Remorse

The bottom may fall out of the southern Ontario housing market a week from Monday. That’s the day local realtors, shocked, dismayed, in disbelief and caressing their A7 key fobs a final time, release the stats for May. Expect epic.

So far we know listings have exploded. Up almost 50% in the first two weeks of this month compared to last year. Sales are going in the other direction – down about a fifth. And sentiment is changing fast. Just two weeks ago this breathless blog told you that for the first time in the history of polling more than half the people expected house prices to keep on going up. Well, that was then. Now it’s a mere 45% or so – but a significant change in 14 days.

Suddenly the headlines are graphic. “Bidding Wars Turn to Homebuyers’ Remorse in Toronto,” yells Bloomberg. And remorse it is. Deals are falling apart all over the place as buyers who suddenly realize they were the greater fools – buying at the tippy-top of an inflated market in a FOMO frenzy – do everything they can to avoid closing.

Mortgage originations are drying up. Open houses are empty. Agents are starting to completely abandon (thankfully) the barbaric cultural ritual of staging blind auctions. Suddenly buyers have a wide choice of properties to browse, no pressure to make an immediate offer, the ability to demand financing or home inspection conditions, and can even make a low-ball offer without shame or ridicule.

How is it for sellers? Wicked bad.

A few weeks ago 94% of new listings were snapped up as they hit the market. Now that ratio has plunged to 52%, and could be on its way to the Credit Crisis low of about 35%, hit when the world was ending in early 2009.

There are two stories at play. First, the sellers. Another 9,500 properties came on the market in the Greater Golden Horseshoe area since last Wednesday. This is historic, with almost 30,000 active listings now in the region. As the meme spreads that the boom is over, tens of thousands of owners are trying to exit at the top, while scores of speculators, leveraged to their pits, panic and list.

Then there are the buyers. The sales decline was 16% in the first two weeks of May, and odds are it will increase. Why would people stop looking for a house just when there are more to choose from, with less pressure and the potential for a better deal? Because we move in herds. People are desperate to buy things that others desperately covet. We back off in hesitation when something becomes unwanted, smelling risk.

It suddenly became clear to many that this market was a total gasbag. And how could a sane person believe otherwise?

Not only did prices travel from the unaffordable to the delusional and into the criminal, but the news for real estate has been all bad. Home Capital, the biggest non-bank lender, laid an egg. Ontario started taxing foreign dudes. Universal rent controls were slapped on all condos. The major banks were downgraded. The media’s been filled with stories of a population shouldering record debt, one missed paycheque away from oblivion, with 70% unable to afford any mortgage rate hike – when higher rates are a certainty.

So, the next few weeks and months will be pivotal in the financial lives of millions of people with the bulk of their worth in residential real estate. Many who bought in March or April will find they paid far too much, may never recoup, and are courting years of agony and expenses if they try to walk away from their deals before closing.

Greed is morphing into fear. Maybe it wasn’t different here after all.

214 comments ↓

#1 Kurt on 05.24.17 at 7:00 pm

Not first!

#2 For those about to flop... on 05.24.17 at 7:01 pm

#4 AJM on 05.23.17 at 5:36 pm
Rare poster, but an avid reader & big fan of Flop’s pink snow posts. Along that vein, 2652 Haywood Ave, West Vancouver makes an interesting study. I’ve been keeping tabs on this one as it’s in my hood.

##########################

#37 Adam on 05.23.17 at 7:06 pm
#4 AJM
2652 Haywood sold for $3.6 million according to MLS. If all goes through, sale price will be confirmed on evalue BC in a few months time.

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

Hey AJM ,thanks for the support,this post is for you then.

I see Adam has access to the MLS and so if he has no homework and wants to help me show what’s going on in real time he can tell us if these recent sales ended in triumph or tears.

My guess is a few wins ,a few gins and a few sins…

M42BC

Recent sales and removals.

11231 64a Ave Delta ….paid 1.24…asking 1.29

5746 Lancaster St. Van …paid 2.21…asking 2.09

3208 e 53rd Ave Van…paid 1.59 …asking 1.69

3855 Brandon St Burnaby….paid 1.46 asking ….1.49

1237 e 64th Ave Van…paid 1.45 …asking 1.34

808 e 28th Ave Van …paid 2.0 ….asking 2.08

3471 Rosamond Ave Richmond paid 1.65 asking 1.68

9267 154 st. Surrey…paid 850 …asking 898

9247 138 st. Surrey…paid 803… asking 799

5833 Cove Link Rd. Delta paid…1.39 ….asking 1.49

1346 Crestlawn Dr. Burnaby..paid 1.56 asking 1.48

13523 79 Ave Surrey..paid 900 asking 999

8933 149 st. Surrey…paid 800 ….asking 869

4798 Killarney St. Van paid 985 asking 999

3140 Springfield Dr. Richmond paid 1.85 asking 1.99

10680 Housman st. Richmond…1.6 asking 1.72

10619 137a st. Surrey…paid 672….,asking 690

21-6878 Southpoint Dr. Burnaby paid 645 …asking 580

1805 Eighth Ave New Westminster paid 1.12 …asking 1.18

#3 Happy Housing Crash Everyone! on 05.24.17 at 7:02 pm

http://wolfstreet.com/2017/05/24/toronto-house-price-bubble-pops/

#4 guru on 05.24.17 at 7:03 pm

Who in their right mind would buy in places like Milton, Barrie, Brampton, Oshawa, Hamilton and commute over an hour to work?. These are the first places to crash hard and you’re looking at 50-60% declines in the next 2 years. History in the USA tells us one thing, it’s the suburbs like Queen Creek AZ that will fell hard and the same will happen here.

#5 Shawn on 05.24.17 at 7:07 pm

Wild. Just wild…

#6 Doug t on 05.24.17 at 7:07 pm

Sadly it’s going to have go down a hell of a lot – like 40%

#7 The Wet Coast on 05.24.17 at 7:09 pm

Thank god I don’t have to look at that Halloween dog any more.

So it begins….

#8 Dave on 05.24.17 at 7:09 pm

Throwing in the towel, tired of being so wrong for so long in real estate. Have watched remedial folks make 2 to 3 fold as much as I do. Regardless of when the market turn now, I know that all developers have made a killing. Rest of us smucks can wait for 5% returns and budget every month for a tiny reward for our tireless 40 to 50 hour work week.

#9 Smartalox on 05.24.17 at 7:09 pm

We probably won’t see a similar frenzy of listings in BC, until this province’s biggest non-bank lender starts to feel the pressures on its books. Remember kids, the credit unions are provincially regulated, and we all know that the BC Liberals have been prioritizing the well-being of their real-estate industry backers, in lieu of actually regulating anything.

#10 Johnny boy on 05.24.17 at 7:10 pm

https://www.bloomberg.com/news/articles/2017-05-24/toronto-bidding-wars-turn-to-homebuyers-remorse-as-market-slows

#11 I'm Not Poloz on 05.24.17 at 7:11 pm

I have to also note that Poloz desiring to drive an 18 wheeler semi-truck at 180kmh in a crowded downtown Toronto location is comparing when the value of a country’s currency declines where there is political instability such as those.

Poloz looks like he would rather take down the electronic database of the stock exchange than to see the Loonie at over 80 cents USD.

Poloz insisted in his speech at Drummondville that a 62 cent loonie is the fair market value of the Loonie, so a 40 cent Loonie isn’t a shock.

The NZD low was at 38 cents in 2000, and the AUD was at its lowest at 48 cents in 2001.

Poloz wants Canada to have a 40 cent Loonie, and I stand by my position.

#12 For those about to flop... on 05.24.17 at 7:11 pm

Damn you Kurt!

Luckily for me I can accept defeat as this is not the only time I have been beaten into the number two spot by a guy named Kurt.

A long time ago ,due to poor managerial advice I released a didgeridoo medley at the same time as Nirvana released a song and suffered the same fate…

M42BC

#13 Leo Trollstoy on 05.24.17 at 7:13 pm

#158 Pete—-Mark is wrong on 05.24.17 at 9:25 am
#137 Mark

Canada has had large trade deficit in goods for the past five years. And Canada also has huge trade deficit in services in ALL YEARS. The US trade numbers include goods and services while Canada trade numbers only includes goods.

The best measure is current account. Canada has been running a larger current account deficit than USA for many years.

Go easy on Mark. Like Gartho said, he’s no economist. And he’s been wrong on the CAD, gold and real estate so often that I think his confidence is shook

#14 I'm stupid on 05.24.17 at 7:14 pm

A reverse auction. That’s what I would do if I was a buyer in the market during a correction. Have your realtor notify the owners of 3 properties you like and have then write down their lowest price. One will blink, and you’ll get a great deal. Enjoy!

#15 Raj on 05.24.17 at 7:14 pm

You forgot to mention
“The average selling price in the Toronto area was down 3.3 percent from the full month of April”

#16 Ace Goodheart on 05.24.17 at 7:15 pm

“The bottom may fall out of the southern Ontario housing market a week from Monday.”

Well so what? Everyone knew it was a bubble. When Tony Robbins and Pit Bull are marketing real estate speculation, you pretty much know things are coming to a messy end.

The thing that will moderate this whole mess is that neither the Libs in Ottawa nor the Libs in Ontario, can stomach an interest rate increase right now. Socialism, while cute and fuzzy, is incredibly expensive and our governments are in massive amounts of low interest debt as a result. So even if peeps bought at the tip of the market, on the leading edge of the wave just before it crashed on the beach of sober reality, it doesn’t really matter. Yeah they can’t sell their over priced, under water debt wise house, but they can continue to make the payments……

Summer festival season is upon us. For those hippies and wanna be hippies among us (including me, semi retired dharma bum turned accidental millionaire), things are going to be fun. Just don’t take an invitation to a gangsta rapper backed event in the Bahamas and you should be fine (what the f*&% is “glamour camping” anyway?).

So I’m packing up the ’86 VW Westfalia and loading it with plenty of beer, as we head out to festival camping (not “glamping”) and the summer party season for all those who don’t mind sleeping in fields and tracking through mud to see bands that won’t be in existence this time next summer.

Have to find someone to take care of the vegetable garden while I’m gone…….

#17 Cj on 05.24.17 at 7:17 pm

I don’t get it? In 24 mths we hit bottom and in 38 mths we are putting in new highs! What could go wrong? Unless of course we are Japan….

#18 Briana on 05.24.17 at 7:20 pm

Yepper – It was the blip before the dip… here we finally go folks. Hold onto your hats!! This is not going to end well. Sorry to all those who bought the last few years…We’re going back to 2009 levels.

#19 I'm Not Poloz on 05.24.17 at 7:22 pm

Currently, the CAD/USD is trading at 74.49 cents USD.

Hopefully, when the Loonie is above 80 cents for 2017, Poloz isn’t driving an 18-wheeler semi truck in downtown Toronto, nor is he attending any Ariana Grande concert.

Poloz wants a 40-cent loonie. When Poloz talked down the Loonie at the last BoC meeting earlier this year, he should have been reported for economic treason to destabilize the Canadian Loonie. Not everyone wants a 40-cent loonie and paying $15 for one crown of Broccoli.

#20 Garthy Fan on 05.24.17 at 7:23 pm

Garth,

The market in Guelph Ontario in terms of number of sales in single detached homes has CRASHED! In several neighbourhoods less than 10% of listings sold. The rest is either sitting there for months or taken off the market.

#21 Dave on 05.24.17 at 7:27 pm

The Developers I speak of build 1 house in Vancouver each year and make over $500k. Lots of free time to enjoy their earning from a monetary system that makes zero common sense

#22 Balmuto on 05.24.17 at 7:27 pm

Before you get too excited…

https://www.google.ca/amp/s/sec.theglobeandmail.com/real-estate/toronto/flood-of-toronto-listings-not-all-that-it-seems/article35096543/%3Fservice%3Damp

#23 Mauro on 05.24.17 at 7:32 pm

Why are you comparing Toronto to Japan and US? Shouldn’t it be Canada if you’re comparing countries in chart?

#24 Dave on 05.24.17 at 7:35 pm

With all the talk about Vancouver starting to tank over a year ago, prices have barely budged.

#25 traderJim on 05.24.17 at 7:36 pm

All the signs are there, it makes so much sense for the bubble to end here…but I’m still just not feeling it.

In any case, sellers will still sit on their high prices for a while yet, unwilling to give up what they thought their place was worth.

How many will be forced to sell? I dunno…but I see a stalemate for a few months.

If there is an actual crash, like big time panic, then all those new regs and taxes will be rolled back faster than you can say ‘Chinese dude’.

I do hope my buddy gets his newly listed place sold quickly, but it’s looking increasingly unlikely. A slightly smaller, older, not as well kept place just went up for sale across the street, many hundreds of thousands less than my pal’s asking price. Like $600k less. Not good.

This should be a good test. But he shoulda listened to me when I was telling him to list in December/January.

He’s not going to be forced to sell though, he just hoped he could get an extra $500k and retire a couple years earlier than planned. If not, he’ll stick it out for a few more years.

#26 JSS on 05.24.17 at 7:36 pm

BMO increases common share dividend.

https://www.google.ca/amp/www.cbc.ca/amp/1.4129005

Rub tummy

#27 young & foolish on 05.24.17 at 7:39 pm

Yup, the market has turned (like all markets) …. if you still believe in the growth of the Golden Horseshoe over the long run you will be fine. I guess you just bought high and may have to wait some time to break even. It’s what happens in the equity markets as well.

#28 ronh on 05.24.17 at 7:41 pm

More good news:

http://www.zerohedge.com/news/2017-05-24/100-increase-monthly-mortgage-payment-would-sink-75-canadian-homeowners

#29 I'm Not Poloz on 05.24.17 at 7:41 pm

@13 Leo Trollstoy:

I don’t know where Mark got the idea that a credit crunch will appreciate the value of the Loonie.

Poloz will be more than happy if the Loonie plummeted below 50 cents USD so that he doesn’t have to force the value down by talking down the loonie, or hopefully he doesn’t resort to booking for Ariana Grande tickets at a Canadian concert. Poloz is that desperate for a low Loonie.

#30 GynnG. on 05.24.17 at 7:43 pm

Bank of Canada leaves key rate unchanged, but ‘soft hawkish tilt’ emerges.

https://www.theglobeandmail.com/report-on-business/economy/bank-of-canada-interest-rate-decision/article35096200/

#31 Pete from St. Cesaire on 05.24.17 at 7:44 pm

I was just going to write ROFL.
But: #14 I’m stupid on 05.24.17 at 7:14 pm

A reverse auction. Have your realtor notify the owners of 3 properties you like and have then write down their lowest price.
————————————————-
That’s a fantastic idea. Figure out a way to do it publicly. (I’m sure agents would gladly spread the word just to scare some people into listing and thereby stirring up business for themselves.). Let people see the prices going over the cliff first hand. You’ll have FONGO (fear of not getting out) pushing people into making terrible deals for themselves just so they can feel that they were one of the few who managed to escape with something while all of the others will crash much harder (what bragging rights!).

#32 Entrepreneur on 05.24.17 at 7:44 pm

Good advice #14 I’m Stupid and not so stupid after all.

With more listings come fear of buying but you would have thought that fear would have come a long time ago. I guess that comes with the low interest rates and credit cards, immune to reality.

What caught my attention is #13 Leo Trollstoy on Canada’s trade deficit on goods for 5 years and service all the time. Well, that is a no brainer, why trade when running a deficit? Is this to keep the trade agreements going?

Time to get back to “get your feet back to the ground” and really think about that statement. If running a deficit means that the trade agreement is not working for Canada. Fix it, basic logical thinking.

#33 traderJim on 05.24.17 at 7:45 pm

In other news, Melania touching Donald’s hand in the universally recognized (by people who have actually had a female partner anyway) signal of ‘I’m here babe’ is now being shared by breathless fools desperate for anything, and I mean anything to keep their hallucinations alive.

Calm down kids, a president can’t be impeached because his wife touched his hand. If you grow up and ever get a girlfriend you’ll see how it works.

Next story: President Trump collapses and has to be chucked into a van like a side of beef. Oh wait, that was Hillary.

#34 Koshy Alex on 05.24.17 at 7:50 pm

1.4 billion people can’t be wrong – Doug Rowat

“China is volatile, as are all emerging markets, but its economy is still strong and, we believe, poses little danger to the global economy or to long-term investors”

China’s Addiction to Debt Now Threatens Its Growth

https://www.nytimes.com/2017/05/24/business/china-debt.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region&region=top-news&WT.nav=top-news&_r=0

SHANGHAI — China has gone on a spending spree, borrowing money to build cities, create manufacturing giants and nurture financial markets — money that has helped drive the economic powerhouse in recent years. But the debt-fueled binge now threatens to sap growth in the world’s second largest economy.

#35 Happy Housing Crash Everyone! on 05.24.17 at 7:52 pm

Saw two empty open houses in the Annex today. A few months ago there would be people climbing over each other. Today Noooooooobody. Happy Housing Crash Everyone! :-)

#36 In Markham on 05.24.17 at 7:54 pm

#14 I’m Stupid

I like your idea of reverse auction. In Markham, you can try these properties since they are on the same street.

25 Greenspire Ave, Markham $1,288,888
37 Greenspire Ave, Markham $1,390,000
41 Greenspire Ave, Markham $1,298,000

OR

6 Memon Pl, Markham $988,000
30 Memon Pl, Markham $1,188,888
96 Memon Pl, Markham $1,188,000

#37 Millenial on 05.24.17 at 7:55 pm

Hey Garth,
I went to the Chipotle at Yonge & Eglinton today for a burrito. Prices have gone up from $10.11 to $10.49. I remarked to the cashier lady and she replied, “well, prices haven’t changed in 6 years, so…. “

#38 Pete on 05.24.17 at 7:56 pm

First, Home Capital liquidity is down to $1140 million and that includes $350 million credit facility. They have only $350 million left on the $2 billion facility. Their GIC is still dropping, $36 million a day.

#39 Happy Housing Crash Everyone! on 05.24.17 at 7:57 pm

10’s of thousands are trying to sell in a desperate bid. Many of those got fraudulent mortgages and need to sell before they go BANKRUPT. Happy Housing Crash Everyone! :-) Leo Trollstoy you are a desperate realtor. Happy Housing Crash to you! :-)

#40 Pete on 05.24.17 at 7:57 pm

Average selling price in GTA was $890k in the first half of May, vs $920k for April.

Average price was $336K in 2005 and $920k in April 2017, an increase of 174% in 12 years. While in the same 12 years, average income in Toronto rose 30%.

So now you have it. Income rose 30% while housing price rose 174% in the same 12 years. And that is not bubble?

I predict GTA housing price will drop 50% from peak to bottom to $460k. Just don’t know how long it will take.

#41 Waiverless on 05.24.17 at 8:03 pm

Counts have been confirmed in BC
Libs 43, NDP 41, Greens 3
Christy Clark signals her intention to run a minority government. More likely she losses the first vote of confidence and the Horgan is asked to form a govt with Greens. Then a coalition or case by case voting on bills. Or maybe an election? If NDP and Greens can hold it together, perhaps the developer gravy train in BC comes to an end…

#42 In Markham on 05.24.17 at 8:06 pm

This neighborhood must be having a “Let’s find the next fool to buy our house” party:

21 Dundas Way, Markham $788,800
23 Dundas Way, Markham $798,000
53 Dundas Way, Markham $769,900
105 Dundas Way, Markham $779,800
122 Dundas Way, Markham $699,900

#43 Howard on 05.24.17 at 8:09 pm

Right now the Star still has this screeching headline:

“Newly built GTA home prices soar despite surge in re-sale listings. Prices still increasing as demand outstrips historically low inventories, say builders.” – https://www.thestar.com/business/2017/05/24/newly-built-gta-home-prices-soar-despite-surge-in-re-sale-listings.html

#44 traderJim on 05.24.17 at 8:13 pm

Uh oh Trump’s trip to Saudi Arabia might have disastrous consequences: https://twitter.com/Fred_Delicious/status/866740996561940480

#45 Joseph R. on 05.24.17 at 8:30 pm

#18 Waiverless on 05.24.17 at 8:03 pm
Counts have been confirmed in BC
Libs 43, NDP 41, Greens 3
Christy Clark signals her intention to run a minority government. More likely she losses the first vote of confidence and the Horgan is asked to form a govt with Greens.

————————————————————-

This will be bad news for the “champagne socialists” in Edmonton. Both NDP and Green have pledged to the electorate, to stop the Kinder Morgan’s Trans Mountain pipeline expansion (TMX). The Project will increase the current pipeline capacity from 300,000 to 890,000 barrels of oil per day and narrow the WTI/WCS price differential (currently $ 14/barrel), and thereby bring some desperately needed cash and work to Alberta.

I am not aware if a provincial government can outright stop a federally-approved project, but I am sure that will not prevent them from trying.

#46 crdt on 05.24.17 at 8:32 pm

Those bricks scintillating wealth and goodness, the very essence of success. Gently stroking the egos of debtors dreaming of the day when they will drain the life out of the next generation looking for shelter. The glory of ownership, the exhilaration of signing on the dotted line knowing someone else tried but could not come up with the funds or would not embellish a little on the application, being better really. Feeling the un-earned wealth accumulate hour by hour, trying desperately not to look overly condescending while getting milked like a cow over paying for everything else knowing it does not matter because you have the sphincter of the golden goose at your disposal. The miracle of financial manias…

#47 Ron on 05.24.17 at 8:34 pm

#17 Cj on 05.24.17 at 7:17 pm
I don’t get it? In 24 mths we hit bottom and in 38 mths we are putting in new highs! What could go wrong? Unless of course we are Japan….

————————————————–

Nope. This won’t be like the U.S. recovery, which was driven by dropping rates to the floor. We’re starting from the floor. Negative rates? Dog help us if the banks start paying people to borrow money.

#48 Rifles on 05.24.17 at 8:35 pm

#40 Waiverless

I did not expect that outcome but there it is. Trudeau must be gritting his teeth as both the NDP and Greens oppose his pipeline to the sea. He can’t run it through his prized Quebec constituencies either. Even with a “soft hawkish” lean to the BoC’s thinking, the C$ is not going to do very well against Horgan, Notley and Wynne. Those non-existent foreign buyers who have no influence over Vancouver housing prices will note happily that a weaker CAD makes it that much easier to have no influence over Vancouver housing prices as they scoop up whatever is left.

#49 Pete on 05.24.17 at 8:37 pm

HOUSING PRICE INCREASE FOR MAJOR CITIES SINCE 2008 FINANCIAL CRISIS

London 40%
Paris 80%
Sydney 80%
Melbourne 70%
Tokyo 5%
Toronto 145%

boy, isn’t Toronto and Canada the centre of the Universe, beating majors pants down…..

#50 Howard on 05.24.17 at 8:42 pm

#39 Pete on 05.24.17 at 7:57 pm

Average price was $336K in 2005 and $920k in April 2017, an increase of 174% in 12 years. While in the same 12 years, average income in Toronto rose 30%.

—————————————–

Income rose 30% in Toronto in the past 12 years? Was that a typo, Pete? I thought income in Canada has been stagnant for 20 years, certainly after accounting for inflation. I haven’t been able to find Toronto-specific stats.

#51 Biff on 05.24.17 at 8:43 pm

#36 MILLENIAL
just wanted to express a collective thank you from all of us on your brilliant insight on the .38 cent increase of a burrito. You are a genius for making us more aware of this!
Thank god there are academics like you who can educate us on important economic fundamentals of inflation.
What is your next token of earth shattering revelations??

#52 Joseph R. on 05.24.17 at 8:44 pm

*typo*

The current WCS/WTI price differential is $10, not 14.

It is predicted that the increased oil shipments to the Asian market will make WCS more attractive, and thereby narrow the WCS/WTI price differential.

#53 45north on 05.24.17 at 8:45 pm

The bottom may fall out of the southern Ontario housing market a week from Monday. That’s the day local realtors, shocked, dismayed, in disbelief and caressing their A7 key fobs a final time, release the stats for May. Expect epic.

billions of dollars of private transactions stop. Interest rates don’t have to rise. If the next day the US Fed raises rates .25% then the Bank of Canada will have no flexibility on its own rates. Neither will the banks.

I met a gal and her husband yesterday who just arrived in Saskatoon from the United States.

I asked her casually if things were really as bad in the States as we see in the news. “Worse” she said in a thick Southern drawl “you really have no idea”

And then she looked at me with the dead certainty and shell-shocked conviction of a person who had just witnessed a head-on collision and deadpanned “if it’s true, you had better have some money saved. That was our biggest mistake. We had no money when it all fell apart. Nobody had cash in the bank.”.

http://www.greaterfool.ca/2011/03/31/grow-a-set/#comment-93218

#54 Leebow on 05.24.17 at 8:48 pm

#43 traderJim
Nah, he went to ask the orb how much oil will be in 2 years. The orb said 40 roubles. That’s why Trump now wants to sell the oil reserves.

#55 Nonplused on 05.24.17 at 8:49 pm

And don’t forget carbon taxes. Whether you think they might save the planet or not (I don’t think they’ll have any affect but everyone is entitled to their own opinion), the one thing they will do is put a lot of strain on the family budget. This is not a small tax increase and for most people it is not avoidable because they don’t have $80,000 for a huge roof top solar system and an electric car.

This winter in zany Alberta the carbon taxes added 50% to the fuel cost of heating a home, about 33% in total counting utility services, and it’s going even higher next year. How can people avoid this expense? Are there any attics out there left to insulate? How much does a “smart thermostat” really save? (answer: not much. They are worth the money but that’s about it.)

So, the long and the short of it is the news is reporting that a $100 increase in mortgage costs would sink many Canadians. Well, in Alberta we already got a $200 per month increase in costs, they just call it “carbon taxes”. What’s that going to do? I think I can tell you.

I was at Costco today and it appears the Alberta Government is subsidizing a sale on LED bulbs, pretty significant discounts. Get out there and buy some if you need them. LED bulbs are pretty good in my opinion, a lot better than those compact florescent bulbs, but there are lots of scenarios where a good old incandescent bulb would be the right solution, and they are a lot cheaper. For example, here in Alberta most houses do not have air-conditioning, so especially in the winter the heat from an incandescent is not wasted. You have to heat the house anyway. So going LED saves very little actual money because they don’t count the fact that what you save on lighting you spend on heating.

There are other places where cheap incandescent bulbs are still the best solution. For example, garage door openers. How long are those lights actually on? I don’t think I’ve ever replaced a bulb in a garage door opener, they aren’t on long enough to burn out. So how do you save money by spending 5 times as much for a bulb?

Another example would be any light that isn’t on very much. I have an incandescent bulb by the electrical panel under the back stairs. I doubt it will ever burn out, the only time it’s ever on is when I have to change the hot tub water and thus must shut off the fuse. So for a few minutes once every 2 or 3 months. An LED wouldn’t make any economic sense until the price comes way down.

However there are lots of places LED’s do make sense, for example any bulb that is on a lot in an air conditioned environment. No use heating the place up just to cool it down so use LED’s. Bulbs that are outside and on a lot are also good for LED. For example if you have a driveway light that is always on at night.

Another place they make a lot of sense is running on batteries. If you dry camp in your RV replace the incandescent bulbs that you use the most often with LED’s, it will significantly stretch out the battery. Any time a battery is the power source use an LED. If you have any flashlights that still have an incandescent bulb throw them away and get an LED flashlight. They go perhaps 10 times as long and batteries are expensive. Also if you still have a propane lantern throw that away too and get an LED lantern. A single set of batteries in one of those will last all season, whereas a propane lantern maybe runs 4 or 5 hours on a bottle. Plus you can use the LED lantern in the RV if you killed the house batteries with your incandescent bulbs, and you can also use it in a tent. Lots of people prefer a propane lantern in a tent because they throw off a lot of heat but I am not sure it’s safe.

#56 Tony on 05.24.17 at 8:57 pm

Re: #4 guru on 05.24.17 at 7:03 pm

Georgina, Keswick, Sutton and Brock will likely crash harder than any of those cities.

#57 Howard on 05.24.17 at 8:58 pm

#44 Joseph R. on 05.24.17 at 8:30 pm
#18 Waiverless on 05.24.17 at 8:03 pm
Counts have been confirmed in BC
Libs 43, NDP 41, Greens 3
Christy Clark signals her intention to run a minority government. More likely she losses the first vote of confidence and the Horgan is asked to form a govt with Greens.

————————————————————-

This will be bad news for the “champagne socialists” in Edmonton. Both NDP and Green have pledged to the electorate, to stop the Kinder Morgan’s Trans Mountain pipeline expansion (TMX). The Project will increase the current pipeline capacity from 300,000 to 890,000 barrels of oil per day and narrow the WTI/WCS price differential (currently $ 14/barrel), and thereby bring some desperately needed cash and work to Alberta.

I am not aware if a provincial government can outright stop a federally-approved project, but I am sure that will not prevent them from trying.

————————–

Legally they cannot. This is federal jurisdiction.

However, BC can try to bully the feds into backing down and Turdo may decide that it’s worth it to sacrifice his 4 Alberta MPs in order to save his Vancouver fan club.

#58 Vit on 05.24.17 at 8:58 pm

BANNED

#59 jess on 05.24.17 at 9:03 pm

Procter & Gamble to close Brockville, Ont. plant
Nearly 500 employees to be laid off as company moves production to West Virginia

By Elyse Skura, CBC News Posted: May 24, 2017 11:49 AM ET Last Updated: May 24, 2017 7:09 PM ET

#60 Ardy on 05.24.17 at 9:05 pm

Anyone thinking of selling and renting……good luck finding a rental unit in the GTA.

Every listing has 50-75 people on a waiting list.

#61 Bongo on 05.24.17 at 9:06 pm

Garth, you really need to hold off on calling rate rises with such surety. Once again, it looks like the Fed is back to its cautious outlook and will hold off on a June increase. Expect more of the same the rest of the year. Maybe we’ll get one increase instead of three.

I agree with you that rates have nowhere to go but up. But the pace of that rise will continue to be glacial, as it has been.

#62 common sense on 05.24.17 at 9:08 pm

#27 rohn

Bank of Canada sounding Hawkish. best laugh I had today by far.

let them raise rates .5% and see our tax rate go up big time for all the financial assistance the gov’t will be giving out….count USA in too.

#63 Ole Doberman on 05.24.17 at 9:10 pm

Gartho is the guy on the bike a Calgarian, meaning will the contagion spill across the country?

#64 dakkie on 05.24.17 at 9:13 pm

All Heck Breaks Loose in Toronto’s House Price Bubble
http://investmentwatchblog.com/all-heck-breaks-loose-in-torontos-house-price-bubble/

#65 Let it Burn on 05.24.17 at 9:15 pm

There was a bidding war on a dumpy house in Guelph in the bad part of town. Some looser paid way too much for a junker. I see his future – a sea of regret. I guess the outer burbs of the soulless burbs haven’t yet received the memo, that the housing crash has already begun.

#66 Pete on 05.24.17 at 9:18 pm

# 49 Howard,

Howard, you are absolutely right. Income has been stagnant in Canada for the past 20 years. Inflation rose about 35% from 2005 to 2017. The 30% rise in income in Toronto from 2005 to 2017 is BEFORE inflation. So after inflation, no increase in income.

Because housing prices are not inflation adjusted, that is why I used nominal income increase.

#67 Andrew Woburn on 05.24.17 at 9:18 pm

It ain’t the wetbacks, it’s the snowbacks.

– Trump’s wall will do nothing to block the 740,000 people who overstayed their US visa last yea

https://qz.com/988951/the-us-is-finally-telling-the-public-who-overstays-their-visas-the-most-and-its-not-mexicans/

#68 Smoking Man on 05.24.17 at 9:20 pm

April 20th was the peak real estate.
Then Wynne crushed the market.

Wynne did it
Wynne did it
Wynne did it
Wynne did it

I probably would not have sold if I had a gig, she and my drunken rants on linked In are the culprits.

Starting a new company.

Free Invoicing Software….. Going online next week.
Makes quick books look like a comic book.

Let me know who want’s a free bee.

#69 Ala on 05.24.17 at 9:23 pm

Now ur sounding like zerohedge garth with all this negativity.

You need to do some yoga and take in some positive vibes man.

Namaste Garthosaurus.

#70 Balmuto on 05.24.17 at 9:25 pm

Well now this caught my eye:

“The statement “suggests that, if the resale market does not soften, the central bank may decide to complement macro-prudential measures with rate hikes in an attempt at restraining the rampant housing market,” National Bank economists Paul-Andre Pinsonnault and Krishen Rangasamy said in a note to investors.”

Will Poloz really raise rates to cool the housing market?

https://www.google.ca/amp/s/www.bloomberg.com/amp/news/articles/2017-05-24/poloz-says-stimulus-appropriate-at-present-in-nod-to-recovery

#71 Andrew Woburn on 05.24.17 at 9:26 pm

The good news is that the banditos don’t need to cut off your hand or pluck out your eye to crack your biometric security code.

That’s also the bad news.

-It’s Insanely Easy to Bypass Samsung Galaxy S8 Iris Scanner with a Photo

http://thehackernews.com/2017/05/samsung-galaxy-s8-iris-scanner.html?

#72 willworkforpickles on 05.24.17 at 9:26 pm

“why would people stop looking for a house just when there are more to choose from”
It goes to show greedy amateur speculators are generally among the greatest fools accounting for many of the buyers in the last days of a peak market As I said about three years ago on this message board ,they will at some point go into panic sell mode when the doors blow off as they all head for the exits at the same time.
That will be the beginning of the first leg down and drop in prices.
The buyers at this point will be the kind of greatest fools I posted about just a few months ago when I said the only buyers in 2017 will be the greater fool.
The market will continue bleeding out long after they too have bought in down to the end of the current real estate cycle.
When I first started posting here I mentioned that bankruptcy trustees will be rockin in the not too distant future.
That too is on target still – just down the line
….but for now… Its still all good… relatively speaking.

#73 Rental property math on 05.24.17 at 9:27 pm

Hello. Rental property math here. I view the sold closed listings in Hamilton on a daily basis. (I’m not a realtor just signed up for the info) everything and I mean everything sells for over asking. I really don’t see Hamilton loosing any steam next week by any means. They’ve been down for so long. Housing prices doubling in 4 years even makes a rental property mathematician’s head spin. I hope to see 4% gains from here onward.

#74 fishman on 05.24.17 at 9:28 pm

Use incandescent bulbs anywhere you want a “mood” & make the girls look good. They burn hot,(the bulbs) on the high end of the spectrum, red, orange yellow. Dimmable. Soft light, soft flesh.

Really shaping up like B.C. is going to lay a big noisy, slushy stinky fart on the ROC’s party. Funny eh, seeing populism sprouting up through the Greenies. Don’t worry about any deals on any quality B.C. R/E though. There’s so much cash sitting around out here that even a hint of a deal & its gone.

#75 I thinks I know something on 05.24.17 at 9:29 pm

“How is it for sellers? Wicked bad.” – Garth

———————————————————

I don’t think so. Only if they insist on a 350% gain over the last eight years. Not if they’re willing to accept a mere 300% gain.

#76 Pete on 05.24.17 at 9:30 pm

Low interest rates are the key reason why housing prices rise so much in Toronto. But it is not the only reason. Japanese interest rates are lower than Canadian, yet Tokyo housing price rises only 5% in 10 years.

Fraud and liar mortgages, blatant and unashamed encouragements and stimulation from all levels of governments, irresponsible and profit-hungry banks and government-owned CMHC, all have a bigger impact than low rates.

#77 'Greed is morphing into fear' on 05.24.17 at 9:31 pm

not for many of us. Have three properties…and i’ll gooble a few more if opportunity presents

i’m sure it will….:)

#78 45north on 05.24.17 at 9:34 pm

Paul Ryan, Speaker of the United States House of Representatives: “I think James Comey was put in an impossible situation. He served his country ably.”

CNN reporter Daniella Diaz
http://www.cnn.com/2017/05/24/politics/nut-job-trump-james-comey-paul-ryan/index.html

#79 Kanye East on 05.24.17 at 9:42 pm

That last chart makes me think of a volcano.

Thanks, Garth, your blog leaves me ‘breathless’ once again.

#80 NoName on 05.24.17 at 9:45 pm

interesting read

https://www.bloomberg.com/news/features/2017-05-24/when-the-patient-is-a-gold-mine-the-trouble-with-rare-disease-drugs

#81 Smoking Man on 05.24.17 at 9:47 pm

Just working on the about Us page of my new website.

Meet my staff, just me. Jim Stojsin
Happens everytime you give stuff away for free.

My History.

Back in 1990 after working for 10 years as a rivet bucker at De Havilland Aircraft, we went on strike. Having 3 sons with a stay at home wife and mortgage, I was left with no choice but to start a company. I started door knocking selling Aluminum storm doors. My first weekend at this I made more money than I did in the entire month. I never went back to the factory.

I evolved the business and started manufacturing doors and windows, had a multi-million dollar business. It drove me crazy doing office tasks manually, payroll, inventory, I could not find any developers soI learned and started writing software to run my business. Back in the early 90’s there wasn’t anything to buy, I learned lotus 123 then Excel and VBA, then SQL and VB6 now VB.net. and Python

I became so consumed and addicted to coding, enjoyed it so much more than dealing with day to day of running the business. I sold the business in 2000 and started contracting out my coding services.

In the last 17 years, I have worked under contract for Major Companies Royal Bank Canada Capital Markets, Ford Moter Company, Canadian Blood Services, Lucent Technologies, Wells Fargo, Vermilion Software and Hundreds of small companies doing Excel VBA, SQL, MS Access and SQL Server. I only graduated High School, Never went to college

The reason I kept getting gigs, Reputation for delivering excellence. Not so much anymore. I don’t fit into the culture of pretending to be in Grade 10 .

As you can see from my photo, the years are ticking in, gray hair, I’m old school and don’t think I’ll look that good in a Romper

https://www.google.ca/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiDxrKK9onUAhWe2YMKHXq0BNEQjRwIBw&url=http%3A%2F%2Fwww.businessinsider.com%2Fromphim-kickstarter-romper-men-2017-5&psig=AFQjCNHYEsFCdF7QL1Xznje6gTek16zpGg&ust=1495763143295001

So I have decided to leave the big league gigs to the kids and now help small companies with their desktop computing needs and office productivity.

I have built a kick ass invoicing system, that has been in the field for years now, my clients love it. It can be customized to anything one can image.

Please support and share my website. Enjoy your free Best Invoice App.

I will be happy to quote on bigger projects. But not to big.

#82 Pete on 05.24.17 at 10:02 pm

to #74 I thinks I know something on

From 2005 to 2017, housing prices rose 174% in GTA, not some 350% you are s&&& about. Moreover, not every seller bought in 2005. Moreover, most have mortgage and HELOC maxed to 75%, or 80% of their property. A drop of 20% in price will not only net them no gains, they will stand to lose BIG money.

#83 Leo Trollstoy on 05.24.17 at 10:03 pm

I live in Willowdale. Nothing has changed here.

How could you tell? — Garth

#84 MSM-Free Zone on 05.24.17 at 10:03 pm

“…The bank’s statement was uncharacteristically brief — it was the second-shortest in governor Stephen Poloz’s tenure……”
______________________________

TRANSLATION: I’ve finally painted the country into a corner and have absolutely no idea how to exit the basement without getting my socks wet. Maybe I’ll just take early retirement (with bags of cash) and let the next guy in line deal with it.

#85 lala on 05.24.17 at 10:05 pm

Come home uncle SM, I forgive you for steeling my sandwich.

#86 Leo Trollstoy on 05.24.17 at 10:07 pm

I predict GTA housing price will drop 50% from peak to bottom to $460k. Just don’t know how long it will take.

We will all be dead by then

#87 BillyBob on 05.24.17 at 10:08 pm

#21 Dave on 05.24.17 at 7:27 pm
The Developers I speak of build 1 house in Vancouver each year and make over $500k. Lots of free time to enjoy their earning from a monetary system that makes zero common sense

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

So….become a developer?

Or buy shares in their company?

Or just keep whining about the unfairness of life. That should work. Certainly easier than the other options.

#88 Slim on 05.24.17 at 10:08 pm

It wasn’t all peaches and sunshine in the Okanagan.

https://www.castanet.net/news/Kelowna/197804/Tough-times-across-region

#89 Canis on 05.24.17 at 10:09 pm

I’m Not Poloz: Your “jokes” about rogue truck drivers and Ariana Grande concerts are in poor taste.

#90 Boombust on 05.24.17 at 10:14 pm

#73…fishman

Er, not so fast RE pumper. Things are not going as”swimmingly” here in Van as you suggest. May sales are currently running about 25% below last year. And, the lion’s share of those sales are condos…

So, nice try.

#91 Smoking Man on 05.24.17 at 10:19 pm

Wanted

Intern. No pay.

I need a sexy chic voice for my videos for my new website and free invoice software demos.

I’m an equal opportunity employer.

I don’t care if you’re a trans dude so long as you can hit those octaves that make auto repair shop owners run to the bathroom with a box of kleenex.

My voice is rasped out. Years of tobacco over indulgence. Drinking and fighting god.

Send me an angel.

No pay but an autograft book that no one bought.

#92 TCContrarian on 05.24.17 at 10:21 pm

“That’s the day local realtors, shocked, dismayed, in disbelief and caressing their A7 key fobs a final time, release the stats for May.” – GT
**********************************************

This is why I read this blog:
1. Poetic arrangement, as prologue to the impending RE disaster.
2. Comic relief
3. Charts
4. The pink snow data
5. Trying to guess what Smoking Man has been…well, smoking, on any given day (as measured by the coherence level of his posts).

As someone else likes to end his/her contribution:

“Happy Housing Crash Everyone!”

TCC

#93 Happy Housing Crash Everyone! on 05.24.17 at 10:24 pm

Pete on 05.24.17 at 8:37 pm
HOUSING PRICE INCREASE FOR MAJOR CITIES SINCE 2008 FINANCIAL CRISIS

London 40%
Paris 80%
Sydney 80%
Melbourne 70%
Tokyo 5%
Toronto 145%

boy, isn’t Toronto and Canada the centre of the Universe, beating majors pants down…..

Toronto is in a world of hurt. Happy Housing Crash Everyone! :-)

#94 Yuus bin Haad on 05.24.17 at 10:32 pm

Does Brad Lamb’s billboard not raise the image of Doctor Millar’s pig-man?

#95 Pete from St. Cesaire on 05.24.17 at 10:36 pm

Hey Garth, Any truth in this story about ETF’s? https://www.sovereignman.com/trends/do-you-own-any-etfs-or-mutual-funds-read-this-21629/

#96 westcdn on 05.24.17 at 10:37 pm

80 : Smoking Man – why I respect you. Nobody is perfect but overall good spirit matters. By the way, I have my troubles with God too.

#97 For those about to flop.. on 05.24.17 at 10:41 pm

05.24.17 at 10:21 pm
“That’s the day local realtors, shocked, dismayed, in disbelief and caressing their A7 key fobs a final time, release the stats for May.” – GT
**********************************************

This is why I read this blog:
1. Poetic arrangement, as prologue to the impending RE disaster.
2. Comic relief
3. Charts
4. The pink snow data
5. Trying to guess what Smoking Man has been…well, smoking, on any given day (as measured by the coherence level of his posts).

As someone else likes to end his/her contribution:

“Happy Housing Crash Everyone!”

TCC

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

Number 4 on your list ,thanks.

I’m just glad that I finished ahead of Joking Man.

I think he screwed up with the title of his new app,should be called…..No Shame….

M42BC

#98 Millenial on 05.24.17 at 10:45 pm

#50 Biff on 05.24.17 at 8:43 pm
#36 MILLENIAL
just wanted to express a collective thank you from all of us on your brilliant insight on the .38 cent increase of a burrito. You are a genius for making us more aware of this!
Thank god there are academics like you who can educate us on important economic fundamentals of inflation.

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

Brother Biff, we’re not all hedge fund managers like you. How was your lobster tail and filet mignon tonight for dinner?

#99 rates vs capital on 05.24.17 at 10:51 pm

I say this is now the time to invest in the GTA – while there is a slow down before the next run up!

No, I am not a realtor, but that approach would make sense based on the fact that all the market indicators of a correction seem to be jinxed on this blog – like in Vancouver.

Take Vancouver, the foreign buyers tax was supposed to tip the market, and then we saw sales plunge. No correlation of course – cough, ahem – because the market was already turing over and it was the psychological stimulus local buyers needs to cool their heels.

Well that ‘plunge in sales’ hardly moved the market; listings at all time lows; condos and townhouses with massive price increases and bidding wars; and foreign ownership percentages creeping back above the supposed 5% of the market. May stats will show a resurgence of the market – game back on.

Worse, the other parts of BC were Vancouverized – like the Island and Kelowna – with double digit increases in prices.

Whenever it looks like the market might correct, it does a big head fake, and resumes its upward trend.

#100 Kilt on 05.24.17 at 10:54 pm

That last chart makes me want to bail out of everything and wait for the GFC2. Come on Garth, there has to be something we can short to make money on this.
Kilt

#101 Happy Housing Crash Everyone! on 05.24.17 at 10:57 pm

#42 Howard

The toronto star is bankrupt. They will print any fake news for money. Most media outlet are losing money and will print RE propaganda. Do people still read thestar?

#102 I'm Not Poloz on 05.24.17 at 10:58 pm

#88 Canis on 05.24.17 at 10:09 pm

It was theoretical hypothesis on the mind of Poloz & his quest to lower the C$ Loonie.
It is no joke that Poloz, in theory, would do anything to lower the Loonie. You’re conflating theoretical, imaginary comparisons with humor. It is likely that lefties can’t take sarcasm seriously.

#103 Self Directed on 05.24.17 at 10:59 pm

#48 Pete

Wow. Are you rewarding yourself for being the most stupid? You win. Put your pants back on.

#104 WUL on 05.24.17 at 11:01 pm

GTA = Chaos and Darkness.

#105 WUL on 05.24.17 at 11:01 pm

BANDAGED

#106 Smoking Man on 05.24.17 at 11:05 pm

Only remorse I have is not losing my mind 20 years ago.

I’m in a nice spot right now.

#107 data on 05.24.17 at 11:11 pm

From FOMO to FONSO – Fear of not selling out!

The Bloomberg article seems to say people are also walking away from deposits? This is huge.

#108 I'm Not Poloz on 05.24.17 at 11:25 pm

DELETED

#109 Fake News on 05.24.17 at 11:33 pm

#66 Andrew Woburn on 05.24.17 at 9:18 pm
It ain’t the wetbacks, it’s the snowbacks.

– Trump’s wall will do nothing to block the 740,000 people who overstayed their US visa last yea

https://qz.com/988951/the-us-is-finally-telling-the-public-who-overstays-their-visas-the-most-and-its-not-mexicans/

___________________________________________

1. Canadians do not need VISAs. But their stay is limited to 6 months.

2. Mexicans “crossing over in the middle of the night illegally” are not overstaying their length of stay either. They were never allowed to come in the first place.

#110 Myra Andrews on 05.24.17 at 11:35 pm

Vancouver stats for May 24 posted by Paul Boenisch

New 289
Price Change 49
Sold 227
TI: 8769 total inventory

http://www.clivestevepaul.com

#111 Joseph R. on 05.24.17 at 11:43 pm

#56 Howard on 05.24.17 at 8:58 pm
#44 Joseph R. on 05.24.17 at 8:30 pm
#18 Waiverless on 05.24.17 at 8:03 pm
Counts have been confirmed in BC
Libs 43, NDP 41, Greens 3
Christy Clark signals her intention to run a minority government. More likely she losses the first vote of confidence and the Horgan is asked to form a govt with Greens.

————————————————————-

This will be bad news for the “champagne socialists” in Edmonton. Both NDP and Green have pledged to the electorate, to stop the Kinder Morgan’s Trans Mountain pipeline expansion (TMX). The Project will increase the current pipeline capacity from 300,000 to 890,000 barrels of oil per day and narrow the WTI/WCS price differential (currently $ 14/barrel), and thereby bring some desperately needed cash and work to Alberta.

I am not aware if a provincial government can outright stop a federally-approved project, but I am sure that will not prevent them from trying.

————————–

Legally they cannot. This is federal jurisdiction.

However, BC can try to bully the feds into backing down and Turdo may decide that it’s worth it to sacrifice his 4 Alberta MPs in order to save his Vancouver fan club.

—————————————————-

If Trudeau was worried about his Vancouver fan club, he would not have approved it in the first place.

I was wondering if there was any precedent of a provincial government successfully blocking a federally-approved project.

#112 @8_Dave on 05.24.17 at 11:51 pm

@ 8 Dave.

You hit the bullseye. I think most people that found their way to this blog have ended up as the greatershmucks no matter what happens with real estate going forward. Even the prices of 2015 will not be scene again no matter how much this blog quotes the headlines or economists. These people can’t pick a bottom so how on earth can they pick a top???

I keep reading delusional comments on here where the GTA is being compared to Arizona (i.e. check out today’s #4 Guru) and I just shake my head. Who are these people trying to fool or sell? lol It’s so silly.

Compare apples to apples. The GTA to the greater Chicago. Or the GTA to greater Seattle. Then we can have an informed discussion and escape the Jerry Springer mindset that seems to dominate this place.

#113 MF on 05.24.17 at 11:52 pm

It’s hard to take realtor stats seriously. I have a hard time believing a real estate board would report that listings are rising, prices falling…basically that selling or buying is a bad idea (since they make money on transactions).

This is just a temporary lull until prices increase further.

The catalysts are still there:

Low interest rates (our idiot central bankers don’t know anything else) and the useless institution known as the CMHC.

We heard how Vancouver was correcting months ago and now look at it.

MF

#114 westcdn on 05.24.17 at 11:58 pm

It seems I can’t help myself. I would go for walks across his quarter section and notice small firs without foliage on their tops. I asked why. He said there were pecker poles. The male horses would come and rub their privates on the trees. It must have hurt was all I could say.

#115 jay on 05.25.17 at 12:15 am

Even the Canadian government knows this real estate market has been pretty much milked dry. http://www.macleans.ca/economy/economicanalysis/the-bank-of-canada-interest-rate-decision-shows-sunny-steven-is-back/

#116 westcdn on 05.25.17 at 12:55 am

The thing that confuses me the most about women is how strong they can be one moment and so weak the second. It is my life and I make no apologies.

One of my favourite stories from my father was when he was nailed between the eyes from a woman with a stiletto whose bf be was beating up. He never felt so much pain in life and was lucky not to lose an eye. Rumors had it he was the finest male ballroom dancer in Saskatchewan and it seems I picked none of that talent up.

At least, not the same. He told me amazing stories which made me laugh. I may not have his fighting abilities but my spirt is not behind.

#117 T-Rev on 05.25.17 at 1:01 am

Gartho man, I’m not sure whether to believe you , or not, or if I want to believe you, or not. A 90s style decline in TO will hammer the entire country….this is bad, no matter the rapturous schadenfreude the saturates this pathetic blog.

I’m with you that the fundamentals of the market are more distorted than one’s social judgement at 2am in a resort town dive bar, but I don’t see how those fundamentals have changed from a month ago….no rate increase, no unemployment increase. This was being fuelled by a lack of supply and throbbing, turgid demand- what has changed to tip that balance? If its market sentiment, them unless another factor compounds with it we will just experience a brief pause while demand builds up. Or, maybe all the rule changes did have an impact. Or maybe, just maybe, the market is taking stock of where it’s at, before heading in….any direction you can name, down, sideways, or straight back up.

I think it’s too early to call, but it’d make for a boring read if you didn’t rattle them brass balls of yours :)

#118 Rexx Rock on 05.25.17 at 1:02 am

The good news is thank God that interests rates will never go up like Japan.The central bank has long decided our fate long ago,so need to worry.It would be great if we had immigration policies like Japan or Switzerland.We wouldn’t have all this housing mess and families would have affordable housing.Live and learn.

#119 Dan.t on 05.25.17 at 1:06 am

Remember shortly before the Canada housing bubble really got going the Sun “News”, Province “News” and probably every other paid for “news” provider was showing pictures of some 24 year old buying a new condo, real estate pumping articles (paid for by real estate board) started daily…

and it still took 2-3 years to morph into the biggest housing bubble Canadians will ever see again in their lifetime.

That was the agenda. Brainwash the herd, get them spending, lower interest rates, and look at the situation in Canada now.

See a similarity. Now we have negative news slowly coming out. There is still lots of paid for realtor crap out there but “news” preys on fear so they love printing bubble bursting, Home Cap bank collapsing or busted giving fraud loans (which is normal in Canada and going on for years, just they got caught),

and the more this house of cards gets exposed, the more people will stop believing the hype. So I think this will still take a year or two then will be really bad.

The average Canadian needs to be exposed now to daily doses of reality to un-brainwash them. Look in YVR. The public (herd) is doing exactly what they are expected to do… buying right at the top of the market. That is why condo prices are rising (+ Christy Clarks 37k Free Money Debt giveaway) because it is the only thing the herd can afford and “it’s different in BC”.

Just like Nortel, people love to rush in when it’s in and hot and on fire and gonna go to the moon… to the moon I tell you! It’s $80, $90, it’s different this time, tech, we are all gonna be rich, everyone is doing it, just buy $100, $120, double down…$124…..oops, a year later $0 dollars. The difference is, you actually needed money to lose it all…this housing bubble all you had to do was leverage 95 to 100% cause housing only ever ever ever goes to the moon.

Doesn’t matter, Canadians are all rich and 500k condos is nothing, and 700k to 2 million houses are priced just about right based on the massive incomes Canadians earn. Yep, 800k house in Langley, 950k house in Surrey, 1m house in Markam total justifiable. No problem.

#120 Dan.t on 05.25.17 at 1:09 am

#45 crdt

Haha, awesome.

#121 Tony on 05.25.17 at 1:18 am

Re: #106 data on 05.24.17 at 11:11 pm

I was last in Oakville (not driving by it) in the mid 1980’s. I’ve never seen a city with that much poverty at the time, Oshawa ranked second at the time. The average car on the road in Oakville was about twenty years old.

#122 Easy on the word "crash" on 05.25.17 at 1:20 am

There are only 2 times in the last 37 years when RE in Canada crashed:

in the early 80s and early 90s,

during prolonged high unemployment recessions (+10% unemployment, 2 to 3 years in duration) and both happening for different reasons.

We are not there yet and even if indeed such a thing has started, it will take a couple of years for a “crash”.

If indeed 416 Land RE is all that is keeping Canadian GDP positive, then maybe (a big maybe) this is the trigger for one of these prolonged high unemployment recessions.

Why so many are rushing to sell their properties?

Regardless, a BIGthank you Garth for always being ahead of the curve when it comes to letting us know what is happening in Canada financially.

#123 I'm Poloz on 05.25.17 at 1:26 am

I’m Poloz and I want a $2 loonie.

#124 Tony on 05.25.17 at 1:28 am

Re: #99 Kilt on 05.24.17 at 10:54 pm

Canlan Ice Sports Corp. I went short this company. They lease but I can hold out a long time. It isn’t something most people would sell short because of the market cap the low volume and the dividend. It also is down substantially from its all time high meaning at some point you could get short squeezed.

#125 Tony on 05.25.17 at 1:34 am

Re: #103 WUL on 05.24.17 at 11:01 pm

GTA = Greater Turmoil Abounds

#126 Smartalox on 05.25.17 at 1:56 am

Re the BC Liberal Minority Government:

We will see how long the majority government lasts. If the first move is to ban private money from electoral campaigns, (and replace with a per-vote taxpayer subsidy, perhaps) the time line to the next election may be short.

If the legislative agenda is composed of any other issues, the Liberals may remain in power for a while: while a great deal of the Liberals’ pre-election fundraising remains in the bank (they sure didn’t spend it on the campaign trail), the BC NDP are effectively bankrupt after this past election, with NO MONEY to fight another campaign soon after the last one.

#127 fishman on 05.25.17 at 2:24 am

Your sorta right Bombast. I’m speaking from just my circle & non of us is pulling the trigger. We want a pullback, haven’t seen it yet. Mostly looking at small town interior & Van Island. Anything good doesn’t last period. West side Van is way high for my blood. Not interested in burbs. Traffic out & in getting the rent check & checkin up would drive me nuts.

I have to laugh at you for calling me a Real Estate Pumper though. It must hurt cause I held on to my west side Van commercial & residential. Too bad you sold or was too afraid to jump in. The ultimate hurt I guess is that it gives me such a tremendous access to capital. I can ride this thing down till the numbers work & come up with cash to jump in. And if it goes up, thank you very much.

#128 Karma on 05.25.17 at 2:30 am

#60 Bongo on 05.24.17 at 9:06 pm
“Garth, you really need to hold off on calling rate rises with such surety. Once again, it looks like the Fed is back to its cautious outlook and will hold off on a June increase. Expect more of the same the rest of the year. Maybe we’ll get one increase instead of three.

I agree with you that rates have nowhere to go but up. But the pace of that rise will continue to be glacial, as it has been.”

—————————————–

Not according to the CME Group:

“Before the release of the minutes, the chances of a June rate increase stood at 78.5 percent, according to a measure derived from asset prices by CME Group; by the end of Wednesday, the chances were 83.1 percent.”

https://www.nytimes.com/2017/05/24/business/economy/fed-interest-rates-minutes.html

#129 Myra Andrews on 05.25.17 at 3:53 am

Vancouver stats for May 24 from realtor Paul Boenisch

New 289
Price Chang 49
Sold 227
TI:8769 (total inventory)

#130 Eurovision on 05.25.17 at 4:26 am

Cottage country is where the boomer cash-out is flowing. The new normal, working from the cottage, condo in city for a reality chk. I would expect the demand on all yr rec property to hit gains in next few yrs.

#131 Mark Baum on 05.25.17 at 5:22 am

http://hh-math.blogspot.ca

^Newmarket average daily selling price. If this is true – wow.

#132 SimplyPut7 on 05.25.17 at 6:10 am

#41 In Markham on 05.24.17 at 8:06 pm

In the beginning Markham made some really nice homes (e.g. I like 6 Memon Pl, Markham as a starter home) but you can see the greed near the end of the housing boom, where the houses are sitting on top of each other, who needs to be that close to their neighbours? It’s not a condo. There’s lots of land in that area to give everyone a bit more space.

I find a lot of sellers are in denial about their prices, only people who really have to sell, have made any noticeable changes to their price – and even then, it’s usually still too high for the average buyer.

#133 Dharma Bum on 05.25.17 at 6:49 am

#16 Ace Goodheart

“Summer festival season is upon us. For those hippies and wanna be hippies among us (including me, semi retired dharma bum turned accidental millionaire), things are going to be fun.”
——————————————————————-

Are you my alter ego? I think I just found a new soulmate.

#134 Victor V on 05.25.17 at 7:22 am

World stocks hit record after Fed minutes; U.S. dollar dips

http://www.bnn.ca/world-stocks-hit-record-after-fed-minutes-u-s-dollar-dips-1.761003

LONDON – World stocks hit record highs on Thursday and the U.S. dollar dipped after the U.S. Federal Reserve signaled caution in raising interest rates, while oil prices rose in anticipation of top producers agreeing to extend output cuts for up to a year.

#135 A Reply to #108 Fake News on 05.25.17 at 7:39 am

“1. Canadians do not need VISAs. But their stay is limited to 6 months.

2. Mexicans “crossing over in the middle of the night illegally” are not overstaying their length of stay either. They were never allowed to come in the first place.”

WASHINGTON—U.S. Department of Homeland Security (DHS) released today the Fiscal Year (FY) 2016 Entry/Exit Overstay Report. The report provides data on departures and overstays, by country, for foreign visitors to the United States who entered as nonimmigrant visitors through an air or sea Port of Entry (POE) and were expected to depart in FY16.

The in-scope population for this report includes temporary workers and families (temporary workers and trainees, intracompany transferees, treaty traders and investors, representatives of foreign information media), students, exchange visitors, temporary visitors for pleasure, temporary visitors for business, and other nonimmigrant classes of admission. This population accounts for 96.02 percent of all nonimmigrant admissions at U.S. air and sea POEs in FY16.

For Mexico, the FY16 suspected in-country overstay rate is 1.52 percent of 3,079,524 expected departures. Consistent with the methodology for other countries, this represents only travel through air and sea POEs and does not include data on land border crossings. For Canada, the FY16 suspected in-country overstay rate is 1.33 percent of 9,008,496 expected departures.

https://www.dhs.gov/news/2017/05/22/dhs-releases-fiscal-year-2016-entryexit-overstay-report

#136 re., 19 on 05.25.17 at 7:43 am

I’m Not Poloz on 05.24.17 at 7:22 pm
Currently, the CAD/USD is trading at 74.49 cents USD.

Hopefully, when the Loonie is above 80 cents for 2017, Poloz isn’t driving an 18-wheeler semi truck in downtown Toronto, nor is he attending any Ariana Grande concert.

Poloz wants a 40-cent loonie. When Poloz talked down the Loonie at the last BoC meeting earlier this year, he should have been reported for economic treason to destabilize the Canadian Loonie. Not everyone wants a 40-cent loonie and paying $15 for one crown of Broccoli.
……….

you repeat yourself over and over and over again.

Do you ever try to entertain different thoughts?

#137 not a good analogy on 05.25.17 at 8:04 am

Just like Nortel, people love to rush in when it’s in and hot and on fire and gonna go to the moon… to the moon I tell you! It’s $80, $90, it’s different this time, tech, we are all gonna be rich, everyone is doing it, just buy $100, $120, double down…$124…..oops, a year later $0 dollars. The difference is, you actually needed money to lose it all…this housing bubble all you had to do was leverage 95 to 100% cause housing only ever ever ever goes to the moon.
…….

govt will bail the housing chaps. Sad, but true. Rather, they will do everything in their power. They helped create this mess, surely they feel the need to protect.

To go after the rich/savers to spread the wealth, fill voids in tax revenue……………………..sorry

There will be no ‘bail out’ of over-extended homeowners. All governments in Canada are pickled in the same debt and any effective real estate subsidy is out of the question. Besides, the US spent trillions trying to do exactly this, and failed. Dream on. — Garth

#138 Penny Henny on 05.25.17 at 8:11 am

For those of you who have been asking about the progress in selling my house I can happily now say it’s sold.
Long story short sold for $964K with a quick closing.

Long story long as follows.

How to quadruple your money and live rent free.

My first step in to the Toronto house market was in 1996, just one year before the market bottomed and prices started their rise again, albeit very slowly at first. That house was purchased for 207,000. The decor was ugly but it was set up already for two families so the wife and I were able to rent out half the house and fast track our mortgage payment. It is a bit of a sacrifice but in the long run you’ll be glad you did it. Lived in that house for 5 years and sold for 274,000. Also it should be noted that some upgrades and sweat equity went into all these homes.
House two was a lateral move. Smaller house but nicer neighbourhood purchased for 275,000 in 2001. It was during the 5 years in this home where we saw the most appreciation percentage wise. Wife and I were separating and I did a FSBO. A home made sign plunked on the front lawn on Thursday afternoon had me a done deal by Monday. The area was very popular with builders at the time because of the huge lots, 50×161. That house sold 450,000 and no commission to be paid. Garth would say I was greedy but I would call it smart. I knew my audience.
So with 225,000 in my pocket after the split of the proceeds I went out looking for my next home. I did all the legwork myself so I only needed an agent to present the offer for me. For this I received a 1% kickback. So the 392,000 purchase price was actually 388,000 with the cash back. But boy oh boy did this house need some work, it had good bones an awesome layout and a fantastic yard but it needed work. So that brings us to the present.
A month ago the house was priced for offers. Initially 899K. Six offers, one of which was 1M. Our agent asked will they do any better and the buyers agent confidentially says sure. He goes back to his clients who were waiting out front and the couple start arguing about price and the wife leaves the husband and goes home. So dead deal. I was never sure about this offer as there was only 30K down and a 3 month closing.
So the house was re-priced at 1,079,000 and nothing but a couple of low balls. 935K and 929K. Other than that Crickets. Taking that as an obvious sign we quickly re-priced again for 999K. A few showing later we have a proud new owner and I can honestly say they have a great house on a great street. Sale price 964K.
My wife and I had planned to retire and get out of the city. Too many people! And as of late too many A-holes!
So we bought a great place in Welland last year before the price craziness had spread. House was listed for $260 and we bid $280K. Got in at just the right time too. Our agent says she can probably get us close to 400K but it doesn’t matter cause were not moving

#139 crowdedelevatorfartz on 05.25.17 at 8:25 am

@#90 Smoking Man
“I need a sexy chic voice for my videos …”
******

Reminds me of a Gary Larson cartoon.

The real reason dinosaurs went extinct.
They smoked.

#140 crowdedelevatorfartz on 05.25.17 at 8:33 am

@#113 westcdn
“It seems I can’t help myself…..”
***********

Please, try.
“Pecker poles”, “Stiletto heels”, Ballroom Dancer”… These are all some Freudian joke right?

#141 TurnerNation on 05.25.17 at 8:35 am

There is a developer’s stock listed:
Peter Wall’s eponymous Vancouver company Wall Financial.
WFC on the TSX. 3% yield.

#142 Vit on 05.25.17 at 8:41 am

#57 banned .
Looks like any body who does not support yours wrong ideas will be banned without any explanation .
LOL

#143 Julia on 05.25.17 at 8:52 am

#72 Rental property math

Sold over asking doesn’t mean prices have not dropped. My neighbor sold over asking according to the realtor. Except that over asking price was after they had to drop the price and the sale price ended up less than they would have gotten 6 months ago.

#144 Andrew t on 05.25.17 at 8:58 am

#100 Happy Housing Crash Everyone! on 05.24.17 at 10:57 pm
#42 Howard

The toronto star is bankrupt. They will print any fake news for money. Most media outlet are losing money and will print RE propaganda. Do people still read thestar?

The problem these days, with a lack of real journalists (due to cost saving) and the push towards quantity of items over quality (in hopes one catches on and gets lucrative “shares”) is that you have that quote from a builder, which would have been one counter argument of many in a balanced and thoroughly reported article, is now its own stand-alone piece. With its own headline. There’s no context to these bits they throw out there to see what sticks. Plus it’s easy content to fill the daily quota for the reporter. Problem is, it makes it easy for anyone to find a headline that backs up their position. It’s a real failing of the current news model.

#145 thankUfiberalsupporters on 05.25.17 at 9:00 am

Just want to give a shout out to the Ontario liberals for keeping their unwritten promises of death and taxes.

and thank you to all who voted them in again and again and again! not to mention the expert curriculum changes, reorienting children in the wrong direction and gender correction surgeries for all those times God got it wrong :)

… amazing what can be accomplished by a woman scarred/scorned.

#146 traderJim on 05.25.17 at 9:07 am

#23 Dave re Vancouver

I have a lot of friends in Vancouver and I regularly ask them about the market.

Consensus is that after a brief lull, prices are holding firm. Some people who tried to sell for ridiculous amounts had to adjust prices but then quickly sold.

It does sound like prices are no longer shooting up, obviously.

Can’t see why Toronto wouldn’t follow the same path, unless another shoe drops. Maybe another sub-prime lender gets in trouble or something along those lines.

#147 Let me re-phrase .. on 05.25.17 at 9:14 am

Garth. Govt will do everything in its power to ease the pain for ‘hurting ‘ home owners/middle owners . We are seeing this : new higher tax bracket for the rich . Next up is going after the self employed small business owners and the savers . By doing this they get to keep their jobs

Sorry , but the path is set and Trudeau is the man to execute . Sorry

#148 traderJim on 05.25.17 at 9:15 am

Decided to check realtor.ca again on my old childhood home, in one of the poorest, highest crime areas of east end Toronto. Alright, I’ll admit, far reaches of Scarberia.

Shocking, absolutely insane.

A terrible looking house, about 1400 sq ft, in a really bad area (think hookers, drugs, gangs) asking $1.2 M.

Unbelievable. Most other attached 1200 sq ft places asking $800k. These are poorly built, ugly places with zero landscaping. There are several police stations nearby, for obvious reasons.

You could not pay me to live there.

For some reason that really hits home the scale of how bad this bubble is.

I guess it’s because I remember my parents being thrilled to be able to sell for $64,000 and get the hell out of there.

#149 Canada needs a .... on 05.25.17 at 9:21 am

A Trump. Of course he’s flawed , who isn’t . But it’s the bottom line that matters to him

Trudeau ? He is going the 1%s and the savers

#150 Happy Housing Crash Everyone! on 05.25.17 at 9:25 am

Lol. The realtor shills are out in a panic as deals are falling through as buyers are walking away. Happy Housing Crash Everyone! :-) http://wolfstreet.com/2017/05/24/toronto-house-price-bubble-pops/

#151 Raj on 05.25.17 at 9:25 am

#80 Smoking Man
Wow !! Interesting story.BTW, I’m in software too.We can share our experience.
I recently launched a website for tutors

http://www.tutorsbaba.com/
Take a look

#152 Tater on 05.25.17 at 9:37 am

#111 @8_Dave on 05.24.17 at 11:51 pm
@ 8 Dave.

You hit the bullseye. I think most people that found their way to this blog have ended up as the greatershmucks no matter what happens with real estate going forward. Even the prices of 2015 will not be scene again no matter how much this blog quotes the headlines or economists. These people can’t pick a bottom so how on earth can they pick a top???

I keep reading delusional comments on here where the GTA is being compared to Arizona (i.e. check out today’s #4 Guru) and I just shake my head. Who are these people trying to fool or sell? lol It’s so silly.

Compare apples to apples. The GTA to the greater Chicago. Or the GTA to greater Seattle. Then we can have an informed discussion and escape the Jerry Springer mindset that seems to dominate this place.
——————————————————————
Cool. Median price to median income ratios:
Chicago: 3.8
Seattle: 5.5
Toronto: 8+
So, Toronto needs to decline between 30% and 52% based on those two comparables

Residential real estate is emotion-driven and nobody should risk having a one-asset strategy based upon it. The consistent message here is to seek balance. If you can afford a house without gutting the rest of your financial life or walking into extreme leverage, so do. Speculating in an inflating market will, however, likely end in tears. — Garth

#153 };-) aka Devil's Advocate on 05.25.17 at 9:46 am

#142 Julia on 05.25.17 at 8:52 am
#72 Rental property math

Sold over asking doesn’t mean prices have not dropped. My neighbor sold over asking according to the realtor. Except that over asking price was after they had to drop the price and the sale price ended up less than they would have gotten 6 months ago.

You don’t set the price of your property. Your Realtor doesn’t set the price of your property. What you paid for it does not set the price of your property. What your neighbours home sold for does not set the price of your property. How much you owe does not set the price of your property. How much the home your going to does not set the price of your property. The cost of your renovations does not set the price of your property.

What sets the price of your property is; what a ready will and able buyer is prepared to pay you for it.

It’s NOT what a seller asks but what a Buyer PAYS that sets the value of a property.

#154 Sam the Sham on 05.25.17 at 10:11 am

#136 not a good analogy
“govt will bail the housing chaps. Sad, but true. Rather, they will do everything in their power.”

The only thing the government would ever bail out if necessary are the big banks, the peasants will be on their own.

#155 Looney Baloney on 05.25.17 at 10:30 am

@smokey

For all your philosophical espousing I never expected you to be a third rate VB hack. All that time wasted drinking and commenting on this pathetic blog could have been better spent learning a real programming language.

And thanks for the list of companies you worked for, if they are running on VBA and windoze, I know who not to trust with my . How many of them got bit by the latest ransomware spree?

#156 Looney Baloney on 05.25.17 at 10:35 am

Someone on this blog should start a petition for uncle poloz to raise rates and share the link here. Would be interesting to see how many signatures we get from blog dawgs.

And kudos to Whine for the cooling measures. Never thought she’d have the figurative balls to do it. She sure knows how to go out with a bang.

#157 westcdn on 05.25.17 at 10:40 am

139 : Mr Fart

Who are you? I can’t seem to recall anything you have said about yourself probably because you bore me. Are you an obese troll sitting in his lazy boy in the middle of his 400 square foot condo with his laptop? It is what comes to mind.

#158 Smoking Man on 05.25.17 at 10:43 am

Congrats Penny Henny.

Wellend? Yikes

#159 Lillooet, BC on 05.25.17 at 10:46 am

Despite off chart prediction for a decade, Garth keeps predicting RE trend.
Appreciate your courage and like reading this blog!

#160 Looney Baloney on 05.25.17 at 10:52 am

The market might wane with whyne but will bounce back unless:
– rates increase by any meaningful measure (5% for 5)
– Realtors and pumpers like Lamb start counting bars or pay serious fines (millions) for shady business practices and preying on the misinformed
– empty house taxes get imposed seriously
– cra crackdown on flippers and undeclared basement renters hits a high enough note for the globe to run horror stories

This market might run on sentiment but will be sustained by weak fundamentals. Either .gov regulates enough to make what it used to be – shelter, and nothing more, or they create channels to trade it like any other asset class (buy and sell shares). Until then, just BTFD.

#161 Braj on 05.25.17 at 10:52 am

#141 Vit on 05.25.17 at 8:41 am

#57 banned .
Looks like any body who does not support yours wrong ideas will be banned without any explanation .
LOL

You know why you were banned. Garth allowed this post show you can showcase how stupid you look.

An idea is an idea, whether right or wrong is irrelevant and not important. This is a place for discussion, you must have written some real crap to get yourself banned. It makes sense though considering it’s still spewing out of you.

You have the emotional composure of a 1-ply sheet of toilet paper, it makes sense why RE gets you so giddy.

Why do you still come around?

#162 rainclouds on 05.25.17 at 10:59 am

Slowwly the vice tightens

http://vancouversun.com/news/local-news/fraser-valley-board-warns-offshore-clients-seeking-to-misuse-realtor-bank-accounts

#163 Looney Baloney on 05.25.17 at 11:06 am

#144 amazing what can be accomplished by clueless voters smittten by neighbors envy. I’ll gladly lose both my eyes if it means you’ll lose one.

#164 earthboundmisfit on 05.25.17 at 11:21 am

Schadenfreud. ‘Tis a beutiful thing

#165 Pete on 05.25.17 at 11:27 am

Bank Shares Dropped 13% from Peak in March 2017

Shares in CIBC and BMO have both dropped about 13% from their peaks in early March, when the housing bubble was at its fullest in Toronto. Bank shares are good proxies of how this housing bubble will end.

#166 traderJim on 05.25.17 at 11:33 am

#153 Sam Sham

You’re exactly right. I wonder why so many people cling to the idea that Big Government will take money from the rich and give it to the poor?

Reminds me of the dogs who sit by the table waiting for a scrap, even when they’ve never been given one in years.

#167 anappleaday on 05.25.17 at 11:45 am

Re: Surge in listings……
Is there a real surge in listings or is the increase being caused by the same house being listed 2-3 times? I know that on my street there were 5 MLS listings in April/May for 2 houses as the sellers readjusted prices in line with the new reality.
TREB would report 5 listings when in reality there were just 2.
Is the reporting adjusted for the scenario above?

#168 Merima on 05.25.17 at 11:49 am

Dear Mr. Turner,
Can you please digress and explain an apparent pension crisis that is looming over the US and probably over Canada. What are unfunded pension liabilities and how this crisis along with the real estate crisis might affect the overall economy (I know it will be adverse but to what extent and for what sectors). How can an average Canadian shield themselves from such a catalyst event?
Thanks,
Merima

#169 april on 05.25.17 at 12:00 pm

#159 – According to the Canadian realty consultant, we’re in the second stage of a housing decline and what happens is homes at the lower end continue to increase in price for awhile but they too will drop.

#170 april on 05.25.17 at 12:02 pm

Garth was/is right it’s happening and has been happening in parts of Canada including Vancouver since early last yr. You just don’t see it.

#171 Fish on 05.25.17 at 12:04 pm

RE: #45 and # 118

Good point, I think just be true to yourself, if that means anything anymore, and time

#172 Ogopogo on 05.25.17 at 12:08 pm

#10 Johnny boy on 05.24.17 at 7:10 pm

https://www.bloomberg.com/news/articles/2017-05-24/toronto-bidding-wars-turn-to-homebuyers-remorse-as-market-slows

Speaking of remorse… I could barely read the article I was laughing so hard. My wife wondered if I’d stumbled on a Louis C. K. video. I said, “No, better, much better.”

#173 Penny Henny on 05.25.17 at 12:34 pm

#157 Smoking Man on 05.25.17 at 10:43 am
Congrats Penny Henny.

Wellend? Yikes

———————————————

There is a good side and a not so good side in Welland.
The not so good side is Shlong Branch in the making.

#174 Penny Henny on 05.25.17 at 12:39 pm

#168 Penny Henny on 05.25.17 at 12:34 pm
#157 Smoking Man on 05.25.17 at 10:43 am
Congrats Penny Henny.

Wellend? Yikes

———————————————

Handlebar Hanks. $15 for a pitcher of beer. Tax included. Turnernation would love it.

#175 traderJim on 05.25.17 at 12:46 pm

New all time highs for S&P and NASDAQ. WTI back under $50.

Guess the ‘SPY’ isn’t falling after all.

Trump to NATO: “Start paying your fair share.” As NATO leaders stand around looking like children caught with their hand in the cookie jar.

But his best line by far was “I didn’t ask how much this new NATO HQ cost, and I’m not going to.” hahahahaha

#176 James on 05.25.17 at 12:57 pm

#157 Smoking Man on 05.25.17 at 10:43 am

Congrats Penny Henny.

Wellend? Yikes
_____________________________________________
Whats wrong with Welland Smoking Man? My father worked there for Welland Forge in the 1960s and retired from there. It was a great town to grow up in and we were right between Niagara Falls and St Catharines, always lots to do and great scenery. And you will be going where from Schlong Branch…………………?? Good luck touching down in the GTA you picked a bad time to move unless you are going to Moncton NB.

#177 BoomerKid on 05.25.17 at 12:59 pm

My boomer parents sold their Vancouver house close to the peak of the market last year. They are planning to downsize to a luxury condo at some point. They are happy to wait while the housing market sorts itself out, knowing that it could be a few years. But I was wondering if Garth or anyone else has any advice on what to do with the Canadian cash (slowly losing its purchasing power as inflation increases and the loonie gets cheaper) while they wait it out.

#178 Fake News on 05.25.17 at 1:09 pm

#134 A Reply to #108 Fake News on 05.25.17 at 7:39 am
“1. Canadians do not need VISAs. But their stay is limited to 6 months.

2. Mexicans “crossing over in the middle of the night illegally” are not overstaying their length of stay either. They were never allowed to come in the first place.”

WASHINGTON—U.S. Department of Homeland Security (DHS) released today the Fiscal Year (FY) 2016 Entry/Exit Overstay Report. The report provides data on departures and overstays, by country, for foreign visitors to the United States who entered as nonimmigrant visitors through an air or sea Port of Entry (POE) and were expected to depart in FY16.

_________________________________________

What is your point exactly? NAFTA members do NOT need VISAs. A passport or EDL is all that is required. I cross the border 5 times a month.

#179 Howard on 05.25.17 at 1:16 pm

#146 Let me re-phrase .. on 05.25.17 at 9:14 am
Garth. Govt will do everything in its power to ease the pain for ‘hurting ‘ home owners/middle owners . We are seeing this : new higher tax bracket for the rich . Next up is going after the self employed small business owners and the savers . By doing this they get to keep their jobs

Sorry , but the path is set and Trudeau is the man to execute . Sorry

——————————–

Don’t forget that the Liberals have already axed Harper’s higher TFSA limit. Wouldn’t be surprised to see them get rid of the TFSA altogether. It’s the one and only new policy implemented in decades specifically to help savers, so it is expendable.

#180 Contrarian Coyote on 05.25.17 at 1:30 pm

Speaking of real estate collapses…this guy Dan Bell has some great stuff: Dead Mall Series

http://www.youtube.com/channel/UCjU-Cwjfqbo2hMRItlXwnnQ

I know the Sears in my area are prepping for closure…friend of a few of the HR managers and things are circling the drain.

#181 Cottingham a bargain on 05.25.17 at 1:36 pm

#85 Leo Trollstoy on 05.24.17 at 10:07 pm
I predict GTA housing price will drop 50% from peak to bottom to $460k. Just don’t know how long it will take.

We will all be dead by then

——–

Ditto

Mankind will be traveling to the stars in the starship enterprise before that happens

#182 Long-Time Lurker on 05.25.17 at 1:44 pm

#167 Merima on 05.25.17 at 11:49 am

Dear Mr. Turner,

Can you please digress and explain an apparent pension crisis that is looming over the US and probably over Canada. What are unfunded pension liabilities and how this crisis along with the real estate crisis might affect the overall economy (I know it will be adverse but to what extent and for what sectors). How can an average Canadian shield themselves from such a catalyst event?

Thanks,
Merima

Look up Garth’s Post:

Lessons
April 4th, 2017

We have a wrinkly crisis. I hear the same story every day. “We just found out that Mom and Dad saved, like, nothing. We thought they were okay, but since he retired they’ve been asking us for money – which we don’t have because of daycare – and it’s getting worse. They’re living on their CPP. That’s it. What can we do?”….

#183 bdwy sktrn on 05.25.17 at 1:52 pm

WTF? someone posted this link
https://betterdwelling.com/city/vancouver/vancouver-is-seeing-less-sales-in-may-and-more-inventory/

for may rebgv (van) data – someone seems to be f’ing with it as the story changed 180deg over a couple days. cached paged proved i’m not losing it, but i was wondering there for a minute.

yesterday:
Sales Are Higher So Far

Vancouver appears to be seeing more sales this May than last. As of May 23, there was 4,120 sales, which averaged 179 sales per day. The same month last year ended with 4,769 sales, which averages to 153 sales per day. Sales are on target to beat last year’s numbers by almost 17%. That is, if the pace of sales continues through to month end.

today:
Sales Are Lower So Far

Vancouver appears to be seeing less sales this May than last. As of May 23, there was 2,654 sales, which averaged 115 sales per day. The same month last year ended with 4,769 sales, which averages to 153 sales per day. Sales are about 24% lower than the same time last month. That is, if the pace of sales continues through to month end.
—————–
if the first is true it’s an all time high for the month.

#184 it's beacuse that's what they .. on 05.25.17 at 1:53 pm

You’re exactly right. I wonder why so many people cling to the idea that Big Government will take money from the rich and give it to the poor?

they are showing signs of doing. They created a recent higher tax bracket. Remember? They are likely to attack small business (corps) and who knows what.

are you seriously suggesting this Trudeau govt isnt grossly socialist?

#185 I thinks I know something on 05.25.17 at 2:10 pm

#81 Pete on 05.24.17 at 10:02 pm

From 2005 to 2017, housing prices rose 174% in GTA, not some 350% you are s&&& about. Moreover, not every seller bought in 2005. Moreover, most have mortgage and HELOC maxed to 75%, or 80% of their property. A drop of 20% in price will not only net them no gains, they will stand to lose BIG money.

————————————————————

Yeah? Here’s an admittedly non-average example. Friend of a friend situation. It was bought (Maple) in 2008 for $335 and sold it in 2013 for much more. It just sold again 2 months ago for nearly 1.3 million!!!!!

#186 TurnerNation on 05.25.17 at 2:34 pm

Penny Henny you could there invite Smoking man on way to Seneca. I watched his podcasts linked from Twitter.

– VIX single digits today. Don’t just stand there gentleman, trade – buy sell short.

#187 A Reply to #177 Fake News on 05.25.17 at 2:35 pm

#66 Andrew Woburn on 05.24.17 at 9:18 pm
#108 Fake News on 05.24.17 at 11:33 pm
#134 A Reply to #108 Fake News on 05.25.17 at 7:39 am
#177 Fake News on 05.25.17 at 1:09 pm

“What is your point exactly? NAFTA members do NOT need VISAs. A passport or EDL is all that is required. I cross the border 5 times a month.”

Here’s the point, genius. You contradicted Andrew Woborn with arguments that bore no relation to the facts at hand. Go back and see what you both wrote.

You also implied that the facts provided were “fake news”, even though the info came from a report signed off 3 days ago by John F. Kelly, the current U.S. Secretary of Homeland Security, appointed by your beloved Donald Trump, and confirmed by the U.S. Senate.

Here are excerpts from the report:

“The report specifies that U.S. Customs and Border Protection (CBP) processed 50,437,278 in-scope nonimmigrant admissions at U.S. air and sea [points of entry] who were expected to depart in FY16—of which 739,478 overstayed their admission, resulting in a total overstay rate of 1.47 percent….

“For Mexico, the FY16 suspected in-country overstay rate is 1.52 percent of 3,079,524 expected departures…. For Canada, the FY16 suspected in-country overstay rate is 1.33 percent of 9,008,496 expected departures.”

Below is the press release from the DHS official website (and within it there’s a link to the full report):

https://www.dhs.gov/news/2017/05/22/dhs-releases-fiscal-year-2016-entryexit-overstay-report

#188 Mark on 05.25.17 at 2:38 pm

“Bank shares are good proxies of how this housing bubble will end.”

Bank shares did quite well in the 1990s after the housing bubble of the 1980s ended. Most major Canadian banks quadrupled their share prices. A mere 25% housing downpayment invested in their equity, in 1990, was enough 8 years later or so to buy a house outright, in cash. Only the tech bubble and then Finance Minister Paul Martin’s prohibition of bank mergers really stopped the bull market in Canadian bank stocks.

The banks will have their good days and their bad days, but spread expansion and an implosion of competition (ie: HCG) will definitely continue their upwards march profitability-wise.

#189 paracho on 05.25.17 at 2:49 pm

Something is looming and it has been preparing for a ong time. Luckily I sold a bit too early two years ago in October 2015. Made a nice amount in 4 years. Not complaining. Moved back in with my elderly parents..who needed my assistance anyway and I only lived next door.
An interesting observation ..first time I saw this since 2008 ..a listing from an agent I know ( I do mortgages..so I know a lot of agents and never bought their hype ) …first time I saw a listing ‘reduced since 2008 ! Is this a start ?!

#190 James on 05.25.17 at 3:07 pm

#174 traderJim on 05.25.17 at 12:46 pm

New all time highs for S&P and NASDAQ. WTI back under $50.

Guess the ‘SPY’ isn’t falling after all.

Trump to NATO: “Start paying your fair share.” As NATO leaders stand around looking like children caught with their hand in the cookie jar.

But his best line by far was “I didn’t ask how much this new NATO HQ cost, and I’m not going to.” hahahahaha
____________________________________________
Nope the best was when the fat pompous fool pushed his way through the crowd to get to the front of the line for a photo opp. The look on his face is like “I’m here, I’m here, I’m important, take my picture front and centre.” He looked like a uncouth dick!

http://theweek.com/speedreads/701368/watch-trump-casually-push-fellow-nato-leader-way-preen-front

#191 James on 05.25.17 at 3:15 pm

#173 Penny Henny on 05.25.17 at 12:39 pm

#168 Penny Henny on 05.25.17 at 12:34 pm
#157 Smoking Man on 05.25.17 at 10:43 am
Congrats Penny Henny.

Wellend? Yikes

———————————————

Handlebar Hanks. $15 for a pitcher of beer. Tax included. Turnernation would love it.
___________________________________________
Don’t forget the Jumbo Wings, which are in my opinion about the best in all of the Niagara region!

#192 Stan Broock on 05.25.17 at 3:33 pm

#184 I thinks I know something on 05.25.17 at 2:10 pm
#81 Pete on 05.24.17 at 10:02 pm

From 2005 to 2017, housing prices rose 174% in GTA, not some 350% you are s&&& about. Moreover, not every seller bought in 2005. Moreover, most have mortgage and HELOC maxed to 75%, or 80% of their property. A drop of 20% in price will not only net them no gains, they will stand to lose BIG money.

————————————————————

Yeah? Here’s an admittedly non-average example. Friend of a friend situation. It was bought (Maple) in 2008 for $335 and sold it in 2013 for much more. It just sold again 2 months ago for nearly 1.3 million!!!!!
————————–

Some house prices in GTA increased 1000 % since 1999.

#193 calgaryPhantom on 05.25.17 at 3:50 pm

who knew having a bigger down payment is considered as a negative in today’s market.

My mortgage borker says if you are going to pay 20% down the best rate i can get you is 2.69. But if you go with less than 20%, i can get you 2.44. (wtf??)

#194 traderJim on 05.25.17 at 3:57 pm

#189 James

That was a good moment too James, as the obvious alpha male takes his place at the front.

I get it now, Trump’s the guy who picked on you in school. That’s not fun, but time to get over it and realize some people are born alpha and some people are born beta. Not much you can do about it. Life’s not fair, sorry.

#195 A Reply to #186 A Reply to on 05.25.17 at 4:06 pm

Of the estimated 11 million illegal aliens living in the USA, how many are Canadian?

Canadians go to the US in droves to escape winter, which sometimes drags on.

Not that many Canadians go to work illegally, in comparison.

Really not that complicated.

#196 Please Ban From This Site For Reasons of: No One Gives A Crap on 05.25.17 at 4:10 pm

Penny Henny, Smoking Man & Leo the Real Estate Agent in Disguise.

Thank-you.

#197 MF on 05.25.17 at 4:26 pm

#184 I thinks I know something on 05.25.17 at 2:10 pm

Guaranteed that person then put their entire windfall into 2 million plus property and still has a huge mortgage. These people who do well through luck in RE always believe they are the smartest, even though they have the BoC and the CMHC to thank for their “success”.

MF

#198 MF on 05.25.17 at 4:27 pm

#193 traderJim on 05.25.17 at 3:57 pm

NATO would be nothing without the US. Trump can do whatever he pleases.

MF

#199 MF on 05.25.17 at 4:31 pm

#180 Cottingham a bargain on 05.25.17 at 1:36 pm

The US market dipped way less than that and almost bankrupted the country, and the entire world with it.

50% is not needed, and if it did fall 50%, there will be no bailout for Canadian real estate like there was for the US.

MF

#200 traderJim on 05.25.17 at 5:04 pm

#183 “are you seriously suggesting this Trudeau govt isnt grossly socialist?”

I don’t really pay much attention to Junior, but if he’s anything like his dad, then I’m sure he’s a full blown socialist.

My point is that, even under socialism, money does not get to the poor. Venezuela being only the latest example.

‘The rich’ do pay a lot of tax, although some of course get deductions and subsidies (Bombardier) that us regular plebes will never get.

Even if the rich were taxed at 100% of income there isn’t enough money there to pay all the bills. The middle class are the ones that always pay. (Well, and future generations).

But most of the money never makes it to the poor, regardless. It’s frittered away and some is used to pay for regulators to strangle employers and other brilliant collectivist plans.

The very poorest in Canada do get something of course, but it’s not much.

The middle classes who think that they are going to benefit from a transfer of wealth are sadly mistaken.

I blame politicians, but I probably should blame the average voter who buys into the idea that they should vote for politicians who promise to take from some other people and give it to them.

I gave up on that system ever ending though. Hope springs eternal.

“There are those who work for a living then there are those who vote for a living” Mencken

#201 Mark on 05.25.17 at 5:13 pm

“My mortgage borker says if you are going to pay 20% down the best rate i can get you is 2.69. But if you go with less than 20%, i can get you 2.44. (wtf??)”

Less than 20%, and the convention is, the borrower pays for the subprime mortgage insurance which, for a federally regulated institution, is pretty much mandatory.

More than 20%, and many lenders will buy the CMHC subprime mortgage insurance from their own resources. Or they could just decide to hold the loan “naked”.

Hence the disparity in pricing. The person with <20% down is not getting a deal, they will have to purchase (or already have purchased) CMHC subprime mortgage insurance (or similar product offerings from Genworth or Canada Guaranty) separately.

#202 traderJim on 05.25.17 at 5:22 pm

Video surfaces of the Pope putting Trump in his place:

https://giphy.com/gifs/donald-trump-pope-francis-3og0Iwg0F6j5wTN3X2

#203 Boombust on 05.25.17 at 5:58 pm

#183 broadway skytrain

Those numbers are wrong and have been retracted. Sales in Metro Van are trending about 25% lower this May over May, 2016.

#204 jess on 05.25.17 at 6:18 pm

https://www.theguardian.com/world/2016/dec/02/andorra-to-renounce-banking-secrecy-as-it-sheds-tax-haven-status

In 2015 the Banca Privada d’Andorra (BPA), the principality’s fourth-largest bank, was accused by US treasury officials of taking bribes to channel profits and facilitate laundering of cash from Russian and Chinese organised crime as well as Venezuela’s state oil firm PDVSA.

One is Gao Ping, a Chinese businessman, who is now in a Spanish prison awaiting trial in a case of fraudulent trade shipments between Spain and China. The other is Andrey Petrov, a Russian accused of bribing Spanish officials on behalf of Russian criminal gangs in connection with property transactions.

====bank fraud spain===
The court is questioning why they allowed Bankia to sell shares in an initial public offering in 2011, less than a year before Bankia’s portfolio of bad mortgage loans forced the government to seize control of it.
http://www.economist.com/news/finance-and-economics/21717039-assigning-blame-disaster-bankia-spains-banking-clean-up

#205 Dan.t on 05.25.17 at 6:24 pm

Just like Nortel, people love to rush in when it’s in and hot and on fire and gonna go to the moon… to the moon I tell you! It’s $80, $90, it’s different this time, tech, we are all gonna be rich, everyone is doing it, just buy $100, $120, double down…$124…..oops, a year later $0 dollars. The difference is, you actually needed money to lose it all…this housing bubble all you had to do was leverage 95 to 100% cause housing only ever ever ever goes to the moon.
…….

govt will bail the housing chaps. Sad, but true. Rather, they will do everything in their power. They helped create this mess, surely they feel the need to protect.

To go after the rich/savers to spread the wealth, fill voids in tax revenue……………………..sorry

There will be no ‘bail out’ of over-extended homeowners. All governments in Canada are pickled in the same debt and any effective real estate subsidy is out of the question. Besides, the US spent trillions trying to do exactly this, and failed. Dream on. — Garth
____________________________________

>Since 60% of Canucks don’t understand how low interest rates and debt repayment are correlated then I don’t expect most to understand the bail out anyhow. I agree, prudent and sound financial individuals will get F**Ked and those who have no regard for debt or money or took zero financial responsibility, will get bailed out.

Politicians only care about votes. How can you tell when a politician is lying? They open their mouth!

It has been that way forever and will continue that way. Bail out is coming for those who binged on tantalizing, juicy, succulent free money, will get a pass because that was gov plan all along. The herd is stupid…move it towards water and hope that it drinks…well this herd friggen sucked up the whole friggen river!

A bail-out is an impossibility. Get over it. — Garth

#206 conan on 05.25.17 at 6:38 pm

RE #174 traderJim on 05.25.17 at 12:46 pm

Trump to NATO: “Start paying your fair share.”

We will all go bankrupt if we accept America’s vision of paying for military. Politics rules American arms procurement. Look at what the Russians and Chinese are putting on the table with far less money.

It is innovation in thinking, that will bridge the NATO gap. Throwing dollars into a black hole, cough F 35 cough, because of ………politics is a disaster.

https://youtu.be/NbNv7njA-Aw?t=15

Phaneuf…..much more then a pylon.

#207 Daughter of Ponzy on 05.25.17 at 6:48 pm

I think Smoking Man called the top when he sold his Shlong Branch shack for 1 million. So did Penny Henny. These dirty little shacks don’t look much different from Latin American, Asian or even African shanty towns. Third world lifestyle sold for top dollars. Welcome to Canada.

#208 Penny Henny on 05.25.17 at 7:08 pm

#195 Please Ban From This Site For Reasons of: No One Gives A Crap on 05.25.17 at 4:10 pm
Penny Henny, Smoking Man & Leo the Real Estate Agent in Disguise.

Thank-you.

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

As Trump would say ‘You are a loser’

As you would say’Your a looser’

#209 garth reader on 05.25.17 at 7:09 pm

@james 189
Nope the best was when the fat pompous fool pushed his way through the crowd to get to the front of the line for a photo opp. The look on his face is like “I’m here, I’m here, I’m important, take my picture front and centre.” He looked like a uncouth dick!

http://theweek.com/speedreads/701368/watch-trump-casually-push-fellow-nato-leader-way-preen-front
**************

Funny does not our former substitute teacher PM Justine Trudeau preen for cameras, including his own mobile phone camera?

I love smug Canadians…naive and worse off than the mighty Yankees!

#210 crowdedelevatorfartz on 05.25.17 at 7:10 pm

@#159 Westcdn
“Are you an obese troll sitting in his lazy boy in the middle of his 400 square foot condo with his laptop….”
*******

Touched a nerve did I?
While I consider myslef “rubinesque” I guess you could call me fat…but then again “fat shaming” is now a crime so be careful what you say.
The PC Police are extra vigilant in Alberta.
Actually my rental is 750sqft and I prefer a selfpropelled LazyBoy Maximus with the refridgerator that pops cold beer and warm natchos out the side door.
But I (like you) digress.
No one wants to be rendered a drooling catatonic simpleton with the excrutiatingly boring details of my life…thus I refrain from “sharing” my life stories.
And as potentially blockbuster movie worthly some of my escapades may be……..No one here really wants to read them. Think Scarlette Johanson, bath tub, chocolate pudding…….you get the idea.
Hence my suggestion that you might also refrain from the quaint folksy family “Uncle Opie” stories about “pecker poles” and Macdaddy “ballroom dancing”…..another time….another place…..since this is a financial advice site….
Just sayin.

#211 A Reply to #193 traderJim on 05.25.17 at 7:21 pm

You’re a bilious, bloviating blowhard/buffoon just like your beloved Trump.

Nobody likes a bully, jackass.

#212 westcdn on 05.25.17 at 8:23 pm

209 : Mr Fart

I get it. You were righter than me. I don’t like to apologise for my views but you could be worthy.

#213 mouldyinYVR on 05.26.17 at 8:37 am

http://www.cbc.ca/beta/news/canada/toronto/condo-owners-resign-toronto-1.4131732
…and then there’s these guys! …..Who exactly is sitting on your condo board?…ever bothered to find out?? Do you care??

#214 I on 05.26.17 at 8:27 pm

The government giveth (prolonged gift of low interest rates) and the government taketh away (flood of regulation). The RE industry had deluded themselves into thinking it only worked one way.