we tryllu should be due to the state of the real economy, a resource colony to be precise. Just look at Bombardier.
Nortel was bigger than all but a few technology companies in US and dwarfed Apple at the time.

The CMHC liabilities itself is twice the national debt and there will be no easy way to avoid the pain associated with it.

I firmly belive that at this point no easy way out is possible, the time to act was 2007-2008, now we are in such a big trouble which when it unwinds could and will totally destroy the ‘economy’

#144 45north on 02.24.17 at 11:41 am

payroll system for Federal Civil Service:

One year since Canada’s federal government has been unable reliably to fulfil the basic compact between an employer and its employees: You work and we’ll pay you for it. The patchwork of payroll systems it replaced wasn’t perfect at applying an estimated 80,000 “rules” for determining who should be paid what across the federal bureaucracy, but it wasn’t a daily disaster.

http://mcaf.ee/v4fo1a

( original url was too long )

The payroll system is a product of the need of the senior civil service to centralize . Administrative darwinism. True believers.

The article says the old payroll system wasn’t perfect but it was accepted. I received a promotion and moved from Statistics Canada to Agriculture Canada. For one year I was paid from the Statistics Canada pay office.

#145 Euro Observer on 02.24.17 at 11:43 am

Trudy is going after the wealthy tax cheaters.

http://app.tmxmoney.com/news/cpnews/article?locale=EN&newsid=TGB1457

The same CRA that could not track transactions related to house purchases by foreign nationals and Canadian house flipppers (and demand the appropriate taxes) is coming after the tax paying Canadians?

As I have said many times, leave befre the bill comes due.

#146 Damifino on 02.24.17 at 11:47 am

#106 Ronaldo

I know of individuals who had purchased in 2008 and sold recently and made a million dollar gain and put it all back into another home worth a million more not realizing that 1/3 of that gain may be taxable.
—————————————

Yeah, isn’t that a fantastic little gotcha?

(although, they really should have known better)

I knew people who exercised vested company share options and sat on them while their value dropped by half. They still owed tax on the gain they would have made had they resold them at market value immediately after exercising at the option price. They should have known better too. No free lunch at CRA.

Tax on gains they “would have made”. Gotta love that.

#147 Eks dee Sipal on 02.24.17 at 11:53 am

#99 Entrepreneur… The original tax codes were written for entrepreneurs. Like me. I believe in unfettered capitalism, which has simply never been practised anywhere. Instead, we have Crown control, masquerading as the Political Left-Right spectrum.

What is most entertaining, is when supposed free-market capitalists (represented heavily on this blog?) like to whine when their oligopolies are challenged by innovation and real capitalists, like me. Attack the messenger as crazy, and maybe the message will be labelled as such also. Fake Capitalism requires the artificial division of society into hierarchies. And fake capitalists fear equal access to success for everyone. In the world of the fake capitalists, true capitalism=communism, and cronyism=capitalism.

Mergers, trusts, and centralized control that supports wealth disparity should always be challenged by everyone. And it usually is. Naturally, oppressed parties revolt, one way or the other. The resistance takes many forms and doesn’t adhere to your pre-conceived timelines, especially not to your 4-5 year political elections. And lasting change can never occur from within the system itself. Here is Obama’s real birth father explaining it:

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

#148 For those about to flop... on 02.24.17 at 12:00 pm

Pink Snow falling in Coquitlam.

These people spent 1.27m on this place in April 2016 and are now fighting to get the bulk of their money back…

M42BC

653 Lakeshore Drive, Coquitlam

Nov 1:$1,350,000
Feb 23: $1,299,000
Change: – 51000.00 -4%

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

#149 Reply to #129, #83, #18 on 02.24.17 at 12:38 pm

And don’t forget about killer robots (click link below).

http://www.bbc.com/future/story/20150715-killer-robots-the-soldiers-that-never-sleep

Whatever happened to Isaac Asimov’s Three Laws of Robotics?

James Cameron showed remarkable prescience years ago when he wrote the screenplay for The Terminator.

#150 James on 02.24.17 at 1:02 pm

#105 Ponzius Pilatus on 02.24.17 at 1:46 am

#55 Smoking Man on 02.23.17 at 8:14 pm
Marine Le Pen, in a landslide. EU is toast.
Bet Accordingly.
————-
Obviously you must be sober, because your comment makes no sense.
Please stick to stuff you know, whatever it is.
___________________________________________
Here is the latest poop on the French. Recent polls say that 6 out of 10 voters want Francois Fillon to resign as presidential candidate. Alain Juppe, the mayor of Bordeaux who lost to Mr. Fillon in the primary, has already stated he refuses to be the “Plan B.” The party would have to come up with someone else but they are running out of time. Meanwhile, this instability definitely helps the other runners. The ones who are currently left standing are Marine Le Pen, the far-right, anti-immigration, anti-EU, Trump-loving representative of the National Front party; Emmanuel Macron, the former economy minister under President Hollande, who is running as an independent; the Socialist rebel and ex-minister of Education, Benoit Hamon and Jean-Luc Mélenchon, the perpetual candidate from the hard-left.
Oh and they all have outrageous accents! You silly Knights!

#151 IHCTD9 on 02.24.17 at 1:18 pm

#136 Ronaldo on 02.24.17 at 10:51 am
____

Our government has rocks in its heads if they are not thinking about it as a possibility. All over the country, outside big urban areas enrolment is dropping. 2-3 schools get torn down, one new one goes up to replace all three. The current demographics point to more of the same, less marriage, smaller families, more couples with no kids. The only reason the urban areas are exempt from the same is because of immigration.

Private schooling both secular and faith based along with home schooling are also gaining traction in some areas as well, further reducing the demand on the public system.

Those employed by the public system will fight tooth and nail to maintain the status quo – but how long can they fight against obvious common sense? The result would be huge massive earthquake inducing cost reductions. Compensation saved on teachers alone would be BILLIONS.

#152 Damifino on 02.24.17 at 1:22 pm

#141 paulo

it is a interesting prediction statement of what the near future holds,and by extension where the automakers are headed. i think these changes will happen far quicker than most believe.
——————————–

I’m of the opposite opinion. These changes will come far slower than people believe. I base that on years in engineering watching the grandiose promises of unicorn salesmen inevitably fall victim to real world practicalities when the rubber meets the road.

#153 Euro Observer on 02.24.17 at 1:28 pm

#146 Damifino on 02.24.17 at 11:47 am
#106 Ronaldo

I know of individuals who had purchased in 2008 and sold recently and made a million dollar gain and put it all back into another home worth a million more not realizing that 1/3 of that gain may be taxable.
—————————————

Yeah, isn’t that a fantastic little gotcha?

(although, they really should have known better)

I knew people who exercised vested company share options and sat on them while their value dropped by half. They still owed tax on the gain they would have made had they resold them at market value immediately after exercising at the option price. They should have known better too. No free lunch at CRA.

Tax on gains they “would have made”. Gotta love that.

————————
This can be challange in international courts. Canada is the only country in the world with such legislation.

#154 Euro Observer on 02.24.17 at 1:34 pm

#149 Euro Observer on 02.24.17 at 1:28 pm

————————–
As is taxes on taxes, the tax/HST calculated on the provincial and carbon taxes portion of the gas sales prices.

http://ottawacitizen.com/opinion/columnists/denley-in-ontario-weve-got-taxes-on-taxes-ugh

HST is consumption tax by intend.

#155 aa3 on 02.24.17 at 1:52 pm

#147 in my own profession of accounting the people are pumped about going to 1 monopoly professional association, and then really closing off access to the profession. The governments both provincial and federal are highly supportive of this.

I used an analogy i developed to get through to them… by their logic Silicon Valley should be a bad place to be a software programmer, as there are so many programmers crowding in one place. Yet, Silicon Valley I believe has the highest wages for programmers in the world.

Likewise New York City and London seem to have an over proliferation of bankers, lawyers & accountants. Again, if limiting supply is the path to prosperity those cities seem to have taken a wrong turn.

Unfortunately my thinking was so far outside of their paradigm of the world, their dreams and beliefs based on a world of shortages – they simply didn’t know what to make of it. So when I stopped speaking they went back to their celebration of limiting access for other Canadians.

We wonder why young people and new immigrants cannot get jobs. Well when it is illegal, because they do not have the right credentials for them to work in a field, they are unable to work in a field.(naturally those credentials being highly restricted).

Just like when less houses are allowed to be built than there is demand for houses, some are made homeless. Even this is beyond most Canadians ability to comprehend. Even with the best education system money can buy.

#156 Colin on 02.24.17 at 1:52 pm

Hey FLOP. Is there a way to send you pink snow information? I’ve been searching through houses on the west side lately and came across some gooders.

#157 For those about to flop... on 02.24.17 at 1:55 pm

Here’s another fixer upper for under a million if it’s your dream to own some Vancouver dirt.

I noticed this one last night when I was doing research on the one on Culloden.

It is a century old house located near King Edward and Main ,also known as Hipster Central.

It is for sale for 999k and is assessed at 1.449,so basically you could get it for 33% less than assessment.

Some of the houses I am showcasing would have been snapped up by developers in a couple of days this time last year but with tighter profit margins, there is not much to choose from but you have a choice.

Some of these houses could have gone for close to 1.5 this time last year ,the only reason they can be so generous with the pricing is because they weren’t recent buys.

Only the rotten fruit is falling off the tree at this stage.

Cabbage Patch Clark has the sprinkler system set to full blast…

M42BC

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

https://www.zolo.ca/vancouver-real-estate/233-e-26th-avenue

#158 For those about to flop... on 02.24.17 at 2:19 pm

#156 Colin on 02.24.17 at 1:52 pm
Hey FLOP. Is there a way to send you pink snow information? I’ve been searching through houses on the west side lately and came across some gooders.

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

Hey Colin,if you have some ones you want to draw my attention to ,just do a post with the addresses and any other information you think will help.

You can even do the whole case if you want.

The people I have seen in potential trouble ranges from speculators buying knockdowns on the Westside for 6/7 million ,down to people on the North Shore paying 3 million for a 90 year old house ,and even the bottom rung of the ladder ,a 20 y.o condo out Abbotsford that was purchased 410k roughly 100k over assessment.

The Pink Snow is only light but in any city in Vancouver you can find some in about 5 minutes…

M42BC

#159 Ace Goodheart on 02.24.17 at 2:20 pm

#141 Paulo:

“as he is riding in a autonomous automated vehicle.
it is a interesting prediction statement of what the near future holds,and by extension where the automakers are headed. i think these changes will happen far quicker than most believe.”

Self driving cars have been shown to work on highways (ie, interstates, 400 series, “motorways”) with some limitations and when a licensed driver is seated behind a steering wheel, ready to take over if something goes wrong.

In a City driving environment, the situation is very different. No self driving car has been able to successfully navigate city streets, to date.

The problem that we would have with enabling the “self driving” dream is data overload. There is a massive amount of information that we process as we drive in a city or in a neighbourhood type situation. We block out about 98% of it and rely on the 2% that matters. A computer is not very good at this, and cannot function with this amount of data.

On a highway or motorway or interstate, the situation is quite different. All the self driving car is really doing is maintaining separation and lane position, which is actually quite easy to do. The self driving car still has some problems, with one of the big ones being recognition of solid objects (often the computer will mistake a line of trees, for example, for a large vehicle, or will mistake a white coloured vehicle for the sky).

It will likely never be possible for self driving cars to operate in a city driving environment such as currently exists. At some point, the discussion may switch to whether we really want cars operating in a city environment at all, or whether we would rather just have, for example, self driving vehicles that run on defined pathways using under-road navigation points, on defined schedules, and completely do away with human driven vehicles. That may be the “future”. However that then of course creates the question as to why we would want individual vehicles? Why not just have mass transit vehicles?

At any rate, I do not see the current “self driving” trend continuing on its current course. Either we get rid of human operated vehicles entirely, or we limit self driving to highways and motorways.

#160 TorontoBull on 02.24.17 at 2:25 pm

“with widespread support among Toronto city council members.”
there is zero evidence that City council supports such tax

#161 paulo on 02.24.17 at 2:26 pm

Obviously wild bills attempt to cool the real estate market failed completely,to the determent of the average Canadian citizen period.
What needs to be done is in my opinion:
The capitol gains exemption on principal residence should be changed to a “one” per lifetime exemption per Canadian citizen period ,you get one kick at the cat. non citizens numbered companies or any entity other than a citizen individual should be subject to normal taxes, and there should be a requirement that other than a citizen claiming there one shot pass card on taxes,the seller should be required to deposit a amount equal to 50% of amount of sale above initial purchase price with the CRA pending filing of taxes in the current tax year,as a absolute requirement prior or at the time of transfer of title on a sale. how much would you like to bet that the majority of the 99,000 or so alleged “vacant” residences within the GTA would find there way to market!

#162 For those about to flop... on 02.24.17 at 2:31 pm

Colin,one more point if I may.

The reason the local knowledge can help is if you know a little bit about what type of money has gone into the flips this can help.

For example,as I have stated on here a few times there were some houses purchased for roughly 1.3/14 and are back on the market for 1.6 /1.7 and people say why what’s the problem with that?

Well if the spent 3/4 months and 200k to rehab the house ,which a lot of these guys did expecting to get over 2 million,then there is no money to be made,only lost…

M42BC

#163 paulo on 02.24.17 at 2:35 pm

#158
This action would create billions of dollars of tax revenue, cool the real estate market and tax the flippers and investors that are driving this stupidity.
putting onerous taxes on doctors,and other skilled professionals, and more importantly the entrepreneurs and small business persons ,you know the ones that do stupid things like create the majority of jobs, export goods and service and in the end produce the long term tax base that keeps this country running.

#164 TurnerNation on 02.24.17 at 2:48 pm

This year’s CPI (inflation) came in at 2.1%?
GICers are screwed.

Today Macquarie calls for a rate Cut here.
Top in 2018?

#165 paulo on 02.24.17 at 2:53 pm

#159
The Government needs to act responsibly and weigh the consequences, and also needs to do due diligence in reviewing the tax rules concerning real estate, as it should be obvious that far to many people are abusing the rules that where established many years ago and due to be updated. killing our entrepreneurs,and giving our professional service providers reasons to leave the country for more tax friendly locations is stupid and detrimental to every Canadian citizen,

#166 cramar on 02.24.17 at 2:53 pm

LUV the picture!

Hidden meaning. The ball is a GTA house and the pouncing pooch is the buying public. You don’t just casually pick up (buy) a house any more, you have to take a huge leap and pounce on it immediately before someone else does. Even if it costs $2 million!

Nice metaphor Garth.

#167 Lobster Man on 02.24.17 at 2:59 pm

#106 Ronaldo,

Yes, it is very much up to interpretations. But I could see what CRA is pointing at. Accountants are going to be extra busy just to deal with this.

Thanks again.

#168 James on 02.24.17 at 3:00 pm

Ha, Donald Trump (The Fake President) has barred news organizations from the press room. The White House handpicked news organizations, beyond the pool, to attend Friday’s gaggle with Press Secretary Sean Spicer, which was held instead of the White House press briefing.
CNN was not permitted to attend, along with the New York Times, Politico, Buzzfeed and much of the foreign press that regularly attends White House briefings.
NBC, ABC, and FOX were allowed in, along with CBS, who is Friday’s pool network. Breitbart, Washington Times, One America News Network also attended.
The Associated Press and TIME boycotted the gaggle.
There has been no explanation yet from the White House yet other than from Donald Trump. “The press are very bad dudes. They have been mean to me. I’m making a plan plan right now to build a wall between them and me. I have used brown colour crayons to show the bad dudes, a red one for the wall and a golden yellow one to show me.”

#169 James on 02.24.17 at 3:06 pm

Hell no Trumpo and his diots have just violated the first amendment. Nice job.
1st Amendment: Prohibits Congress from making any law respecting an establishment of religion, impeding the free exercise of religion, abridging the freedom of speech, infringing on the freedom of the press, interfering with the right to peaceably assemble or prohibiting the petitioning for a governmental redress of grievances.

#170 Dups on 02.24.17 at 3:18 pm

Sweden/aka ex Vikings welfare generosity, could be because of the accumulated riches that they stole from other countries back in the day when invasions were not counted for. Money comes from somewhere, it does not grow on trees. Canada has no such history of stealing money from anyone…we did not even exist. Maybe that is why we care how much money we can give away in form of welfare, because we do not have much wealth.

#171 Sebee on 02.24.17 at 3:46 pm

#112 DoomandGloomer 

2050? That’s a dream. 2020 latest.

Remember the Tesla accident where guy was killed? Tesla released data from their autonomous mode logs proving Tesla autopilot in current mode was already 50% safer than human drivers. Trucks will get automated like wildfire, on safety alone. No fatigue, no need for driver rest stops. It will start with highway, where the trucks will get driven by human towards a deployment point and then automation takes over on the long haul, until it pulls into a docking point for a trucker to take it to the depot. On from there.

Google it. Here is a bit for you…from 2015.

“Inspiration Truck is already approved for use on public roads. It is based on the Freightliner Cascadia Evolution series production model, thousands of which can be seen on US roads. And it is approved for autonomous driving on public highways in Nevada.”

#172 cramar on 02.24.17 at 3:58 pm

#18 Sebee on 02.23.17 at 5:48 pm

Oh, did you guys see how H&R Block is advertising having IBM Watson assist their agents with your taxes? How long do you think before it’s just Watson, no agents? I’m calling 2 years from now.

————-

Saw an American commercial for this on a U.S. channel, and got a different meaning than you did. Didn’t think of the possibility of reducing human interaction. Rather what I thought—given the history and power of Watson—that it is an indictment on the complexity of the taxation system that a supercomputer of this status is now NEEDED to decipher the ins and outs of the tax code!

Ghastly!

#173 Sebee on 02.24.17 at 3:58 pm

#129 The Wet Coast

Watson is amazing and scary. I remember watching it on Jeopardy and had that amazed scared sensation. Couldn’t stop watching though.

I used to ride with this very smart dude who did automation…wow, more than 10 years back now. He moved to the west coast, Oregon I think. The Wet Coast, you wouldn’t happen to be S.S. on a silver VFR? Long shot.

#174 maxx on 02.24.17 at 4:14 pm

#37 Joe Schmoe on 02.23.17 at 6:55 pm

“I was trying to pay off the last smidgens of mortgage today.”

Congrats!!!!

……….”We live in a debt driven society. Curious on how this ends up. Glad I will be on the sidelines.”

Amazing what happens to perspective on money when you actually possess it. Those with actual wealth respect their money far more than those spending it by borrowing.

I hope that you crack open a fine wine or champagne to toast the milestone!

#175 Rifles on 02.24.17 at 4:14 pm

#157

How do you think about assessment value vs listed value as a tool for determining overall value? Is there a relationship? It seems to me that assessment has gone parabolic on this property (and presumably others in the area) but not convinced the fact that this trades at a significant discount to that number represents value or is a useful measure. Assessment is primarily a tax benchmark is it not? Selling over/under is interesting to real estate agents but meaningless otherwise, isn’t it?

#176 Jay on 02.24.17 at 5:14 pm

@ #157 For those about to flop… on 02.24.17 at 1:55 pm

Still looks like a rip off for $999k, but it’s interesting to finally see a detached in Vancouver for less than a million.

#177 Sebee on 02.24.17 at 5:58 pm

#172 cramar

Interesting view point. The usual method is to ask current employees with experience to train their cheaper replacement. H&R Block agents are basically doing live training for the system that will replace them now. They are blind if they think otherwise.

2 years from now, 90% of filings will be done by Watson is my prediction. Filing with an agent will be a premium service and cost more.

#178 Ronaldo on 02.24.17 at 6:29 pm

176 Jay on 02.24.17 at 5:14 pm

@ #157 For those about to flop… on 02.24.17 at 1:55 pm

Still looks like a rip off for $999k, but it’s interesting to finally see a detached in Vancouver for less than a million.
—————————————————————–
This is only the beginning. The “Flippers” are going to be in for a rude awakening after this tax year is done with. We could see a flood of listings once the CRA is done with them. Many of the flippers are realtors themselves who I believe own many of the empty homes in the city and responsible for manipulating the prices. Going to be an interesting spring.

#179 traderJim on 02.24.17 at 8:14 pm

#143 Euro Observer

“If you believe that Canada has the economy and people have the income to justify such house prices, sure.”

I was being flippant as usual. I agree with you 100%, as I usually do.

It just seems to me that with Poloz ready to accommodate at the first sign of any trouble, I think the housing correction will be slow, as Vancouver seems to be.

‘Slow’ meaning 2 or 3 years to wipe out all the silly gains.

#180 traderJim on 02.24.17 at 8:22 pm

#169 James

hey, didn’t you get the memo? The narrative has moved on from ‘Trump is Hitler’ to ‘Trump is incompetent’.

The Hitler thing wasn’t working too well given Trump’s Jewish kids, strong support for Israel and his criticism of true anti-semites like Ellison, the guy running to head the Democratic National Committee.

(BTW, David Duke had lots of positive things to say about Ellison, did you see that?)

Anyway, if you’re going to whine for the next 8 years, better get on the right mailing lists so you can keep up with the proper narrative, sheesh.

#181 traderJim on 02.24.17 at 8:37 pm

Oh, and in case you were wondering, the current media frenzy over ‘anti-semitism’ has little to do with Trump.

It’s the establishment’s way of highlighting Ellison’s racism to be sure their guy Perez gets in.

But some useful idiots think it’s actually aimed at Trump.

When you see a lot of talk about Islamaphobia, that’s the stuff they will throw at Trump. Right after the DNC thing is decided it should be open season. For the moment though, anti-semitism is the narrative.

Mistakenly, I thought you were wiser. — Garth

#182 aa3 on 02.24.17 at 11:09 pm

The way to limit the extent of housing booms and busts, is to do what Canada & most industrialized nations did from the 1930’s to the 1990’s.

Make it so you have to put 20% down. We learned the hard way the problems of allowing near infinite leverage in the housing crash of the 1930’s. But 60 years later we had forgotten why that was put in place.

Germany stuck with the 20% down rule, probably because of the severity of the housing crash in Central Europe during the 1930’s, and the quite memorable consequences of the credit collapse of that era.

Germany despite its great success in the past few decades has seen relatively little housing boom. And therefore it has little to fear of a housing crash.