The wuss

So a fixed-rate five-year mortgage is currently available for just 2.3% at places where they also sell beauty supplies and occasionally serve souvlaki. If you prefer an actual bank, the best rate currently is about 2.6%. Either way, it’s dirt-cheap money.

Inflation is 2%, thus the traditional fiver mortgage is about as close to free as you’re ever going to get. When houses are rising in value as many have been, why not load up on as much debt as possible? In fact, with semi-conservative, nerdy balanced portfolios returning more than 8% over the past year, why would you pay off a mortgage these days even if you had enough cash lying around to do so?

Incredible. $500,000 borrowed at 2.6% costs about $2,200 a month to carry and after half a decade, you’d have reduced the principal by about $75,000. In contrast, the first mortgage Dorothy and I had in the late 1970s was over 12%. So payments on a half million would have been $5,200 a month, requiring an income of roughly $185,000. At the time I think I made $30,000. But I could still buy a house.

The biggest reason properties cost what they do is the price of money. As it’s trended down for the past two decades, real estate has floated up. The real drama started in 2009 when central banks everywhere – ours included – adopted “emergency” rates following the credit crisis. The acceleration of house prices since then has been historic. Right along with that has been an unprecedented romp in personal debt – because only by swallowing giant loans can people get what they want. Houses.

As you probably know, households in Canada now owe more than $2 trillion, which is a bigger number than the whole economy. And 65% of that is in residential mortgages.

Because money’s so cheap, it’s encouraged borrowing on a scale not previously seen. Even back in the 1950s, families were paying 5% to borrow money to buy houses – twice the level of today. Higher interest rates can be a bitch (when I was sitting in Parliament during the early 1990s my mortgage was again over 12%) but they have one compelling benefit. Real estate gets cheaper when borrowing gets harder.

Here we are nine years after “emergency” rates were invoked. The country is not in recession any longer, the economy’s growing, the latest jobs numbers are satisfactory, the credit crisis is long past, the US is expanding and global growth is around 3% – not bad. Stock markets have ripped up into near-record territory, federal taxes have increased and inflation’s back. So why is the Bank of Canada’s official rate at the lowest point in history – 0.5%?

Cheap money – not Chinese or Iranian dudes – have given us Vancouver Specials at $1.4 million and 1980s particle board 905 clunkers at $1.1 million. They’ve created bidding wars, hollowed out RRSPs and savings accounts, given unearned windfall profits to house-owning Boomers and decimated the finances of house-horny moisters and GIC-adled retirees. Rates never this low before have given prices never this high. Now every level of government is fussing and fretting about ‘what to do’ amid a blizzard of new regs and taxes – on foreigners, speculators, renovators and empty houses. Since 2011 everything’s been dicked around with. Amortizations shortened. Downpayments increased. Stress tests created. Insurance premiums upped and coverage capped. Nothing has slowed the bloat in prices, stemmed the tide of buying or quelled demand.

And nothing will, save higher rates.

This is what the bank CEOs and their economists are now telling Ottawa’s politicians and those running the Bank of Canada. There was scoffing and derision days ago when central bank boss Stephen Poloz said 2% mortgages had nothing to do with real estate speculation. This is what happens to your brain when you ride around in a black limo inside the National Capital Region.

Poloz is afraid higher rates would damage the wider economy, but with each month he delays, the nation becomes more dependent on an irrational and delusional housing market. Now making up almost a quarter of Canada’s GDP, this is a bomb ready to detonate. No wonder that bankers are leading the charge to defuse it.

Meanwhile there’s a whole generation of Millennials, now outnumbering the Boomers and in their house-lusty years, who have grown up with cheap money. They know  throwing another $50,000 onto the pile during a bidding war will cost them only two hundred bucks a month. Three Starbucks a day.

Will it happen? The odds are growing. US rates will rise three times in 2017. Higher inflation and better growth here will rob Poloz of more excuses to be the wuss. Millions of people who never thought mortgages could be 5% again, will be shocked. Houses will fall.

Or, then again, he might do nothing. Fear that.


#1 First on 04.07.17 at 6:55 pm

Who cares about the price of a house in Canada when you are FIRST!!!!!!!!!!!

#2 TLG on 04.07.17 at 7:00 pm

I’m betting he will do nothing.

#3 For those about to flop... on 04.07.17 at 7:03 pm

Pink Pollen falling in Surrey.

These guys only took a small percentage off as they are pretty much down to break even territory.

They paid 1.125m last August when the boss of this blog was only able to do 300 sit ups a day ,he is now topping out at 500.

It is assessed at less than a million ,even with the bloated 2016 assessment and so they overpaid by a fair amount.

It wouldn’t be the worst decision for them to make if they get rid of it before the next one comes along.

It looks a lot better on the Zolo listing but no mention of a renovation.
It might have been the person that flipped it to them that did it and that’s why it’s good to have the local knowledge to guess roughly how much someone is into it.

At least they gave it a decent paint job with a sellable colour to get rid of the dreaded Surrey Salmon…


8847 134b Street, Surrey

Mar 23:$1,225,000
Apr 6: $1,199,000
Change: – 26000.00 -2%

#4 Interventionista on 04.07.17 at 7:06 pm

As I said yesterday, interventionist policies have done nothing to quell the parabolic rise in prices.

Now that we know that any forthcoming GTA policies will do nothing – and that only rates will change the market – side liners and renters better get ready to rent for years and years and years as rates creep up at a snail’s pace.

After a 13 year bull run, and with prices sticky on the way done, it will be another half decade or more before valuations even drop a little. This is the hidden ugly truth for those of you thinking that you were smart cashing out and renting, and for those still on the sidelines after missing a historic run up in prices.

#25 Interventionistista on 04.06.17 at 7:14 pm

While bears are salivating at the thought of some interventionist policies being delivered in the Ontario Budget to cool the GTA, lets just have a refresher on how ineffective government policies have been at ‘cooling the market’

* Elimination of the zero down/40 year mortgages – prices go up

* 20% Down requirement for 35 year amortizations – prices go up

* Tightening on HELOCs to 65% of the value of your home – prices go up

* Increased down payment requirements under T2 – prices go up

* New stress tests at 5 year fixed rate – prices go up

* BC Foreign Buyers Tax – looks like the market responded to the tax only to then realize that sales collapsed after China implemented new capital controls – not after the tax was implemented.

Government has a pretty good history of implementing toothless measures that fail to dampen the market – in part, because there is no will to stop the gravy train. The RE and ancillary services constitute 25% of the market – why kill the golden goose?

The much anticipated ‘affordability’ policies in Ontario will yield the same ‘dramatic results’ in terms of the direction of prices :)

#5 crowdedelevatorfartz on 04.07.17 at 7:09 pm

….and on the “wet coast” we have 31 more sleeps til election day……..

#6 For those about to flop... on 04.07.17 at 7:11 pm

#181 rainclouds on 04.07.17 at 4:31 pm
This dovetails nicely with Floppers hard work.

And the lamestream media is jumping on the bandwagon.

Per Yale Professor and Nobel Laureate for his US RE Econ efforts. “watch the media, when they start reporting negative RE news, the slide in prices is imminent”


Thanks for the help and the acknowledgment Rainy.

I did see the graphic the other day, but I will put this back up in case someone missed it…


#7 Ronaldo on 04.07.17 at 7:11 pm

”So payments on a half million would have been $5,200 a month, requiring an income of roughly $185,000. At the time I think I made $30,000. But I could still buy a house.”
$5200 would have enabled you to buy 10 homes in West Vancouvers British Properties in 1970. $30000 was a lot of money at that time. A good salary was $12000 per year so you were in a very high salary range. I myself was able to purchase a brand new townhouse over 1850 s.f. for $21000 which took 1/3 of my gross pay of $8000 to carry it. A million does not get you much nowadays does it? Sad state of affairs.

#8 The Fat Lady on 04.07.17 at 7:14 pm

Yes, I agree.

#9 Poloz aka mr.ponzi on 04.07.17 at 7:15 pm

Poloz is a useless silver spoon moron who is anti-free markets and anti-canadian. He is a ponzi scheme criminal and should be locked up for financial crimes

#10 maple on 04.07.17 at 7:19 pm

Almost 4 years ago – I made a comment about Poloz’s talking down the dollar, saying there was no problem in housing and even threating to lower interest rates, I said he was crazy and not qualifyed for the job. Even though Flaherty hand picked him he was in over the head. The OECD said at that time, Canada needed to raise rates. He lowered them and encouraged more borrowing at any cost.

4 years later, home prices in the bubble cities are up 75% in some areas – after an already decade long rise in prices. Now, we might be on the precipice of a housing cliff.

But one thing is for sure, many young Canadians are screwed and can’t afford to live in the cities they grew up and work.

Policy makers and politicians have really f—ed the youth.

#11 Joe2.0 on 04.07.17 at 7:22 pm

Martain Armstrong says there is a creatively structured mass cash exodus into Canada’s RE and that’s why prices continue to climb.
We be the greater foolzzzz

#12 Londoner on 04.07.17 at 7:27 pm

Poor Poloz just can’t catch a break. Employment up, economic growth up, inflation up but no wage growth and the damned loonie just won’t drop despite his threats of lowering rates. What’s a central banker to do? Nothing – his hands are tied. Expect more of the same rhetoric next week.

#13 AB Boxster on 04.07.17 at 7:28 pm

The morons that currently drive this country (T2, Mornau, Poloz) are well deserved by their millennial overlords.

They are politically correct, feminism snorting, government teat sucking, cannibis inhaling, tax indulging, energy killing, gender identifying, Liberal hacks without a clue as to how to run an economy.

Give me the bombastic, says what he thinks, political corrrectness hating, America first, kick the shit out of Syria and ISIS, pragmatic, golden haired multi-billionaire, any day.

At least he knows how business works, how to make money, how to build businesses that employ thousands, how to negotiate a deal, the power of patriotism, and the value of money.

While America prospers, Canada will suck badly.

#14 mike from mt; on 04.07.17 at 7:31 pm

Higher inflation and better growth here will rob Poloz of more excuses to be the wuss.


Yea right, RBC complains about housing issue yet quite literally advertises 60 sec mortgage approval. BoC Poloz denies low rates are to blame yet also states raising rates are too blunt a tool. Which would correct RE nationally.

So yes this will not end well either way.

Also very suspicious how FED holds at zero for nearly a decade then magically after an election finds the courage to raise and keep the rhetoric going.

BoC can easily do the same, FED did for almost 10 years, Japan for 20.

With the fiberals in power forget any changes likewise. Which is way I suspect (end of 2019 election) 2020. By then it will be so bad, probably .60c and real inflation at nearly 10%

#15 Pete from St. cesaire on 04.07.17 at 7:31 pm

New $10 bill announced. Will that be our largest denomination soon, a la India? Followed in a few years by the Googoloonieplex, a la Zimbabwe?

#16 Lulu on 04.07.17 at 7:32 pm

I think we need to build a chicken coop for, he is chicken out. He and T2 will do NOTHING until the next election, they will do anything to sustain this madness till the next election, if they win again, they may pop it with higher rates and take all the credit saying we are saving the moisters, if they lose, alright, leave the hot topic to the next administration, typical politician move. They are so afraid that they may not be able to sustain it is what my guess, they won’t do anything at all.. NONE. Shame on you leaders.

#17 Rexx Rock on 04.07.17 at 7:34 pm

They will do nothing.Emergency rates forever.We all know we will be like Japan.End of story.

#18 Jim on 04.07.17 at 7:35 pm

It is obviously “Chinese dudes” that have caused the bubble in Vancouver. It is well documented. Besides, what else explains the fact that other than TO no other city in Canada is as ridiculously overvalued as Vancouver? How many Chinese dudes do you see in Moose Jaw? Quebec City? Regina? Kamloops?

#19 Jim on 04.07.17 at 7:37 pm

The CEOs have to tell our politicians because our politicians are too cowardly or inept to do anything about the housing bubble. Young people are leaving Vancouver in droves thanks to corrupt Christy, the developers stooge, who continues to do nothing to prevent speculation and money laundering in the Vancouver market.

#20 Smartalox on 04.07.17 at 7:42 pm

The liquidity that brought us rock-bottom interest rates is also a key driver of wealth inequality – and it’s about to get worse.

Governments printed a bunch of money to increase supply and keep money cheap when the banking crisis hit, and funnelled it to the banks, to pump into the economy.

The banks started investing the money, in businesses at first, (notably, the oil boom), but then all those new well started producing, and the price of oil cratered. The banks also realized that since rates were so low, the margins (interest rate differential) between what they paid for the money (prime) and what they could charge for that money (commercial rates) was tiny, so to maintain their profitability, they were forced to increase the volumes of dollars lent.

With commercial businesses hoarding cash, or not wanting to assume deb to finance expansion into slowing markets (oil crash), the banks found residential mortgage lending to be a good combination of eager customers and secured assets.

The banks may have found that the combination of increasing the dollars per mortgage, and increasing the number of mortgages solved their ‘dead money’ problems, while the cash flowing from mortgages and HELOCs accomplished the government’s goal of keeping the broader economy rolling, as Canadians bought cars, meals, furnishings and trips with their newfound ‘wealth’.

How much was planned? How much was consequence? How much was the simple opportunism that draws people to the promise of ‘easy money’? We may never know.

But once consequence has been an acceleration of wealth inequality (different from income inequality) with the gap widening in two directions: the wealth of some people is increasing, but not nearly for as many, or by as much as those that decreased their wealth by taking on debt and other liabilities, within the same time frame.

And those debts will only increase as 1) Asset values fall (while prices paid remain the same) and 2) interest rates increase, increasing the costs of borrowed dollars.

These impacts on net worth, will erode wealth for those affected, and further widen wealth inequalities, yet somehow, it’ll be the ones on the other side of the gap – those that post modest increases in wealth – that will be vilified for the expansion.

The interesting thing is that however wide the gap it has never been easier to travel from one side of the gap to the other.

Just sell some over-leveraged assets.

Or just buy some, if you want to go the other way.

#21 ronh on 04.07.17 at 7:42 pm

So why is the Bank of Canada’s official rate at the lowest point in history – 0.5%? Asked, but not answered.

#22 Slow Canada on 04.07.17 at 7:44 pm

I do fear that, Garth. I fear so many people getting co-opted by the system that they become unwilling to return us to solid ground. What can I do except refuse to participate, come what may. At least I know that I am in good company. Thank you for that.

#23 I'm Not Poloz on 04.07.17 at 7:53 pm

I don’t get it.

You’re saying that Inflation is 2%, yet that bastard Poloz claims that inflation is below target and that the Loonie even at 74 cents is way too high and overvalued?

Toronto real estate inflation is over 30% in a month, while rent increases are over 115% in some places, while the maximum at 1.5% under Rent Control.

Transit increased from $3.00 cash fare to $3.25, even with record low oil prices. You’re right about inflation.

But Poloz and Morneau wants Canadians to work for free under the Punitive polices of social assistance in a 50-cent Loonie, while the 20-year-old female International student from China is automatically accepted into a low-income quota for Work Study program to afford a 31 million dollar mansion in Vancouver.

In other words, while Poloz is purposely causing thousands of Canadians to be suckered into the welfare system where they have to provide every detail of their life to a bureaucrat social worker of the Trudeau feminist Liberal party,

these International Students can be approved for Work study program which are supposed to assist low-income students, while they are able to purchase million dollar homes in Canada no questions asked in fear of being called a “racist Nazi” or” Right wing supporter”.

#24 Jetfixer on 04.07.17 at 7:54 pm

I’ll say it again, this Poloz guy is a limp d**k. He keeps interest rates in the basement because of oil? What percentage does oil make up of the GDP? 3%? Yellen has bigger cojones than this government. These low rates are going to destroy the economy because no stunning amount of business investment has occurred with low rates, just asset price inflation. Good job T2 team, bravo!

#25 Smartalox on 04.07.17 at 7:57 pm

Ever wonder why the first global leader to visit Trump was the PM of Japan?

Dos anyone remember back in the early 1990s when Trump was over a billion dollars in debt? He was. Do you remember which global economy was an economic powerhouse at that time? Japan.

Do you remember the hew and cry when the news broke that the Japanese had bought half of New York’s real estate, and Columbia Studios? Guess what else they bought: Trump.

Trump owes a lot of money to Japan, on a lot of long-term paper, stuff he bought 25 years ago. Now it’s all coming to term, and the Japanese investors are sniffing around for payment.

Watch Trump for actions in Asia that will benefit the elite of Japan, at the cost of the American taxpayer. North Korea is a ‘problem’? Better put a fleet in the sea of Japan. Better still, arm Japan, and let it keep China and the Koreas at bay.

#26 Ronaldo on 04.07.17 at 8:00 pm

#18 Jim

Better get used to it Jim because:

”A 2013 study by Dan Hiebert of the University of British Columbia predicted that by 2031 the Chinese population of Vancouver would be 809,000.”

#27 Lee on 04.07.17 at 8:01 pm

How does Poloz raise mortgage rates? He only manages the bank rate.

#28 wallflower on 04.07.17 at 8:03 pm

3 out of 10 and it’s not offshore money? are the locals stupid?
$1.5M to rent it out?
This HAS to be offshore money. Ignorant money. People who simply are ignorant of the circumstances.

#29 amazon girl on 04.07.17 at 8:04 pm

Where is smoking Man?

#30 Arto on 04.07.17 at 8:09 pm

It may be educational to all the “it’s not HAM” crowd to actually listen to an Agent “on the ground” to what’s REALLY happening in Vancouver

Vancouver Pre Sale Condos are a Ponzi Scheme

#31 };-) aka Devil's Advocate on 04.07.17 at 8:14 pm

#5 crowdedelevatorfartz on 04.07.17 at 7:09 pm
….and on the “wet coast” we have 31 more sleeps til election day……..

I can’t believe I am actually even contemplating an NDP vote. Hey I am a for capatilist free enterprise and growth but we need something to quell this. If we don’t slow it down one way or another when it hits the wall it will be a HARD HIT.

#32 VS on 04.07.17 at 8:14 pm

#29 amazon girl on 04.07.17 at 8:04 pm
Where is smoking Man?
ya; where is smoking man with his loonie forecast. David Doyle at Macquarie calls for 1.53 rate by the end of the year.

#33 Jas on 04.07.17 at 8:15 pm

First, I think these idiots deserve to be kicked out in the next election.
Secondly, here is my solution to residential RE price issue:
Agreed that the govt can’t dictate people on house sale prices but it sure can control the interest rate.
And as you’ve now concluded that the only thing which will put brakes on residential RE prices is higher interest rates then what the hell is govt. waiting for?
If they are concerned about not hurting the business activity then sir, those idiots can make the rule: A raise in interest rate by the central bank will only be passed to residential loans…not to businesses.
There! kill it like that …but will they?
They deserve to KICKED OUT at the next election

#34 Lobster Man on 04.07.17 at 8:15 pm

Hi, Flop:

Would you be able to tell me how much the following three Vancouver properties were sold for?

They are all west side properties, and were sold in December, 2016:

595 West 37th Ave.
5250 Ash St.
5270 Ash St.

Their owners seemed to have fetched very good prices. Special cases because of Assembly?


#35 Millenial on 04.07.17 at 8:15 pm

Garth, haven’t you heard? Balance sheet normalization is the new interest rate hike.

#36 OttawaMike on 04.07.17 at 8:21 pm

US doesn’t want to raise rates either.

Fed will raise rates slightly in the classic head fake then resume the low interest rate policies. With more debt piled on by the GFC than ever in history. America does not want higher rates and the CAD loonie can’t take it either.

#37 economictsunami on 04.07.17 at 8:32 pm

With the Fed raising rates, one has to wonder how much leg is left in this reflation policy driven,

“economic recovery”…

Global debt explodes at ‘eye-watering’ pace to hit £170 trillion

“The IIF said total debt levels, including household, government and corporate debt, climbed by more than $70 trillion over the last 10 years to a record high of $215 trillion (£173 trillion) in 2016 – or the equivalent of 325pc of global gross domestic product (GDP).”

David Rosenberg: “This Is A Bubble Of Historic Proportions”

#38 NOTHING SURPRISES on 04.07.17 at 8:33 pm

In contrast, the first mortgage Dorothy and I had in the late 1970s was over 12%.At the time I think I made $30,000. But I could still buy a house – Garth.

Year WageIndex

1976 $9,226.48
1977 $9,779.44
1978 $10,556.03
1979 $11,479.46

Making $30,000 year with a 12% mortgage rate was not a hardship………almost 3x’s the average income in 1978!

Fun with numbers: the median individual income today in Canada is $27,600. Stop embarrassing yourself. — Garth

#39 Jim on 04.07.17 at 8:33 pm

Re #26 Ronaldo: Uh, I think it already is…Just sayin’

#40 FormerSaskie on 04.07.17 at 8:36 pm

Question…could the BoC charge higher interest rates to banks borrowing money for residential mortgage money only and keep the lower rate for business investment and maybe commercial real estate?

#41 crowdedelevatorfartz on 04.07.17 at 8:39 pm

@#29 Amazon Girl
“Where is smoking Man?”
Jail? Hospital? Betty Ford Clinic? All three?

#42 dr. seuss on 04.07.17 at 8:40 pm

#27 Lee
“Poloz raise mortgage rates? He only manages the bank rate.”
You smoked a lot of pot in high school, right?

#43 Astroplane on 04.07.17 at 8:44 pm

#29 amazon girl on 04.07.17 at 8:04 pm
Where is smoking Man?

Interglactic police arrested him. On his way back to nectonite for breaking mission code. He told the truth one to many times.

#44 Smoked alien on 04.07.17 at 8:53 pm

It appears the resident drunken alien has been liquidated.!! Was he ever real! Hopefully he has made it to Ecuador to enjoy the millions of his tax free forex winnings. Safe from the CRA, commies, lesbians and SJW’s hot on his trail. Long may he run!

#45 wallflower on 04.07.17 at 9:02 pm

Attention Builders, Renovators, Professionals And End Users!

end users! the term our realtor/agents now use to refer to the historic, quaint, hard-to-find, resident homeowner

MLS® Number: C3751468

Garth – it just might be the single most peakish point of the whole bubble. End user, which follows, builder, renovator, and professional: the higher real estate buying classes.

#46 Bank of Millenial on 04.07.17 at 9:04 pm

#27 Lee – The bank rate is the rate charged to banks, and the banks make a profit spread off that rate. If the bank rate goes up, the banks need to increase to maintain their profit spread (for doubtful loans, losses, Operating costs, replacing Capital etc.)

I think the private sector is reaching saturation on lending, the who wanted money now have it. When everyone starts paying it down and not leveraging up, that is when money in circulation in the real economy slows down… This is what every Canadian economist fears right now.. CMHC, BOC, Ontario Finance minister – they’ve all said it.

#47 greyswan on 04.07.17 at 9:18 pm

According to Vancouver realtor on u-tube is saying….
pre-sale condos are being mostly sold to foreigners!!

Pre-sales properties are not part of 15% tax until occupied and registered in land titles office….another
BC Liberal lie… more housing for foreigners!!

What else would a condo-selling realtor say in a YouTube advertisement? Gullible much? — Garth

#48 joblo on 04.07.17 at 9:21 pm

So CEO’s need guberment to raise rates?
They can’t?
Lets see:
Auto loans 6-9%
Lines of Credit 6- 14%
Credit card 20%
and they can’t raise Mortgage rates why?

#49 Former South Etobicoke Trump White House Liaison Office on 04.07.17 at 9:30 pm

With the latest developments in Syria, I have good reason to make a forecast that real estate values in the major cities in North America will be cooling pretty quickly. In fact, you can say we might see a nuclear winter…

#50 For those about to flop... on 04.07.17 at 9:46 pm

Lobster Man on 04.07.17 at 8:15 pm
Hi, Flop:

Would you be able to tell me how much the following three Vancouver properties were sold for?

They are all west side properties, and were sold in December, 2016:

595 West 37th Ave.
5250 Ash St.
5270 Ash St.

Their owners seemed to have fetched very good prices. Special cases because of Assembly?



Hey Lobster,I just looked at the public database for you but they have not been updated yet.

The only ones I have seen updated this year yet are the ones that were bought this year and already being flipped again already,like they got expedited or something,maybe that is a legal requirement.

Broadway,will you help the Lobster Man out for me…


#51 common sense on 04.07.17 at 9:46 pm

#17 Rex

I agree with Rex…Central banks will do NOTHING as they have zero options left….they waited too long to raise rates, people are tapped out, nothing looks good future wise for growth and demographics say everything.

We are Japan…..if the stock markets ever fails, pension plans – retirement funds drop dramatically and nothing will bring them back for years unless we have a nice debt erasing war….

Nice options huh?

Raise rates? Please.

#52 Cto on 04.07.17 at 9:48 pm

No 2 TLG
I second your thoughts. Poloz will do “0” for at least a year. He’s a big fat nothin!
What can you expect from a central banker who drops the peddle to metal and leaves it in the red line for 10 years straight.
Sorry, car talk there… I bet he,s blew a few engines in his Mercedes a time or to…
I,m sure the clarity of leaving rates at the very bottom for 10 Years will be clear when it all ends, but most will be too busy surviving to care….

#53 common sense on 04.07.17 at 9:49 pm

US Credit car debt 1 BILLION – highest since 2007.

US auto loans 1 BILLION and 15% are sub prime for anyone with a pulse.

US Student loans are now over 1 BILLION.

And this ends peacefully?

#54 common sense on 04.07.17 at 9:55 pm

As for Poloz, he is just a pawn….don’t blame him, he has zero control of what to do and is just following orders. Wrong place at the wrong time. He deserves the $ for the abuse to he has to take for not a thing he can do. Would you look like an idiot to the masses for $200,000 ? As Moe Berg sang “The things I do for money…..”

A figure head at $200 plus grand a year (?)…nice gig if you can get it….and when he is done, he can kiss butt and make another $200 grand a year consulting….

#55 Chaddywack on 04.07.17 at 10:05 pm

@3 #3 For those about to flop…

Maybe I’m getting ahead of myself, but we had pink snow, pink pollen, pink lemonade….any thoughts for the fall what it will be before we go full circle again? Pink salmon? for spawning season.

#56 Harvey Lipshitz on 04.07.17 at 10:15 pm

Sell CMHC to the Banks.

#57 paulo on 04.07.17 at 10:24 pm

You know the banks could act unilaterally and in tandem
to raise rates for residential loans on a slow but gradual time line, instead of chasing each other to the bottom. such as following the us fed increases.
this would cool down the market very quickly with no goverment intervention, except agreeing to look the other way.

#58 Entrepreneur on 04.07.17 at 10:26 pm

Have to agree with #13 Boxster on how Trump knows how to get businesses and people back to work with patriotism.

People of a nation come first and the leader should prioritize his/her thinking with this concept.

The problem I am having now is the “…The economy is growing, the lasts jobs numbers are satisfactory, etc…” GT. What about the people who are on welfare, employment insurance? Does that get subtracted from how the economy is really performing?

At least Trump is heading the correct way and thinking of the worker; whereas, T2 if off talking usually in another country.

#59 yorkville renter on 04.07.17 at 10:28 pm

#6 Flop – agree 100% it’s finally getting socialized

#60 wbhyoung on 04.07.17 at 10:38 pm

The cost of mortgages could be increased by eliminating or significantly curtailing the cmhc and mortgage insurance in Canada. Borrower risk and thus mortgage rates are being artificially suppressed by underpriced mortgage insurance. Make lenders assess the creditworthiness and risk of borrowers without government intervetion.

#61 Arto on 04.07.17 at 10:51 pm


You really are hopeless. Steve Saretsky is not that kind of agent. He has been crying out Bubble for two years now. You are like the Knight in The Holy Grail with his arms cut off that claims it’s only a flesh wound

#62 Here is what will happen on 04.07.17 at 10:59 pm

The canadian central bank rate will rise only in concert with the government relaxing mortgage rules once more, like in the four successive steps taken in 2009. This will keep the housing bubble from bursting while also preventing the CAD from dropping to 60 cents on the USD. Agreed?

#63 Darth Vader on 04.07.17 at 11:48 pm

OPM ……..fell the FOMO

#64 QUEST FOR OPM on 04.07.17 at 11:50 pm

Keep eviscerating……the Masses…in search of investing OPM.. .many have lost thousands listening to this non sense

#65 House Trap on 04.07.17 at 11:59 pm

Fun with numbers: the median individual income today in Canada is $27,600. Stop embarrassing yourself. — Garth

What does the median income figures really mean?

#66 Northwind on 04.08.17 at 12:04 am

Poloz has successfully ruined this country completely. What a moron.

#67 Mad on 04.08.17 at 12:34 am

Poloz is as retarded and as brain dead as one gets.
Only “when” the market turns south will we see this whole thing as engineered by Poloz.

#68 steerage steward on 04.08.17 at 12:39 am

It has been fun laughing when reading greaterfoll.

It’s not funny anymore. We in Canada are about to experience something that has never been.

#69 Stock Picker on 04.08.17 at 12:41 am

Poloz and Trudy will go down in history as the single two worst single contributors to what might be the Canada’s longest depression. The contributions of positive propaganda by the CBC that supports the idiot twins is catastrophic.

#70 steerage steeward on 04.08.17 at 1:04 am

Just got this flyer through the door..

Don’t just dream of a better financial future. Live it.

From a bank.

Wow. Ahhhahahah! lets get in debt more and we will help you.

As Garth mentions this may be the top of idyioscey

#71 steerage steeward on 04.08.17 at 1:14 am

Where Are the Customers’ Yachts?

For one thing, customers have an unfortunate habit of asking about the financial future. Now, if you do someone the single honor of asking him a difficult question, you may be assured that you will get a detailed answer. Rarely will it be the most difficult of all answers – “I don’t know.”

Never heard myself or Garth say it.

#72 For those about to flop... on 04.08.17 at 1:37 am

This is the latest offering from my buddies over at how much .

Property taxes in the U.S for those interested…


How Much Are Property Taxes in Each State, a Visual Answer

#73 steerage steeward on 04.08.17 at 2:15 am

This is a bubble of historic proportions.

#74 Dan.t on 04.08.17 at 3:38 am

I remember that comment ” 2% rates are not responsible for housing speculation “… and that guy is in charge????

Probably the most brain dead comment ever. Raise rates .5% would be a start. I guess giving everyone access to massive amounts of free money doesn’t cause asset bubbles because public is super smart and can regulate themselves….

just like the Real Estate industry did in BC with self regulation. Shadow flipping, liar loans, deceptive advertising, down right criminal actions left to be self regulated…. nothing happened by the way- all left unpublished or small slap on wrist.

Housing is untouchable, politicians wants votes and it appears they don’t really care about public wellbeing until the flock starts to complain, then window dressing measures are taken….. Poloz doesn’t see a problem, he makes enough and can sent his other expenses to tax payers, free money for long long long time I guess doesn’t distort the true cost of assets?? I’m reassured now. This has to all be by design, no one can be that dumb. Just look at cost of living in Canada now.

#75 Ed Gough on 04.08.17 at 5:16 am

Hi Garth,
I have read your blog for some time and am in general agreement with you on most items. However, I do not believe Toronto house prices will fall much, no matter what governments do, because Canada still allows far too many immigrants into the country for our infrastructure to handle. All these new Canadians have to live somewhere and most settle in the large urban centres, because this is where the jobs are.

#76 paulo on 04.08.17 at 7:49 am

Absolutely correct on raising rates immediately,the emergency stimulus (artificially low rates) are/is no longer required,and now creating a dangerous situation.
Southern Ontario is the manufacturing center of the country, exporting companies are facing a critical shortage of skilled labor,some of the highest hydro costs in north america,and now the most costly housing in Canada, while competing with 3$/hour workers in mexico and 9$/hour workers in many southern states
all looking to take the jobs from Ontario.
Our banks are playing into the game by on one hand crying wolf and sounding the alarm, and handing mortgages out like candy at Halloween with the other hand. if it continues the only export increase we will see is the export of employers and there jobs to more cost efficient locals. those that remain will be hit with a barrage of new taxes,regulations and market interference, by provincial and local governments trying to address a situation that should be handled by the fed
Poloz needs show some leadership and step up to the plate and start immediately normalizing interest rates. a .50 raise followed by lock step increases following US fed moves.

#77 Just saying it again on 04.08.17 at 8:03 am

I love hot property show on CP24. Contradicts everything said in this blog.

Yesterday al Sinclair recommended that a seller of a property looking to buy again, split his proceeds and buy two so that he can have an investment property for” a little diversification”

He also went on to say ( and he never misses a beat here) that the stock market being “risky” why not buy more property. The other guests all nodded.

#78 maxx on 04.08.17 at 8:16 am

#14 mike from mt; on 04.07.17 at 7:31 pm

“Higher inflation and better growth here will rob Poloz of more excuses to be the wuss.


Yea right, RBC complains about housing issue yet quite literally advertises 60 sec mortgage approval. BoC Poloz denies low rates are to blame yet also states raising rates are too blunt a tool.”

A scalpel is also too blunt a tool in the wrong hands.
The only thing he seems to have done since he got the job is to lower and sit upon interest rates. No scalpel was ever required there.
Canada’s economy will never improve until this post is staffed with the DNA required to return value to Canada’s money- with someone who believes that all of Canada’s businesses deserve a fair shake. All of them.
Slowly increasing rates will not harm the broader economy. Quite the opposite. All sectors of our economy will become more robust (not just banks), because we won’t be continuing to spend ourselves into the abyss of re, re, re.
Anyone believing that higher rates will harm banks or any other business is gravely mistaken and no business is better than a bank at adapting to its economic environment. No business is better at taking educated guesstimates at what’s coming down the pipe.
Is there some sort of bloody-minded determination not to be seen as indecisive and ineffective during tenure? Too late. What is it, exactly? Not even a rat’s behind is forthcoming from this office. Stone face and crickets.
This disastrous exercise in economic policy exposes the fact that many of the impressive degrees on the hill are indeed tools of the bluntest sort.
What a waste, on so many levels.
Perhaps worst of all, the quality of life of so many Canadians.

#79 A Reply to #24 Jetfixer on 04.08.17 at 8:25 am

“[Poloz] keeps interest rates in the basement because of oil? What percentage does oil make up of the GDP? 3%?”

As of Jan. 2017, mining, quarrying and oil and gas extraction make up 8.3% of the GDP; however, real estate and rental and leasing make up 13.0%. These two sectors alone make up over a fifth of the economy. (Be careful what you wish for; you may just get it.)

“These low rates are going to destroy the economy because no stunning amount of business investment has occurred with low rates, just asset price inflation.”

There’s an inverse relationship between market interest rates and investment, all else held constant. Read up on the marginal efficiency of capital.

#80 A Reply to #25 Smartalox on 04.08.17 at 8:28 am

… hue (not hew) and cry…. D’oh!

“Better still, arm Japan….” I hope you’re being facetious; otherwise, decades of arms control and disarmament talks have fallen on deaf ears. Besides, you do know about the Second World War, don’t you?

#81 Moishe Cohen on 04.08.17 at 8:37 am

Hi Ed Gough,

If what you are saying is true, and the infrastructure is getting overloaded, then the said infrastructure will break. Surely living in a broken city won’t be worth as much as in a functional one.

#82 DoomandGloomer on 04.08.17 at 9:04 am

There she stood in the street
Smiling from her head to her feet
I said “Hey, what is this?”
Now baby, maybe she’s in need of a kiss
I said “Hey, what’s your name baby?”
Maybe we can see things the same
Now don’t you wait or hesitate
Let’s move before they raise the MORTGAGE rate!

All right now baby, it’s all right now
All right now baby, it’s all right now!

#83 DoomandGloomer on 04.08.17 at 9:08 am


#84 Trumpocalypse2017 on 04.08.17 at 9:15 am

8 April 2017 • 1:01pm

“Boris Johnson, the Foreign Secretary, has dramatically cancelled plans to visit Moscow just hours before he was due to fly amid escalating tensions over Syria. ”

Tension is ratcheting up now by the hour.

In his bizarre, puerile gamer logic, Trump and his insiders now are thinking that if they go to war with Russia, it will also be their best defence against the claim of collusion in the last election. And damn the consequences.

World wars often start in the strangest of ways.

We’re about to see another example

#85 maxx on 04.08.17 at 9:31 am

#20 Smartalox on 04.07.17 at 7:42 pm

You live up to your name- what a truly excellent summary.

Those of us who eschewed debt and accumulated wealth are now economic freaks.

The wealthy are generally and specifically vilified. Especially savers, but not businesses that hoard cash. Oh dear no. They’re simply being strategic.

At any rate, I’ve always found it so much easier to save and build independence than to pay off debt.

I’ve said this before, but the irony of our times is that even though low rates affects our view of money as generally being cheap, it is more difficult to get (via a decent job) and harder than ever to keep (costs defying the rate of inflation).

My conclusion: get the heck out of debt, yesterday, and save as though your life depends on it.

Oh yeah, it does.

#86 The Great Gazoo on 04.08.17 at 9:47 am

Article in the Post by David Rosenberg.

Headline is that Toronto housing is in a bubble of historic proportions. He believes that foreign buyers are “clearly having an impact” and that relative to other world class cities, prices here are not out of line. Still more upside left? See excerpts below:

“One caveat should be noted because what is different this time around (oh, how I hate using that phrase) is that Toronto has emerged as a world-class city and the foreign buyer is clearly having an impact.”

“So while Toronto residential real estate is indeed expensive for the locals, it is far less so for foreign investors, especially for Americans who can buy Canadian assets at a 25 per cent discount from a currency perspective.”

“So while prices may seem a little nutty, it is important to note that Toronto is a major financial, economic and cultural centre, and when compared to its peers globally, prices appear far less crazy, too.”

#87 maxx on 04.08.17 at 9:55 am

The Loonie. Duck Buck. Canada au naturel, en plastique svp.

The US is smart enough to have kept a paper dollar, the penny and the look of currency that means business and is taken seriously.

And how ’bout that twoonie. Cutesy poopsie little circles.
Hey! Let’s have a colouring book contest to come up with a “Canada’s 150th” pretty plastic dollarette. Winner gets to meet Poloz!

#88 U.S. Economy in a Snapshot on 04.08.17 at 10:27 am

Federal Reserve Bank of New York, Research and Statistics Group, March 2017

#89 Doug in London on 04.08.17 at 10:44 am

@Interventionista, post #4:
This is the hidden ugly truth for those of you thinking that you were smart cashing out and renting, and for those still on the sidelines after missing a historic run up in prices.
If I had one of those GROSSLY overpriced houses, I would have gladly cashed out, be renting, and have invested the proceeds. Why would any sane person not cash in a once in a lifetime winning lottery ticket? I would sleep better at night knowing I cashed out of the Ponzi scheme and have my money invested in more diversity. So what if you rent instead of owning? The dividends and distributions from your lottery winnings if you sell will more than cover your rent. As for anyone who hasn’t bought a house, why sink all your money into such an overpriced asset when there are far better places to invest your money? Also, if you rent it’s a lot easier to pick up and move if you want or need to.

#90 crowdedelevatorfartz on 04.08.17 at 10:50 am

@#31 Devils Advocate
” I can’t believe I am actually even contemplating an NDP vote……”

Was that an earthquake? Or did I just totally agree with you?

Christy Cash is waaaaaaay past her “due date” and the Provincial Liberals are starting to really reek.
They’ve been in far far too long.
4 years of NDP then Boot THEM out
Reset the Legislature.
Start from scratch

#91 crowdedelevatorfartz on 04.08.17 at 11:01 am

@#83 Trumpocalypse2017
“Boris Johnson, the Foreign Secretary, has dramatically cancelled plans to visit Moscow ….”
Boris Johnson was a grandstanding socialist clown when he was the Mayor of London and since his election to federal politics in Britain……nothing has changed.
Whether he’s mugging for the cameras in Paris or embarassing the EU leadership in Brussels nothing changes. His zippy one liners for the cameras and a 10 second sound bite on tv is about all he is good for.
Lets see how he handles Brexit and all it’s economic consequences.
I’m sure the Russian leadership took one less than 10 seconds to tell the British Foreign Office not to bother sending him.

Moscow without Boris…..the irony .

#92 4winds on 04.08.17 at 11:21 am

#83 Trumpocalypse2017

Relax. Keep breathing…

#93 traderJim on 04.08.17 at 11:30 am

#49 Former Trump HQ

I don’t support the intervention in Syria either, but thinking it, or anything else including N Korea issue, will lead to nuclear war is almost as bad as the Trump/Russia hysteria.

Now, if he adopts Hillary’s plan to have no-fly zones etc., then I’d say the deep state has really gotten to him and a conventional war (not nuclear, get real) will be guaranteed, even if they don’t openly declare it.

I’m still optimistic that he won’t fall into the trap.

But it does worry me that the left suddenly loves Trump for bombing a foreign nation. MSM will be pushing for a full scale war, which they know will be a disastrous quagmire for President Trump.

#94 traderJim on 04.08.17 at 11:37 am

#83 Trumpocalypseanysecondnow

Aren’t you taking a big risk being online? They can track your location you know.

Probably a sarin tipped tactical nuke bunker buster headed your way as we speak.

That’s probably a better outcome than having to eat canned spam in your basement for the next 30 years anyway though.

#95 traderJim on 04.08.17 at 11:54 am

Crowdedfartz from last thread:

“Now trump gets to play with missles and bombs in foreign Arab countries…and with Allies of Russia no less.”

Forgive my not understanding your statement about Trump playing ‘WITH allies of Russia’. I was probably distracted by your creative spelling and use of redundant terms like ‘foreign arab countries’.

But grammar naziism aside, I regret my comment entirely since I was eating my breakfast when I read your moon comeback. That’s an image I didn’t need, thanks a lot. : (

#96 traderJim on 04.08.17 at 11:57 am

To whoever was quoting gallup polls as if they are even remotely accurate, let alone meaningful, I can only say hahahahahahahahahaha

You must have missed the last election

#97 TurnerNation on 04.08.17 at 12:10 pm

The kids are alright? They are under attack on all levels – breaking up the family, home structure, financial engineering and record debt. And this:

Last night we have one dead, several nearly due to taking weaponized drugs (softer drugs laced with deadlier stuff) in Toronto.
Never forget there’s a war on. We are the target.

#98 Free Bird on 04.08.17 at 1:01 pm

So this is good timing…

Just in time for new taxes (or rate increases?) Hits the right demographic no?

#99 Lobster Man on 04.08.17 at 1:02 pm

#50 Flop –

Thank you Flop for trying. We’ll see if Broadway can get us some numbers.


#100 crowdedelevatorfartz on 04.08.17 at 1:16 pm

@#95 traderJim
“…..was eating my breakfast when I read your moon comeback. That’s an image I didn’t need, thanks a lot. : ( ”

Consider your loss of appetite my version of a free “crowdedelevator diet”.

Glad I could help….


#101 Ronaldo on 04.08.17 at 1:32 pm

#88 Doug In London

Well said. Absolutely agree.

#102 Trumpocalypse2017 on 04.08.17 at 1:36 pm


More Breaking News:

So….Russia now gives itself deniability for any attacks that affect US assets and allies.

Boris Johnson visit cancelled.

Tillerson next?

Ambassador recalls?

(Check your history books if you don’t know how things will roll from this point)

#103 Ronaldo on 04.08.17 at 3:20 pm

#101 Trumpocalypse2017 on 04.08.17 at 1:36 pm

I suspect that history will tell us that its all about control of energy and always has been. If only the truth were known. Where the heck is the Smoking Dude, he can tell us what’s going on. Probably passed out in some casino somewhere.

#104 Ronaldo on 04.08.17 at 3:27 pm

#101 Trumpocalypse2017 on 04.08.17 at 1:36 pm

Here is a book written by Marin Katusa you may find interesting and informative.

#105 45north on 04.08.17 at 4:43 pm

Will it happen? The odds are growing. US rates will rise three times in 2017. Higher inflation and better growth here will rob Poloz of more excuses to be the wuss. Millions of people who never thought mortgages could be 5% again, will be shocked. Houses will fall.

economic tsunami: from your link ( talking about real estate in the GTA ):
This is a bubble of historic proportions.

which leaves Justin Trudeau, the Federal Liberal Party and Stephen Poloz in a bind. If they do nothing the bubble will burst and they will be blamed. If they raise interest rates or off-load risk from CMHC unto the banks the bubble will burst and they will be blamed.

In baseball if you’re going to strike out, it looks better if you go down swinging. Poloz should increase interest rates by a quarter and Bill Morneau the Finance Minister should announce CMHC will only insure 90% of the sale price – the buyer has to have 5% down and the banks will have to risk the other 5%.

#106 Tony on 04.08.17 at 5:05 pm

Cheap money huh? What happened with cheap money in Japan and Germany? I wonder if it has anything to do with the Chinese buying residential real estate? Gee every place they invade it’s the same story. How about all the places the Chinese don’t buy? Prices Toronto saw thirty years ago!!

#107 Tony on 04.08.17 at 5:14 pm

Re: #2 TLG on 04.07.17 at 7:00 pm

Everyone around the world is betting Poloz will do nothing and the next move will be a cut in the Bank of Canada rate. The Canadian dollar is being heavily shorted presently.

#108 Robbing Hood on 04.08.17 at 6:56 pm

#88 “Why would any sane person not cash in a once in a lifetime winning lottery ticket? ”

Do you know what it costs to build a condo in Toronto? Do you doubt this is the housing of the future, as there won’t be any more supply of land for detached homes?

Let me give you the numbers: NICE, good location brand new 2 bdrm 2 bathrooms 900 sqft condo – 700k. Not extortionary price, it’s what it costs (land, construction, levies, etc..) + reasonable profit. Sure, you can find 2nd tier locations older building for half price.

NOW, similarly nice, central location, but better, quieter street, TWICE the size, renovated detached home + >5000sqft land.. do you think it should be at least 2, but more likely 3 times the price? I do.

Toronto ‘world class city’ rubs you the wrong way? How else then do you think it gets listed year after year in the TOP 5 cities in the world?

#109 Doug in London on 04.08.17 at 9:42 pm

@Robbing Hood, post #107:
It doesn’t matter one bit if Toronto is a world class city or not, the fact is at today’s high prices it makes far more economical sense to rent. The corollary of that is it makes good sense to cash in that winning lottery ticket which would give your retirement nest egg an ASTRONOMICAL BOOST! Only a fool wouldn’t see the good economic sense in that. Also keep in mind that, just like prices of bonds, there is a strong inverse correlation between house prices and interest rates. Also, there’s only one way these historically low interest rates can go in the future and it isn’t down. That’s bound to affect prices, and not in the upward direction. As I said there are far better places to put your money.

#110 b riding dirty on 04.09.17 at 1:17 am

free smoking man garth.

I invest with you, dont always agree with you

but is that not life is all about?

willing to hear each other out then banter and disagree?

free him, let him back in

thanks from the people who like jd and weird rants

#111 AGuyInVancouver on 04.09.17 at 5:09 pm

Poloz needs to be fired. He’s incompetent.