Contagion

In a moment: are the banks safe?

Let’s set the scene with comments from two blog dogs sitting on opposite sides of the real estate maelstrom. First a poster we’ll respectfully call Dick:

“People, don’t listen to Turnster, he knows nothing about nothing. If you bought into RE 1 year ago, 2, 5, 10, 15, 20 you are golden no matter what. Open your eyes and see for yourselves – RE in Canada will always be of value and will never go down in price. NEVER! There ain’t no bubble here. RE prices simply have caught up with the levels where they should have been in the first place. TO is a major cultural and economic city. I bought last years and it’s gone way up! And always will. And everyone will want to live here. The demand for RE will never dry up. NEVER!”

And here’s a further update from Derek, the dude who blissed out last month when his house went in a bidding war for lots more than he expected: $2.25 million. Then the buyer got cold feet while the other bidders fled. Lawyers are fighting. Derek’s in a funk.

“Well the shit show continues. Buyers did not even respond to our lawyer. We had hoped maybe they would come to their senses but have waited long enough. I just can’t believe peoples mentality. Stick your head in the sand and hope it goes away. So it looks like we are relisting on Monday.

“Really nervous that the market has changed and we will be at a terrible disadvantage now. Dealing with all this and maybe having to sue them is really not the way we had planned on having this happen. Most people I talk seem to feel that I will win if this is the outcome but obviously we are nervous.”

And finally, another dog who just sold for far less than anticipated after an attempt to create a bidding war failed. No offers – even for a detached in prime 416.

“At the beginning of April in this area there was a boat load of sales, before Ontario dropped the hammer.  Since then, just four sales.  Listings have tripled.  Bidding wars being held, but no offers.  Condos listings exploding. Now I just got to find a desperate owner willing to take a haircut on rent.”

Yeah, everyone sees reality through their own lens of experience. The guy who bought recently wants nothing more than validation for having made a sacrifice – which is exactly what it takes to buy into a bubble market. So he pumps, gloats and pumps harder. The person who wants to sell and can’t, sees nothing but disaster looming. The guy who swallowed a lump pf pride and took less, rationalizes the action. It’s impossible to know if the market switch has flipped from ‘Insane’ to ‘Scared,’ but something is afoot.

Days ago the savvy investment wonks at Mawer money managers sold almost three million shares in Home Capital Group, squeaking out the door before it shut behind them. The loss would be staggering, and now the company’s chief investment officer, Jim Hall, is saying some serious things about what the collapse of Home Cap might suggest about the whole mortgage financial business and even (gasp) the Big Banks.

Could the looming death of Canada’s biggest non-bank lender cause a run on deposits at other institutions as depositors start to understand their money went to finance a housing market that could blow up?

“The probability has gone from infinitesimal to possible — unlikely, but possible.” He told the Financial Post. “If depositors or bondholders start to lose faith in their banks, well then that becomes systemic.”

Yikes. Spooky words from a guy who manages $40 billion in assets. And while Home Cap’ mortgages represent just 1% of the entire Canadian home loan business, even little wounds are serious when you’re dealing with a system built on confidence. People blindly put their savings into the GICs and high-interest accounts of outfits like EQ Bank and Home Trust because they got a little more interest and were too trusting to ask when the cash went. (Most of it was loaned out to home-buyers who required high-ratio mortgages and didn’t qualify at the bank.) Now many depositors are desperate to get their cash back – and Home had to borrow $2 billion at usurious rates from an insider to stay alive. As a result, its stock plunged and the corporate carcass is now for sale.

See how it works? Not pretty. And fast.

There’s little doubt our big banks are secure, despite their jaw-dropping exposure to residential real estate. (If you want to worry, fret about the credit unions.) But the residential real estate market is just as susceptible to sharp U-turns in sentiment as GIC-holders in operations like Home or EQ.

On Friday US ratings agency Fitch hoisted a red flag over the GTA’s runaway, but conflicted, market. Ontario’s recent 16-point plan will bite, it says, and it could all start with those universal rent controls – since that market (as we’ve been telling you) has become dominated by speckers.

“The proposed rent controls could dampen price growth in the condo market if the rent investors can charge tenants is limited. Investors who are highly leveraged may be forced to sell, which could begin downward momentum that leads speculators to follow suit. Further, if all measures are passed, municipalities will have the power to introduce a tax on vacant units to encourage sales or rentals of unoccupied units, which may discourage speculators from holding onto vacant properties.”

Well, make up your own mind about what comes next. Dick has.

Code red: CMHC says Lower Mainland, GTA in trouble

Source: Canada Mortgage and Housing Corporation.

.

Never before have we seen such house price contagion

Source: Teranet-National Bank

208 comments ↓

#1 Victoria Real Estate Update on 04.30.17 at 6:23 pm

CANADA’S MSM SPINS THE HOME CAPITAL CRISIS AS A NOTHING EVENT

Nothing new there in terms of how the Canadian mainstream media approaches anything to do with Canada’s real estate market, whether it’s newsworthy or not, true or false…

Their message – it’s a minor thing. Nothing a simple patch won’t fix. Means nothing. Party on Canada.

The fact of the matter is that Home Capital issued tons of mortgages to the weakest applicants out there (no money and poor credit ratings) that regular banks wouldn‘t touch, despite Canada‘s extremely lax lending standards that allow almost anyone who can sign an “X” to get a mortgage.

And if that wasn’t bad enough, add in the liar loan factor (it’s what Home Capital is known for) and you have all of these weak mortgage holders who lied to get qualified for mortgages at house prices that are far beyond ridiculously overvalued and guaranteed to undergo a shockingly deep correction.

And Canada’s liar loan problem isn’t confined to Home Capital or the rest of the country’s alternative lenders, it’s a widespread problem that warrants suspicion of all Canadian lenders and mortgage brokers.

I guarantee that liar loans are much more prevalent in Canada than almost anyone can imagine.

THE CORRELATION BETWEEN MORTGAGE FRAUD AND DEFAULT RATES

Home Capital’s crisis won’t cause house prices in Canada to sink by next week or anything, that’s not how this type of thing works.

However, the damage of this illegal activity will inevitably be brought about through the correlation between mortgage fraud and mortgage default rates.

Sometimes mortgage fraud can be identified as the thing that pricked the housing bubble, that along with the average family no longer being able to afford the average home. That’s the “sometimes” role that mortgage fraud plays in the deflation of a housing bubble.

The “every time” role that mortgage fraud plays in the deflation of a housing bubble is evident in the amount that house prices fall after the inevitable price correction takes hold.

MORTGAGE FRAUD AND HOUSING BUSTS

There is a long list of countries that have experienced housing busts in which the depth of the price correction was made far more severe due to the existence of market-weakening fraudulent loans being on the books of lenders.

In a lot of cases, those who were given mortgages by falsifying their income need constantly rising prices to avoid going into default. Rising prices allow them to use HELOCs to pay for the monthly expenses that they don’t have enough income to cover.

WHEN HOUSE PRICES STOP RISING

It’s impossible for house prices in a housing bubble to peak and then plateau for an extended period of time, avoiding a major price correction. This is fantasy thinking on the part of those in the housing industry or those heavily invested in housing. History has proven that this doesn’t happen with housing bubbles. It doesn’t happen because it is simply impossible.

The end of rising prices indicates the time when the housing market is no longer able to artificially boost the economy. As the economy inevitably slows and jobs are lost, consumer spending is hit hard (it accounts for two-thirds of the Canadian economy). Most often, incomes fall as well. Fewer houses are sold , yet more people need to sell for obvious reasons. Fewer houses and condos are built and sold, and it keeps getting worse. The end of rising prices initiates a snowball effect. Interest rates don’t have to play any role at all in this.

That house prices stop rising brings about a weakening or an elimination of the forces that have been pushing prices higher and brings into effect the strong forces that pull prices lower. The result is obvious – falling house prices.

Every housing bubble gets to this point. And for Canada that time is drawing near. It could be a month or two away.

A brutally destructive outcome awaits every housing bubble.

#2 BG on 04.30.17 at 6:27 pm

Garth, if the 2018 budget contains a raise of capital gain tax, will this raise start applying to gains taken in 2017, 2018 or 2019?

Thank you.

#3 Pete from St. Cesaire on 04.30.17 at 6:31 pm

There’s little doubt our big banks are secure.
—————————————————–
The only thing secure about them is that the govt is willing to bail them out by imposing the bail-ins, by depositors, and further bail-outs by the govt (future taxes on the newly created bail-out money). I don’t have much money, but I don’t keep it in a bank where they can take what I do have and consider it legal to do so (of course they can inflate away the value of my cash by printing so much more).

#4 OttawaMike on 04.30.17 at 6:34 pm

Ottawa is picking up again with my central west place comparable houses up 10% this spring. East end us back in business too. SF homes had lost value there over past couple years.
Sure glad I own and don’t rent.

#5 Unbalanced on 04.30.17 at 6:47 pm

What’s to fret about the credit unions. Thanks in advance

#6 Lastline on 04.30.17 at 6:47 pm

Yeah baby.. All we need now are some unexpected black swan geopolitical events to exacerbate the situation. Get ready to plunder!

#7 When Will They Raise Rates? on 04.30.17 at 6:55 pm

#1 Victoria Real Estate Update on 04.30.17 at 6:23 pm

—————————

Nailed it.

#8 WUL on 04.30.17 at 7:06 pm

I relish the appearance of the daily entry of our brave, influential and rugged host. Thanks Turner.

#9 old gringo on 04.30.17 at 7:07 pm

It appears many of the contributors on this blog are very young.
I say this because I have witnessed the crash of Vancouver and Victoria both.
I remember buying 500k houses for 175K in both in the mid 1980″s.
Many friends crashed and burned , never to recover.
If you think this cannot/ will not, happen again , well then I have a lovely bridge for sale in London England we should talk about.
Reality is a game changer but also a reality check.
Best proceed with “mucho” caution in this marketplace.
Will see you on the other side of this.
We live in interesting times indeed!

#10 I'm Not Poloz on 04.30.17 at 7:07 pm

Why does Toronto have to spoil the rest of Canada? First it was when they spread that SJW culture from the politically correct campuses of Chanty Binx, Smugglypuff, Ru Pauland others.

Now Toronto is going to crash the Canadian economy because a million of empowered Millennials purchased overpriced condos in a frenzy while living the faux-uber-wealthy lifestyle while they take time off during Summer to ride naked on bikes with an entire Division of Toronto Police protecting them from criticism from sane people.

Toronto’s problems may cause the C$ to go below US$0.50 in the near future. Poloz is waiting to cut interest rates to 0.25% at the next Bank of Canada meeting in May. The Loonie will collapse to pre-70c levels when that happens this time, but you’re not going to get a pay raise to compensate for loss of purchasing power locally and internationally.

#11 but when on 04.30.17 at 7:09 pm

A month or two away? I live in Hamilton, houses that were 80k in 2000 are going up, and selling, everyday, at 450k. Unfinished basements, dingy 2-floor houses, narrow stairway, a humble abode* Real estate agents are throwing around terms like “non compliant” (erm, is this it, please correct me if I’m wrong) — it refers to a house that doesn’t meet current standards but is compliant with the regulations for a 3 bdr house in the 1960s for example.

Anyway, does a boom/bust happen that quickly, really? Today I sold for 450 – next month, the price falls like 30%. That seems a little unrealistic, even for a bubble market. It would just spur another bubble if things went that quickly. Am I off for predicting a “brutally destructive outcome” is years down the road. By the time the governments accept it, people enter a grieving stage, and the dissolution and desolation that is left sinks in, I feel like it could take years given the slow-pace of change that Canada’s bureaucratic nation contends with.

People will be enjoying their fresh bounty + earnings for a couple more years, propagating the illusion that all is well. Right? Until the money runs out, and there’s no one left to sell to. And the realization that the economy is worse off than before hits home, people will be trying to sell off slowly at first…I think, no?

Idk, I’m just trying to pace the way this could go.

#12 Rates vs Capital on 04.30.17 at 7:12 pm

Oh goody, another dated diatribe from VREU that regurgitates mainstream bearish arguments. All we are missing is the diatribe about collapsing sales in Victoria.

She still must have some cognitive dissonance since prices have gone up 20% in Victoria and surrounding communities since she started with her ‘the correction is around the corner’ speech last year arising from the collapse in sales.

Well, I told VREU that she should watch the foreign ownership numbers because she relied on 2015 data – which said that only 0.68% of Victoria buyers were foreign. Guess what, foreign buyers have increased 7 fold in 2016 to 4.7% – and golly gee, prices went up 20% over that time.

Its not like there is a correlation or anything. Its not like people in Victoria just discovered low interest rates after they have been low for 9 years; its not like the economy is booming in a stagnant government town; its not like average incomes have increased as Victoria’s is still below many other major cities.

So why the increase VREU?

If VREU actually got out of her Mom’s basement, she would have seen the changed demographics in Victoria along with the spread of luxury vehicles in a blue collar town.

You need to look around VREU at trends AND look at the numbers – you are not doing a good job of either

#13 rainclouds on 04.30.17 at 7:14 pm

YVR hits “code red” mid 2016 meanwhile Regina was problematic commencing Jan 2015?

That seems counterintuitive. Are Rent to Price and Price to Income that much worse in irrelevant Regina compared to Vandelusional? What about average housing price?

Answer: no

Regina has one of the highest household incomes Vancouver is much lower.

https://en.wikipedia.org/wiki/List_of_Median_household_income_of_cities_in_Canada

Rents not excessive in the flatland.

https://www.cmhc-schl.gc.ca/en/hoficlincl/homain/stda/data/data_004.cfm

Housing Prices Regina VS Van $300,000/$1,000,000

http://www.crea.ca/housing-market-stats/national-average-price-map/

Sorry, Not getting it. Regina has one of the highest average household incomes, Lower rents, MUCH lower housing prices. The CMHC data appears flawed.

#14 dopeystockpicker on 04.30.17 at 7:17 pm

I’m so not cut out for holding individual stocks. That much risk makes me nervous and reading one article from a guy I like makes me look at the exits. I have to get back into the etf boring portfolio.

Luckily this foolish adventure in stock picking is confined to my unregistered account so there’s some silver lining on losses.

#15 North Burnaby on 04.30.17 at 7:24 pm

We are noticing significant increase in new listings recently

#16 Danny Smyth on 04.30.17 at 7:30 pm

You think your preferred shares, REIT’s and bank stocks and other financials are not going to wiped out.

Guess again. Be careful what you wish for guys!

We wish you would leave. There is no reason to fear any of that. — Garth

#17 Debtslavecreator on 04.30.17 at 7:34 pm

The economic , social and political unraveling we are in is only the 2nd or 3rd inning. The corruption and fraud is systemic and the entire Canadian economy is a massive debt based Ponzi scheme designed to siphon off money for the benefit of the political and financial elite
The incredible leverage and shocking ignorance of an financially illiterate and docile population ensure an ugly unwind that ought to be fast.
This is an economy driven by a fraudulent monetary policy, state intervention via legislation and out of control spending / borrowing and rampant fraud among the FIRE elites. CMHC/LCBO/Beer Store / bailouts /free tuition for low income households / very high taxes especially on high earning salaried pros, state interference in the Telecom sector and car insurance sectors that ensure we pay some of the highest prices in the world and on and on. Add in the blatant public sector union corruption driving up crushing pension costs and we can keep going.
Hold onto your hat and loonies
There is a reason your money is nicknamed after a bird that dives down
The next 10 years are not going to be fun

#18 All out panic on 04.30.17 at 7:42 pm

Realtors, mortgage brokers, greaterfools and sellers are in an all out panic. Mortgage fraud is now main stream and RE appreciation is finished and is now on a decline. A pause or decline = game over. People trying to sell with NO BUYERS. Buyers backing out of deal. Depositors pulling money out. Lenders becoming the subprime borrower (home capital 15-22% loan). The house of cards is falling apart.

#19 bigtowne on 04.30.17 at 7:50 pm

The only financial transition or change in direction we need as boomers is a “nice bond market” so we can snap up some income with a well priced “debt instrument”.

Houses will still be attached to the landscape but the bonds have been priced high to heaven while we wait for how long for this never to end bull market in bonds continues.

#20 I'm stupid on 04.30.17 at 7:51 pm

#1

Great post

#21 Kick out the jams on 04.30.17 at 8:00 pm

Still plotting my escape from the country but need to make sure I have ample funds for my inevitable period of stasis. If the CDN dollar goes to shit then ill be in trouble… Would it be a wise move to convert a good hunk of cash into USD right not so I don’t lose a big % of my cash?

#22 Old Salt on 04.30.17 at 8:13 pm

Bring on the housing price adjustment.

At this point , I check out the occasional open house in one of the Ottawa area burbs to satisfy my curiosity and it’s sad. A bunch of generic 10-20 year old homes where the owners haven’t updated anything since they bought it, and the builder grade fittings are crying out for replacement. Why buy it if you can’t afford to maintain it?

And here the average wage is comparatively high relative to house prices compared in the GTA, so I’d hate to see the condition of some houses in the burbs there.

#23 renoviction on 04.30.17 at 8:14 pm

renoviction… coming to a neighbourhood near you. if you aren’t paying market rent… doesn’t matter how balanced and diversified you are.. thirsty landlords want market rent!

#24 jay on 04.30.17 at 8:17 pm

I’m gonna move some money out of credit union this week.

#25 Wrk.dover on 04.30.17 at 8:18 pm

Oh Canada, why do y’all think your monkey see, monkey do, is going to crash in slow mo compared to the one you emulate from the USA a decade ago?

#26 Doug t on 04.30.17 at 8:21 pm

Fear is contagious – when talk turns from “horny” to “worry” then people start looking for the exit quick. 5 to 10% in precious metals doesn’t seem so crazy at times like these. The Great Depession caught everyone by surprise – nobody likes a surprise like that – be prepared.

RATM

#27 For those about to flop... on 04.30.17 at 8:26 pm

Pink Pollen falling in Surrey.

These guys only waited a few weeks to wake up and smell the coffee and get serious about offloading this house.

They shelled out 735k last Spring and the bloated 2016 assessment came in at 755k after a nutso 57% increase from the year before, so this years edition has a good chance of being below their purchase price.

There’s your motivation,yeah…

M42BC

15136 86a Avenue, Surrey

Apr 6:$938,800
Apr 30: $699,800
Change: – 239000.00 -25%

https://www.zolo.ca/index.php?sarea=15136%2086a%20Avenue,%20Surrey&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA3N1lKMw==

#28 John in Mtl on 04.30.17 at 8:26 pm

Is there such a thing as an ETF composed of prefered shares?, or do I have to buy the shares directly, assuming I can of course!

#29 im not buyin' what dey sellin' on 04.30.17 at 8:28 pm

Why would anyone care about ‘liar loans’
and so called ‘mortgage fraud’
these are 100% non issues
the fraud is the amortization schedule and the mythical ‘risk’ to lenders and taxpayers who are ‘on the hook’
in a collateral loan even the credit worthiness of the borrower is irrelevant
need proof?
Ever see a sign like this?-
“New and used cars! 2017 models, Good credit, bad credit, NO credit history, no problem!!! everyone is approved”
and wonder why? it’s because if you don’t pay the dealer gets the collateral back on the lot to resell to another deadbeat.
Houses are the same, but banks created CHMC as a kind of hoax management, the hoax is brainwashing the general public about their ‘risk’
and another thing, if someone lied their head off on an app, what’s it too you? he pays every month, enriches the lender, his kids and dogs play in the yard and he lives happily ever after

#30 Smoking Man on 04.30.17 at 8:31 pm

#18 All out panic on 04.30.17 at 7:42 pm
Realtors, mortgage brokers, greaterfools and sellers are in an all out panic. Mortgage fraud is now main stream and RE appreciation is finished and is now on a decline. A pause or decline = game over. People trying to sell with NO BUYERS. Buyers backing out of deal. Depositors pulling money out. Lenders becoming the subprime borrower (home capital 15-22% loan). The house of cards is falling apart.

Your insane laughing con. Only reason I’m selling is to buy a huge house. We are opening up a rehab center. How ironic.

My son who will run it knows my routine. Rule is I have to be off the property by 8pm.

He knows that Dr Smoking only comes out after 9pm.

Huge grouth industry. Phentonal kills and if you love your kid you will pay anything. You either get off it or you die.

Son being a former oxy addict who was saved by one of these places. Big thank you to Jim McKenney.

He went and got certified. He’s got the best track record for curing addiction in Canada. Why would I not put the house money to good use. Save some lives and make some loot.

I’m proud of him.

He’s come along way since that cell call standing on top of a bridge. Desperate and afraid. What we went through that night, I don’t even wish that on James.

#31 toronto1 on 04.30.17 at 8:32 pm

Contagion has already spread- although it wont be mainstream for another 6-9 months.

Any Tier 2 lender, credit union etc.. credit availability is going to be drying up for anyone without verifiable (T4A) income, brokers wont be able to get you “fake paper” anymore at any cost.

All lenders including banks will be looking into their mortgages via internal audit- those that are suspicious will not be renewed when the term ends-

its no longer about market share- its now about protecting their shareholders.

withing the GTA in 2016- 14% of homes sold went to speculators (those who already own a home) another 5% was foreign buyers– 20% of the entire market was not from organic or holistic growth but speculation.
What was it in 2015? 15%?

there is massive oversupply in housing right now- that will become evident in the next 9-12 months.

simply put- there are not enough credit worthy folks in the GTA in the 25-50 age group to fuel this market any longer at its current price point– most likely there never was enough to fuel the market the last 2 years as if not for the speculators or foreign buyers it would have already dried up.

the price discovery that will take place in the next few years is going to be epic.

if your one of those that brought with a shifty loan- I would sell right now while the market is still moving. All lenders will be looking at shoring up their balance sheets and getting rid of shifty loans sell now while you still can

#32 traderJim on 04.30.17 at 8:33 pm

@Leo T

“Hard to beat paid off multi family buildings for lifetime cash flow”

Part of what is admirable about that couple is that they held on for the long term, even when they saw a substantial increase in the value of their buildings.

I sold my 4-plex after it quickly jumped up about 30%, as I was tired of the landlord gig. (Beach homes are quite old, lots of maintenance).

Thing is, I did crunch the numbers, mostly due to seeing my neighbours’ very comfortable lifestyle. It was almost a no-brainer to just keep the 4 plex, add on another one once finances allowed, and then another.

But…I decided to go another route and now am almost certainly not as well off as if I had stayed the course.

But that’s ok, I tell myself my life was more fun.

I don’t keep in touch with that couple. Chances are they bought several more over the years, who knows?

I hope they are selling now. Or maybe they are smarter than I am, again?

#33 Doghouse Dweller on 04.30.17 at 8:34 pm

#5 Unbalanced on
What’s to fret about the credit unions. Thanks in advance
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Depositor beware, Garth might be spot on with this. How safe is Meridian , nobody really knows for sure, especially the members..

To the bottom
——————–
April 10th, 2015
“Meridian, by the way, is the forth-biggest CU in the country, outside of Quebec. The largest is Vancity, already well-known to readers of this blog as one of the biggest house-pumping financial institutions in the land which gives out money to people who want to live in garages, don’t have down payments or buy a house with the swingles next door. It’s worth noting these guys are not part of the Canada Deposit Insurance Corporation, so you might want to think twice before parking your money in places that are happily turning into subprime lenders with massive exposure to a bloated property market.”

#34 Andrew Woburn on 04.30.17 at 8:35 pm

– Science finally figured out why your phone battery gets worse with age

Presumably this also has large potential implications for the lifetime costs of running an electric vehicle.

http://bgr.com/2017/04/26/battery-life-capacity-study/

#35 mawer guy on 04.30.17 at 8:37 pm

I had a good week with my mawer funds last week.
120 mill is a drop in the bucket when it comes to 40 billion

An investment call like that might go to judgment. — Garth

#36 unbalanced on 04.30.17 at 8:39 pm

Thanks Doghouse Dweller

#37 Mark on 04.30.17 at 8:44 pm

“The only financial transition or change in direction we need as boomers is a “nice bond market” so we can snap up some income with a well priced “debt instrument”.”

Then you’d want a bond market crash. So you can pick up bonds that are cheap, and hence, higher yielding.

The problem is, with the economy being so weak, the Bank of Canada is going to do everything in its power to stop that from happening. This includes reducing policy rates to zero (or negative), QE, etc.

#38 wallflower on 04.30.17 at 8:52 pm

#35 mawer guy on 04.30.17 at 8:37 pm
I had a good week with my mawer funds last week.
120 mill is a drop in the bucket when it comes to 40 billion

An investment call like that might go to judgment. — Garth

– – – – – –
“fiduciary responsibility”

#39 AK on 04.30.17 at 8:54 pm

“TO is a major cultural and economic city.”

“And everyone will want to live here. The demand for RE will never dry up. NEVER!””
——————————————————————–
Yeap. Sounds like the Pumpers and Loud Touts on BNN.

#40 mike from mtl on 04.30.17 at 8:59 pm

#21 Kick out the jams

If the CDN dollar goes to shit then ill be in trouble… Would it be a wise move to convert a good hunk of cash into USD right not so I don’t lose a big % of my cash?

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

I am not a financial advisor however the trend is difficult to ignore – stay far far away from CA$

If you have spare cash buy ONLY unhedged funds, that is not only a great equity gain, but a hedge against the CA$. Then if just spare cash is what you want, buy ‘currency’ ETFs, any decent one like US, GB, CH, even AU are a better than the effective negative CA$.

I’ve seen .77,75,74,now 73. Not a total stretch to find .60 by years end. If the trumpfer destroys or changes NAFTA and snr Poloz stays put or even cuts again… hello again .60>

Plenty of excuses for Poloz to stay put and even cut IMHO. Don’t let your CA$ cash rot because of your indecision!

#41 AK on 04.30.17 at 8:59 pm

“The probability has gone from infinitesimal to possible — unlikely, but possible.” He told the Financial Post. “If depositors or bondholders start to lose faith in their banks, well then that becomes systemic.”
——————————————————————–
They will take their money out from the big 5, which pay a whopping 0.05%? LMAO…

#42 mike from mtl on 04.30.17 at 9:06 pm

#28 John in Mtl on 04.30.17 at 8:26 pm
Is there such a thing as an ETF composed of prefered shares?,
///////////////////////////////////////////////////

ZPR is nearly completely rate reset preferreds, CPD is mostly RRP with some perpetuals, XPF is 50/50 CA$ and US$ preferreds.

PFF is US$ completely and listed but because the US tends to be perpetual the equity gain from FED makes very little gain. However you do get dividends paid in REAL Dollars! Best in something like an RRSP.

Be very mindful owning as Canadian preferreds can be wealth destroyers when BoC cuts rates as par for course.

#43 AK on 04.30.17 at 9:07 pm

“#28 John in Mtl on 04.30.17 at 8:26 pm

Is there such a thing as an ETF composed of prefered shares?, or do I have to buy the shares directly, assuming I can of course!”
——————————————————————
CPD – TSX
XPF – TSX
ZPR – TSX

PFF – NYSE

#44 For those about to flop... on 04.30.17 at 9:14 pm

Pink Pollen falling in Surrey.

Just like the last guys buying a 1970s house out in Surrey didn’t turn into the financial windfall they thought it would be.

They paid 803k last summer when the Fraser River was a lighter shade of brown and now they are in a fight to get their money back.

Maybe like the last guys they woke up and smelled the coffee or maybe they were just drinking the water from the Fraser all along…

M42BC

9247 138 Street, Surrey

Dec 21:$999,888
Apr 30: $799,999
Change: – 199889.00 -20%

https://www.zolo.ca/index.php?sarea=9247%20138%20Street,%20Surrey&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA3ODdQRQ==

#45 common sense on 04.30.17 at 9:16 pm

Seems like everyone is a weeee bit nervous money wise here tonight..

First the housing market dropping, a little run on Home Capital …hopefully this is not a precursor to a quick exit in the markets as well….that feeling at a top of a roller coaster just before…..

#46 im not buyin' what dey sellin' on 04.30.17 at 9:18 pm

on more thing,
my example of a car dealer may be a bad choice
why? because the car dealer actually has a car to hand over to you! the bank has no house, they enter digits,
it’s that bad, and if everything goes south they have an asset to sell
The car dealer risk is similar to yours if you do a
vtb, there is a slight risk that the buyer trashes the place, depreciating the asset. But the dealer is using a 3rd party finance company, whereas in a vtb the vendor becomes the bank

#47 Lee on 04.30.17 at 9:19 pm

When sfhs were selling on average for $1M last year in Toronto I figured there were more than enough high income earners in Toronto to sustain those prices for a long time. But now it seems most sfhs sell for $2.5 or more. There is no where near enough wealth in Toronto to pay these prices. So what’s holding up the market? Should we all sell?

#48 Smoking Man on 04.30.17 at 9:20 pm

Trader Jim

Usdcad has been range bound for the last six months. 1.35 to 1.31 it’s going to break out soon. Get ready to pounce.

T2 and Wynee are such clueless idiot teachers.
No clue on how shit works.

Since the rent control crap came out. Condos and Triplex type property listings have explode. SFH too but it’s just un motivated sellers trying to capitalize on March prices. If they won’t get bidding wars and price they want, they will de list. Invetory will dry up. Bidding wars by Dec.

I’m looking to vaulch a Triplex type property for the rehab center. Turf the renters. My whole family is moving in. Do some renos.

People think to small. Cost me 100k for 2 months when he took the wrong fork in the road. Think 10 rooms per month.

Even one room. Can’t legalize mj fast enough.

#49 John on 04.30.17 at 9:22 pm

#24 jay on 04.30.17 at 8:17 pm
I’m gonna move some money out of credit union this week.

Did the same with IC savings. We know how crazy Italians are willing to gamble on housing. Not with my money anymore.

#50 X on 04.30.17 at 9:23 pm

I always wonder about some of the RE pumpers….not the agents or developers who have a direct interest…but the average joe who owns a rental property or two….I always wonder if they really believe what they are saying about what a great market it is, how RE only goes up, or if it is more wishful thinking as they have all of their financial eggs in one basket. RE has done incredibly well the past ….what 8 years…. hard to argue short term with their results… but long term, I don’t know how anyone can’t see the RE market is out of whack (speaking for GTA)

Only when the tide goes out do you discover who’s been swimming naked. ‘Warren Buffett’

#51 im not buyin' what dey sellin' on 04.30.17 at 9:38 pm

a better example is-
how did Long and Mcquade become the biggest musical instrument retailer in Canada?

by giving credit to people that no one else would give credit to- musicians and student musicians and 12 yr olds who need Les Pauls
dont pay? you sing the ‘repossession blues’

#52 Smartalox on 04.30.17 at 9:38 pm

The un-dropped shoe in this situation is:

How many mortgages did Home Capital hold, anyway?

If it’s a few hundred, it’ll be a non-event.

A hundred thousand mortgagees getting hit with higher interest rates, that might start a trend of sell offs.

Until we know that number, all bets on whether or not this is the prick that bursts the bubble, are off.

#53 Smoking Man on 04.30.17 at 9:39 pm

Ok started early tonight.

Bay street wants me to take the stir stick out of my mouth while preforming myracals on the trade floor. They want me Stop salivating at big bobos in a low cut top.
They want me to wear a pink shirt on pick shirt day.
They want me to swallow climate change inspite of record population growth in polar bars.

They want me cut my rate down from 150 per hour to 85 wag my tail and settled for a head pat. They want me to diverse and keep my mouth shut about Saudi Arbia being on the woman human race councel.

Fk em.

My plan J rocks.

Enjoy your TFW. It was a lot easier screaming out JS now you have 25 sylibal names to deal with who are going to destroy my sheets.

But I’m not coming back a fourth time to help you suck up heathens.

Now let’s find an old western where real men don’t wear dresses.

#54 Leo Trollstoy on 04.30.17 at 9:46 pm

Great data again by Garth that shows that real estate prices have increased on individual compariable units over a long period of time and that this disease is spreading.

But just like bacteria in a Petri dish, everything dies once the food runs dry

#55 Leo Trollstoy on 04.30.17 at 9:47 pm

Usdcad has been range bound for the last six months. 1.35 to 1.31 it’s going to break out soon. Get ready to pounce.

I’ve noticed this as well but what are some potential catalysts for this breakout?

#56 Leo Trollstoy on 04.30.17 at 9:51 pm

#32 traderJim on 04.30.17 at 8:33 pm

I wouldn’t be so hard on yourself! It sounds like you did alright!

#57 Smoking Man on 04.30.17 at 10:02 pm

#55 Leo Trollstoy on 04.30.17 at 9:47 pm
Usdcad has been range bound for the last six months. 1.35 to 1.31 it’s going to break out soon. Get ready to pounce.

I’ve noticed this as well but what are some potential catalysts for this breakout?

…..

I’m jobless at the moment. NOT suffering from incopatance, but risitance to insane cultural demands. Send me 100k to my pay pall and I will tell you.

Option B

Buy my 6 dollar book , write good review on amazon even if your lying, I’ll give it up for every one for free.

IT’S UP TO YOU.

#58 Poorguy on 04.30.17 at 10:03 pm

I got 2 stories -a recent development
1. One of my friends got her pre-approved mortgage rejected by one of those 6 banks.Now ,he is stuck with 2 properties in GTA :(

2. Another friend is trying to cash the fortune which he got in last 2 years but not getting what once was a sure bet.

So thing are surely lot different than what they were just 2 weeks ago !!

#59 Smoking Man on 04.30.17 at 10:16 pm

Smuggling 420 across the bordar was more fun sobar that Smoking it tonight and chasing away the stench of a skunk with my tried and true friend Jack.

https://youtu.be/89g1P_J40JA

Good night dogs. My 9pm started a 3pm

#60 GFD on 04.30.17 at 10:23 pm

Garth, is Dick the same person as Dickhead?

The less formal version. — Garth

#61 Mike E on 04.30.17 at 10:27 pm

So just heard from my landlord that he’s considering putting both of his rental condos at Lakeshore/Parklawn in Toronto on the market to sell. He was complaining that it no longer makes sense to own these with rent control and he’s looking to cash out. Something has changed.

#62 I'm stupid on 04.30.17 at 10:28 pm

#30 Smoking Man

I know your pain… I had a lot of friends and family go down that road. Oxys, perks, t3s it’s sad that you can get perscription for them so easily.

#63 When Will They Raise Rates? on 04.30.17 at 10:30 pm

http://www.zerohedge.com/news/2017-04-30/contagion-fears-rise-aftermath-home-capital-group-collapse

#64 When Will They Raise Rates? on 04.30.17 at 10:32 pm

#57 Smoking Man on 04.30.17 at 10:02 pm

Option B

Buy my 6 dollar book , write good review on amazon even if your lying, I’ll give it up for every one for free.

IT’S UP TO YOU.
___________

#65 When Will They Raise Rates? on 04.30.17 at 10:33 pm

I’ll take you up on that offer smokey…

#66 PawPatrol on 04.30.17 at 10:35 pm

I googled “cmhc code red lower mainland” and saw this little number come up on craigslist, a warning to renters of a coming Vancouver crash and to negotiate fair rent.

‘TENANTS: NEGOTIATE RENTAL TERMS-Demand Fair Rent” https://vancouver.craigslist.ca/van/apa/6111514254.html

#67 Original dave on 04.30.17 at 10:35 pm

Smoking man, bidding wars in december? So the bubbble is never ending?

If we start seeing problems in another sub prime lender plus more negative news with home cap, this whole thing is gonna turn down. And possibly quickly

#68 John in Mtl on 04.30.17 at 10:37 pm

@ #42 mike from mtl on 04.30.17 at 9:06 pm
@#43 AK on 04.30.17 at 9:07 pm

Thank you, Mike from Mtl, and AK, for helping me out! And especially to you, Garth, for your blog and advice herein. I’ve much to learn still. And that’s OK with me. Got my discount brokerage account open, got funds sitting in there since 30 days but still undecided on what to buy. Had a look at Cdn couch Potato & PWL Capital sample portfolios to get some ideas, and also re-reading notes I took from our generous host, Sir Garth.

#69 Ace Goodheart on 04.30.17 at 10:44 pm

RE: “The loss would be staggering, and now the company’s chief investment officer, Jim Hall, is saying some serious things about what the collapse of Home Cap might suggest about the whole mortgage financial business and even (gasp) the Big Banks.”

The Chartereds will recover. But their imminent share price “correction” represents a twice in a lifetime buying opportunity (this happened once before in 2008). Get yourself a cash pile, as much as you can. Get some popcorn, sit back and watch the fireworks. When you feel Chartered shares have gone as low as they can go (likely winter 2018 will be the best buy in opportunity) then start purchasing and don’t stop.

If you are over 30 years old, you will not get another buying opportunity like this in your lifetime…..

#70 Smoking Man on 04.30.17 at 10:53 pm

What is our purpose on earth.

To out car your buddy, who’s wife’s chest is challenging your wife’s.

I don’t know. I’m a Man who fooled two smart dogs by putting my 420 in zip lock bags and shoved them in the shampoo bottle.

Entrupenurs rock.

Problem solved.

Govt people not so much. Special coodos to Ottawa Mike.

Your not like them. Thank you for not burning me.

#71 Mawer New Canada on 04.30.17 at 10:53 pm

has been closed to new investors for quite some time. Shocked they had exposure to both Equitable and Home Capital. Top 10 holdings.

proves that we all blow it from time to time

to say this fund has been stellar is an understatement;

15 yr average; 14.65%
20 yr average; 13.85%

true story…..:)

Highly volatile small cap fund with an MER of 1.45%. Be careful with exposure, as Home Cap proved. — Garth

#72 batt519 on 04.30.17 at 10:56 pm

$afe in my $uicide $ilver portfolio. Still have strong gains after the brutal decline starting last August.
One, CRJ, got bought out by SSO(which is also a holding). Another, FCO, changed their name to ECS and went up 10x. STA went teats up. The others are up 30% +.

The best real estate blog by far. Thanks!
-Batt519

#73 Bob Dog on 04.30.17 at 11:01 pm

Average family income

1 Ottawa $94,700
2 Calgary $89,490
3 Edmonton $87,930
4 Regina $84,890
8 Victoria $77,820
11 Hamilton $76,730
13 Halifax $76,500
14 Québec $76,450
21 Toronto $68,110
22 Vancouver $67,090
23 Montréal $67,010
24 St. Catharines $65,900
27 Abbotsford $62,320

This means the average home value in Canadian city are as follows. The calculation for hundreds of years has been 3-4 times income

Ottawa (268,555.00)
Hamilton (268,555.00)
Toronto (238,350.00)
Vancouver (234,815.00)

Soon I plan to start making lowball offers at a 30% discount from the prices listed above. I don’t actually want to buy a home but it would be fun.

Interesting point is the city with the vermin who caused this disaster seem to be paid the most.

I honestly think its time to get the Canadian Military involved and start rounding up the criminal bankers and politicians for processing.

#74 Smoking Man on 04.30.17 at 11:04 pm

67 Original dave on 04.30.17 at 10:35 pm
Smoking man, bidding wars in december? So the bubbble is never ending?

If we start seeing problems in another sub prime lender plus more negative news with home cap, this whole thing is gonna turn down. And possibly quickly.

I sold Shlong Branch to a realy nice young couple yesterday at a discount , sent me one of these notes about there new baby. I don’t wish them harm. Im doing everything I can via the UCC. To help em.

Go real estate

Laughing Con will have a problem with that.

Prick hates his sister.that’s not what family is all about

#75 When Will They Raise Rates? on 04.30.17 at 11:14 pm

Can’t find the book… link?

#76 Smoking Man on 04.30.17 at 11:23 pm

I’m stupid on 04.30.17 at 10:28 pm
#30 Smoking Man

I know your pain… I had a lot of friends and family go down that road. Oxys, perks, t3s it’s sad that you can get perscription for them so easily.
….

The fact you’re talking about it is a good thing.

Silence kills.

Nothing else matters. Now you know why I like that tune

#77 Doug in London on 04.30.17 at 11:33 pm

@Ace Goodheart, post #69:
I hope you’re right. I’m just itching to pick up some discounted bank stocks or better yet XFN if it goes on sale. I’ve been following this blog for many years, and some years ago Garth said something like: when a correction occurs some people panic, while others are salivating at the thought of scooping up assets cheap. It’s springtime now, when a lot of people sell unwanted stuff cheap at yard sales. Bring it on!

#78 Barry on 04.30.17 at 11:35 pm

#1 excellent post, thank you.

#79 Ronaldo on 05.01.17 at 12:04 am

#69 Ace Goodheart

If you are over 30 years old, you will not get another buying opportunity like this in your lifetime…..
—————————————————————
I tend to agree with you on this Ace. Feb. 23, 2009, the big banks bottomed at almost exactly 50% from previous high. RBC for example was around $26.00. I can certainly see it hit $65 in the not too distant future and this could be the bottom for it this time around and I would definately be in buying as I was in 2009. Can you believe that I bought CWB for 7.50 in early March 2009. I thought I was a real genius cashing out at $14.00. It continued on into the 30’s. We may get another chance.

#80 Rates vs Capital on 05.01.17 at 12:15 am

As someone who watched the Vancouver affordability crisis materialize over the last 10 years, I have to admit amusement over how many GTA posters are perplexed home people are affording 1 or 2 million dollar homes ‘despite the wealth of Toronto.’

Its the same refrain we heard from Vancouver bears for years as prices were detached from fundamentals like incomes or price to rent ratios. For years, some many bears have had the ‘does not compute’ narrative embedded in their critique of the RE market.

Sorry, GTA, but your Vancouverization is just beginning. Foreign capital has found you following the implementation of the BC Foreign Buyer’s Tax and the party is just getting started. One million becomes two and then three, and then those that sell cash out to the surrounding communities, bumping prices up – and it spreads like cancer.

Oh, and judging by Vancouver, it will take locals 5-10 years of nosebleed prices and rents before someone squawks publicly or decides to take ‘action’ that is all optics.

I feel sorry for you GTA, but best to have that capital diverted your way before Vancouver become a complete resort town for the rich of overseas…

#81 paulo on 05.01.17 at 12:32 am

let responsible underwriting begin! the days of mortgages being handed out like candy are over the trick or treat factor trick factor exposed the treat not so palatable especially if you held HCG plenty of similar skeletons
on other mortgage granters books
some credit unions and similar alternate mtg players suspect do your home work carefully if you are invested
but do not lump all in the same basket there are some well run credit unions, pace comes to mind as for the other alternate lenders time to leave the warning shot has crossed the bow

#82 traderJim on 05.01.17 at 12:38 am

#48 Smoking Man

re: USD/CAD breakout

Yeah, I had bought 40 FXC calls in the last dip, and then realized it was a mistake. Luckily I got a Trump comment that allowed me to bail out, at a tiny profit.

So I am back to full short CAD, I can’t see a catalyst to make the loonie do more than jump a cent temporarily (likely on bad econ data in the US, meaning less likely Yellen raises in June).

But I have learned my lesson. The trend is down, and my attempts to take profit and make a few bucks on a bounce have been scary and not too profitable.

Better to stand aside and just watch it go.

But I am human, and do get scared now and again that Trump will talk the mighty buck down and cost me a fortune.

#83 DON on 05.01.17 at 12:41 am

#45 common sense on 04.30.17 at 9:16 pm
Seems like everyone is a weeee bit nervous money wise here tonight..

First the housing market dropping, a little run on Home Capital …hopefully this is not a precursor to a quick exit in the markets as well….that feeling at a top of a roller coaster just before…..
********

“…that feeling…”

yah that feeling is getting stronger no doubt.

#84 traderJim on 05.01.17 at 12:45 am

@ Smoking Man

p.s. congrats on selling the house.

My pal is listing soon…I think he missed the peak obviously. But I will still tell him to wait a bit and see if he can’t get one last chance at an insane buyer.

He’s a risk taker and doesn’t seem too worried. I hope it works out…hope not being a good strategy…

#85 DON on 05.01.17 at 12:49 am

#52 Smartalox on 04.30.17 at 9:38 pm
The un-dropped shoe in this situation is:

How many mortgages did Home Capital hold, anyway?

If it’s a few hundred, it’ll be a non-event.

A hundred thousand mortgagees getting hit with higher interest rates, that might start a trend of sell offs.

Until we know that number, all bets on whether or not this is the prick that bursts the bubble, are off.
****************

Do you think it was a few hundred – there were a lot of brokers involved in this scheme. No doubt why everyone is worried at the moment.

#86 BailinginBC on 05.01.17 at 1:15 am

Has anyone else noticed that there seems to be alot more rental homes available on the North Shore in Vancouver? Or is it just my imagination? Prices seem to have dropped a bit as well.

#87 dr. talc on 05.01.17 at 1:34 am

#61 Mike E on 04.30.17 at 10:27 pm
So just heard from my landlord that he’s considering putting both of his rental condos at Lakeshore/Parklawn in Toronto on the market to sell. He was complaining that it no longer makes sense to own these with rent control and he’s looking to cash out. Something has changed.

—-

add to this the impact of morneau’s pr reporting= many bsmt apt landlords will desist the activity fearing impact on their pr exemption. that’s why tory’s planning more social housing

#88 IKnow on 05.01.17 at 1:35 am

To those comments about mortgage lending was too lax in Canada …

Last year I applied for mortgages a few times to buy cheap townhouses in greater YVR (prices had since gone up about 40%, maybe the party will go on for another n months).
My primary bank asked for numerous support documents to prove my income and wealth.
I also used a regular mortgage broker (abbreviated as TN), never used one before.
The broker asked for MORE proof than the bank did.

My opinion is that it’s way over-blown to think of mortgage brokers being serial liars.

#89 John on 05.01.17 at 1:36 am

Amazing how shorts can find all the dirt(home capital)
https://twitter.com/Mr_Silbergleit/status/858891030506205184

#90 Ponzius Pilatus on 05.01.17 at 1:39 am

Smoking Guy.
You are wrong again about the impending decline of the EU.
Le Pen just declared that she will not pull out of the Union.
Vivre EU libre!
And the Brits are shaking in their boots.

#91 Joe2.0 on 05.01.17 at 1:40 am

HCG 1% market share.
No mortgage defaults.
Nothing to see here.

#92 Laughing Con on 05.01.17 at 1:51 am

Smokingman “Go real estate…..Laughing Con will have a problem with that .Prick hates his sister.that’s not what family is all about”

You still make me laugh smokingman. You are alright in my books . You maybe a pumper but you are no puppet. POP……lol maybe soon ill do it again. Peace.

#93 bdwy sktrn on 05.01.17 at 1:51 am

not read any posts yet but did a quick scan thru the names from tonight, got me some smokey to read, looks like mark and vreu slipped in too:(

slash slash slash slash slash

spring finally hit van after the crap/cold last 6 months.
heating up the market too?
newer duplex off vic drive at vic park – saw a photographer on mon or tue , sign on wed, got back from the wknd and it’s sold.
(new 2013- 650 today-1.3m =same unit – {don’t ever believe mark})
//location? 6′ from the bedroom wall there is a previously infamous apt block where a swat takedown, shots fired and an alligator recovered made the 11pm news several years back:)//

local newish/nicer duplexes 1.3-1.6 have not dropped a penny , continue to sell briskly and supply remains drier than a costco pack of unopened depends.

Victoria prices are still low, that is a great place to get a house too.

got an idea for a program – who can write a tiny script to count all posts by user name for the lifetime of this pointy blog. who would be #1? – flop is too new i think. boomer if he was still with us. sm? maybe. remember bpoe? those were the days….

someone do this so i don’t have to please!

ps: biggest miss of the month? not getting more costco when it dipped. 7$/sh div – surprise – who does not like that? i mostly just copied buffett.

float on (i promise it’s not same metallica one that sm posted 100 times)
https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwiZu9vd_83TAhUKy2MKHd3DAYkQyCkIKjAA&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DCTAud5O7Qqk&usg=AFQjCNFVLD4l_4rjCg0Mb0Bh4G1qKab5pA&sig2=dx1b-dEYUY0kwM98PlP1uw

damn that’s a long link….

#94 When Will They Raise Rates? on 05.01.17 at 2:10 am

#73 Bob Dog on 04.30.17 at 11:01 pm

I honestly think its time to get the Canadian Military involved and start rounding up the criminal bankers and politicians for processing.

——————–

Can’t. The parasite has full immunity:

http://laws-lois.justice.gc.ca/eng/acts/B-1.5/page-1.html

^ Read that, then watch this:

https://www.youtube.com/watch?v=2gK3s5j7PgA

#95 jane24 on 05.01.17 at 3:28 am

Garth please tell Derek that this is not how it works. I know as an old RE agent from TO in the RE last crash. The couple who are refusing to close but do have a valid contract on Derek’s house have to be released first. Derek cannot sell his house twice or he will be sued by the new set of buyers. In order to sign the second contract he has to release the first buyers from theirs. There are two ways of doing this. Asking the new buyers to wait while he sues the first buyers through the court system for a couple of years and the house goes likely down in value and the second buyers lose interest. Or giving those first buyers their deposit back and signing to release them. The second finishes the matter in a matter of days and is the best choice in a declining market.

Wow I hear you all say, Derek is the innocent party and he got screwed. Sad but true. in a declining market you have to be practical and move fast.

My other advice from the last time around is NEVER to buy before you sell. This will destroy your marriage, your finances and your health.

My sister in CO4 puts her staged home on the market today. She took 5 weeks to stage and I said to slap it on the market unstaged and her Lawrence area address would sell it for top dollar anyway. I think that they may still get a bidding war as so very prime. I’ll let you know later in the week.

#96 Sam Us on 05.01.17 at 4:43 am

My fear is, we may have (home capital) Bear Stearns-type event that investors are again ignoring at their peril.
USK

#97 Dan.t on 05.01.17 at 5:16 am

“#73 Bob Dog”

Average family income
1 Ottawa $94,700
2 Calgary $89,490
3 Edmonton $87,930
4 Regina $84,890
8 Victoria $77,820
11 Hamilton $76,730
13 Halifax $76,500
14 Québec $76,450
21 Toronto $68,110
22 Vancouver $67,090
23 Montréal $67,010
24 St. Catharines $65,900
27 Abbotsford $62,320

This means the average home value in Canadian city are as follows. The calculation for hundreds of years has been 3-4 times income
Ottawa (268,555.00)
Hamilton (268,555.00)
Toronto (238,350.00)
Vancouver (234,815.00)”

Wouldn’t that be crazy. People would then actually have more money (actual money and not debt) to spend at restaurants, hangout with friends, be less stressed, wouldn’t watch HGTV, Love it or list it, etc

…would not consider themselves to be wise, super smart,”mini Donald Trump” “investors” because they bought a residence in the right era because they needed a place to live (and not as an investment)

…and people might now only buy if it actually made sense, like it is affordable based on their incomes, close to work, comfortable size for their needs, and again, they can actually afford it

…and maybe, just maybe they might have something to talk about other than real estate and for most who bought the last 5 years and haven’t cashed out, their imaginary equity.

We are at or near the end but it is so frustrating to watch it play out.

The market has detached from fundamentals (a clear sign of a bubble) for years. Low interest rates, fraudulent and liar loans, government policies and zero regulation, super lax lending environment, and massive massive group think and herd mentality is what has kept the bubble up and growing after it clearly detached from fundamentals.

There might be one more push upwards but it will only be a blowoff top, just as the last suckers to buy in. Novice or amateur investors love to buy near and at the tops, and there seems to be an unlimited supply of fools in Canada who are willing to take out massive debt and seem super eager for a life of debt servitude and just can’t get enough of insane overinflated real estate at any cost.

On a side note, I am actually getting worried that Poloz might actually lower interest rates but if were to happens no one in Canada should be happy about it. It would be a clear sign that Canadian households and Canadian economy in general is in terrible shape and the ponzi scheme economy of people selling houses to each other really is a house of cards build only on cheap credit, fraud, and FOMO and needs even more government intervention to hold it somewhat together.

It would be governments version of a bail out for all the debt pigs who view debt as money and just another slap in the face to those who live within their means and try act in a rational and prudent manner (I don’t think that those in power want that- you all should have been drinking the cool aid… one way of another they will screw you over). Hope that wasn’t too cynical, I’m really a happy person:-)

#98 GTA Girl on 05.01.17 at 5:46 am

Opened up RE listings in Vaughan. From a week ago where listings were few in spots, now has exploded. Especially in new build areas. Many established areas, listings are still small.

The new Kleinburg area that Garth previously mentioned, has 15 new listings. Oldest listings are now dipping below $1mil mark. This is exact area where cluster of developers are opening newest release on May 13th with homes starting near $2mil.
http://www.impressionskleinburg.com/impressions-location.html

Still puzzled how buyers will line up for these new release pre-construction when listings in area are almost 1/3 or more cheaper. Yes, the builder changed up some outside designs, but lot size and cookie cutter is exactly the same. Area is still a construction mud nightmare (which after last nights rain, must be a disaster). This insane desire for ‘new’, and putting huge amounts of cash for 5 deposit cheques is a very risky endeavour. No one remembers the awful ’90’s, where even Tridel faced bankruptcy.

And some of these cowboy developers with their idiot sons have no problems closing up shop and taking everything with them.

Speaking of, entire area is noticing… the idiot son who drives around in his new Maserati with his posse of Instagram call girls, seems rather subdued lately. His dad finally made him pull all those social media pics of the wild parties at Lavelle. Rather difficult to sell $1mill townhomes in a farmers field when you have your son wearing a tshirt w/your development logo, coked out in a private booth w/a ladies who advertise their cell numbers and hashtag your newest family suburban development.

#99 GTA Girl on 05.01.17 at 5:59 am

Blind item:

Don’t even get me started about the big time Vaughan developer who seems to be grasping for glory days, when his brothers let him play politics and glam, between stints in Florida for rehab.

His brothers finally cut him loose, split the companies. He’s running his own show now. Crashed and burned when his politician buddy flopped. He cant get a meeting with his one quiet brother. It all ended when his niece went by the office one Sunday to finish some work, caught her uncle with a young lass who wasn’t her aunt. Yes, on his desk….Big mistake to angrily confront your niece and slap her in a fit of rage… now both brothers barely speak to him

Coke makes you do bad stuff. Another trip to Florida, almost divorce. But now he’s ready to sell your family nice pretty McMansions in a field beside the highway.

#100 neo on 05.01.17 at 7:00 am

#67 Original dave on 04.30.17 at 10:35 pm
Smoking man, bidding wars in december? So the bubbble is never ending?

If we start seeing problems in another sub prime lender plus more negative news with home cap, this whole thing is gonna turn down. And possibly quickly

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

We are already starting to see problems with other alt lenders. Look at Equitable Group’s stock. It was down 17% on Friday and the selling hasn’t stopped since HCG problems. I am pretty sure there is already a run on EQ Bank accounts which they own. Shoot and ask questions later is what contagion is all about.

#101 willworkforpickles on 05.01.17 at 7:04 am

Can AMerica ever be great again or CAnada ….even with the expectation of and declining real estate prices to come.
Do the first 100 days of a failing Trump administration inspire anyone ?
Not anything Trump attempts to do is going to have the dreaming in technicolour effect of making America great again but have the opposite effect and results.
The days of true leadership in the west are long over with.
Trump administration will crash and burn in debt failure.
The unravelling of the western world is afoot.

#102 Figure it out on 05.01.17 at 7:08 am

Top 20 greaterfool blowhards, all time, by number of posts:
1 9941 Smoking Man
2 4731 Mark
3 4630 jess
4 4530 TurnerNation
5 3632 Daisy Mae
6 3136 Bottoms_Up
7 2438 T.O. Bubble Boy
8 2419 Devore
9 2270 For those about to flop…
10 2261 Ralph Cramdown
11 2216 Tony
12 2169 Ronaldo
13 2168 45north
14 2141 crowdedelevatorfartz
15 2087 Nemesis
16 2062 Old Man
17 2002 Shawn
18 1972 Freedom First
19 1961 Canadian Watchdog
20 1925 Nostradamus Le Mad Vlad

#103 NoName on 05.01.17 at 7:35 am

MUST PRESS PLAY

An hour long video, and worth every second of it! Guy in video talks abut what makes popular and makes it go viral, from music to politics. How familiarity beats novelty, basically how to repackage same old bs, and make it new again.
How partys big wigs and msm blew it in us election, spent all millions and trump spend next to nothing and beat them.at there own game. One of the books I read touch base with this, but this dude neiled it.

Plz watch.

https://youtu.be/l9KW3GtWm30

#104 jess on 05.01.17 at 7:52 am

“adverse selection” The loans have a “negative expected value”

Lenders’ Lies about Liar’s Loans and “Rigorous Underwriting”
Posted on February 2, 2016 by William Black | 5 Comments
http://neweconomicperspectives.org/2016/02/lenders-lies-liars-loans-rigorous-underwriting.html
William K. Black
February 2, 2016 Bloomington, MN

#105 IHCTD9 on 05.01.17 at 8:01 am

Ahhh, it’s nice to watch the show from the sidelines. Let the GTA RE market be cleansed by fire. It’s going to take some really high temperatures to bring the speculators back down to earth. It will have to hurt – and I mean soul wrenching financial pain for lessons to be learned. Full recourse mortgages and a couple decade slide in house prices will do the rest.

There is always government if all else fails – they’ll come along and pass a few measures to make things fair and equitable. If the fat lady hasn’t sung already at that point, she’ll be clearing her throat the minute Wynne and T2 reach for their pen.

#106 Cottingham a bargain on 05.01.17 at 8:08 am

#49 John on 04.30.17 at 9:22 pm
#24 jay on 04.30.17 at 8:17 pm
I’m gonna move some money out of credit union this week.

Did the same with IC savings. We know how crazy Italians are willing to gamble on housing. Not with my money anymore.
——

Yup very true . Italians love RE !! Know that first hand and I am proud member of that club.

Seems we practically own all the ‘ casinos’ and have the game well rigged in our favour

#107 FLHTK on 05.01.17 at 8:13 am

#97 Dan T

Halifax has a higher average family income than Toronto?? Wow.

#108 Harjit Sajjan Gore on 05.01.17 at 8:15 am

I have to say, as the architect of this blog and the inventor of the internet, things are going to crash. Bigly.

#109 Shawn on 05.01.17 at 8:16 am

Most People Don’t Recognize a good investment

People posted here thinking Health Ontario pension plan made a risky investment at Home Capital. In fact it is Buffett like and more than double secured by mortgages. They get $100 million upfront!

Home is probably toast due to the bad publicity and how they horribly bungled the reaction to the OSC investigation. (When God gets on your case, mea culpa, and the greatest humility is called for). The original bad brokers and liar loans were not that big of an issue. The the lack of candid and timely disclosure made it an issue.

#110 Shawn on 05.01.17 at 8:21 am

Pull Cash Out of Credit Unions, Smaller lenders?

And where will the cash end up? It can only go one place; Into the big banks. It is completely infeasible to take it out in actual (very) old fashioned paper cash.

Use the cash to buy houses, stocks, gold? Sorry the cash must still end up in the big banks; This time in the account of the seller of those assets.

Cash in banks can only be reduced meaningfully if people pay off loans. How likely is that?

#111 Trump's First 100 Days on 05.01.17 at 8:22 am

TRUMP’S FIRST 100 DAYS: Here’s how they compare with Obama’s, Bush’s, and Clinton’s

http://www.businessinsider.com/trump-first-100-days-how-compare-obama-bush-clinton-2017-4/#more-laws-fewer-words-1

#112 Julia on 05.01.17 at 8:30 am

#95 Jane24
Isn’t there a third option? Come to an agreement with the current buyer to put up for sale now and current buyer is on the hook for the difference if sale price is lower?
Would need legal advice and drafting but reasonable people can come to reasonable agreements.

#113 InvestorsFriend on 05.01.17 at 8:37 am

WHAT rule of 3 times Income for a house?

Dan.T claims:

The calculation for hundreds of years has been 3-4 times income.

***************************************
Really? I have followed the business news since about 1976 and never heard of such a rule until the last decade or so and then mostly in this blog.

The MATH would suggest that the affordability multiple changes GREATLY with interest rates. It is utter nonsense to suggest that 3 times income be used both when interest rates are 15% and when they are 3%.

The rule I always was aware of was more like 30% of income on mortgage and property tax and total 40% of income on debt payments of any kind. That MATH forces the times income ratio to change as interest rates change.

Yes, houses are unaffordable for most people now. But no, a rule of 3 to 4 times income does not apply. If it ever applied in the past (Again it was not in the news in the 1990’s or 1980’s to my knowledge) it must have only applied for a given level of interest rates. The math requires that to be so.

#114 TurnerNation on 05.01.17 at 8:43 am

Gta girl funny stuff. Lavelle is nearby me. With friends who are known I always can bypass the line up of kids but most nights the D-bag index is off the charts on rooftop. One goes for the views only.

#115 Tater on 05.01.17 at 9:05 am

#91 Joe2.0 on 05.01.17 at 1:40 am
HCG 1% market share.
No mortgage defaults.
Nothing to see here.
—————————————————————
So a subprime lender has lower defaults than the big 5? And to believe this you have to take them at their word. And, they lied to owners about why originations were down all while selling their own shares. Yep, great business, great management. Buy, buy, buy.

#116 Best Approach on 05.01.17 at 9:12 am

While I am not a client of Raymond James (regrettably as Garth Turner is a very honourable man but all that testosterone put my wife off), I agree completely with what GT puts out here for all and sundry, including the great unwashed masses (that reminds me, it is laundry day and I no longer have to recycle my underwear).

As an observation, it is these unwashed masses, spouting inane and stupid questions that are to me the greatest source of risk to this country. When did we all become collectively so stupid? For every one person posting here a question in which they reveal their profound ignorance (and I am certainly not one to claim exclusion from this group), there are probably a thousand naifs lurking in the shadows cast by their own ignorance.

My wife and I have smart financial managers, using roughly what GT has recommended and we will weather any coming storm. What we really don’t want to see though is the wholesale slaughter of Canadians on the altar of the false god of real estate or any other single-minded pursuit. If anyone reading this blog has any concerns or doubts, your best bet is to contact GT, ask questions, and start investing using the services he offers. Simple, really fricken’ simple.

#117 45north on 05.01.17 at 9:12 am

toronto1: All lenders including banks will be looking into their mortgages via internal audit- those that are suspicious will not be renewed when the term ends

the price discovery that will take place in the next few years is going to be epic

that got my attention

#118 Ace Goodheart on 05.01.17 at 9:30 am

Looks like the red ink has begun to flow in the Toronto Condo market. Serious overbuilding, all on time-payment plans. The industry is ridiculous. No one owns these condos. From the day they are envisioned decades after the date they are finished, it is all borrowed money.

It all made sense right up to last week, when our increasingly left-leaning “Liberal” Provincial government (which is going to lose the next election badly) decided to socialize the rental condo market, with badly written legislation aimed directly at small time, mom and pop type single unit amateur landlord condo rentals.

This is a low interest rate era where property prices are inflated in a bubble market.

All of the folks who were up until last week purchasing condos, with no intention of living in them, as “investments”, safe in the knowledge that they could rent them for anything they pleased, and if they wanted to, raise the rent to anything they could get, are now the proud owners of rent controlled properties.

This is brutal. The full effect of this has not yet been felt. Expect a ripple through the construction trades, massive layoffs in feeder industries, and the associated defaults and personal bankruptcies of the overly leveraged individuals behind this never ending property “boom”.

All we can hope is if the Cons get into Ontario govt, they at least partially reverse this ridiculous legislation before entire neighbourhoods are turned into rent controlled condo slums.

#119 Q2 Class 2-B-C-2 Duplex Drive on 05.01.17 at 9:34 am

Dick is obviously a Toronto-based realtor.
***
Construction continues apace at Yonge & Eligible in the Big Lemon, ground zero for the uptown trendy set. On my street – Roehampton, just east of Yonge – that absurd twin-tower complex at Y&E is taking shape while right next door another condo will commence construction when the existing tiny condo currently on-site is finally demolished. Another towering condo! Maybe fifteen foot away from that twin-tower condo! People are spending, what, 400K for a skybox on the 40th floor so they can look into their neighbours skybox. This is madness! Besides, I’ve had it with the cement mixers and dumptrucks and traffic disruption.
***
I’m renting and saving my money and watching all the young folks so in love oblivious to the impending RE disaster. Someone really should explain that prices do go down and Toronto is not the centre of the universe. I’m not holding my breath.

#120 traderJim on 05.01.17 at 9:45 am

Worry about the Big 5 banks? Don’t be ridiculous.

The Big 5 will be bailed out (if necessary) obviously. I mean they have been always been protected from foreign competition for example, no reason the gov would ever stop coddling them.

That’s one of the reasons for their amazing share performance of course, they have a government backed oligopoly. Nice work if you can get it (and you can, just buy the shares when the crash happens, as others have suggested).

But people with money in credit unions and other small institutions are out of their minds, imho.

Taxpayers will undoubtedly ending up bailing out those greedy simpletons as well.

That would really piss me off but I am working furiously to get my taxes paid as close to 0 as possible so that I can just shake my head and eat my popcorn when it all goes down. Still doesn’t feel like it’s imminent though…we have a couple more years yet.

#121 cramar on 05.01.17 at 9:47 am

I surmise that Dick is a millennial who never lived in anything other than low-interest times. This is the way it has been all his life, therefore that is the way it always will be. Such juvenile linear thinking!

I hope he will update us in 2 years, 3 years, and 5 years. I doubt it. When the bubble bursts, he will be nowhere to be found.

As far as everybody wanting to live in Toronto . . . not EVERYONE! My neighbour who downsized last year from K-W, went to Toronto for a visit. He said he couldn’t wait to get out of the insane traffic. He said he wouldn’t live there even if someone gave him a million-dollar condo for free!

#122 Grantmi on 05.01.17 at 9:50 am

Looks like the stink for Home Cap continues. Gap’d down at the open and back down to $6.00 bucks.

What’s the next life line! Looks like the plunge patrol didn’t have enough plungers working on this over the weekend.

#123 Mike in Edm on 05.01.17 at 9:50 am

That traffic light chart from the CMHC… Who are the problematic conditions for? CMHC? Banks? Home owners? Home buyers?

#124 Grantmi on 05.01.17 at 9:57 am

Remember this??

http://bit.ly/2pAiv2F

Nope! We’re good! We got this… it’s all contained!! FED to the rescue.

Opppsie Daisy!!

#125 FNAiks on 05.01.17 at 9:59 am

HCG down almost 22% out of the gate today.

Garth would you prefer to be played by Hugh Jackman or Ryan Reynolds in the upcoming movie, The Big Canadian Short?

#126 bigrider on 05.01.17 at 10:02 am

GTA Girl -I am your biggest fan. Lets meet for a coffee at the center of the Universe , Starbucks Klienburg. You get it.

Wondering how many hits this site is getting daily/monthly now. Interested now that things look like they might tilting to the downside . You have always been good at letting us know.

And besides I want to show my nonno and zio the stats because just this weekend they said again ,quote’ dis a Gartha turner webadasita isa completa merda. Ima a tella you oncea I tella you a milliona times, da prica da housa she’sa stilla gonna go uppa Uppa UPPA ima tella you figlio mio. !! “

#127 Wrk.dover on 05.01.17 at 10:05 am

#107 FLHTK on 05.01.17 at 8:13 am
#97 Dan T

Halifax has a higher average family income than Toronto?? Wow.

—————————————–

Hfx is basically a Mississauga with out a dirty old Toronto beside it.

#128 NEVER GIVE UP on 05.01.17 at 10:19 am

#54 Leo Trollstoy on 04.30.17 at 9:46 pm
Great data again by Garth that shows that real estate prices have increased on individual compariable units over a long period of time and that this disease is spreading.
But just like bacteria in a Petri dish, everything dies once the food runs dry
==================================

Food will not run dry.

Inflation is raging at 6%.

Fake fiat currency cannot be controlled that is why we see interest rates dropping for the last 40 years.

Asking a politician in any country to restrain himself is a contradiction in terms.

My prediction is that no matter how many controls you put on real estate, Interest rates will be the number one factor by a country mile.

Interest rates will not go up in any meaningful way in our lifetimes.

Interest rates will go up and down in ranges. We will never see 5% or 10% interest rates again.

#129 };-) aka Devil's Advocate on 05.01.17 at 10:24 am

It all makes complete sense when you look at the fact that inventory is practically nil wherever people want to live. Wherever people WANT to live.

That and that banks have created a false sense of a “you’re richer than you think”, mentality, treating real estate like an ATM and a more addictive speculative venture than Vegas baby!

It doesn’t matter whether you rent or own, a real estate transaction took place where a seller sold to a buyer.

It is all quite logically illogical, or illogically logical, that the markets are behaving such as they are… badly for which they will be, eventually, punished.

#130 Grantmi on 05.01.17 at 10:29 am

Someone is desperately trying to hold the wall at $6 bucks for Home Cap. you can see it in the minute chart. Every time someone throws in a stink bid… the Ask moves up the Ask. There is a team on this.

Fun times! Yipppppeeeee!!

#131 Ronaldo on 05.01.17 at 10:42 am

#102 Figure it out on 05.01.17 at 7:08 am

Top 20 greaterfool blowhards, all time, by number of posts:
1 9941 Smoking Man
—————————————————————
Let’s see:

2169/102 mo. = about .7 posts per day. Yep, blowhard alright. Do you work for Stats Canada?

#132 Will.H.Slade on 05.01.17 at 10:43 am

I think the real shocker is that Hamilton has a higher family income than Toronto.

#133 Original dave on 05.01.17 at 10:55 am

Two things you cannot bad mouth to Italians:

1. Padre Pio
2. Real Estate

#134 Bond Junkie on 05.01.17 at 11:00 am

Equitable 1, HCG 0

From mgmt, stock up ~35%

The equity and funding markets have experienced some disruption over the past week.  We will continue to monitor our liquidity position carefully to ensure that we protect the money that Canadian investors and savers have trusted to us.  Our deposits have been relatively stable and we did not notice any unusual trends until last Wednesday.  As expected, after another financial institution publicly announced its business challenges last Wednesday, we began to experience an elevated but manageable decrease in our deposit balances.  Between Wednesday and Friday, we had average daily net deposit outflows of $75 million, with the total over that period representing only 2.4% of our total deposit base and with the most significant daily outflows being on the Wednesday.  Even after those outflows, our portfolio of liquid assets remained at approximately $1 billion.

-Bj

#135 Bond Junkie on 05.01.17 at 11:01 am

More:

EQB Obtained a letter of commitment for a two-year, $2.0 billion secured backstop funding facility from a syndicate of Canadian banks, including The Toronto-Dominion Bank, CIBC, and National Bank (“the Banks”). The terms of the facility include a 0.75% commitment fee, a 0.50% standby charge on any unused portion of the facility, and an interest rate on the drawn portion of the facility equal to the Banks’ cost of funds plus 1.25%. This interest rate is approximately 60 basis points over our GIC costs and competitive with the spreads on our most recent deposit note issuance, and as such will allow us to continue growing profitably.

-Bj

#136 InvestorsFriend on 05.01.17 at 11:03 am

Never Give Up said:

Inflation is raging at 6%.

Fake fiat currency cannot be controlled that is why we see interest rates dropping for the last 40 years.

************************************
Looks like you already gave up and gave in to weird doomer sites that lead you to incorrect conclusions.

Since fiat (meaning based on trust) is the ONLY kind of money there is, I rather like it. I find it rather useful indeed.

#137 NoName on 05.01.17 at 11:08 am

#102 Figure it out on 05.01.17 at 7:08 am

http://imgur.com/a/UdNN4

#138 LP on 05.01.17 at 11:12 am

Re GTA Girl’s posts

Is it really okay now to slander someone willy-nilly when he has no chance to defend himself? And is this blog now a safe haven for people who would do that?

#139 Ronaldo on 05.01.17 at 11:15 am

#128 Never Give Up

”Interest rates will go up and down in ranges. We will never see 5% or 10% interest rates again.”
—————————————————————
Here is a quote from the Vancouver Sun on Aug. 17/74 when mortgage rates were 11.75 to 12%.

“Don’t expect rates to ever go below 10% again.”

7 years later we saw them go to 23%.

#140 For those about to flop... on 05.01.17 at 11:17 am

Hey Devils Advocate,I don’t suppose you are interested in telling me the latest sales prices for these recent sales would you?

It’s o.k to say no and I’m hoping we can do five a week to show people what’s going on in real time.

Already been called a blowhard today,so what do ya say…

M42BC

10619 137a St. Surrey …draw?

1401 – 6659 Southoaks Cresent Burnaby ….loss?

5626 Elizabeth St. Vancouver ..win?

#141 Bigrider on 05.01.17 at 11:18 am

Nonna just came over to make lunch. She caught me reading your site this morning Garth. Looked over my shoulder. She is very nossey and opinionated. She ‘knows it all’. Yes, for all you who understand ,southern Italian.

“stoppa reading disa crap abouta marketo, stocks and all of disa bologna about da realestato crash. Nottagonnahappen.You wanna maka real moneta,you buya da land. If she hava some bricks on it, maa be you renta out but maka sure she’sa have a lotsa land under da bricks. God ,he, nota she ,not maka anymore land ” !

” You bigga jackass for buya dis stocks upa down upa down, you go nowhere. Now coma mangare, da lunch I maka for you she’sa gonna get cold “

#142 Damifino on 05.01.17 at 11:23 am

#128 NEVER GIVE UP

We will never see 5% or 10% interest rates again.
—————————————

Those were the exact words my father said to me in October of 1980 when the Canadian Bank Rate rose up to about 12%.

#143 Cottingham a bargain on 05.01.17 at 11:27 am

Bigrider !!

I’m peeing myself laughing !!Hysterical !!!

Hope it’s all in good fun .

Your nonna is right though .

#144 Con Fuscious on 05.01.17 at 11:33 am

42 Damifino on 05.01.17 at 11:23 am
#128 NEVER GIVE UP
We will never see 5% or 10% interest rates again.
—————————————

Even if we do, if the context is similar – rising inflation – RE prices may actually hold steady, as they did in early 80’s. Few seem to understand this: high interest rates only hurt when they come as a result of lack of confidence. This could be a result of sustained, large budget deficits or political/financial crisis. We are nowhere near such a scenario, even with T2’s $30 bil deficit – less than half that of late 80’s in real terms.

#145 Bigrider on 05.01.17 at 11:34 am

Cottingham a bargain.

Yes, all meant in good fun with no offense to no one I hope and NO she is not right.

#146 David on 05.01.17 at 11:42 am

Under the guise of affordable housing, Nova Scotia is offering 0% interest loans to pay a 5% down payment on a first house for buyers making under $75k.

https://housing.novascotia.ca/downpayment

An election called yesterday. Some things never change. — Garth

#147 IHCTD9 on 05.01.17 at 11:42 am

Another spring, and another round of Kijijiing off the unwanted collectables still littering IHCTD9 head offices.

First deal was to a nice young 20 something couple out of Whitby. Guy complimented our small village and asked about home prices in the area. I said yeah, things must be expensive out your way eh? That query brought forth a gush of anecdotes to the affirmative. They’re looking to move out our way, they’ve had enough of the GTA real estate culture.

Another house that sold down the road for 450K or so this spring is having the new owners slowly move in on weekends and evenings. They look all the world like another ex Toronto boomer couple hightailing it out of the GTA. I saw a brand new 2017 Grizzly 700 sitting out front last week, I suppose I’ll meet him out on the trails sometime this summer, I’ll get his story then :).

I get the feeling I am soon going to soon be surrounded by refugees from Toronto. Boomers in the mansions, Millennials in the starter homes.

Some kind of irony, that those who won the housing lottery; and those that lost it – both end up moving to the same area…

#148 IHCTD9 on 05.01.17 at 11:48 am

#141 Bigrider on 05.01.17 at 11:18 am

LOL, nice.

Nonna is completely wrong, housing is going downa down. Have her come make lunch for me, and I’ll show her 4th quarter 2016 results on my portfolio – she’sa uppa uppa! :)

#149 Ace Goodheart on 05.01.17 at 11:53 am

#141 Bigrider on 05.01.17 at 11:18 am

What’s Nonna’s take on condos sitting on “air rights”?

#150 Original dave on 05.01.17 at 11:56 am

so what’s the best way to find whether listings are going up or down? I’m seeing people posting that there’s a huge spike in numbers of listings. Wondering where those stats come from

#151 Yuus bin Haad on 05.01.17 at 11:56 am

Jim and I have been thinking about lowering our price target for HCG – watch out for our next Advisory Note (it should be a timely one).

#152 neo on 05.01.17 at 12:03 pm

134 Bond Junkie on 05.01.17 at 11:00 am

Like I said, I knew the run on the bank had started and they needed to calm fears. They don’t even report until May 11th and had to come out today before panic sets in.

I can guarantee you they are looking over their current loan books right now for any turds and new applicants are getting raked over the coals.

Either way, this isn’t good to house prices as credit is tightening.

#153 Zuco on 05.01.17 at 12:05 pm

What are the chances of Poloz cutting interest rates in may?

#154 Pre-retiree on 05.01.17 at 12:10 pm

#115 Tater
#91 Joe2.0 on 05.01.17 at 1:40 am
HCG 1% market share.
No mortgage defaults.
Nothing to see here.
—————————————————————
So a subprime lender has lower defaults than the big 5? And to believe this you have to take them at their word. And, they lied to owners about why originations were down all while selling their own shares. Yep, great
business, great management. Buy, buy, buy.
_____________________________

One reason that there are no or low % of defaults reported is that they have been thought to off-load the bad loans to other companies to be “restructured” – they have done it in the past with Brookstreet MCI (Google it for a nice surprise) – may not be doing that anymore nowadays but there are likely other companies around…

#155 A Reply to #142 Damifino on 05.01.17 at 12:15 pm

Your dad must have been flummoxed and flabbergasted when the bank rate hit 21% less than a year later (August, 1981).

http://www.bankofcanada.ca/wp-content/uploads/2010/09/selected_historical_v122530.pdf

#156 Con Fuscious on 05.01.17 at 12:16 pm

Hmmm, wonder how much to the + will HCG close today. Once it closes the gap is fun over for the shorts.

#157 Richard Simms on 05.01.17 at 12:17 pm

Not just Home Capital but these shorters will be in big trouble. All these so called hedge fund managers and other shorters alike better enjoy your profits now because it will not end well.

#158 GFD on 05.01.17 at 12:20 pm

Dollar about to break 73 and Home Cap losses Fridays gains, back to 6 bucks and a few Canadian pennies. Greater Fool Dead cat bounce. Still a short with lots of stick now available.

#159 Ogopogo on 05.01.17 at 12:21 pm

I just wanted to add to the good news about HCG.TO (Home Capital), minus double digits this morning, to say that crude is also down below $50/barrel.

Voting NDP for the first time ever, in the hopes that Horgan will help to crash BC RE. With any luck, we will soon see a perfect storm.

#160 The real Kip on 05.01.17 at 12:29 pm

Always nice to see Canada mentioned in the states by our American friends.

http://kunstler.com/clusterfuck-nation/sound-one-wing-flapping/#more-

#161 Lahdeedah on 05.01.17 at 12:29 pm

Geez, what kind of drugs are you on, entire comments section? I’d get better information by just listening to the hum of an air vent…

#162 BailinginBC on 05.01.17 at 12:56 pm

Yuus bin Haad – Love your website ;-) just needs a video of Rick Astley

#163 Editrix on 05.01.17 at 1:07 pm

If I were to sell my Upper Beach bungalow today (not that I can), I’d still make a profit. Only when prices on houses like mine go below about $600K, then it will be a problem. Most of the current sellers are just being greedy, not realistic. If someone wants to buy the house for $800K that you paid $450K for ten years ago and not the $1mil that you could have made 6 months ago, it’s not a big deal for someone who isn’t greedy.

#164 someone who isn't bdyskt on 05.01.17 at 1:24 pm

160 Lahdeedah on 05.01.17 at 12:29 pm
Geez, what kind of drugs are you on
———————
caffeine, statin, aspirin, blood pressure, and pot. ;))))))
………….
long time ago i was leaving sw ont for the left coast. had everything i owned stuffed into an old boat chev. last stop before leaving , go see the ‘man’ for a fat bag for the ride. jump back in the car, look at briefcase on the front seat think about ‘hiding’ the bag in said locked briefcase to cross the line for a more southerly winter crossing. the border was only a few kms away. somehow decided against the briefcase and stuffed it up under the dash/wheel where it was barely concealed.

was not too concerned as i was crossing daily there for a few years for work and i knew most all of the border guards – they always sent me through, no probs.

did not ‘think’ that a large car jammed full of ones possessions would be such a big red flag! immediately pulled in for inspection – oh crap.
park here, go into this room while we search the car. guy starts checking inside/trunk/backseat. He grabs the briefcase and brings it back to the room, throws it on the table, “open it”…

sometimes ya get lucky.

#165 Damifino on 05.01.17 at 1:29 pm

#155 A Reply to #142 Damifino

Your dad must have been flummoxed and flabbergasted when the bank rate hit 21% less than a year later (August, 1981).
————————————–

In fact, he was rather smug about it since it confirmed his belief that high interest rates were here to stay.

He died fairly young in December 1982 when the bank rate was back down to 10.26%. It stayed around that range for a few years then peaked once more in May 1990 at 14.05% before beginning a long, slow descent to the ridiculously low rates of today.

#166 soost on 05.01.17 at 1:33 pm

I’m not one for conspiracy theories – so here is a blatant conspiracy theory:

The government has been willfully blind to what happened at Home Capital or Jim Keohane would be out on bail awaiting trial.

Were it not for his Conflict of Interest, Home Capital would be selling its book, and fraud mortgages would be exposed on due diligence – leaving the inappropriate leveraged out of home.

The myth of a growing economy would be exposed and it would be plain to see that the entire country is headed in the negative direction.

#167 bdwy sktrn on 05.01.17 at 1:39 pm

Voting NDP for the first time ever,
————————
a month ago i was sure cheeky clark would win again, but i keep hearing this and it scares me.

NDP will absolutely bring the BC economy to it’s knees , just like last time. Be careful what you wish for.

yvr core is likely a lost cause for the libs but the burbs and many rural area will stay red, um ..blue, or is it red and blue? Just not orange or green.

still a tossup but green strength will sap ndp helping the libs.

#168 bdwy sktrn on 05.01.17 at 1:53 pm

#102 Figure it out on 05.01.17 at 7:08 am
Top 20 greaterfool blowhards, all time, by number of posts:
1 9941 Smoking Man
2 4731 Mark
3 4630 jess
4 4530 TurnerNation
5 3632 Daisy Mae
6 3136 Bottoms_Up
7 2438 T.O. Bubble Boy
8 2419 Devore
9 2270 For those about to flop…
10 2261 Ralph Cramdown
11 2216 Tony
12 2169 Ronaldo
13 2168 45north
14 2141 crowdedelevatorfartz
15 2087 Nemesis
16 2062 Old Man
17 2002 Shawn
18 1972 Freedom First
19 1961 Canadian Watchdog
20 1925 Nostradamus Le Mad Vlad
————————————————
awsome! thank you!
maybe smokey could use a few coding pointers from you.

how about the top 100?

///////

and, flop u sure those ones are actually sold?

#169 bdwy sktrn on 05.01.17 at 1:57 pm

nametags for the meet-up at la belle fountain should include the new ‘blowhard’ ranking for each attendee.

#170 Johnny Boy on 05.01.17 at 2:01 pm

#102 Figure it out on 05.01.17 at 7:08 am

Top 20 greaterfool blowhards, all time, by number of posts:
1 9941 Smoking Man
2 4731 Mark
3 4630 jess
4 4530 TurnerNation
5 3632 Daisy Mae
6 3136 Bottoms_Up
7 2438 T.O. Bubble Boy
8 2419 Devore
9 2270 For those about to flop…
10 2261 Ralph Cramdown
11 2216 Tony
12 2169 Ronaldo
13 2168 45north
14 2141 crowdedelevatorfartz
15 2087 Nemesis
16 2062 Old Man
17 2002 Shawn
18 1972 Freedom First
19 1961 Canadian Watchdog
20 1925 Nostradamus Le Mad Vlad
_________________________________________
WTF Where is Donald Trump?

#171 wallflower on 05.01.17 at 2:07 pm

#95 jane24 on 05.01.17 at 3:28 am
– – – – –
CO4 – definitely keep us posted
been watching that quadrant for a while – many houses on market since 2016 July and many gone to rental pool and still not renting

#172 bdwy sktrn on 05.01.17 at 2:11 pm

and btw who the heck is ‘jess’? (#3)

seems vaguely familiar but 4600 posts and i can’t recall one?

#173 Johnny Boy on 05.01.17 at 2:13 pm

#103 NoName on 05.01.17 at 7:35 am

MUST PRESS PLAY

An hour long video, and worth every second of it! Guy in video talks abut what makes popular and makes it go viral, from music to politics. How familiarity beats novelty, basically how to repackage same old bs, and make it new again.
How partys big wigs and msm blew it in us election, spent all millions and trump spend next to nothing and beat them.at there own game. One of the books I read touch base with this, but this dude neiled it.

Plz watch.

https://youtu.be/l9KW3GtWm30
____________________________________________
You are correct in the sense that Trump used social media on tidbits of viral content to spread his bullshit virally and sheeple sucked it up. He lives off of half truths, or no truths. He is a master of the switch and bait and has a disposition that allows him to lie to your face and when faced with the truth will disavow it, make it menial, change the subject or run away and not answer it.
Watch him in action here President Trump cut off an Oval Office interview with CBS anchor John Dickerson and gestured for him to leave the room when Dickerson repeatedly asked about the president’s unfounded wiretapping claims..
http://money.cnn.com/2017/05/01/media/john-dickerson-donald-trump/index.html

#174 isuckless on 05.01.17 at 2:18 pm

#113 InvestorsFriend

If you do some math, 3 times the income equals roughly 10% mortgage.
If you look at 2% mortgage, it is about 6 times the income.
So yes, this depends on the mortgage rates, however going more than 7 or 8 time the annual income becomes silly. no matter what.

#175 Smartalox on 05.01.17 at 2:19 pm

So from what I can see, HCG has about $4Billion in mortgages in effect.

If we assume that the average mortgage value is $250k, then there are 16,000 Canadian mortgage holders in this country that can expect to pay significantly higher mortgage rates in the near future.

If the average amount of an HCG mortgage is $400k, then it’s 10,000 Canadian mortgage holders about to re-set at higher rates. Possibly all at once, or in very short order, once HCG finds a buyer.

That could be a lot of properties hitting the market, in a very short time, if mortgage holders can’t end up making ends meet at higher rates.

What might the effect be of say:
– 5000 properties hitting the markets in short order the GTA?
– 3000 more on the market in Vancouver
– with 2000 more scattered in markets across the country (Calgary, Edmonton, etc.)?

That might only be a doubling of new listings in a month, based on recent months for Vancouver for example. Less than there were in the peak years of 2012 and 2013.

Will it be enough to move the market? I guess that it depends when the flood hits; in summer, maybe not, but if the deluge hits in a traditionally slow month, like October, with three months to make a sale before the end of the year, prices might yet feel some pressure.

#176 Paul on 05.01.17 at 2:23 pm

Smoking Man

I guess raising the price works.

57 James St

Sold:$950,000

List:$999,000

#177 Con Fuscious on 05.01.17 at 2:26 pm

#159 Ogopogo That’s the way to do it, vote NDP in spite, if you hate your country because you lost fair and square. Read the blog and listen to nice rock’n roll https://www.youtube.com/watch?v=ed5S-UgmLek

#178 GFD on 05.01.17 at 2:34 pm

I’m on Cold-FX

#179 InvestorsFriend on 05.01.17 at 2:38 pm

COMPLETE GARBAGE

#165 soost on 05.01.17 at 1:33 pm said:

I’m not one for conspiracy theories – so here is a blatant conspiracy theory:

The government has been willfully blind to what happened at Home Capital or Jim Keohane would be out on bail awaiting trial.
|************************************

That is complete garbage. And why not use your whole name for such a statement?

Jim Keohane says he recused himself from Home Capital’s decision to take the loan. Do you have evidence to the contrary? What if, like most transactions, it is good for both parties? Does Jim own a whole ton of Home Capital shares? Enough to risk his pension plan CEO job? The loan is very well secured. Get over it.

As for Home Capital, why not Short it, Buy it or ignore it? If anyone at Home Capital broke the law, it was not Jim Keohane.

There is a name for people who see conspiracies everywhere. That name is not “rich people”, more like “poor people”.

#180 Ret on 05.01.17 at 2:42 pm

Forget T.O., Montreal or Van. The big money is in Hamilton.
I guess social assistance pays more than I thought.

Seriously, Hamilton? I live here. Think crime, corruption and Detroit. The highest RE property taxes in Canada, yet boo all services. Public sector unions that own city hall, sanctuary city nonsense, and young punks running around claiming to be artists, all add to the joys of living here.

#181 Bobby13 on 05.01.17 at 2:48 pm

I spent timed with 2 chartered accountants one is a partner with MNP and other works for SPower. We were on the housing subject and its there belief that housing is good debt. I am under the impression that good debt is one that puts money in your pocket. So I asked what if prices fall? Reply home prices never fall and if they do it doesn’t really matter because it’s good debt. My thinking must be wrong I guess they’re probably both smarter than me.

#182 Bobby13 on 05.01.17 at 2:51 pm

I steered a close friend to this site to try and help them see things from a better perspective cause they’re about to way overspend at the top of the market. Funny how people get tunnel vision no amount of sense or mathematics to show them can even get them thinking.

#183 I am the mighty Oz on 05.01.17 at 2:53 pm

All lenders including banks will be looking into their mortgages via internal audit- those that are suspicious will not be renewed when the term ends-

nonsense

#184 The real Kip on 05.01.17 at 2:59 pm

Just reading up on Home Capital woes. Wow, they got spanked hard by depositors who withdrew $1-billion in a week. Clearly the Ponzi has problems, she’s getting wobbly!

#185 Old Dog on 05.01.17 at 3:09 pm

After reading some of these comments all I can say is, WOW!
Garth, you have a lot of work to do. You may have to start putting in 14 hour days.

#186 InvestorsFriend on 05.01.17 at 3:20 pm

Home Capital Nonsense

#175 Smartalox on 05.01.17 at 2:19 pm said:

So from what I can see, HCG has about $4Billion in mortgages in effect.

If we assume that the average mortgage value is $250k, then there are 16,000 Canadian mortgage holders in this country that can expect to pay significantly higher mortgage rates in the near future.

**********************************
Maybe look harder ’cause they got $18 billion in total loans on the books and another $26 billion under administration (which are likely mortgage loans they originated and then sold).

BUT no these will not likely come up for renewal other than at the contracted expiry date. If Home sells or folds the loans will be taken over by a buyer and will not be called in early.

There is no evidence the interest rate on renewal will be higher. They might be is rates are rising but Home’s issues will not likely cause higher rates. There remains tons of competition to lend out money.

Your notion of Home Capital causing a flood of home sales is wishful thinking.

#187 traderJim on 05.01.17 at 3:31 pm

#173 Johnny Boy

Love that video! Best part was where Trump told him he called his show ‘deface the nation’ hahahahaha. Absolutely classic.

#188 GTA Girl on 05.01.17 at 3:37 pm

Dear LP,

Who am I slandering? Did I mention a name?

No, I didn’t. (Why do you know them?) drugged up people in development is old news. Cleaning money thru projects makes a Fortune. Some people can’t handle it, begin to believe they’re rock stars. Its why when the bubble bursts its going to be really messy. Save your pearl clutching till then.

Big Rider,

Heyyyyy!!! Starbucks Kleinburg on a Saturday is a zoo. Ferrari watchers crowd the porch. But next door, Cafe Volo is putting in a patio….and serving Negronis. And then there’s the tapas bar going in. Drinking will be the new hobby when the coke parade ends.

#189 Wrk.dover on 05.01.17 at 3:42 pm

#179 InvestorsFriend

Jim Keohane says he recused himself from Home Capital’s decision to take the loan. Do you have evidence to the contrary? What if, like most transactions, it is good for both parties? Does Jim own a whole ton of Home Capital shares? Enough to risk his pension plan CEO job? The loan is very well secured. Get over it.

As for Home Capital, why not Short it, Buy it or ignore it? If anyone at Home Capital broke the law, it was not Jim Keohane.

There is a name for people who see conspiracies everywhere. That name is not “rich people”, more like “poor people”. on 05.01.17 at 2:38 pm

———————————————————–

Investors Friend is Jim Cornhole’s friend.

Obviously the floor sweeper is the one to bear the burden of the blame in this saga.

The corporate suite royalty is only there for stock options and benefits such as all of the workers pension money in the end. Don’t expect Jim is complicit in any of this…just that G.D. janitor.

#190 Johnny Boy on 05.01.17 at 3:52 pm

#187 traderJim on 05.01.17 at 3:31 pm

#173 Johnny Boy

Love that video! Best part was where Trump told him he called his show ‘deface the nation’ hahahahaha. Absolutely classic.
_________________________________________
Trump is good at his schtick, a master liar. I’m Sicilian Italian background and if he pulled shit on an Italian Cosa boy impeachment would be the least of his concerns.

#191 n1tro on 05.01.17 at 4:04 pm

@Investorsfriend

That is complete garbage. And why not use your whole name for such a statement?

Jim Keohane says he recused himself from Home Capital’s decision to take the loan. Do you have evidence to the contrary? What if, like most transactions, it is good for both parties? Does Jim own a whole ton of Home Capital shares? Enough to risk his pension plan CEO job? The loan is very well secured. Get over it.

As for Home Capital, why not Short it, Buy it or ignore it? If anyone at Home Capital broke the law, it was not Jim Keohane.

There is a name for people who see conspiracies everywhere. That name is not “rich people”, more like “poor people”.

————————————-

Can you enlighten the rest of us how HOOP giving HCG a predatory loan benefits HCG and its shareholders? Being an active director and board member when the deal was hatched and then accepted still requires Jim to perform a fiduciary duty on the behalf of HCG and its shareholders. Seems like he did well for HOOP shareholders though.

#192 InvestorsFriend on 05.01.17 at 4:05 pm

Home capital

Maybe look harder ’cause they got $18 billion in total loans on the books and another $26 billion under administration (which are likely mortgage loans they originated and then sold).

*******************************
The $26 is the total including the $18… so it is only $26 billion in Home Capital loans…

#193 Smoking Man on 05.01.17 at 4:12 pm

#137 NoName on 05.01.17 at 11:08 am
#102 Figure it out on 05.01.17 at 7:08 am

http://imgur.com/a/UdNN4
…..
Ha Told you I’m a writer. And that’s only about 5% my total writing. It’s vastly improved since I started.

#194 soost on 05.01.17 at 4:18 pm

#179 InvestorsFriend on 05.01.17 at 2:38 pm
COMPLETE GARBAGE

#165 soost on 05.01.17 at 1:33 pm said:

I’m not one for conspiracy theories – so here is a blatant conspiracy theory:

The government has been willfully blind to what happened at Home Capital or Jim Keohane would be out on bail awaiting trial.
|************************************

That is complete garbage. And why not use your whole name for such a statement?

Jim Keohane says he recused himself from Home Capital’s decision to take the loan. Do you have evidence to the contrary? What if, like most transactions, it is good for both parties? Does Jim own a whole ton of Home Capital shares? Enough to risk his pension plan CEO job? The loan is very well secured. Get over it.

As for Home Capital, why not Short it, Buy it or ignore it? If anyone at Home Capital broke the law, it was not Jim Keohane.

There is a name for people who see conspiracies everywhere. That name is not “rich people”, more like “poor people”.

———————
Take a deep breath and calm yourself. Your defense seems emotional rather than logical.

Clear compensation by and authority over both parties. You want to be the guy who Directed a Company that went down like the Hindenburg on the back of fraudulant financing? Apparently you need a “whole ton” of stock to be accused of unscrupulous manipulation.

I’ll grab my bankers boxes of ‘evidence’.

Interestingly you take the position that financing 4% mortgages at 10% interest is MUTUALLY BENEFICIAL.

Accept these kinds of deals and you will be a “poor person”

#195 n1tro on 05.01.17 at 4:34 pm

Excerpt from: http://www.mcmillan.ca/files/Overview_duties_and_liabilities_of_directors_in_Canada_a1.pdf

Conflicts of Interest
Historically, the common law in Canada generally prohibited directors from doing
business with the corporation that it served; to permit otherwise could result in the
director’s private interests conflicting with the bests interests of the corporation.
Modern corporation legislation has modified the common law prohibition provided the
director discloses his or her interest and abstains from voting in accordance with the
applicable legislation.

What this means is Jimbo should have resigned a month ago, hatched the deal, and see what HCG says. It isnt enough to “recuse” yourself from the voting of a deal you (being the CEO of company on the other side which is reaping a large benefit) help hatch up. Hey, maybe I’m jumping to conclusions and an HOOP analyst came up with this deal all by themselves and Jim didnt know about it. Just like when Nigel gave Duffy $90K to pay back taxes for free as a good co-worker would do. Harper didnt know right!?

#196 For those about to flop... on 05.01.17 at 4:44 pm

#168 bdwy sktrn on 05.01.17 at 1:53 pm
#102 Figure it out on 05.01.17 at 7:08 am
Top 20 greaterfool blowhards, all time, by number of posts:
1 9941 Smoking Man
2 4731 Mark
3 4630 jess
4 4530 TurnerNation
5 3632 Daisy Mae
6 3136 Bottoms_Up
7 2438 T.O. Bubble Boy
8 2419 Devore
9 2270 For those about to flop…
10 2261 Ralph Cramdown
11 2216 Tony
12 2169 Ronaldo
13 2168 45north
14 2141 crowdedelevatorfartz
15 2087 Nemesis
16 2062 Old Man
17 2002 Shawn
18 1972 Freedom First
19 1961 Canadian Watchdog
20 1925 Nostradamus Le Mad Vlad
————————————————
awsome! thank you!
maybe smokey could use a few coding pointers from you.

how about the top 100?

///////

and, flop u sure those ones are actually sold?

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

I see I passed Cramdown easily once he retired.

Devore could take me a while depending on how much Pink Snow ,Pollen, Lemonade and Salmon I can dig up and if someone wants to hire a guy with half a brain and a vicious limp.

As far as the addresses being sold?

Nah ,I don’t know because it just takes them off and says sold or removed,but this is what I have been finding….a lot of the people that can’t get their price to make them whole have just been taking the property off the market because some of them are probably jaded after trying to get their money back for 6 months.

To take your property off the market at the hottest time of the year tells you about the state of the market.

Most of the ones that have sold had that 7-10% wiggle room in the asking price…

M42BC

#197 toronto1 on 05.01.17 at 5:34 pm

#183 I am the mighty Oz on 05.01.17 at 2:53 pm
All lenders including banks will be looking into their mortgages via internal audit- those that are suspicious will not be renewed when the term ends-

nonsense

Wait and see– Banks have been lax on credit to maintain their market share. Never before has there been as much ease and availability of credit in the marketplace. The fact that HCG (among others) made a billion dollars plus industry out of giving people loans at 100% more (4.6% vs 2.6%) interest should be a warning sign.

A mortgage is a contract- at most a 5 year contract- the banks at that time can and routinely do ask income verification and property appraisal etc..

No lending institution is going to take over HCG book without verifying the value of the underling asset.

the true effect will not be felt for 6-9 months out as thats how markets work– initially you will start to hear about deals falling through due to financing, HCG will not be the only outfit to go down- i expect some major credit unions to dive as well.

simply put- the average income of Canadians do not support the current valuations of the collateral (property) held by the banks- no one really knows that that price support level is but its not what is stated.

#198 TurnerNation on 05.01.17 at 5:41 pm

http://www.cbc.ca/beta/news/canada/toronto/black-smoke-pouring-from-beneath-scotia-plaza-in-heart-of-toronto-s-business-district-1.4094416

#199 NoName on 05.01.17 at 5:53 pm

#193 Smoking Man on 05.01.17 at 4:12 pm

#137 NoName on 05.01.17 at 11:08 am
#102 Figure it out on 05.01.17 at 7:08 am

http://imgur.com/a/UdNN4
…..
Ha Told you I’m a writer. And that’s only about 5% my total writing. It’s vastly improved since I started.

—-

some progress is made, but also there is room for improvement.

#200 bdwy sktrn on 05.01.17 at 6:01 pm

#198 TurnerNation on 05.01.17 at 5:41 pm
http://www.cbc.ca/beta/news/canada/toronto/black-smoke-pouring-from-beneath-scotia-plaza-in-heart-of-toronto-s-business-district-1.4094416
————————–
the porsches need a tune-up.

#201 crowdedelevatorfartz on 05.01.17 at 6:04 pm

@#102 Figure it out

Soooo I should post more often?

#202 Penny Henny on 05.01.17 at 6:07 pm

One hour till offers are presented.
Wish me luck!

#203 Penny Henny on 05.01.17 at 6:08 pm

#198 TurnerNation on 05.01.17 at 5:41 pm
http://www.cbc.ca/beta/news/canada/toronto/black-smoke-pouring-from-beneath-scotia-plaza-in-heart-of-toronto-s-business-district-1.4094416

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

Garth doing a burn out in the Trans Am.

#204 Russ on 05.01.17 at 6:11 pm

Unbalanced on 04.30.17 at 6:47 pm
What’s to fret about the credit unions. Thanks in advance
===================

I believe Garth doesn’t like Credit Unions because the deposit is guaranteed by our Provincial Government, instead of the Feds.

cheers, R

#205 shanna pendakis on 05.01.17 at 6:23 pm

Good luck penny henny!

#206 Research is Hard on 05.01.17 at 7:02 pm

#167 bdwy sktrn on 05.01.17 at 1:39 pm

Voting NDP for the first time ever,
————————
a month ago i was sure cheeky clark would win again, but i keep hearing this and it scares me.

NDP will absolutely bring the BC economy to it’s knees , just like last time. Be careful what you wish for.

yvr core is likely a lost cause for the libs but the burbs and many rural area will stay red, um ..blue, or is it red and blue? Just not orange or green.

still a tossup but green strength will sap ndp helping the libs.
————–

If you do your research you will find the the BC NDP left the incoming BC Liberal/Harper Conservatives government with a 1.5Billion surplus and the 90’s was recovering from the Social Credit rule and 80’s housing bubble and loss of forestry jobs. In the last 16 years BC’s debt has increased significantly and is now 85% of GDP and increasing.

And debt at BC hydro is out of control – best way to privatize a once BC Crown cash cow.

Jan 2017. BC govts been forcing Hydro to borrow, to pay dividends! Debt out of control.No plan. http://vancouversun.com/news/politics/b-c-s-credit-rating-at-risk-as-hydros-debt-grows … #bcelxn17 #bcpoli
https://twitter.com/lailayuile/status/859148799612043264

Maybe one day we will vote for Independents, and stop being blindly partisan.

Now I know Vancouver housing is in trouble with the way bdwy sktrn spins things. The only thing going for BC right now is real estate. Please prove me wrong!

#207 Willy2 on 05.01.17 at 7:32 pm

Quote:

“There’s little doubt our big banks are secure, despite their jaw-dropping exposure to residential real estate.”

– Yeah, sure. And I was bron yesterday. Right ???
– This is the reason why we will have DEFLATION in the (near) future. And it will be accompanied with RISING interest rates.
– But that’s not something one Mr. G. Turner doesn’t like to hear. Right ??

#208 Tony on 05.01.17 at 11:18 pm

Re: #79 Ronaldo on 05.01.17 at 12:04 am

Maybe “deep out of the money puts” on the major market indexes monthly are what to buy in case the FED and bankers finally decide to crash the stock market.