Knee jerks

A home that sold in April in Vaughan (an ugly one, too) for $1.85 million didn’t close. You know why. The buyers walked, figuring any legal crap they might endure was better than buying a house for twice what it might eventually be worth.

The owners listed again for $1.6 million. They received a conditional offer for $1.288 million, and took it. Then that deal fell through. And back it goes for sale.

If you think reductions in the street value of houses in the GTA, especially in the wind-whipped, desolate reaches of 905, of 20% or 30% are rare exceptions, you’re not into the market. Such situations are common. Sentiment has turned. Greed has morphed into fear. Fear of missing out has become fear of not being able to get out.

Across the bubble regions in southern Ontario and the Lower Mainland, detached houses are wilting even as horny moisters continue to pour cash into condos. Average prices are declining steadily as a result – and now the Real Estate-Industrial-Financial Complex is fighting back. In fact, it’s in full-on damage control.

Here’s Royal LePage, for example. Right after the Bank of Canada popped the first of several rate increases CEO Phil Soper was out trolling for microphones. “Canadian homeowners are prepared for the marginal increase in mortgage rates,” he said, even knowing that every credible survey has shown the opposite. Among Soper’s other manufactured facts: interest rates will rise only by one quarter point in the next 18 months and house prices will increase 9.5%.

Here’s Re/Max, out with a new ‘report’ showing despite the fact overall GTA prices have fallen hard in each of the last three months – by a shuddering 17% – that “40% of 65 districts” are showing higher prices. A further conclusion: “Toronto’s recent downturn in house prices may reverse course later this year.”

Here’s CMHC, saying yesterday the country’s housing markets are fraught with risk,  now appearing to blame ‘emotional’ buyers instead of greedy, opportunistic sellers and their agents.

“The response we were seeing in the Toronto market seems almost emotional and almost a knee-jerk reaction to some of the changes, which suggests that these impacts will be short-lived if all other fundamentals remain intact,” a CMHC analyst told reporters this week.

And maybe you’ve noticed how the MSM has been giving yards of space to real estate ‘experts’ such as realtors, mortgage brokers, housing marketing execs and economists for banks with huge home loan portfolios. The message is one of reassurance and support to an over-housed, over-indebted and cash-strapped nation. Don’t worry. This is temporary. Houses will go up again, and then probably forever.

So, who’s right? Will Mr. Market keep on falling until demand and supply balance? Or will buyers be talked back to the table with these suggestions that any price decline is temporary, and a buying opp? What of the Millennial conviction than anybody who makes it onto the cover of Rolling Stone is a god and will never let their young butts be singed by the reality of a housing bust?

Beats me. It’s entirely possible sentiment will shift again as quickly as it did at Easter. That’s what the real estate establishment is praying for – a summer of soft landing followed by the resumption of bull market conditions. Of course, if it happens – with a return to rising prices, plumping debt levels and more dependence on housing – you can be sure this correction will eventually be followed by a crash. Any recovery now would be an epic opportunity to sell, not to buy. But, of course, you can count on your co-workers and confused relatives to do exactly the opposite.

Here is why there’s reason to be concerned, if not terrified:

“CMHC chief economist Bob Dugan told reporters that strong job creation and income growth in Toronto favour the housing market. He expects price growth to resume in the city.”

Yup, the big thinker at a federal government agency overseeing $600 billion in debt assets, at the apex of a housing bubble, in a country where personal borrowing exceeds the size of the entire economy, is telling people to buy. If they don’t, they’ll be priced out.

Will the people listen?

Our fate hangs on that answer.

225 comments ↓

#1 Victoria Real Estate Update on 07.27.17 at 5:32 pm

FLUSHING MONEY DOWN THE TOILET

Up until 3 months ago in Toronto… realtors were telling potential buyers that renting was like flushing money down the toilet. Instead of flushing $2,000.00 in rent down the toilet each month and getting poorer, they could be getting richer like homeowners and building equity because house prices only go down in cities like Miami, Belfast, Tokyo, Madrid, etc. but not Toronto.

Then Toronto’s ridiculously overvalued bubble market reminded everybody in Toronto what inevitably happens with bubbles – it suddenly and unexpectedly turned south.

Detached house prices in Toronto have fallen almost 20% in 3 months. On a million dollar house that represents a loss of $200,000.00.

That’s like flushing $200,000.00 down the toilet in 3 months.

If they would have followed Garth’s advice and continued to rent, they would have (safely) spent perhaps $2,000.00 on rent in each of the 3 months (and saved and invested the rest). Clearly the smart choice.

Instead, they chose to follow the advice of their realtor, went all-in on housing at the worst possible time and ended up flushing $67,000.00 down the toilet in each of the 3 months.

Right now in Victoria… realtors are telling potential buyers that renting is like flushing money down the toilet. Instead of flushing perhaps $2,000.00 in rent down the toilet each month and getting poorer, they could be getting richer like homeowners and building equity because house prices only go down in cities like Miami, Belfast, Tokyo, Madrid, Toronto, etc. but not Victoria…

THE HOUSING BUBBLE GUARANTEE

History has shown, with many examples worldwide, that the guarantee of a soft landing always ends up being the last big lie before the inevitable hard landing becomes reality.

#2 Mike on 07.27.17 at 5:33 pm

Up north and in cold recession hit Edmonton prices for SFH have hit record high, when inventory is highest in almost 10 years…..Oh Canada.

What are fundamentals? Means nothing.

Rich Canadians…

#3 nick on 07.27.17 at 5:36 pm

It really is sickening that people eat up whatever MSM tells them. I tell people to stop, do their own research, and then come to a conclusion. But instead, they want to be spoonfed… and they want to be spoonfed what reinforces their current beliefs.

If the drop continues, these people will be like deer in headlights/sheep to the slaughter.

#4 Alberta Ed on 07.27.17 at 5:37 pm

The Beavis & Buttshead Show in Ottawa is terrified that the SWHTF just before the next election.

#5 Terrence on 07.27.17 at 5:40 pm

Is TORONTO the new TECH CAPITAL OF THE WORLD NOW? That what $h#t80 NEWS is reporting. If true look for home prices to keep climbing! Garth what happened to all THE FED RAISES THIS YEAR? Canada will probably keep intrest rates UNCHANGED this year aswell,2018 a different story

#6 HoweStreet.com on 07.27.17 at 5:40 pm

Ross Kay on HoweStreet.com Radio:
Vancouver Policies Do Not Make Housing More Affordable.
Vancouver condo prices; not higher, just higher quality being bought.

http://www.howestreet.com/2017/07/24/vancouver-housing-policies/

#7 Neil Wedholm on 07.27.17 at 5:46 pm

Permanent, perpetual growth. There is only one way forward. As long as there are groceries and toilet paper to be purchased at the store, the party keeps on going.

#8 Storage Auction King on 07.27.17 at 5:51 pm

Hey VIRU, do you sit around with pre-written posts hitting refresh for hours waiting for garth to post? just so you can post the same bland drivel you have been posting here for the past three years?

Did you ever stop to think that if you had bought in Victoria 5 years ago, when you were calling for a massive crash, that even after the end of the coming crash you would still come out ontop? Or maybe that’s why you keep posting the same crap. To sooth yourself of the epic mistake you made.

#9 Arctic Gringo: Qalunaaq on 07.27.17 at 5:53 pm

Came across a new employment opportunity today with the Town of Milton. Then checked MLS for Milton and surrounding area.

Laughed, nearly puked.

#10 The Limited Sage on 07.27.17 at 5:55 pm

A buddy of mine (Buyer A) – one of several who I explained about in yesterday’s comments – who recently bought a house, calls me up today to give me an update on the move we were suppose to do for him this weekend (as he’s suppose to be moving from his condo into a semi-detached this weekend).

He tells me the buyer of his condo (Buyer B) suddenly can’t close the deal on his condo because the buyer of their house (Buyer C) suddenly also can’t come up with the finances for Buyer B’s house. So now my buddy (Buyer A) tells me he might not be able to move this weekend because he also can’t afford the semi-detached house he’s buying unless he gets the funds from Buyer B, who, in turn, are relying solely on Buyer C to come up with their funds.

I have a feeling this domino effect is happening all across the GTA. And if it’s not yet, it will be at rates continue to climb and mortgage rules get tighter and tighter.

#11 41 trillion USD on 07.27.17 at 6:06 pm

Look at the bright side: total government and personal debt in the U.S. has hit 41 trillion dollars ($329,961.34 per household).

Does it matter anymore “who is right”, “will the people listen”?

The larger the debt, the more fictional the repayment becomes. Servicing debt is a far cry from clearing it. Government does not make money – people in households do. There must be a reset button somewhere hidden.

#12 TurnerNation on 07.27.17 at 6:06 pm

Toronto tech job earnings blow.
And we have Mark :-(

https://m.imgur.com/91qsdcm?r

https://www.reddit.com/r/toronto/comments/6pvehe/tech_salaries_in_toronto_vs_north_america/

#13 Canadian Moose on 07.27.17 at 6:07 pm

Back from a long holiday in the Hinterland. Oh how times have changed since I shed my fur in April in Barbados. lol Its mind boggling the sentiment on the real estate market in Canada fueled my such greed in all forms in Vancouver and Toronto etc.

The real estate community including buyer and sellers and our bureaucrats at the CMHC are the laughing stock of the world. Its time for serious leadership in this country before people get their asses handed to them and my brother has to live in my basement….aint gonna happen!

#14 Dan.t on 07.27.17 at 6:09 pm

During bubbles fundamentals don’t apply.

Not long ago I heard a story of a top notch analyst during the dot com bubble who was dead on but lost her job for being the voice of reason (forget the name right now) but nobody cared, she didn’t join the party and got canned. Was later vindicated but still lost her job.

Point being, while everyone and their dog wanted to believe that pet.com or car.com or something.com was “gonna be worth a billions, billions, I tell ya, it’s the internet!”.

Of course they had no business plan, no business model, 99% of investors couldn’t tell you how it was gonna be worth billions but price went insane. Remember Nortel at $124 per share (give or take)?

No difference what is going on in Canada. I can write 6-10 valid and logical reason why it makes zero sense to buy a 1.2 million dollar house in Abbotsford or why dropping 450+k for a small apartment 1 hour (or longer) commute to YVR makes zero fundamental sense.

What matters is

1) real estate never goes down (until it does…but I guess that statement is true in Canada) and if it does, it’s just temporary.

2) and everybody wants to live here. End!

Deal with it. Those 2 statements trump everything and have for the last 10 years. Rising prices will never stop.

Or can someone rationally explain to me why houses in Canada, especially BC cost so much? And if you use the 2 comments above, fill me in on when real estate in Canada is than out of reach for any actual average wage earning Canadian. Is it when average houses in Abbotsford cost 2.9 million, or 6.4 million, or how high should condo prices be and how high can they actually go?

Canadians need to get out of Canada to see how nuts they are, but the love affair with housing is simply way to strong. Or is it a fetish. Whatever, all that matters is real estate.

#15 blobby on 07.27.17 at 6:11 pm

#4 Alberta Ed

“The Beavis & Buttshead Show in Ottawa is terrified that the SWHTF just before the next election.”

Which is no different to the Tories, why do you think Harper introduced 40 year 0 downs, etc etc?

Whoever is in charge when this mess explodes will take the blame. It’s like playing a game of hot potato.

#16 Doghouse Dweller on 07.27.17 at 6:12 pm

TD discount brokerage has changed my monthly statement into something that resembles a cheesy store flyer, complete with brain dead graphs and moronic investment advice.

I just want the facts and figures, not 5 pages of marketing fluff per account.
Called to complain and they said it`s the new IROC regs. Is this true?

#17 Smoking Man on 07.27.17 at 6:13 pm

First round of boomers are hitting 70, most have all their assets tide up property. They hope to cash out and buy that bed and breakfast in Costorica. What if all the boomers had the same plan at the same time.

The problem is moistets can’t afford to buy em out. Until SFH are in condo zone prices. Its going to ugly.

Through out my whole life as a late boomer I’ve been two weeks behind the herd.

Not this time. Put my valuables photos, buffies ashes, and family treasures and my most prized possessions that hand painted canvis of my book cover in storage.

I rented a F150 took 3 days of intensive labor sometjing Im not use too. My man tit’s are now a solid mass of muscle. Feels good.

The loot cleared the bank, bit coined and electronicaly re claimed in a far away land.

Oh and at the storage unit. Meet 7 boomers over the three days. All sold in April and never buying again.

Toss in some liberal communism. They hate old white guys.

Canadian boomers who waited to long. One asset class called RE in your portfolio. Your screwed. You all should pay attention to this drunk how almost always hits em out of the park. And pay attention to what Garth writes.

Got some business to do over the next few weeks. I’ll be life periscoping from St Marteen in a few short weeks.

#18 Victorian on 07.27.17 at 6:13 pm

Oh VREU, the passion is gone from your posts. You are now just regurgitating the obvious from Garth’s posts…

#19 WUL on 07.27.17 at 6:15 pm

Gobsmacked is I. This is getting serious.

The French giant, Total, has quit paying its bills and won’t answer cash calls to its partners Suncor and Teck for the completion of the construction of the Fort Hills Mine and hour north of McMurray. 99 problems.

I seen the article in the Globe and Mail while outside sun tanning in Calgary at 32 degrees C. I came into the cool house for ice cream, and the article is not up on the Globe website.

It will return.

#20 blobby on 07.27.17 at 6:19 pm

#5 Terrence : ” Garth what happened to all THE FED RAISES THIS YEAR?”


You’ve had 3 already. They tend to come whenever there’s a press conference. So I expect next one in September.

#21 ole Doberman on 07.27.17 at 6:24 pm

I know from experience people are blind and in denial to trend changes. Even lose all gains on paper. Cant stop market forces?

But in this age of disconnects who knows for sure

#22 yorkville renter on 07.27.17 at 6:31 pm

40% of 65 districts” are showing higher prices

written in a way to appear that over half of districts improved….

#23 Dave on 07.27.17 at 6:35 pm

When have you ever heard a realtor say now is not a good time to buy?

#24 Porsche on 07.27.17 at 6:36 pm

“CMHC chief economist Bob Dugan told reporters that strong job creation and income growth in Toronto favour the housing market. He expects price growth to resume in the city.”
………………………………………………………………………..

Wages have always been shit in Ontario and now Alberistan is joining.

Tech, network, surveillance, operations, analysts, programmers, etc, etc wages have totally gone into the gutter.

#25 MSM-Free Zone on 07.27.17 at 6:37 pm

“….Yup, the big thinker at a federal government agency overseeing $600 billion in debt assets, at the apex of a housing bubble, in a country where personal borrowing exceeds the size of the entire economy, is telling people to buy. If they don’t, they’ll be priced out….”
=========================

It appears some ‘chief economists’ will say anything following a $4 billion ‘dividend’ (kickback) to the federal government. Guaranteed job security.

#26 Wolf_eats_his_kitten on 07.27.17 at 6:38 pm

So I purchased my home about 4 years ago in Toronto. $580. I knew I was already paying far too much for it. Considering the size and the fact that it was 100 years old and riddled with future issues. But I really wanted a home. Emotional purchase coupled with, this is what my parents did and this is what an adult does.

5 months ago we saw the rediculous jump in value for homes and decided to sell. Sold it for a little over 1m and we are now renting in the same gentrified (cringe) hood we love here in Toronto. 2 bedroom for $1699 a month.

Selling my house was really tough on me emotionally and I resisted the whole way. It sucked. Years of home ownership conditioning. But now I honestly could not be happier. I pay a small amount of rent and the rest is living, vacations, fun and investment. I was seriously struggling in house debt. Never again. Unless I have money for investments and responsibly purchasing a home that is. But otherwise. Forget it.

#27 common sense on 07.27.17 at 6:46 pm

Regarding debt, what is the old saying?

“Owe someone a bit it’s your problem, owe someone a lot it’s their problem?”

Biiig problems for everyone holding all the debt and guess who will be there again to bail everyone out in the end?

Mirror see face.

#28 Wrk.dover on 07.27.17 at 6:46 pm

The ‘cost’ of a paid-for house is not just property tax, maintenance, utilities, insurance, accrued interest paid plus renovations, but all of the equity you have in there times 6% annually. A shocker. — Garth

—————————————

I mean no disrespect to your mantra Garth, but in my unique case, the rural home I have would be a challenge to shed in a week at $150,000, so I am only out 9 grand a year on opportunity dough which I would have to pay tax on. Plus another 9 grand lost on the earnings the toys I have that make it fun to live here could realize, and I am down 18 grand total yearly before tax, which would yield after tax what most people smoke a year in car depreciation.
So yes, I am pleased to be living here on 4 grand/month for $877/month plus that lost opportunity dough.

#29 paracho on 07.27.17 at 6:52 pm

I live and work in Woodbridge , Ontario ( Vaughan ) . I keep driving by the same houses that have been for sale for over 6 weeks now . The new signs on top of for sale read ‘ reduced price’ or ‘new price”. Similar to what I saw as a teen in the early 1990s.
The RE agents are in full catastrophe control over social media and keep forwarding articles that keep the mantra of this just being temporary, a September rebound, Vancouver rebounded..etc.
I think we are in for surprising and interesting times to say the least.
Thanks Garth..for sharing what many do not want to see or hear .

#30 TS on 07.27.17 at 6:58 pm

I work for a Large City in Ontario as an operator at their sewage plant —>starts at $35 / hr . Top of the pay scale $43 / hr

Same job for the City of Toronto—-> starts at $29 / hr. end of the pay scale $35 /hr.

So taking into consideration the cost of living difference, I’m making the $70 / hr in Toronto Dollars :D

Gotta love the GTA

#31 Mark on 07.27.17 at 7:00 pm

“Toronto tech job earnings blow.”

Numbers seem a bit on the low side. But the bigger elephant in the room is the sheer numbers of applicants relative to available positions. Meaning there’s probably a lot of people who not only aren’t earning those low amounts, but probably aren’t earning much of anything. Unless they can find a job as say, a Sandwich Artist. Or stalking Loblaws customers during their shopping trying to sell them points Mastercards.

Seriously though, in light of Canada’s IT glut, and chronically low salaries, all TFW’s to the sector should be rejected. That’s why you have such a lobbying push and “fake news” trying to convince people there’s some sort of IT shortage. A certain Troll seems to have even fallen for it here.

#32 Bonhomme Carnaval on 07.27.17 at 7:03 pm

@ #4 Alberta Ed on 07.27.17 at 5:37 pm

Me think that October 2019, might be climax of the R/E bubble.

Will the GTA & YVR bubbles trigger a domino effect on the rest of the country ?

What will be the popping order ? :

1) Toronto
2) Vancouver
3) ?

What will be the average correction % ?

Toronto
a) 20%
b) 30%
c) 50%
d) Free Houses

If we look back on the USA’s R/E crash, not all markets corrected at the same time, and not all by the same %.

Anybody care to take a stab (no pun intended) ?

#33 WUL on 07.27.17 at 7:04 pm

So spurned sellers of real estate are off to court.

“About half the practice of a decent lawyer consists in telling would-be clients that they are damned fools and should stop.”

Elihu Root

“Litigation takes the place of sex at middle age.”

Gore Vidal

#34 Cloudy on 07.27.17 at 7:08 pm

In my neck of the woods on southern Vancouver Island there isn’t much evidence of the market slowing down. Despite what VREU says, aside from a small increase in listings, houses are selling fast and for prices I can’t make sense of. I’ve been cautiously looking at buying for the last three years as things continue to get out of control. I keep thinking prices can’t possibly keep ascending, but I am wrong time and time again. It would take a pretty serious correction to eliminate the last three years of gains alone.

With the large number of government workers and jobs catering to those workers I don’t foresee much of a downturn here. Even with the baffling run up in prices. The only thing that makes me think a correction is possible is the large number of acquaintances, coworkers and friends that own multiple income properties and could be hurt with mortgage renewals (likely 3-5 years from now). By the way, they all say they don’t claim rental income on basement suites because the “CRA doesn’t care about small infractions, they’re busy chasing larger, easier targets.” Probably true but frustrating. My father was an accountant and I was taught that being honest and maintaining integrity pays off in the long run. So far not panning out, lol.

#35 Porsche on 07.27.17 at 7:15 pm

#29 TS on 07.27.17 at 6:58 pm
Definitely a union job where wages have been creamy for a long time and glut has no affect.

#30 Mark on 07.27.17 at 7:00 pm
Had a prescreen HR call today from a company for a NOC -Network Operations Center position where you are monitoring/trouble shooting/analyzing the companies entire network… it paid $17 an hour.

I said thanks, but no thanks and hung up

#36 DON on 07.27.17 at 7:17 pm

#8 Storage Auction King on 07.27.17 at 5:51 pm

Hey VIRU, do you sit around with pre-written posts hitting refresh for hours waiting for garth to post? just so you can post the same bland drivel you have been posting here for the past three years?

Did you ever stop to think that if you had bought in Victoria 5 years ago, when you were calling for a massive crash, that even after the end of the coming crash you would still come out ontop? Or maybe that’s why you keep posting the same crap. To sooth yourself of the epic mistake you made.
**************

Did you ever stop to think…as prices rise, the first time home buyer becomes priced out and there are less people willing to buy your house, even if you bought 5 years ago. You assume the game has been played out and prices will rise yr over yr to infinity. When things correct – people’s mindset will slowly change and this will re-examine theirs wants and needs. The meme changes, prices will go back to what is affordable is a market that is no longer hyped up. Wages haven’t risen so why couldn’t we go back to prices prior to 2007 when people fall out of love with housing?

#37 sam on 07.27.17 at 7:24 pm

Its much more fun to watch Al sinclair on cp24 than read garth. Sir Al, says we only have 1 month before prices start going back up. Garth you should watch him too.

#38 Guy in Calgary on 07.27.17 at 7:25 pm

And in 10 years when I’m 38, I’ll be a millionaire. This does not include the house. The days of getting rich quick through real-estate are over. Fine by me you can all do it the old fashion way now.

Having a spouse on the same page financially, both having good jobs and no kids is how you get rich, not by flipping a beaten down semi. Sure my house may go down in value, all assets do from time to time. I am not concerned as I am diversified and plan to live here a minimum of 10 years barring nothing crazy happens.

If the U.S and the world (maybe minus Iceland) can survive the 2008 credit crisis, 2 world wars, Vietnam, the Cold War, 9/11, the great depression and everything else, me thinks we can survive an increase in the cost of money and some evaporated equity.

Diversify and live within your means and this will be a blip in the long term like everything else. Enjoy life everyone, it’s too short to concern yourselves with how much “equity” you have and trying to look better off with your neighbours. Go back packing and take some pictures in the mountains. It’s almost free but as we know, nothing is free here.

#39 will on 07.27.17 at 7:28 pm

“fear of not being able to get out.”

Lol.

FONBATGO? Or maybe just FONBAGO.

#40 sam on 07.27.17 at 7:29 pm

CP24 says 40% price increase in gta housing since last year. WOW!!!!

#41 Doghouse Dweller on 07.27.17 at 7:33 pm

The new IIROC regs. Is this true?
———— Yup
http://www.rbcphnic.com/_assets-custom/pdf/crm2-client-factsheet.pdf

It was new seven months ago. — Garth

#42 acdel on 07.27.17 at 7:53 pm

As you said Garth in your blog, you knows. It looks like this is the way of life from here on in, debt it what keeps us afloat; I cannot beleive that I said that!! Sad, pitiful, and down right scary when the hammer finally comes down when, you knows?
I just hope that I can enjoy my retirement without losing it all like so many did in 2008/2009, next time will be no comparison to 2008/2009.

Marie Antoinette lost her head over the people she ruled until they had enough, it will never happen in the Western World, the majority have been dumbed down to the point that they just do do care anymore.

Hey, the biggies won; but no worries we have T2!

#43 Nonplused on 07.27.17 at 7:54 pm

Well, bankers talk their book just like everyone else. No one who has exposure to the mortgage industry is going to predict a decline in housing prices. It would be suicide.

#44 I believe everything on television on 07.27.17 at 7:54 pm

And don’t forget, the ministry of propaganda is going to make the big banks stress test their ‘A list’ clients, the ones with money, I know you’re laughing, that’s right, me too; the big banks, who want to handle every conceivable service in your life from insurance to investments are going stress test the ‘A list’.
Yep

#45 GiveItUp on 07.27.17 at 7:55 pm

Arrghh, there’s nothing I’d do more for house with a laneway garage and a backyard. Wait, they say.

#46 North of 89 on 07.27.17 at 7:58 pm

Down here in Atlanta the radio stations were buzzing all talking about our fab prime minister who lost his balls in Halifax and making terrorists millionaires for killing an American. Not to mention Taking shots at his rolling stone photo shoot. Pretty bad when they phrase “we got trump lucky we don’t have this Trudeau lefty”

#47 Nic on 07.27.17 at 8:00 pm

Reading this blog for years. Great entertainment and investment advice. I agree housing prices are riduculous and have thought so for 3-4 years. However I am not sure now. Never thought it would continue and DOUBLE in the last 2 years. Should have got in before when we could have afforded it but I thought it was overpriced..ha..I was wrong. Even with a correction wont go down to that level again.

#48 Locals Are Moot on 07.27.17 at 8:02 pm

Did you ever stop to think…as prices rise, the first time home buyer becomes priced out and there are less people willing to buy your house, even if you bought 5 years ago. You assume the game has been played out and prices will rise yr over yr to infinity. When things correct – people’s mindset will slowly change and this will re-examine theirs wants and needs. The meme changes, prices will go back to what is affordable is a market that is no longer hyped up. Wages haven’t risen so why couldn’t we go back to prices prior to 2007 when people fall out of love with housing?

———-

Is that the first time local homebuyer or the first time foreign buyer?

Because, if the market is insular and devoid of significant foreign capital purchase, like the US largely was prior to the collapse, then yes, prices detached from local incomes will eventually see a crash.

However, if the market is open to external buyers, then no – the eventual disconnect between local incomes and prices becomes moot in the face of continuous foreign capital flows. Hence the decade long bull run in Vancouver’s prices that have never reflected local incomes.

And seeing how places like Richmond and Burnaby have 10% of their buyers from overseas, down from 20% before the foreign buyers tax, the number of local buyers is moot. At these percentages, the non-local buyers are market makers that shape prices.

That is the joy of globalization and global capital flows!
Maybe think about the next time you buy your ‘cheap made in China goods’ from Walmart or brag to the world that you are the best place to live…unintended consequences indeed!

#49 Ex-Cowtown on 07.27.17 at 8:05 pm

Off topic, but I did some back of the envelope calculations regarding phasing out ICE engines by 2040 in Canada.

About 20 minutes on Google shows that electricity grid in Canada would have to be about 3-4 times larger than it is today to phase out ICE engines. And that we’ll save about 4% of CO2 emissions.

Let’s get at this! What are we waiting for? Quick before all the drunks sober up!

#50 Howard on 07.27.17 at 8:11 pm

Once again I feel compelled to apologize for laughing at over-indebted Americans and their sub-prime fiasco in 2008. I thought at the time that such mass delusion and debt couldn’t happen in prudent Canada. I have been schooled.

#51 2 cents Canadian on 07.27.17 at 8:11 pm

Looking at the picture with today’s heading …… I’m surprised they still have “Reduced” signs in stock. You might have some RE agents asking if you know where that store is : )

#52 Eastender on 07.27.17 at 8:12 pm

@8 Storage Auction King

Thumbs up! Your comment shows maturity and wisdom unlike many who missed the boat and are partially correct, once in past seven years. GT has many valid points but the good thing is we can agree to disagree on few things ..

#53 Flatlander on 07.27.17 at 8:14 pm

#16 Guy in Calgary on 07.26.17 at 6:56 pm
“Toronto, Vancouver, Hamilton, Victoria and Canada.”

It was Saskatoon listed in the article, not Canada. Saskatoon… really!?

———————————
#31 Howard on 07.26.17 at 7:33 pm
Saskatoon is actually a very pretty city. I was surprised when I first went there 10 years ago.

Regina, on the other hand…..wasteland.

——————————————————————

Saskatoon and Regina have both suffered from the same delirious buying/building evident in some of the big Canadian cities. I recall not long ago the national media referring to us as “Saska-boom”. During the boom years new houses and condos were popping up daily, prices were skyrocketing, restaurants were packed, hell…Saskatoon even got a Porsche dealership.

While I slaved away at my “professional schooling”, rented a modest place, and tried to save what little I could, many of my house horny Millennial friends with resource sector jobs went BIG on the house, new truck, and a BMW for the wife. Boats, quads, snowmobiles, lot of trips to Vegas and Mexico…all debt.

Then crude tanked, potash slumped, and Alberta voted Orange. The last year has seen hundreds of new houses sitting empty, half built condos moth balled by developers, restaurants closing. Those millennial buddies with the big overvalued house and a fat mortgage? Lots unemployed, the lucky ones finding part time gigs or clinging to life from rolling layoffs. All praying rates don’t increase…we all know how this story ends

The prairie cities are set up for a real estate dive no different than YYZ.

And my prof corp is set up to get cut down at the knees. At least I rent.

#54 Angry Millennial on 07.27.17 at 8:16 pm

Long-time reader, first-time poster, lifelong Millennial.

I happened to catch Al Sinclair giving so-called advice on Hot Property tonight. A woman called to ask whether to sell her 10 year old condo now or wait until a pre-build condo she has put 20% down on is complete in 2019.

Al couldn’t wait to tell her that she should hold on to her condo until her new property is ready in 2019 because, “it is a great market”, clearly evidenced by the “surge in sales and prices” that the Toronto condo market has seen, so why would she even consider selling now blah blah blah…
He even went so far as to say that if she were to sell her condo now, she would have to *gasp* rent and “she doesn’t want to do that”.

This man, along with many other so-called real-estate experts, have NO IDEA that people are no just asking for advice on purchasing real estate, but actually turning to him for what is clearly financial advice.

People have been treating real estate purchases in this city (Toronto) as an investment but realtors have not been advising them on that basis. All they want to know is what mortgage amount you have been approved for. They are sales people masquerading as experts and it needs to stop. It’s the equivalent of asking an Apple “Genius” who sells iPhones to advise you on the tech stocks in your $1m portfolio…

Why aren’t realtors held to the same rules and codes of conduct that financial advisors and other licensed investment professionals are held to when they are dealing with clients? When I spoke to a financial advisor about investing a mere $5000 cash into a RRSP, he had to CLEARLY explain that “past performance is not indicative of future performance”. He had to outline all of the fees, and I had to fill out a KYC form asking for my time horizon, risk tolerance etc…

How can it POSSIBLY be OK for Al, and other realtors like him, to walk around spewing garbage advice on huge, mostly leveraged investments, and ultimately decade-long debt sentences, worth 100s of thousands of dollars without so much as asking this woman’s age?!

#55 Danny on 07.27.17 at 8:30 pm

Yes Garth , I am witnessing the Real Estate Cartel….acting very much like politicians in an election campaign.
Bring out all the ammunition…advertising like crazy with flyers, get on radio, TV…the Internet….sell the product…and get the message out there…” trust us….ignore the down turn…it is only temporary ”
We made money for a lot of people over the last few years…we will help you make money..That’s what we do, we know real estate…that’s our business ” trust us.
And so…what I am experiencing in South Etobicoke…is high prices still and houses that have been on the market for over 6 weeks…NOT SELLING.
Of course not…..if these houses sell for lower…they will drop the average price…and prove the Real Estate Cartel wrong…..so they say to their agents and to the clients hang tough.
Will these sellers come to their realistic senses…..or are many of the houses and condos owned by speculators who are in no rush to sell….in a somewhat loyal pledge to their speculative cause…keep the product priced high long enough to exhaust the buyer.
Hopefully the buyers will wake up and realize the loss will be theirs…..and the real estate Cartel run all the way to the bank….never to be seen again.

#56 Grey Dog on 07.27.17 at 8:31 pm

On the cover of the Rolling Stone…didn’t they within the last year or so have a similar flattering picture of one of the terrorist brothers responsible for the Boston Marathon Bombing?

Proof one no longer has to be a famous band to appear of the cover of Rolling Stone…Just so you know.

#57 DON on 07.27.17 at 8:40 pm

#46 Nic on 07.27.17 at 8:00 pm

Reading this blog for years. Great entertainment and investment advice. I agree housing prices are riduculous and have thought so for 3-4 years. However I am not sure now. Never thought it would continue and DOUBLE in the last 2 years. Should have got in before when we could have afforded it but I thought it was overpriced..ha..I was wrong. Even with a correction wont go down to that level again.
********************

“Even with a correction wont go down to that level again”

Why can’t price go down – did you follow the US, Ireland, Spanish housing busts. Prices did go down. Now London UK is having problems. The fact that things are no longer booming is a sign of the times. The hottest months haven seen price decrease – what happen when the autumn comes and most do not want to move to do schools etc. We have or will reach debt saturation, who doesn’t have a new car, toys, house, cabin/cottage and the big one who doesn’t have an LOC? I am curious to hear about the factors that could send us to new highs. I am always interested in new information to form my opinion. By all means please share this new info. Remember Garth said a slow trickle and you will only recognize it if you are paying close attention. Price out the first time home buying and you got a problem as it is now even small interest rate increases on mortgages, LOCs, credit cards, etc will nibble away at the ability to pay all. Just be patient and wait. It is not like a bubble hasn’t happened before. Perhaps you weren’t old enough to understand the past bubble crashes.

#58 MF on 07.27.17 at 8:40 pm

#16 Smoking Man on 07.27.17 at 6:13 pm

Astute advice and observations as per usual. Houses still cost a million during this fake “crash”. Condos are on fire because that’s all anyone, including the all important first time home buyers like me, can afford. The perception of housing has not changed and everyone hates renting (me included).

Easy rebound in the GTA coming soon.

#25 Wolf_eats_his_kitten on 07.27.17 at 6:38 pm

Smart. Looks like the house doubled in value. Congrats. I, like everyone else who did not buy, wish I bought when I first started looking in 2013. A 500k house doubling in value is something. A 50k portfolio going up 6% is 3k (who cares).

#36 sam on 07.27.17 at 7:24 pm

That show is hilarious. If I called in asking about whether I should buy an old crack house in the worst part of town, they would say it’s “an up and coming area and a good time to buy”. He’s right about some areas of Toronto though. It is actually a good time to buy for once.

MF

#59 Looney Baloney on 07.27.17 at 8:41 pm

“priced out”, a novel Canadian concept. If real estate is local, and homes are bought and sold by locals making average wages, how can they ever be ‘priced out’? Any such condition would be extremely short lived, as either wages must catch up or prices must come down to what the market can afford. But don’t try explaining that to a realtor.

#60 Doghouse Dweller on 07.27.17 at 8:42 pm

It was new seven months ago. — Garth
=================================
Maybe for you Hummer-Harley Amazonized insiders, but I just got the new statement yesterday. And frankly it`s a franken number farce . Does Phil Soper also advise the IIROC ?

Really, take $5500 and transfer it to your TFSA and your cash account
performance graph and return numbers totally crater . It tells you absolutely nothing about the performance of your securities.

plus an added IIROC bonus —Important info about your account !
Set up an systematic investment plan (SIP) { actually a GMC plan – get more commissions }

What happened to know your client ? I need a systematic withdrawal plan . The only good thing is a bigger font for the hoodwinked seniors.

Stop buying mutual funds. Problem solved. — Garth

#61 Pepito on 07.27.17 at 8:43 pm

They all lie knowingly with the hope that their lies will fool the public. Lying has become an accepted practice and there is little if any downside to it. All public officials and representatives of all private and public enterprises now lie openly on a regular basis.

This is the world we now live in. Surrounded by fake news and false, made up facts. There will eventually be a very high price to pay for such a loss of public trust.

#62 i'm jus sayin' on 07.27.17 at 8:46 pm

#53 Angry Millennial on 07.27.17 at 8:16 pm
Long-time reader, first-time poster, lifelong Millennial.

I happened to catch Al Sinclair giving so-called advice on Hot Property tonight. A woman called to ask whether to sell her 10 year old condo now or wait until a pre-build condo she has put 20% down on is complete in 2019.

Al couldn’t wait to tell her that she should hold on to her condo until her new property is ready in 2019 because, “it is a great market”, clearly evidenced by the “surge in sales and prices” that the Toronto condo market has seen, so why would she even consider selling now blah blah blah…
He even went so far as to say that if she were to sell her condo now, she would have to *gasp* rent and “she doesn’t want to do that”.

This man, along with many other so-called real-estate experts, have NO IDEA that people are no just asking for advice on purchasing real estate, but actually turning to him for what is clearly financial advice.

People have been treating real estate purchases in this city (Toronto) as an investment but realtors have not been advising them on that basis. All they want to know is what mortgage amount you have been approved for. They are sales people masquerading as experts and it needs to stop. It’s the equivalent of asking an Apple “Genius” who sells iPhones to advise you on the tech stocks in your $1m portfolio…

Why aren’t realtors held to the same rules and codes of conduct that financial advisors and other licensed investment professionals are held to when they are dealing with clients? When I spoke to a financial advisor about investing a mere $5000 cash into a RRSP, he had to CLEARLY explain that “past performance is not indicative of future performance”. He had to outline all of the fees, and I had to fill out a KYC form asking for my time horizon, risk tolerance etc…

How can it POSSIBLY be OK for Al, and other realtors like him, to walk around spewing garbage advice on huge, mostly leveraged investments, and ultimately decade-long debt sentences, worth 100s of thousands of dollars without so much as asking this woman’s age?!

His advice is contrary to the normal agent rule, when asked that type of question-
‘it’s always time to sell, and it’s always time to buy’
I agree with the advice, it is impartial.

#63 Smoking Man on 07.27.17 at 8:53 pm

#36 sam on 07.27.17 at 7:24 pm
Its much more fun to watch Al sinclair on cp24 than read garth. Sir Al, says we only have 1 month before prices start going back up. Garth you should watch him too.
…..

I’m some what of a slime bag. I’ll admit it. I was pumping that september shit too till my deal closed and got the loot out of the country. I’ll say alot more when I get my ass out of the country.

You are about to see the biggest shit show that there is no other like it in History.

#64 MF on 07.27.17 at 8:56 pm

#53 Angry Millennial on 07.27.17 at 8:16 pm

Hello, fellow millennial here.

You are 100% correct. People should not be turning to realtors for financial advice, and the difference between using a realtor and an actual financial adviser is stark.

Thing is, Al Sinclair has been 100% correct for 15 years and counting. People who purchased in the GTA back then have made a killing. Anyone else, especially those of us starting out with smaller portfolios, who behaved responsible and saved + invested has not done as well.

Point is, you cannot blame people for looking towards realtors for financial advice. Those that did that in 2009 are much better off for it in general.

The responsibility for this joke market largely lies with:

1) the CMHC, which is worthless and should be disbanded.

2) The BoC, which is simply put, completely incompetent and behind the curve on everything. They are loath to raise interest rates because it will prove how incompetent they have been, but will be forced into it by the bond market or Trump

I don’t even blame realtors, the FIRE industry, or immigrants since making money where people can is basically capitalism.

MF

#65 bigtowne on 07.27.17 at 8:59 pm

The real crucible in the economy and the financial health of our future society depends on the pensions of today’s seniors and tomorrow’s milineals. Using housing as a decoy from dealing with the real issues of keeping the pensions and the banks in good working order is not legitimate and removes the need for the Bank of Canada to focus on the real “McCoy” the low interest rates hobbling businesses; retirees; pensions funds; savers and banks.

How housing kidnapped the government; the civil service; the banks; financial planners; and MSM at the expense of the real elephant in the room is surely the outgrowth of selfies and twitter and facebook where exposure is seen as giving legitimacy to ornaments of little or no quality.

We will pay for this stoopidity. Bigger issues stare at us on every corner in our brave new suburban neighborhoods like “payday loans” at predatory rate of 60% or credit card rates at over 19%.

1984 would have been a breeze.

Doublespeak and euphemisms rule the land of robotic lack of intelligensia

#66 DON on 07.27.17 at 9:08 pm

#47 Locals Are Moot on 07.27.17 at 8:02 pm

Did you ever stop to think…as prices rise, the first time home buyer becomes priced out and there are less people willing to buy your house, even if you bought 5 years ago. You assume the game has been played out and prices will rise yr over yr to infinity. When things correct – people’s mindset will slowly change and this will re-examine theirs wants and needs. The meme changes, prices will go back to what is affordable is a market that is no longer hyped up. Wages haven’t risen so why couldn’t we go back to prices prior to 2007 when people fall out of love with housing?

———-

Is that the first time local homebuyer or the first time foreign buyer?

Because, if the market is insular and devoid of significant foreign capital purchase, like the US largely was prior to the collapse, then yes, prices detached from local incomes will eventually see a crash.

However, if the market is open to external buyers, then no – the eventual disconnect between local incomes and prices becomes moot in the face of continuous foreign capital flows. Hence the decade long bull run in Vancouver’s prices that have never reflected local incomes.

And seeing how places like Richmond and Burnaby have 10% of their buyers from overseas, down from 20% before the foreign buyers tax, the number of local buyers is moot. At these percentages, the non-local buyers are market makers that shape prices.

That is the joy of globalization and global capital flows!
Maybe think about the next time you buy your ‘cheap made in China goods’ from Walmart or brag to the world that you are the best place to live…unintended consequences indeed!
*****************************

Ah you have a point, foreign first time buyers. Hmm – don’t see many foreigners buying on mass in Qualicum Beach or Parksville or even Victoria but perhaps the realtors are mis-reporting those stats. If that’s the case, can one trust their unregulated stats at all? In the US – foreign buyers weren’t a problem? I would have thought that the US being the richest country in the World would have attracted lots of foreign buyers.

Have many locals do you know that own multiple properties? I know a lot…I hear it from them all the time from them. So if locals are buying multiple properties – perhaps they are outmatching the foreigners. The market is about sentiment and when that changes so do individual perceptions. Cracks in markets (with little or no foreigners) can affect the sentiment in all markets. So what happens when the average house gets to 2-3 Million and even the foreigners are priced out! Perpetual growth on debt and the richest country in the world took a knee and Canada did not.

Not sure where you got 20% foreign buyers from (insider realtor numbers?). Nothing…I repeat nothing lasts forever. Vancouver in the 80’s it was the Japanese buying up everything, at least that was the mantra (left a sushi fad behind). The FOMO was created by telling locals – get it before the foreigners do. So they did and they bought more than one in some/several cases. The locals are still buying more than the foreigners. Where did you get your foreigner stats from I will need to consider the source prior to cementing my thoughts on the current housing bubble.

#67 Kim on 07.27.17 at 9:14 pm

20% down means 100% loss (more if you include fees) with a 20% down payment. If you put down less than that, congratulations, you are under water. Leveraging is awesome

#68 Data Check on 07.27.17 at 9:23 pm

#64 Don

As requested….

Over 20% of sales in Burnaby and Richmond came from foreign buyers…

http://www.theglobeandmail.com/news/toronto/ontario-isnt-moving-fast-enough-to-track-foreign-buyers-observers/article34074430/?utm_content=buffer64ac7&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

According to BC provincial data, non-resident foreign buyers accounted for 10.5% of all sales in Richmond and 9.4% of all sales in Burnaby for the entire year.

There is so much data out there on foreign capital now that the development industry cannot hide behind ‘we don’t know how many there are but its about 5%’

Stop beating this dead horse. House-horny Canadians are the drivers of the market, combined with speculators, amateur landlords and the Bank of Mom. Go hate foreigners, immigrants and new Canadians on another blog. There are many to choose from. — Garth

#69 mathman on 07.27.17 at 9:24 pm

pretty clear that the gig is up.

you can defy the laws of economics and the simple math for many moons but eventually the piper comes a calling.

the GTA has become of sea of non-stop consumption and people pretending to be Millionaires. People that can’t spell the and add 10 +2 are able to offer uncheck advice and spew BS.

It was not too long ago that 500k was a mountain of a mtg, now it is nothing. The funny thing is on a real basis wages have not changed, our economy has not become more diversified and no Toronto is not NY, London, Sydney, Tokyo or any of the other stupid comparisons people make.

when money is free it is a moral hazard. the price of homes in the GTA is nothing more than a function of the cost of capital+ financial illiteracy+emotion.

We a going to feel the pain… and it may be a long, long time to recover. The US is the most diversified, business friendly and powerful economy on earth, look what excess did down south.

Please give me one logical argument how we will fare differently?

#70 DON on 07.27.17 at 9:28 pm

Re post – too many spelling mistakes hampering flow.

#47 Locals Are Moot on 07.27.17 at 8:02 pm

Did you ever stop to think…as prices rise, the first time home buyer becomes priced out and there are less people willing to buy your house, even if you bought 5 years ago. You assume the game has been played out and prices will rise yr over yr to infinity. When things correct – people’s mindset will slowly change and this will re-examine theirs wants and needs. The meme changes, prices will go back to what is affordable is a market that is no longer hyped up. Wages haven’t risen so why couldn’t we go back to prices prior to 2007 when people fall out of love with housing?

———-

Is that the first time local homebuyer or the first time foreign buyer?

Because, if the market is insular and devoid of significant foreign capital purchase, like the US largely was prior to the collapse, then yes, prices detached from local incomes will eventually see a crash.

However, if the market is open to external buyers, then no – the eventual disconnect between local incomes and prices becomes moot in the face of continuous foreign capital flows. Hence the decade long bull run in Vancouver’s prices that have never reflected local incomes.

And seeing how places like Richmond and Burnaby have 10% of their buyers from overseas, down from 20% before the foreign buyers tax, the number of local buyers is moot. At these percentages, the non-local buyers are market makers that shape prices.

That is the joy of globalization and global capital flows!
Maybe think about the next time you buy your ‘cheap made in China goods’ from Walmart or brag to the world that you are the best place to live…unintended consequences indeed!
*****************************

Ah you have a point, foreign buyers. Hmm – don’t see many foreigners buying on mass in Qualicum Beach or Parksville or even Victoria but perhaps the realtors are mis-reporting those stats. If that’s the case, can one trust their unregulated stats at all? In the US – foreign buyers weren’t a problem? I would have thought that the US being the richest country in the World would have attracted lots of foreign buyers. Maybe the US realtors manipulated the stats as well.

How many locals do you know, own multiple properties? I know a lot…I hear it from them all the time. So if locals are buying multiple properties – perhaps they are outdoing the foreigners. The market is about sentiment and when that changes so do individual perceptions. Cracks in markets (with little or no foreigners) can affect the sentiment in all markets (even those with lots of foreigners). So what happens when the average house gets to 2-3 Million and even the foreigners are priced out! Perpetual growth on debt and the richest country in the world took a knee and Canada will not???. Obviously Hawaii of the North is the best place on earth.

Not sure where you got 20% foreign buyers from (insider realtor numbers?). Nothing…I repeat nothing lasts forever. Vancouver in the 80’s – it was the Japanese buying up everything, at least that was the mantra (left a sushi fad behind). The FOMO was created by telling locals – get it before the foreigners do. So they did and they bought more than one properties in some/several cases. The locals are still buying more than the foreigners. Where did you get your foreigner stats from I will need to consider the source prior to cementing my thoughts on the current housing bubble.

#71 YVR on 07.27.17 at 9:31 pm

Fraser Valley still heading higher. Record prices.

Link? Sales were down 10% in June. – Garth

#72 AB Boxster on 07.27.17 at 9:39 pm

#9 Arctic Gringo: Qalunaaq on 07.27.17 at 5:53 pm

———————-
Whaaaat?
You don’t want to spend 750 k on a Milton shitbox house.
So that you can then make payments of 4k per month for 25 years which will cost you well over $1.2 million for your then fully depreciated pile of chipboard.
As well as paying 6k per year in propery tax for a total of over 150k over 25 years.

How could that not be a great deal?
One could even call it a great investment!
Especially if one is a realtor.

Think of the great vacations you could have in the tent in your back yard.
Or the great trips you could make to the downtwn Milton thrift store to get your kids new clothes. (if you can afford to cloth your kids)

Or the fun driving that new (to you) hyunai pony.

Your should re-think your decision.
Your richer than you think, I’ve heard.

And being massively in debt is so darn Canadian these days.

#73 DON on 07.27.17 at 9:40 pm

Re post – spelling, yes I need to slow down

71 DON on 07.27.17 at 9:36 pm

General question to all: If foreign buyers are driving the market, where did they go? Why the pause/decline in sales, prices etc? Did their perceptions change? Why isn’t the market still rocking like it once was? Why aren’t we experiencing new highs month over month? We haven’t gone through a financial crash like 2007. SO why are things still stalling? What is the catalyst?

Just a few questions.

#74 paulo on 07.27.17 at 9:43 pm

#12 turner nation

interesting chart; it would seem that a individual in the IT
field would earn the second lowest remuneration in north america with Vancouver the lowest …umm so in reality couldent afford to purchase a out house in Toronto or Vancouver and would likely be handing over north of 50% of take home pay to rent .
there in is the nut, by the time speckers and want to be landlords are smoked out, there will be precious few possible purchasers that can get qualified for a mortgage even at current reduced levels. there is still a long and hard road ahead in this crash i figure about 30% of the end number has been booked the remaining 70% coming in a very timely manor.

#75 45north on 07.27.17 at 9:46 pm

ex-Cowtown: Off topic, but I did some back of the envelope calculations regarding phasing out internal combustion engines by 2040 in Canada.

we went from Ottawa to Kirkland Lake and back for $81 in a car powered by an internal combustion engine. today’s internal combustion engines are reliable and amazingly efficient but let’s consider your premise – internal combustion engines will be phased out by 2040. If you said 2020, then it’s pretty obvious it’s not going to happen. Consider the lanes of cars on the 400 heading south in the morning ( in the GTA ). The people in them have mortgages, they are making payments on their cars and they have money owing on their credit cards. They don’t have any money to spend on hybrid cars!

wolf: 5 months ago we saw the ridiculous jump in value for homes and decided to sell. Sold it for a little over 1m

two of the few. congratulations

#76 WillD on 07.27.17 at 9:46 pm

If condos are all most people can afford, and they are still being bought, then house prices will fall even further due to even less demand.

#77 FOUR FINGERS WATSON on 07.27.17 at 9:51 pm

Garth. Garth Garth Garth. You are so in denial. Have u been to Vancouver and the Lower Mainland in the last decade or so ? With your eyes open ?

Stop beating this dead horse. House-horny Canadians are the drivers of the market, combined with speculators, amateur landlords and the Bank of Mom. Go hate foreigners, immigrants and new Canadians on another blog. There are many to choose from. — Garth

Often. Lots of Asian Canadians. What’s your point? — Garth

#78 M on 07.27.17 at 10:03 pm

People never listen. Especially a population reduced to the mentally readiness of a teenager.
So reality must follow its course.
And here it is what will going to happen:
– hosing goes(is) smoky hole in the ground
– financial bubble that is the CDN economy will go bust
– unemployment skyrockets to 10-12% (based on the gov type of calculation)
– loonie turns to $hit with T2 suckling his right hand thumb not knowing what to do (raise rates or print money). The location of T2 left hand thumb remains undiclosed (for the moment)
– tremors will propagate to US since the entire canadian RE is actually owned by the southern gringo (Royal Lepage is Brookfield, and so are the other big canadian brokers-owners are in the states).
– MIC will hit Genworth right in the chin and that may start something. Big Buffet will loose his shirt with HCG without the gains promised by T2 in an eventual oily endeavor.

…how’s that for the next 3 to 10 months ?

stay tuned for more

(the Breathlessly Thick one :) )

PS. There is no recourse to stopping this since the population is (will be shortly) cleaned out and dependent on debt. Which will go horribly higher in interest but not because Polosz says so (he will try actually a QE) but because the foreing currency markets will say so.

#79 Cristian on 07.27.17 at 10:04 pm

“appearing to blame ‘emotional’ buyers instead of greedy, opportunistic sellers and their agents.”

Isn’t normal for any seller (of anything, not just houses) to try to get the best possible price for whatever they sell? That is not greedy, it is normal.
Of course the buyers are to blame for offering more than anything is worth.

#80 DON on 07.27.17 at 10:05 pm

#62 Smoking Man on 07.27.17 at 8:53 pm

#36 sam on 07.27.17 at 7:24 pm
Its much more fun to watch Al sinclair on cp24 than read garth. Sir Al, says we only have 1 month before prices start going back up. Garth you should watch him too.
…..

I’m some what of a slime bag. I’ll admit it. I was pumping that september shit too till my deal closed and got the loot out of the country. I’ll say alot more when I get my ass out of the country.

You are about to see the biggest shit show that there is no other like it in History.
***********************

I noticed your sudden head fake a couple weeks back while waiting for your house to sell – I knew something was up. Your last few posts didn’t bring up the September subject. Sound strategy. Garth did do post on the subject – he didn’t mention you directly…but! What was the date of the sale? Just curious.

Congrats!

#81 toronto1 on 07.27.17 at 10:07 pm

Its funny how history repeats itself yet people cannot see reality from the fog.

Do a quick google search of US housing crash and Ireland, see the comments from the experts at the same time in the cycle as GTA is now— almost verbatim what is being feed to us now by so called RE experts- the turn is just around the corner– its going to get better etc…

to those that will need to sell if interest rates rise to the 5% area- do it now! right now there is still a lot of fog out there, still some greater fools left that are willing to buy at the cusp of the biggest housing crash that this country has ever seen. SELL NOW, price it aggressively and get out while you still can at a minor profit or break even or even minor loss.

its only going to get much much worse- the declines that are coming will be huge and unimaginable.

the last time interest rates where at 6% (5.89/5.99 was in May-June 2010) Thats where people will have to qualify at if the 5 year fixed is in the 4% range.

average home price in toronto in june 2010 was approx 350-400K with an average income of 70K

average income now is closer to 80-85K so ill add 20% to 350-400K price and you are looking at a median price of approve 400-500K.

current median price in toronto is 793K- so roughly a 40% drop from current levels coming to Toronto.

within the GTA it will be 50-60% drop

and thats if it does not overshoot to the bottom.

the naysayers can laugh- i suggest they look into the housing market in LA when it crashed- that a diverse economy with huge population base and way more foreign money then toronto and vancouver combined- look at what happened there………

#82 M on 07.27.17 at 10:16 pm

..further.. in terms of numbers, the regular paycheck in Tor “middle class” (whatever that is) 85 to105 K.
In a normal world where money is worth something (deposits give you a pension after 30 years) with gov bond interests on investments of 5-7%, mortgages are 8 to 10 %. Which will put the affordability price for a house in Tor SOUTH of 200 K.
So…when do we know that the mayhem (that will last for years and years) will be ready ? When housing goes from 995K down to 185K and mortgage rates go from 2% back to 10-22-15%.
This my friends will happen not because “M”, or Garth or Polosz (I exclude T2 for he doesn’t really know what he wants) want so.
But because this where the market will find its equilibrium. When ? No clue. But so it was for the top..we didn’t have a clue “when”.
Printing money is the worst curse for a society and the western suckers NEVER EVER learned the commie experience, because that was EXACTLY why that version of socialism collapsed (the “freedom” crap was made up by the western state media to make suckers feel good about themselves). Eastern Europe collapse was brought by senseless printing of money for senseless purposes (dictated by state).
Keep in mind the “printing money” part.

#83 TOrenter on 07.27.17 at 10:22 pm

Garth, although I am grateful that I found this blog about year and half ago and I do thank you for being the light in these dark times we’re going through I really think you should start using this blog and your clout to demand the government to create transparency in the real estate market.
It is maddening to hear these real estate agents, real estate boards etc spewing lies and talking people into making huge investments for their own financial gain.
The msm buys it cause they have no other data to rely on.
It’s about time people will rise up and say enough is enough. Show me real time data, real sales numbers.

Who’s better than you to lead such a fight?
You have the experience and connection, radio, TV appearances as well as huge following on this blog.
Maybe it’s time you stop talking about it and actually take a stand? (Unless your happy with the situation and rather seat on the bench)

#84 Doug in London on 07.27.17 at 10:22 pm

It wasn’t long ago that some “experts” said that if prices dropped a lot of buyers would rush in to fill the void like this comment:

“And why do I still think real estate prices will continue to shoot up in Vancouver and Toronto defying all logic for eternity?”

cause if any ‘dip’ occurs the pent up buyers will come out of the woodwork to buy…rinse and repeat…
maybe not ‘eternity’ but much longer than anyone can imagine….

So now my question, why isn’t this happening? Where are all these buyers itching to get into the market?

#85 viorelli on 07.27.17 at 10:22 pm

Vancouver realities:
An obstetrician doctor locally employed clears between $7500 and 9000 per month depending on hours worked, anywhere between 40 and 65 hrs weekly. After she pays back her student loans (not from rich mom and dad), mortgage (Burnaby townhome), car payment and insurance (new Subaru), Montessori pre-school fees, hockey, summer camp fees for her son, and groceries. She can barely put aside $1000 per months, half into TFSA and half into RESP. The husband is not there as a child was conceived during internship with her then common law, thus she is on her own. Now, this is a doctor who has numerous years of education and dedication to hard work and night shifts, what do you think about the average wage folks in Vancouver. My advise to the new immigrants, and educated millennials moving into our town with the hopes of making it here: stay away, or try for the States. Your future will be much brighter down south.

#86 For those about to flop... on 07.27.17 at 10:24 pm

Pink Lemonade stand in Coquitlam.

This is one of the ones I asked Honest Realtor to help me with but they are yet to get back to me.

Maybe they should change their name to “Honest and extremely busy’ but not too busy to complain about the housing crash guy.”

Anyway these guys just re-listed this one a couple of days ago.

Paid 1.3 now asking 1.09

Old case ,cold case,no case…

M43BC

1607 Balmoral Avenue, Coquitlam

Mar 29:$1,468,000
May 25: $1,398,000
Change 70000.00 -5%

1607 Balmoral Avenue, Coquitlam

Mar 29:$1,468,000
Jul 25: $1,099,000
Change: – 369000.00 -25%

https://www.zolo.ca/index.php?sarea=1607%20Balmoral%20Avenue,%20Coquitlam&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzWE5XRA==

#87 Fish on 07.27.17 at 10:26 pm

Strike at Pearson air port

#88 Doghouse Dweller on 07.27.17 at 10:33 pm

Stop buying mutual funds. Problem solved. — Garth
““““““““““““““““““““““““““““““““““
4 liberal accounts Cdn , US , TFSA , RRSP, Don`t have any Mutual Funds, but it sure looks like they want me to buy some. I`ve seen the graphs they always go up.

#89 genbizx on 07.27.17 at 10:34 pm

this is why economics is a social science….the fundamentals point to serious problems but who cares? people want to be loved, respected, accepted…having a house is part of that for many people…we live in the era of image first and everything else second. substance? well, that doesn’t show up on facebook….look the part and spend life buying things you don’t need with money you don’t have to impress people you don’t like….

#90 Tony on 07.27.17 at 10:38 pm

The first time buyers or the Millennials are preventing the housing market from collapsing in price. The housing market is always based on the first time buyer but the Millennials are oblivious to reality and are completely clueless when it comes to business and finance. If interest rates do in fact rise in Canada then the Millennials will finally figure it out as home prices in the mid to higher range keep on falling in price.

#91 FOUR FINGERS WATSON on 07.27.17 at 10:40 pm

There you go again. Denial.

#92 M on 07.27.17 at 10:43 pm

@#45 North of 89

… was that american fellow sipping drinks in Miami on the beach ? Key West maybe ?

In gringo land it appears that goin’ armed in another man’s country , is ok :)

… after so many years of lies, there are still morons believing in that “war against the terrorism” .

Definitely CNN, CTV CBC CNBC did a much better job than Pravda (for example). Then again.. the gringo of today..is not what it used to be…

#93 mark on 07.27.17 at 10:43 pm

Had been keeping an eye on a place in Nova Scotia, just outside Bridgewater. 4 beds 2 bath. Looked in good shape, was modern inside, had half an acre with it.

Sold in 2011 for $112k, I found it when the price had hit $86k, late last year, then nothing for 6 months. Dropped it into the high 70’s at the start of May, it finally sold last month – I pulled it up on viewpoint and it went for $50k!!

I wouldn’t have had the stones to offer $50k, but people will clearly take a lowball if they want out.

#94 Tony on 07.27.17 at 10:46 pm

Re: #83 Doug in London on 07.27.17 at 10:22 pm

It’s only the daft Millennials or first time buyers at the lowest end of the real estate market who are buyers. They haven’t a clue on God’s green Earth when it comes to business and finance. If interest rates rise in Canada then home prices will keep falling in the mid to higher range and only then will the first time buyers or Millennials at the low end of the market figure it out. Remember we haven’t seen the huge price drops in Brampton and Mississauga the two twin cities that will lead the GTA in price decline this year.

#95 Sunnyside on 07.27.17 at 10:53 pm

Smoking Man #62

“I’m some what of a slime bag. I’ll admit it. I was pumping that september shit too till my deal closed and got the loot out of the country. I’ll say alot more when I get my ass out of the country.

You are about to see the biggest shit show that there is no other like it in History.”
__________________________
THAT’S more like it. I was grilling you on that..And was going to add the additional fact that any September rebound would have to go up against this massive shit show unfolding in Washington – and what it should eventually do to equity markets (if not started already).

#96 VICTORIA TEA PARTY on 07.27.17 at 11:06 pm

CANADA’S VERY OWN DEEP STATE

While we all focus on the US Deep State that is trying to unseat Trump (they’ll fail), we have our very own Deep State right here in Canuckistan.

It is an amalgam of the following: federal government/Bank of Canada/real estate industry/consumers wanting to cash out of their real estate before it tanks and other factors especially low interest rates.

It is obvious as the day is long that these special interest groups want the status quo to remain unchanged. Otherwise the industry will all come crashing down, they fear, and they’d be right.

Why? Because too much borrowed money rides on this carnival ride to Hell.

Also, eroding prices in Toronto and Vancouver could affect 2019’s federal election picture for Trudeau.

GARDEN CITY BLUES

Meanwhile, Victoria real estate prices continue to rise because a whole lot of condo supply is about to come onstream.

For example, a flurry of new 400 to 600 square foot concrete boxes are soon to change the face of downtown Victoria.

That and the numbers of pot smokers wafting along the streets make the whole area look just depressing.

The next ignominy will be additional bike lanes downtown which will cost taxpayers millions and tie up traffic even more.

Victoria ain’t what she used to be.

Such a shame that her nest is being spoiled by a series of milti-storey condo buldings which their developers extoll as being the ultimate in urban living and so on.

Very soon you’ll need to be a millionaire to live here.

So, how will poorly-paid cafe baristas be able to afford to live here, sharing a one bedroom apartment with three others for $1,300.00 a month, so they can cater to spoiled insolent customers?

Beats me. But that’s the price of success in a real estate-drugged society egged on by low interest rates and the abysmal ignorance of the dopey, greedy participants.

Locals are getting what they deserve, the whole flaming lot of them.

#97 Smoking Man on 07.27.17 at 11:09 pm

#79 DON on 07.27.17 at 10:05 pm
#62 Smoking Man on 07.27.17 at 8:53 pm

#36 sam on 07.27.17 at 7:24 pm
Its much more fun to watch Al sinclair on cp24 than read garth. Sir Al, says we only have 1 month before prices start going back up. Garth you should watch him too.
…..

I’m some what of a slime bag. I’ll admit it. I was pumping that september shit too till my deal closed and got the loot out of the country. I’ll say alot more when I get my ass out of the country.

You are about to see the biggest shit show that there is no other like it in History.
***********************

I noticed your sudden head fake a couple weeks back while waiting for your house to sell – I knew something was up. Your last few posts didn’t bring up the September subject. Sound strategy. Garth did do post on the subject – he didn’t mention you directly…but! What was the date of the sale? Just curious.

Congrats!
…..

Yeah closed Tuesday. For 3 months to be honest I was shitting myself. I resurech my buyers. Young 30ish. Great jobs and they made out like bandets when they sold there fix me upper in March.

I was affraid their buyers would bail causing a chain reaction.

Not that it would have been the end of times for me, but I would have hated suing a young family into oblivion. Luckly no chain reaction. But 3 out of 4 of the homes my agent sold since April all fell through.

I was just lucky. No one picks tops and bottoms like me.

I told everyone on here when I was renovating and planning on selling in the spring. Mabey followed suit.

#98 My Wife Loves Garth on 07.27.17 at 11:10 pm

I live in Richmond Hill and got a cold call from a real estate firm today with a friendly lady asking “if I knew anyone in the area that was interested in selling”.

Desperate times for real estate agents.

#99 Tony on 07.27.17 at 11:20 pm

Re: #80 toronto1 on 07.27.17 at 10:07 pm

In America it was the collapse of the first time buyer or first time buyer at the low end of the market than sank the real estate market. The N.I.N.J.A. loans were all first time buyers at the low end of the housing market in America. In the GTA it’s the Millennials or first time buyers at the low end of the housing market that are preventing the housing crash in the GTA by buying in the initial fall of a housing market that has followed the bond market in a 34 year bull run. Now the bond market has shifted downwards and losses could be extreme because of the length of time that long term bonds produced capital gains.

#100 Tony on 07.27.17 at 11:28 pm

Re: #77 M on 07.27.17 at 10:03 pm

If unemployment skyrockets then Trudeau will cut the immigration quotas due to lack of jobs in Canada which will further push down demand for housing.

#101 Smoking Man on 07.27.17 at 11:32 pm

How is this for a conspiracy theory.

Real estate prices growing 3% anualy. Then in march 10 years of gains in one month. The herd who owns the antenna goes hey let’s cash in. They were all going to put inventory on the market at a contoled pace.

Then Wynee comes out with the fair housing plan. The day I list by the way. When a liberal says fair you know someone is going to get screwed.

Then poloz does a 24 hour about face.

Agenda 2030 people. They want to crunch the middle class while pretending to be fair and now in an all out war to turn masculine boys into soft little sheep.

The globalists machine is powerfull lucky we have Trump taking it on.

Great speech to the boy scouts.

#102 Xbox Economist on 07.27.17 at 11:38 pm

Reading recent comments reminds me of when I was selling my GTA property back in the spring of 2010. I had listed the place for just over $425k when one guy submitted a low ball offer of $300k. I was curious so contacted him directly and asked why he’d done that. He told me that he reads the greaterfool website and follows Garth’s advice. He also said that I would be begging for him to make the same offer in a couple of months and that he would be buying my place for “pennies on the dollar”. Well, obviously that didn’t happen and I believe that same place sold recently for about double what I sold it for. Anyways, the point of this story is not to say that house prices will continue to rise but show how people can over-interpret what they read. Drooling at the prospects of a crash and ready to vultch when prices have just barely reached levels seen a year ago. Mania has infested the blog comments section and I’m reminded of that guy back in 2010.
Well one good thing came out of that experience. Shortly after selling that place I started visiting this site to see what all the hype was about. And I have to say that I’ve enjoyed commenting on here since.

#103 ANON on 07.27.17 at 11:43 pm

To Bull trap, or not to bull trap? That is the question. Psychologically, it is inevitable to think all will be hunky-dory, just a blip, and resume the narrative, it has always happened. Will it happen this time? Delusia bull trapped, for sure. Will New Delusia bull trap also, or will Delusia resume descend before that, and ruin the last bit of fun? Flip a coin.

#104 Oft deleted much maligned stock picker on 07.27.17 at 11:50 pm

Garth….you worked in media….so did I…..the Trudeau piece in RS was paid for advertising……placed by a publicist…..for cash. What we are witnessing is one of the most corrupt media circuses in history. Due to a collapse in ad revenue since the last recession and now a flight of business out of Ontario the Canadian media depends on primarily govt advertising. Media writes nice about Junior…..the govt buys advertising in return. In constant dollar terms the Liberals are buying ads in magazines around the world to drum up a phony ‘Trudeaumania’, which in fact does not exist. The big fail was Trudeaus trip to the Phillipines when his handlers hired street walkers to line the path and somebody noticed they were repeating the Liberal script…..in English……saying he was ‘hot’……like the CBC……instead of “guapo’ which is Phillipino.

#105 Smoking Man on 07.27.17 at 11:59 pm

#130 Covfefe on 07.27.17 at 9:23 am
#66 Smoking Man on 07.26.17 at 9:09 pm

TFW
http://www.acting-man.com/?p=51024

Tax Farm wants me back. No chance, get rid of Pink Shit day, and I desire whats on the screen saver I’ll consider it.
…………………………………………………………………….
Go to the Island idiot, go, go fast please. If the tax farm wanted you back and you just lost your home due to lack of funds then you truly are a big sausage. We all heard your love of Long Branch and the million’s in the secret Caribbean bank account that the Canada Revenue Agency can not touch so go, please go. So which is it you lying sausage head! You are as bad of a flip flop and liar as that piece of turd in Washington. Now cut the drivel and move on. Oh one more thing my sister in-law works for CRA. She was amused when I showed her your BS.
…..
And before I forget this from yesterday.
James you are such a pawn in a game far beyond your comprehention.
Do you not know Nictonites can read minds.
Obviously you never spent 10 bucks to buy the book of books.

#106 Mike on 07.28.17 at 12:21 am

#84

Vancouver realities:
An obstetrician doctor locally employed clears between $7500 and 9000 per month depending on hours worked, anywhere between 40 and 65 hrs weekly.

—————–

I know quite a few doctors personally. What u said above is a lie. A nurse with that hours make more than that. Doctor do a 3x, with minimal tax they pay due to income sprinkling among family members and dividends for low tax.

#107 Smoking Man on 07.28.17 at 12:24 am

DELETED

#108 DON on 07.28.17 at 12:27 am

#62 Smoking Man on 07.27.17 at 8:53 pm

Thanks for the info on your buyers, that was my next ask. 3/4 deals falling through – Yikes!

What’s your outlook for the Cdn dollar, yes I have a vested interest but need to get a realistic outlook. I think I am clouding my own vision, just want to make sure.

#109 Irrational exuberance on 07.28.17 at 12:51 am

Schiller doesn’t believe in “there’s no more land” argument and has talk to bank of Canada about real estate bubble to deaf ears. What does he know… just a nobel prize winner in Econ

https://youtu.be/hsz9d9vjLzY

#110 Entrepreneur on 07.28.17 at 1:06 am

#22 Dave…”When have you ever heard a realtor say now us not a good time to buy.” When a realtor is a close friend and tells you to wait until the crash, after the summer.

#111 Phily on 07.28.17 at 1:10 am

Al’s still pumping.
Geez, may be aware of T2 and his team’s pre determined/anticipated/manipulated market.
Where did free market go ?

#112 PET Contribution on 07.28.17 at 1:32 am

#99 Tony on 07.27.17 at 11:28 pm
Re: #77 M on 07.27.17 at 10:03 pm

If unemployment skyrockets then Trudeau will cut the immigration quotas due to lack of jobs in Canada which will further push down demand for housing.
———-

Lol – you really need to learn your immigration history. The last time immigration was tied to the economy was before T2’s daddy really got a hold of it.

Before 1971, immigration was a lever – turned on and off depending on the economic circumstances. After 1971, it became a political calculation and has remained so for over 40 years.

Sorry, there is no tap to turn on or off – the handle has been taken off permanently.

The entire economy can tank and that quota will never change.

Your naivete is cute though.

#113 SAD SM on 07.28.17 at 1:37 am

My goodness, why does anyone read Smoking Man’s lies.

A self admitted liar who stirs the pot with: I am a tech man; and I am writer; I am a coder; and I millionaire; I sold at the ‘top’, etc…..

Classic narcissist seeking the attention of other anonymous trolls….sad

#114 Invictus on 07.28.17 at 2:11 am

#68 mathman on 07.27.17 at 9:24 pm

“the price of homes”-” is nothing more than a function of the cost of capital+ financial illiteracy+emotion.”

If you can turn this statement in to a universal mathematical formula, expect a call from Stockholm Sweden.

Well said.

#115 Mark on 07.28.17 at 2:17 am

“How is this for a conspiracy theory.
Real estate prices growing 3% anualy. Then in march 10 years of gains in one month.”

Its not conspiracy theory. Its unadulterated nonsense. I don’t know if you’ve been hitting the bottle this evening, or if that’s actually what the Realtors are claiming, but all credibility is shot by whomever made that claim.

The sales mix changes are likely exaggerating the downside at this point as well.

#116 The Dude on 07.28.17 at 2:43 am

Seems to me like a lot of people have been priced out of certain markets since this blog started. If you go back to the original posts you can read how the price predictions haven’t come true. Main reason: lack of housing supply. Rental vacancy rates are low. In places like Vancouver, competition is fierce for housing whether you rent or own.

#117 j cruelest on 07.28.17 at 2:49 am

#63 MF on 07.27.17 at 8:56 pm

Mind if I take my boat up that river you’re crying?

#118 Oft deleted much maligned stock picker on 07.28.17 at 2:50 am

#2 Mike……don’t forget that the NDP has been hiring civil service workers ( read…..new arrivals) like crazy…..hence houses selling…..how long before those people cry foul and demand $10 million?

#4 Alberta……which is why Moroneau and co are bad mouthing Poloz saying that the rate rise is uncalled for.

#18 Wul…..Total is one in a line of thousands of businesses that are abandoning Canada due to political uncertainty and socialist taxation.'”

#23 Porsche…..yeah…..tech jobs in Canada….what a joke. Last time I was in delusional Vancouver the tech masters were all in a Starbucks trying to sell each other services……’cause it’s better than saying yer unemployed.

#27 Work…….the idea isn’t to disown real estate but to able to afford ownership. I keep a pied a terre t/h in Vancouver so that the family can crash when we pass through. I don’t give a crap what my 6% might be…..because I earn free cash flow on divvies every day all year. You can rent…..but if you travel then a hotel doesn’t cut it when Christmas comes around and kids fly in from around the world.

#37 Guy……you’ll be a millionaire in ten years…..lol…..study the ups and downs of the market my friend……you could just as well be penniless.

#45 North…..exactly….the only people who think Trudy is popular are either paid by him or locked into the CBC. I loved the diverse coverage that came out of British media when Trudeau met the Queen….the CBC wrote it like Junior was a lost loved child coming home. The UK media remarked on the Queens circle guffaw when Junior tried to constantly remind the Queen who he was because ‘surely she remembered him’……she dint .

Btw…..loved the numbers out of CVE…..justified the Connocco bite……an 10 percent yesterday.

#119 Dolce Vita on 07.28.17 at 2:58 am

Just look at the past. No need to conjure up a future or argue about it.

Not a single RE correction has ever reversed with price drops as are happening now in YVR and 416 since the early 80s and for all major cities in Canada.

Not one.

Maybe a small dead cat bounce is all.

Thus far, 416 prefers a rapid get it over with drop; whereas, YVR prefers a slower death by a thousand cuts drop.

RE is local after all.

Time to pay the piper reckless investors et. al.

All I hope is that these bad single asset economic players are purged from investing for quite some time and the rest of the economy weathers their reckless actions – Creative Destruction.

#120 Canadian expat on 07.28.17 at 3:02 am

Who or what is “MSM”? Thanks!

#121 Adrian on 07.28.17 at 3:28 am

It only takes the deceleration – not the reversal – of debt growth to cause a recession when private debt-to-gdp is at or above current levels. Professor Steve Keen explains this, starting at the 29 minute mark of the following talk:

https://www.youtube.com/watch?v=vCFubyGd_R0&index=30&list=PLeTlY33FDoJzvjsQoLBbCHiJFa2LmVJNH

The rest of his presentation is quite informative, as well, since he is discussing the Australian real estate bubble. If you keep watching after the above, he goes on to explain how saving by individuals shrinks GDP.

Also, the global Credit Impulse has turned negative in recent months, which is ominous for future growth:

https://www.macrobusiness.com.au/wp-content/uploads/2017/05/PIMCO_Blog_China_Credit_Frieda_May2017_Fig2.jpg

#122 steerage steward on 07.28.17 at 3:59 am

Live in Vancouver, haven’t seen a better bubble.

Sock away 20% in RRSP and or TFA. Friends say say I should buy. Because they do.

Asked them if they maxed their Investments, they asked me what an investment is

#123 boonmeister on 07.28.17 at 5:58 am

Garth old chap…..riddle me this….many cite the great nature as being a reason to live in Canada, yet 99% of the people live in large urban centers in clapboard shacks or moldy basement apartments! What gives? Why do people not live in cabins on an acreage out in the Laurentians, Northern Ontario, or the Kootenays. Surely, there must be some ways of living off the land out there in the boons?

#124 Dharma Bum on 07.28.17 at 6:44 am

#37 Guy in Calgary

“Go back packing and take some pictures in the mountains.”
——————————————————————–

I hear you brother. I’m scheduled to board a 4:10pm flight to Calgary from Toronto this aft. Plan on doing just what you said. That is the life!

I only hope that the scumbag striking unionized baggage coolies don’t eff it up too bad. The airport should hire some monkeys to replace those overpaid goons. Bunch of disruptive lowlife.

#125 Dan.t on 07.28.17 at 7:17 am

#33 Cloudy
“The only thing that makes me think a correction is possible is the large number of acquaintances, coworkers and friends that own multiple income properties and could be hurt with mortgage renewals (likely 3-5 years from now). By the way, they all say they don’t claim rental income on basement suites because the “CRA doesn’t care about small infractions, they’re busy chasing larger, easier targets.” Probably true but frustrating.”

It is unreal. I have heard that so many times and couple times directly from acquaintances about them having renters, when I ask, do you claim, nope.

I guarantee that is so wide spread all over BC. It is down right tax fraud.

CRA will drill you for a $200 buck capital gain infraction, but 14k+ in undeclared tax income is a small infraction. Something is seriously wrong with the system.

It is a weird mentality in Canada. Houses in BC are simply unaffordable and yet people must know that unclaimed rentals are fuel to the fire, they bitch about crazy prices (believe me they do) but knowingly let empty houses and tax fraud go so the owners can earn tax free income to pay off the mortgage on the backs of renters.

Again, you wonder why prices are the way they are is because Real estate gets a free pass on everything. Lie, Cheat, Rob, Steal and government still doesn’t seem inclined to stop the party.

I bet if more people reported tax fraud on undeclared rental units, supply would increase pretty fast.

I bet virtually every BC resident on average owns multiple properties and I bet tons (a majority) are not declaring rental income. I guess that is small peanuts to CRA. Weird. I would say that is worth hundreds of million or more in tax revenue that CRA doesn’t care about…when a 1 bedroom goes for $1800. Multiply that by….whatever, doesn’t matter, it’s Real Estate.

#126 MF on 07.28.17 at 7:29 am

#116 j cruelest on 07.28.17 at 2:49 am

Please do. If you see my 2013 self there, please remind him to buy that condo.

Thanks.

MF

#127 MF on 07.28.17 at 7:38 am

#122 boonmeister on 07.28.17 at 5:58 am

That’s simple. Jobs and amenities.

#118 Dolce Vita on 07.28.17 at 2:58 am

You forgot the drop in 1989-90 that basically saw prices stagnate afterwards for 10 years. My parents bought their second house (cash) in the GTA in 1992 and there were zero sellers for miles and massive price drops. 2008 and ZIRP changed everything and is unprecedented. The boom bust cycle has been modified but still exists. Instead of regular contractions and recoveries, we will have a period of huge increases in prices with teeny tiny meaningless corrections, and then possibly a huge crash IMO. We are not there yet though and it could take years or decades if at all.

MF

#128 Ace Goodheart on 07.28.17 at 7:45 am

I don’t think millenials give a rat’s hoot about who is on the cover of rolling stone. Or even read rolling stone. Or know it exists.

For all of us old folks (40+) interest can any of the millenial readers out there let us know what publications you actually do read?

#129 MF on 07.28.17 at 7:50 am

#111 PET Contribution on 07.28.17 at 1:32 am

It’s been a huge positive from what I have seen here growing up in the GTA alongside immigrants my whole life.

My observations are they are proud to be new Canadians, happy to start lives, work hard in whatever job they can get and start a life.

My GF is going through the immigration process right now and, contrary to popular belief, it is not easy at all. You have to prove yourself as educated, young, english or french speaking, healthy etc. The process takes years.

If they change the process, like in Europe, then we could have problems. But so far since PET, it’s been a success.

MF

#130 A Reply to #119 Canadian expat on 07.28.17 at 8:00 am

“Who or what is ‘MSM’? Thanks!”

Common: mainstream media.

Esoteric: the Markov-switching multifractal (a model of asset returns in financial econometrics), the Muscat Securities Market (the only stock exchange in Oman), the method of simulated moments (a structural estimation technique in econometrics), etc., etc.

#131 fancy_pants on 07.28.17 at 8:13 am

is this a knee jerk?

https://economyandmarkets.com/exclusives/american-home-values-cut-half/?z=718209

#132 crowdedelevatorfartz on 07.28.17 at 8:19 am

@#127 Ace goodheart
“Or even read rolling stone. Or know it exists…..”
******
Was thinking the exact same thing.
Didnt kow they were still publishing. Cant remember the last decade I picked one up and read an article. 1980’s? 90’s?

#133 maxx on 07.28.17 at 8:23 am

….”now the Real Estate-Industrial-Financial Complex is fighting back. In fact, it’s in full-on damage control.”

Fighting for the gullible hearts and minds of the re addled Canucklehead. Remains to be seen whether the Canucklehead has evolved even a quark of financial sagacity.

As for the “Complex”….the bs beat ups the tempo, and the oxymoronic blind, such as Honest Realtor wonder why so many find the lot of them beyond repugnant, such as Happy Housing Crash Guy. I hope that they all get a major dose of a new reality……one of economic and industrial balance. One that sees their paychecks decimate. If that comes to pass, don’t expect to feel the love. Schadenfreude will be the national sport.

I sincerely hope that we are on a course for a better Canadian economy. If we aren’t, I would advise anyone with real wealth to make certain that their wealth is protected and lovingly cared for by factoring in social stupidity and the legislative consequences of that stupidity.

Happy Housing Crash Everyone!

#134 crowdedelevatorfartz on 07.28.17 at 8:25 am

@#112 Sad SM
“My goodness, why does anyone read Smoking Man…”
*********

Apparently you can answer that question yourself

#135 MF on 07.28.17 at 8:26 am

129 A Reply to #119 Canadian expat on 07.28.17 at 8:00 am

Wow. Totally pedantic!

MF

#136 maxx on 07.28.17 at 8:29 am

#4 Alberta Ed on 07.27.17 at 5:37 pm

“The Beavis & Buttshead Show in Ottawa is terrified that the SWHTF just before the next election.”

One way or another, they’ll be trumped.

#137 Ian on 07.28.17 at 9:18 am

Real Estate-Industrial-Financial Complex!!! I love it. Echoes of Eisenhower. Beauty

#138 oh my on 07.28.17 at 9:20 am

148 Caproni Dr, Vaughan

Listed for $1.188M in March 2017 and sold for $1.680M a week later.

Now back on the market for $1.680M.

How much do you think the buyers will get?

#139 SW on 07.28.17 at 9:28 am

#4 Alberta Ed on 07.27.17 at 5:37 pm
…One way or another, they’ll be trumped.

We might all be…

#140 paulo on 07.28.17 at 9:33 am

I am sure many remember the “tune” cover of the rolling stone by dr hook and the medicine show
this could actually be the T-2 and crew theme song
check it out for a laugh!

#141 Keith in Calgary on 07.28.17 at 9:43 am

It actually hit 40 degrees yesterday in YYC. My car (a Kia) has a thermometer that reached 39 and the sign on Macleod Trail showed 40. Wearing a t-shirt, shorts and flip flips while cruising around. This not working and being a renter “gig” is pretty good……..heh. It’s hotter here than in Rio right now.

As I do around one thing was apparent. Those ubiquitous orange and black FOR RENT signs you can buy for $5.99 at Home Depot are multiplying. It’s hard not to drive 2-3 blocks in most residential areas and not see 2-3 of them immediately. I guess advertising online with 23,600 other landlords just doesn’t work anymore. What’s next ? A sign twirler on the corner during rush hour for $15 an hour ?

#142 A Reply to #134 M—F— on 07.28.17 at 9:45 am

“Wow. Totally pedantic!”

I’m just having fun with you, you F—I—.

#143 Dolce Vita on 07.28.17 at 9:48 am

Canada’s GDP: up by 4.6% in the year up to May, largest rise since 2000. 0.6% mo/mo. 3 times Economist predictions…shows you how much they know.

Not good for everyone though:

“Real estate and rental and leasing declined 0.2% in May after five consecutive months of growth. Following a 0.6% decline in April, activity at offices of real estate agents and brokers declined 6.3% in May as housing resale activity slowed in the Greater Toronto Area.”

And what are all these Realtor stories as of late how all is well? 17% increases etc.

Answered today by Statistics Canada:

it’s all BS.

Rates will be going up. Sweet.

#144 n1tro on 07.28.17 at 9:48 am

“CMHC chief economist Bob Dugan told reporters that strong job creation and income growth in Toronto favour the housing market. He expects price growth to resume in the city.”

Just another example of an idiot with an economics degree.

Hmmm…I wonder if any other people in high profile, high influence positions making decisions on behalf of the masses?

#145 MF on 07.28.17 at 9:57 am

#127 Ace Goodheart on 07.28.17 at 7:45 am

None really. It’s all social media (facebook, instagram, blogs like this one).

The only time I read a magazine is if i’m waiting for an appointment.

I’ll pick up Men’s Health and sometimes the other exercise/gym related ones. Either that or GQ. Definitely not Rolling Stone, and now that T2 is supposedly on the cover, never Rolling Stone.

For finance I like the Financial Post.

MF

#146 Lee on 07.28.17 at 10:03 am

#132 MAXX,

You people just don’t get it. There are over 150,000 on our Ontario Sunshine, if one includes people just under $100,000 a year who are being kept off strategically by Ms. Wynne. Add in Federal employees, and we’re pushing 200,000 families in and around Toronto that have one income earner earning at least $100,000, plus gold plated pensions. Bankers will tell you this is enough to sustain prices in Toronto forever. There is no crash coming. The 15% we’ve lost this year was because of the craziness of last year, and even after 15% we’re still 100% over 2012 levels and 200% over 2009 levels. I am starting to feel really bad for you dreamers caught in this illusion that real SF houses in Toronto will soon be priced with Barbie Malibu houses at Toy’s R’ Us. Get Woke people. People don’t work hard ever day all their lives to hand over their property for nothing. After almost 10 years of reading this blog I have only one thing to say to the dreamers: Suckers.

#147 chopstix on 07.28.17 at 10:08 am

seems the condo market is the same in Toronto as in Vancouver: bucking the trend of falling sales in other RE segments.
from Financial Post:
”Condos buck Toronto housing slowdown as new construction sales hit record
Toronto builders maintain they have yet to see the slowdown happening in the existing home market, but some report investors and speculators might be out of the picture”
http://business.financialpost.com/personal-finance/mortgages-real-estate/condos-buck-toronto-housing-slowdown-as-new-construction-sales-hit-record/wcm/8be2b43f-16a8-43dc-a1ed-9517b00dc2c0

#148 SimplyPut7 on 07.28.17 at 10:16 am

Sounds like we’re getting another rate hike soon…

“There appears to be no holding back the Canadian economy, at least for now,” TD Bank economist Brian DePratto said. “The robustness of the Canadian economy will likely allow the Bank of Canada to carry through with another interest rate increase this fall, completing the removal of the 2015 emergency stimulus.”

http://www.cbc.ca/news/business/canada-gdp-may-1.4225650

Construction and real estate shrank and the world didn’t end, life goes on.

Suck it up.

#149 Good_news,Everyone on 07.28.17 at 10:17 am

“The recent slowdown in Toronto home sales following provincial measures to rein in the market was starting to weigh on economic growth, with activity at offices of real estate agents and brokers tumbling 6.3 per cent.”

https://www.theglobeandmail.com/report-on-business/economy/canadas-economic-growth-blows-past-forecasts-in-may/article35826298/

#150 maxx on 07.28.17 at 10:27 am

#145 Lee on 07.28.17 at 10:03 am

“#132 MAXX,

You people just don’t get it. There are over 150,000 on our Ontario Sunshine, if one includes people just under $100,000 a year who are being kept off strategically by Ms. Wynne. Add in Federal employees, and we’re pushing 200,000 families in and around Toronto that have one income earner earning at least $100,000, plus gold plated pensions. Bankers will tell you this is enough to sustain prices in Toronto forever. There is no crash coming. The 15% we’ve lost this year was because of the craziness of last year, and even after 15% we’re still 100% over 2012 levels and 200% over 2009 levels. I am starting to feel really bad for you dreamers caught in this illusion that real SF houses in Toronto will soon be priced with Barbie Malibu houses at Toy’s R’ Us. Get Woke people. People don’t work hard ever day all their lives to hand over their property for nothing. After almost 10 years of reading this blog I have only one thing to say to the dreamers: Suckers.”

150K? WOW!!!!

Relative to the population of this debt-choked, tax-spraying on crap province, the sunshine bunnies are but a tiny drop in the bucket. Add in the sub 100K and you still don’t peer over the top of the wall.

The debt-ridden, a mammoth segment of Ontario , will definitely fight tooth and nail to preserve their brick-lickin’ rights, but the cost of moolah is about to climb again, so many will need to get cozy with no-name pasta.

#151 NoName on 07.28.17 at 10:29 am

https://www.cnbc.com/amp/2017/07/26/billionaire-investor-marks-who-called-the-dotcom-bubble-says-bitcoin-is-a-pyramid-scheme.htm

interesting

#152 cramar on 07.28.17 at 10:39 am

#119 Canadian expat on 07.28.17 at 3:02 am
Who or what is “MSM”? Thanks!

————————–

MainStream Media

#153 InvestorsFriend on 07.28.17 at 10:45 am

Lack of ethics in media and elsewhere

#103 Oft deleted much maligned stock picker on 07.27.17 at 11:50 pm said:

..the Trudeau piece in RS [Rolling Stone] was paid for advertising……placed by a publicist…..for cash. Media writes nice about Junior…..the govt buys advertising in return.

**********************************
Disgusting if true. And I suspect it is true. Print media is circling the drain and desperate. Still SOME good journalism out there. But its tough. How to compete with the likes of this free blog?

Another example. All of those TOP 100 employer type lists and awards are bought and paid for (via advertising and ,cough cough , “cost recovery fees”) by the “winners” that got on the list. Disgusting! Unethical.

#154 IHCTD9 on 07.28.17 at 11:23 am

#47 Locals Are Moot on 07.27.17 at 8:02 pm

… the number of local buyers is moot. At these percentages, the non-local buyers are market makers that shape prices.
________________________________

There is some truth to this. I see it here in the Hinterland on a micro scale. The big thing here is everyone knows exactly what happened, who bought, and especially what they paid.

Here the “foreign buyers” are GTA RE lotto winners. A scenario from this spring:

Nice new house goes up for sale, two GTA escapees want it and start bidding against each other, house goes from 650 ask, to sell at 750K.

A very nice place just down the road a bit then goes up for sale a few weeks later – 750K. Then another big nice house that just got a quick exterior update goes up a week after that for 650K.

I know all the homeowners involved in the houses above. They are all fishing for the same type of buyer the first house got. They won’t sell unless they get similar numbers, the guy with the 750K house #2 has been living in that house for 15+ years. If the market craps out and they get 5-600K offers, both will come off the market till next time. All these guys know each other.

These two houses never would have even been listed at all if that first house went for ask, so that one sale prompted at least two new very high priced listings. Call it greed, call opportunism, call it capitalism, – it is what it is.

The first big $ sale or two cements the knowledge that insane buyers are on the prowl amongst the local homeowners. Seeing is believing, and it’s not long before everyone’s talking about what Bob down the road got for his house. Then the listings start sprouting like dandelions.

Meanwhile, a beautiful bungalow equal to the 650K (if not better IMHO) sat on the market for most of last year, dropped 100K while the absent owner paid the heat and hydro bill, went through 2 realtors, and finally sold for less than 470K. I’d probably be the owner of that house right now if it wasn’t for the 6.5K/yr tax bill.

#155 MF on 07.28.17 at 11:27 am

#141 A Reply to #134 M—F— on 07.28.17 at 9:45

Hmm F–I:

Either Financially invincible or financially intolerable.

Not sure which one.

MF

#156 Jessica Lauren Annis, BURPl, MCIP, RPP on 07.28.17 at 11:39 am

Watch Randal O’Toole: War on Home ownership. “Smart Growth” is the culprit of the housing crisis & current crash, just like in the USA.
http://www.operationpushback.ca/blog/randal-otoole-war-on-home-ownership

In September I wrote about the real culprit of the housing crisis – land use planning & housing tax policies. http://www.operationpushback.ca/blog/archives/09-2016

In May, CANCEA blamed “bedroom hoarding grannies” for the housing crisis (I kid you not) and the politicians and land use planners ate it up. http://www.operationpushback.ca/blog/and-the-winner-is-bedroom-hoarding-grannies

(I am a land use planner in ON. I knew the crash was coming, just not when. I am frankly surprised it took this long).

#157 Johnny Boy on 07.28.17 at 11:40 am

#112 SAD SM on 07.28.17 at 1:37 am

My goodness, why does anyone read Smoking Man’s lies.
A self admitted liar who stirs the pot with: I am a tech man; and I am writer; I am a coder; and I millionaire; I sold at the ‘top’, etc…..

Classic narcissist seeking the attention of other anonymous trolls….sad
…………………………………………………………………..
Ha Smoking Man is the biggest liar on this blog. He is truly a sad sack of crap. The truth of the matter is he brags about taking the money and running. However a true millionaire could not give two shits about his real estate as that is not an investment income. He lost his home as he lost his job and became unemployable for some particular reason then had to sell, so now hes making up excuses and backtracking to support his position as an astute investor and seer of all things to come. Anybody who kept up with the market knew this was coming. But reading his whimsical crap is entertaining, sort of like watching the monkeys in a zoo playing with a loaded gun.

#158 Howard on 07.28.17 at 11:45 am

#145 Lee on 07.28.17 at 10:03 am
#132 MAXX,

You people just don’t get it. There are over 150,000 on our Ontario Sunshine, if one includes people just under $100,000 a year who are being kept off strategically by Ms. Wynne. Add in Federal employees, and we’re pushing 200,000 families in and around Toronto that have one income earner earning at least $100,000, plus gold plated pensions.

———————————-

Are you one of them Lee?

#159 Braj on 07.28.17 at 11:58 am

#112 SAD SM on 07.28.17 at 1:37 am
My goodness, why does anyone read Smoking Man’s lies.

A self admitted liar who stirs the pot with: I am a tech man; and I am writer; I am a coder; and I millionaire; I sold at the ‘top’, etc…..

Classic narcissist seeking the attention of other anonymous trolls….sad

Are you using your brain? If he wanted attention, he’d be at the pride parade in leather pants with his ass hanging out wrapped in rainbows.

A non-clear divide between fiction and non-fiction in SM’s writing is what keeps SM interesting to us I think.

#160 Reality 1 on 07.28.17 at 11:59 am

in reply to comment # 145 Lee

It is you that ‘doesn’t get it’ !

Where do you think civil servant wages and benefits come from ?

The more you pay out to civil servants, the greater the cost of taxes and fees for all home “owners” and citizens to pay for this.

Ergo, less money (after tax disposable income) to buy things in the economy which ultimately means less money for housing.

Add that fact to increased interest rates and you have LESS money for housing.

#161 maxx on 07.28.17 at 12:03 pm

#37 Guy in Calgary on 07.27.17 at 7:25 pm

You’re each other’s most important asset and over time, you’ll be even more amazed at how lucky you both are.

Great life attitude – that too will keep you growing $trong in all the ways that matter.

#162 Reality 1 on 07.28.17 at 12:08 pm

question to # 155 JESSICA Lauren Annis

1) Do you expect any changes in the current land use regulations in Ontario to allow greater development / density ?

2) What would be those changes in your view, if any ?

3) What time frame to re-write or change extant policies if changes were to be made ?

Your professional input would be greatly appreciated here I believe as it speaks to the ‘supply’ side of housing, which I agree is at the heart of this crisis.

#163 Rational Optimist on 07.28.17 at 12:16 pm

Canada’s GDP expanded by 4.6% in the year up to May, strongest pace in 17 years

http://www.cbc.ca/news/business/canada-gdp-may-1.4225650

“Canada’s economy grew by 0.6 per cent in May, the seventh straight monthly gain.

The overall economy has grown by 4.6 per cent in the 12 months leading up to the end of May, Statistics Canada said. That’s the biggest 12-month figure since 2000.

The strong showing blew past what economists were expecting, which was modest growth of 0.2 per cent for the month…

…Oil and gas extraction grew by 7.6 per cent, while manufacturing grew by 1.1 per cent.

Real estate, rental and leasing shrank by 0.2 per cent.”

Rate hike in October?

#164 HaHaHa on 07.28.17 at 12:25 pm

Alberta and the NDP. Fellow Albertans answer please. After living through one Trudeau nightmare and seeing another come in my lifetime started thinking to myself….really? Brian Jean is already talking about hacking and slashing government jobs. Okay I get it. Times have changed and the province has gone through another boom bust. Question is what good is it for Alberta to get its fiscal house in order so the other provinces can rape us again when and if another boom comes? Time to change the game. If oil went to 100 per barrel we should spend as though its 150. Why should WE let the rest of Canada suck at the Alberta tit again? Call it fiscal separation if you will. I despise these socialists but why should we have less services here so the clowns in Ontario and Quebec and face it Newfoundland can keep getting transfer payments? This is the question. Please Liberal voting easterners need not answer. Go prance at a parade with your PM with the 10 million dollar man

#165 Ole Doberman on 07.28.17 at 12:35 pm

wow loonie just went parabolic:

http://www.bnn.ca/canada-posts-small-budget-surplus-to-start-fiscal-year-1.816292

no wonder T2 made Rolling Stone

#166 maxx on 07.28.17 at 12:38 pm

#54 Danny on 07.27.17 at 8:30 pm

“……so they say to their agents and to the clients hang tough.
……keep the product priced high long enough to exhaust the buyer.”

The only buyers who will capitulate through exhaustion will be the low wattage ones. Moreover, the next demographic to discover absolute disrespect and revulsion towards realtards is the very one that was encouraged to “hang tough”.

Low cash flow at retirement anyone? Just hang tough.

#167 n1tro on 07.28.17 at 12:41 pm

#55 Grey Dog

Who cares who they put on the cover. Its more the biased “journalism” that is in it that is more of a concern. Words do matter.

http://www.nbcnews.com/news/us-news/rolling-stone-magazine-settles-rape-story-lawsuit-1-65-million-n772006

#168 conan on 07.28.17 at 12:43 pm

Ottawa all weekend. We are going to run out of Cheetos soon.

https://www.youtube.com/watch?v=9H2gEhfn7v0

https://youtu.be/ZkeX28qiXKI?t=678

#169 westcdn on 07.28.17 at 1:00 pm

There are a lot of things I just not know. When faced with uncertainty, I just try to use common sense and what other people have to say about their experiences under the same circumstances.

I have a determination to move past my mistakes and learn from them. My divorce was painful. I think my losing nearly 40% (~700 k$) of our combined savings during the height of the great financial crisis brought it to a head. My former was mad at me and found my deficiencies suddenly intolerable but I think there is more of the story she hid from me.

I recovered my financial losses and then some. I am a lone wolf but I do have grandchildren. I don’t know how they will turn out and I wonder where the fair skin and blond hair comes.

Feeding birds is something I like to do. I used to go to the Inglewood Bird Sanctuary and feed the chickadees by hand. Then a forest ranger showed up to tell me I was causing nature great harm by not letting them to survive on their wiles. I became a miscreant on the spot.

I thought this was a good picture of leadership.
https://www.armstrongeconomics.com/international-news/nature/nature-taking-care-of-the-elderly/

#170 IHCTD9 on 07.28.17 at 1:00 pm

#145 Lee on 07.28.17 at 10:03 am

You people just don’t get it. There are over 150,000 on our Ontario Sunshine, if one includes people just under $100,000 a year who are being kept off strategically by Ms. Wynne. Add in Federal employees, and we’re pushing 200,000 families in and around Toronto that have one income earner earning at least $100,000, plus gold plated pensions. Bankers will tell you this is enough to sustain prices in Toronto forever. There is no crash coming. The 15% we’ve lost this year was because of the craziness of last year, and even after 15% we’re still 100% over 2012 levels and 200% over 2009 levels. I am starting to feel really bad for you dreamers caught in this illusion that real SF houses in Toronto will soon be priced with Barbie Malibu houses at Toy’s R’ Us. Get Woke people. People don’t work hard ever day all their lives to hand over their property for nothing. After almost 10 years of reading this blog I have only one thing to say to the dreamers: Suckers.
___________________________

Just did a few quick calculations:

A couple, one Sunshiner making 100K, the other a private sector grunt making 60K, will have a combined take home of less than 118,800.00 (I deducted income taxes only off their individual grosses)

If they bought a “decent” 1.5 million detached shack in the 416 at 3.0%, they’d be looking at a $7098.00/monthly payment. When they renew in 5 years, they could be looking at a new rate of 5.0%+, which puts their payment at 9155.00/ month.

That’s 72%-92% of their entire combined income.

I can’t see how 160K puts any GTA’er in a great position to buy a house – Condo maybe, but SFD? No way.

We paid off our house with ease, it was about 1.5X our income at the time. That’s the kind of ratio that would support big increases – the realistic example above is 9.5X income, and they could not even consider moving into an actual “nice” 2+ Million house in a decent area because they simply do not earn enough, neither would a couple who grossed 200K. Everyone is already eating their lawn trying to make the mortgage payment

Median Household Income in Toronto is only $78,000.00 (StatsCan 2015). That is 8,000 less than remote Thunder Bay. Thunder Bay does not have more expensive houses than Toronto. Not by a long shot.

#171 TheDood on 07.28.17 at 1:01 pm

#137 oh my on 07.28.17 at 9:20 am
148 Caproni Dr, Vaughan

Listed for $1.188M in March 2017 and sold for $1.680M a week later.

Now back on the market for $1.680M.

How much do you think the buyers will get?
___________________________________________

Laughable!

In my opinion – thats a $500K-$550K property.

Who knows, GTA apparently full of dummies who might be willing to part with twice that, or worse, the asking price. Let’s hope nobody gets themselves into that kind of debt for what amounts to a roof over their head.

#172 Lee on 07.28.17 at 1:02 pm

#149 MAXX,

Why do you think that union contracts last three years (coincidentally shorter than most mortgage terms)? When these agreements come up for renewal they will include a mortgage premium to cover people’s increased costs on their mortgages. Just like many government workers have wages tied to minimum wage such they are always paid $x an hour more than minimum wage. These are indirect ways for the government to increase wages for government workers without actually saying so. The next time up the union will say interest rates are up 2% so each worker gets a $3,000 one-time bonus to cover these costs for the next three years (or last three depending on how you look at it). They can all also get small advances on their pensions to cover unexpected life costs.

#173 Dissident on 07.28.17 at 1:02 pm

I think Garth is OOTO today.

@ Wolf_eats_his_kitten #25 – see, that’s what most people dream of doing. I own property, but not with those margins. Still decent, but not doubling my money. That’s cray. Good for you, bro.

Guys, get your whining caps on …Xennial here, and I can barely afford a house in Mimico or Longbranch that is not a dank, mouldy hellhole. Coulda, woulda, shoulda two even three years ago, but hubby was dragging his feet. Its painful when you remember seeing a tiny 2 bedroom in Mimico 2 years 8 months ago on MLS, and then you see it listed AGAIN after the flippers had their shoddy way with it, aka “Uncle Jim was here” throwing down some whack flooring, etc (Me: How long did the owners live here?
Agent: “oh, for about a year, then they rented it to an older couple, now they’re selling” – translation: the flippers “lived” aka renovated it for a year, then rented it out for a year, and now realized, hey, we better sell, cause market’s going down. Me: Why are they selling?
Agent: “Oh they have other properties”. Of course they do buddy, of course they do. And that mercedes sedan is a lease).

Been “seeing” houses for the last two weeks with a realtor we signed up with. You would not believe what passes for $670K. Just came back from a little trip like that; wet basement, crumbling foundation, cruddy carpets/wallpaper from the 60s (your Boomer golden years no doubt). A crack house.

Previously, we had been thinking of renting an entire house, basement included, in the same area, and would you believe, we were also looking at dank, mouldy hellholes…literally fluffy, green mold patches were growing on the white baseboards in the basement, except this was not a week old sandwich, this was a freakin’ house. It baffles me as to why that person doesn’t just sell it. It was easily built in 1920 or 1930, and has brass radiators…probably all profit if they sold now, but no, they want to hang onto this decrepit thing for rent income…good luck with that. Any realtor worth their salt would not touch that with a ten foot pole. Who would trust them to sell them something that is not total crapola if they associate themselves with a compost heap.

If its not at least $775K in Mimico/Longbranch, then its going to be shoddy. Even the detached/semis in Centennial Park area south of the airport are $70K more than they were last time we looked. Last one we saw there was $700K, and that was on the ‘low end’.

So basically, we waited too long to get into the good enough areas of Toronto. Now what. Move to Keele and St. Clair I guess. Or keep on trying in Mimico/Longbranch.

Its getting ugly. And I don’t really buy this ‘housing crash’ business. Houses are going up to 1 Mil and not coming down from there. The only ones that are coming down a bit are the ones that are well over 1 Mil in Vaughan, Newmarket, etc. The FOMO is freakin’ real.

Challenge – find me a newer 3 bed detached/semi/town-house in Etobicoke south of the 401 for around $700K (including maint fees). Answer: its tough going.

Why developers don’t make more 3-bedroom condos is a whole other conversation. But we want a multi-level house, for reasons other than children. So that’s that.

Wish me luck. I am seeing another house tonight.

#174 YYC Geer on 07.28.17 at 1:06 pm

Reply to:
#158 Braj on 07.28.17 at 11:58 am
#112 SAD SM on 07.28.17 at 1:37 am
My goodness, why does anyone read Smoking Man’s lies.

A self admitted liar who stirs the pot with: I am a tech man; and I am writer; I am a coder; and I millionaire; I sold at the ‘top’, etc…..

Classic narcissist seeking the attention of other anonymous trolls….sad

Are you using your brain? If he wanted attention, he’d be at the pride parade in leather pants with his ass hanging out wrapped in rainbows.

A non-clear divide between fiction and non-fiction in SM’s writing is what keeps SM interesting to us I think.
—————————————————————–

Braj, +1

SM is so funny BECAUSE he is so ridiculous. He hides some nuggets of true insight and knowledge among the greater flow of BS and troll-bait. :)

#175 Asterix1 on 07.28.17 at 1:10 pm

#170 TheDood on 07.28.17 at 1:01 pm
#137 oh my on 07.28.17 at 9:20 am
148 Caproni Dr, Vaughan

Listed for $1.188M in March 2017 and sold for $1.680M a week later.

Now back on the market for $1.680M.

How much do you think the buyers will get?
____________________________________________

Its in the middle of nowhere (brutal commute if you work downtown) in a cookie cutter subdivision.

Should not be worth more than 650K$!

#176 Globally diversified portfolio on 07.28.17 at 1:14 pm

The good old CAD is hammering it

What happened to the dollar seeing .65c ?

One thing I’ve learned threw time is not there are NO experts . All these financial bloggers r evidence

#177 Smoking Man on 07.28.17 at 1:15 pm

#156 Johnny Boy on 07.28.17 at 11:40 am
#112 SAD SM on 07.28.17 at 1:37 am

My goodness, why does anyone read Smoking Man’s lies.
A self admitted liar who stirs the pot with: I am a tech man; and I am writer; I am a coder; and I millionaire; I sold at the ‘top’, etc…..

Classic narcissist seeking the attention of other anonymous trolls….sad
…………………………………………………………………..
Ha Smoking Man is the biggest liar on this blog. He is truly a sad sack of crap. The truth of the matter is he brags about taking the money and running. However a true millionaire could not give two shits about his real estate as that is not an investment income. He lost his home as he lost his job and became unemployable for some particular reason then had to sell, so now hes making up excuses and backtracking to support his position as an astute investor and seer of all things to come. Anybody who kept up with the market knew this was coming. But reading his whimsical crap is entertaining, sort of like watching the monkeys in a zoo playing with a loaded gun..
……

Good one, what’s wrong with being a narcissist anyway. Just look at what Trump did with that Characteristic: He’s the President of the United states.

Kids, don’t listen to teachers, the reason they try and convince you Narcissism is bad. They are grooming you to be someone’s bitch at a job.

Show me any self-made CEO, I’ll show you a Narcissist.

Appointed CEO’s don’t count.

#178 YYC Geer on 07.28.17 at 1:18 pm

Reply to:
#168 westcdn on 07.28.17 at 1:00 pm
There are a lot of things I just not know. When faced with uncertainty, I just try to use common sense and what other people have to say about their experiences under the same circumstances.

I have a determination to move past my mistakes and learn from them. My divorce was painful. I think my losing nearly 40% (~700 k$) of our combined savings during the height of the great financial crisis brought it to a head. My former was mad at me and found my deficiencies suddenly intolerable but I think there is more of the story she hid from me.

I recovered my financial losses and then some. I am a lone wolf but I do have grandchildren. I don’t know how they will turn out and I wonder where the fair skin and blond hair comes.

Feeding birds is something I like to do. I used to go to the Inglewood Bird Sanctuary and feed the chickadees by hand. Then a forest ranger showed up to tell me I was causing nature great harm by not letting them to survive on their wiles. I became a miscreant on the spot.

I thought this was a good picture of leadership.
https://www.armstrongeconomics.com/international-news/nature/nature-taking-care-of-the-elderly/
—————————————————————-

Thank you for sharing your story and lessons with us. I’m so very glad to hear that you’ve made it through your personal crises with your sanity, empathy, and family relationships (grandchildren) intact.

And thank you for sharing that photo. I’ve seen it before but it is always a wonderful reminder of what it means to be a true leader. The best thing you can do moving forward is be the alpha wolf of your family; impart on them as much of your wisdom and knowledge as possible and watch over them as a protector and leader.

#179 InvestorsFriend on 07.28.17 at 1:21 pm

Alberta Myths

HaHaHa at 163 said:

Why should WE let the rest of Canada suck at the Alberta tit again?

****************************************
A few things. There is no “WE”. YOU do not own the oil that the province of Alberta owns. You are on your own economically. There is no “team Alberta”.

Actually, any oil currently produced in Alberta must be owned by the producers which in turn are owned by shareholders from all over. Alberta collected a fee when they sold the right to extract the oil ahead of time and collects a royalty fee. Ottawa collects income taxes from the producers.

The Alberta government does not pay a penny into equalization, that comes solely from Federal government revenues.

Residents of Alberta, including myself, are citizens of Canada and owe some duty of loyalty to Canada. I don’t think we owe any duty of loyalty to the province. Disloyalty to Canada is not a good thing.

It would be highly rude of me to point out that the geography that is Alberta was once part of the North West Territories owned by the federal government and /or the original provinces. Also rude to point out that when Alberta was granted status as a province it did not originally get control of its resources that came some years later.

Residents of Alberta are, on average, doing well. Ottawa collects more income tax in Alberta than it spends here because incomes are higher than average in Alberta. Why is that something to complain about?

#180 paracho on 07.28.17 at 1:29 pm

Looks like there is more evidence for a rising interest rate . Plus we do follow the US Fed, which has a high probability of raising interest rates .
https://www.theglobeandmail.com/report-on-business/economy/growth/canadas-economic-growth-blows-past-forecasts-in-may/article35826298/

#181 Smoking Man on 07.28.17 at 1:54 pm

DELETED

#182 Logical Millennial on 07.28.17 at 1:57 pm

#127 Ace Goodheart

I can’t speak for all millennials but most of my reading content are online articles, social media sites, and blogs found online. Reddit mostly, Facebook sometimes, this blog every day, and some online newspapers if they have a comments section. I believe the only time I look at magazines is to glance at the cover while waiting in the check out line at the store.

#183 InvestorsFriend on 07.28.17 at 2:08 pm

Latest Mortgage arrears figures just posted

http://www.cba.ca/Assets/CBA/Files/Article%20Category/PDF/stat_mortgage_db050_en.pdf

Latest numbers are for May. No increase in arrears yet. Ontario at same record low as April. So, probably the climb in arrears begins next month. Outside of Ontario arrears still falling in most provinces.

Ontario is at 0.11%. Apparently, in Ontario, only 1 mortgage in 1000 (well 909 technically) is more than 90 days late.

However, arrears today may not be comparable to arrears of early 1990’s. when Ontario was at this same record low. Today banks offer flexible mortgages with skip a payment (or three) options. Lines of credit are FAR more prevalent today. In other words it is far easier to keep the mortgage current by borrowing to pay it than it ever was.

If it becomes apparent that house prices are sinking (and equity going negative), then we should see arrears rise. Some people in a negative equity position will let it go. A drowning man cannot tread water forever. Even Jack eventually let go and went underwater.

#184 rainclouds on 07.28.17 at 2:26 pm

Its official Christy Clark is done in couple of weeks.
Red/Greens will have a 2 seat cushion.

While I dont begrudge her wanting to move on the timing is auspicious. Apparently her caucus unloaded on her after the election. Today she decided to throw the whole party under the bus.

No doubt the skeletons in the closet that she helped hide will be rattling around soon. ICBC/HYDRO/Developer cash for access, likely the tip of the iceberg……

#185 paulo on 07.28.17 at 2:27 pm

#179 paracho:

street is calling high 70% for October, and near 40% for September!

given the strong data coming out i am suspecting that there is a possibility although light that we could see 2 raises this year .

our loon will benefit from the possibility of a BAT tax from the states, being set aside seems nafta negotiations are on already.

#186 Johnny Boy on 07.28.17 at 2:32 pm

#176 Smoking Man on 07.28.17 at 1:15 pm

#156 Johnny Boy on 07.28.17 at 11:40 am
#112 SAD SM on 07.28.17 at 1:37 am
My goodness, why does anyone read Smoking Man’s lies.
A self admitted liar who stirs the pot with: I am a tech man; and I am writer; I am a coder; and I millionaire; I sold at the ‘top’, etc…..
Classic narcissist seeking the attention of other anonymous trolls….sad
…………………………………………………………………..
Ha Smoking Man is the biggest liar on this blog. He is truly a sad sack of crap. The truth of the matter is he brags about taking the money and running. However a true millionaire could not give two shits about his real estate as that is not an investment income. He lost his home as he lost his job and became unemployable for some particular reason then had to sell, so now hes making up excuses and backtracking to support his position as an astute investor and seer of all things to come. Anybody who kept up with the market knew this was coming. But reading his whimsical crap is entertaining, sort of like watching the monkeys in a zoo playing with a loaded gun..
……………………………………………………
Good one, what’s wrong with being a narcissist anyway. Just look at what Trump did with that Characteristic: He’s the President of the United states.
Kids, don’t listen to teachers, the reason they try and convince you Narcissism is bad. They are grooming you to be someone’s bitch at a job.
Show me any self-made CEO, I’ll show you a Narcissist.
Appointed CEO’s don’t count.
………………………………………………………………..
Narcissism is an inflated view of the self, it is everywhere. Public figures say it’s what makes them stray from their wives. Parents teach it by dressing children in T-shirts that say “Princess.” Teenagers and young adults hone it on Facebook, and celebrity newsmakers have elevated it to an art form. And it’s what’s making people depressed, lonely, and buried under piles of debt.
But having said that you are still hilarious, your flip flops are fantastical and unbelievable as if you live in a completely different world. Perhaps you really are an alien from another world.
https://www.youtube.com/watch?v=U9UkJWL2-jg

#187 not going down on 07.28.17 at 2:45 pm

First of all I am surprised anyone reads smoking man’s post, I literally scroll past all of them. He’s a blowhard fool.

Secondly, I used to be a skeptical bear. I sort of read the news a lot and let my mood fluctuate with what I read. Sometimes I am more pessimistic and sometimes more optimistic.

But here is the thing. . .

No matter what I read now, I seem to be a real estate bull. Why? Because I just can’t see any end to it. Take it for what it’s worth. This is my gut feeling these last few years and it’s made me money. No matter how hard I try to be a skeptic “housing” is a necessity, and I can see that anything associated with it is booming. Whether you rent or own. A buddy of mine bought a rental and was amazed at the amount of people lining up for it. Likewise, a couple I know bought a house and was amazed at the amount of offers on it.

So. . .

Figure it out. Do you really think that all of a sudden everyone is going to realize they made a mistake investing in a house or apartment and they are going to sell it all at a huge loss (to who I have no idea) and then just try to start over? Grab a brain people, when your butt is over the fire you will do ANYTHING to keep what you have. The gov’t knows interest rates are not going back to anything above 4-5% probably ever again, and the smart people buying know this as well. In the meantime assume a mortgage you can handle at these historic low rates and use the benefit of these interest rates to pay down that mortgage. 2025 rates will not be above 4-5% and the mortgages will be eaten up by inflation and modest increases in home prices and some paid down too.

No crash. At least not in the next 5 years. Modest price increases, higher interest rates. Yes, it get’s worse if you haven’t bought.

Stunning how willfully blind (or ignorant) people are to monetary policy. — Garth

#188 Shortymac on 07.28.17 at 2:48 pm

@Dissident on 07.28.17 at 1:02 pm

I think that a lot of sellers still think it’s 2016 and have listed under those prices. Wait until the winter, that is when the panic will truly set in.

I’m also looking for a whole house and I suggest either Vaughn or Richmond hill for decent whole house rentals in the 2000-2500 range.

Lots of inventory up there and all relatively new and updated.

My plan is to wait for next year, that is when people will be willing to get out no matter what.

#189 Potatoe Head on 07.28.17 at 3:08 pm

Good one, what’s wrong with being a narcissist anyway. Just look at what Trump did with that Characteristic: He’s the President of the United states.

Kids, don’t listen to teachers, the reason they try and convince you Narcissism is bad. They are grooming you to be someone’s bitch at a job.

Show me any self-made CEO, I’ll show you a Narcissist.

Appointed CEO’s don’t count.
——

Show me any sociopath or serial killer and I will show you a narcissist.

Does that equivalency work for you?

And lets not try to compare your dried up, has been, drunken poor self with a CEO or president….

#190 Potatoe Head on 07.28.17 at 3:16 pm

I thought this was a good picture of leadership.
https://www.armstrongeconomics.com/international-news/nature/nature-taking-care-of-the-elderly/

——–

Totally agree.

Lets put the weak and the old first so that they get taken out in the case of an ambush, preserving the productive members of society.

In days gone by in this continent, the elderly would be left behind in camps as the others packed up to move the camp to greener pastures. Or they would be put on icebergs to be sent adrift.

I am sure that a lot of millennials feel this way about there older generation when they see the bleakness of their housing future.

#191 RE Game Changer on 07.28.17 at 3:24 pm

Looks like new banking rules could be a game change for RE markets like Vancouver where its a well known and well documented centre of tax evasion – if the provincial government actually assists.

http://vancouversun.com/news/local-news/new-canadian-banking-rules-called-game-changer-for-real-estate-tax-evasion

#192 Same Same on 07.28.17 at 3:27 pm

#183 rainclouds on 07.28.17 at 2:26 pm
Its official Christy Clark is done in couple of weeks.
Red/Greens will have a 2 seat cushion.

While I dont begrudge her wanting to move on the timing is auspicious. Apparently her caucus unloaded on her after the election. Today she decided to throw the whole party under the bus.

No doubt the skeletons in the closet that she helped hide will be rattling around soon. ICBC/HYDRO/Developer cash for access, likely the tip of the iceberg……

——-

No, a by-election will be called for her seat in 2 weeks and the Liberals will remain with 43 seats.

No change.

You do understand that her Kelowna riding was selected for the party leader because its a Liberal bastion right?

#193 45north on 07.28.17 at 3:27 pm

Article by Josh Wingrove, Vancouver Sun, July 28 2017

the first quote supports my view that higher interest rates do not favour Trudeau

Officials within Prime Minister Justin Trudeau’s government are concerned the Bank of Canada is moving too quickly to raise interest rates, fearing higher borrowing costs could inadvertently trigger a downturn.

the following quote supports Mark’s comments on inflation:

Household debt is at unprecedented levels in an economy that has relied mostly on consumer spending for growth since the 2008-09 recession. The central bank decided July 12 to raise borrowing costs against a backdrop of broadening disinflation that seemed to argue against such a move.

the next quote also supports my view that higher interest rates do not favour Trudeau

Trudeau faces potential political fallout from any hike. Canada’s most indebted households overlap demographically with his base of support — higher debt servicing costs spell trouble for the poster-family of Trudeau’s first budget

I got the quotes from Press Reader

#194 Jessica Lauren Annis, BURPl, MCIP, RPP on 07.28.17 at 3:30 pm

#161 Reality 1

1) Yes, the provincial gov’t just passed new, higher density targets which came in force on July 1st (I believe) – which means the last 5 years of planning work across the GGH is now useless. As well, imposing higher density won’t solve the problem of the dearth of supply of single family dwellings. Lastly, given the new targets, land use planners are pushing the idea that single family dwelling neighbourhoods (called stable neighbourhoods) should lose their current zoning protections. But if you ask questions about the negative impacts of high density on people (like I did at the last conference) you’re called a bigot. (sigh)

2) Land use planners (not all, but the ones in charge) have been thoroughly indoctrinated by the social engineers. They refuse to admit culpability for the housing crisis/crash, so they will continue on this ruinous path. They will never admit that “sustainability” is a top-down, authoritarian, collectivist ideology, masquerading as a grassroots, environmental movement.

If it was up to me, I would repeal all provincial government land use plans and delegate planning authority back to municipalities. Also, I would allow municipalities to de-amalgamate if they so chose. It’s time to increase competition between municipalities to attract residents.

3) Timeframe: Repealing legislation is (technically) easy, but the globalist NGOs would go nuts. It’s an ideological war fought by the collectivists to incrementally destroy private property rights, the foundation of western, developed civilization. That may sound hysterical, but I’ve been involved in this battle since 1999, and I can tell you, these ideologues mean business and have enormous power.

I don’t mean to be such a downer, but I think that it’s important to get the message out, let people know what is really going on as MSM does not report. (And please, don’t shoot the messenger!)

#195 Fake News Again on 07.28.17 at 3:31 pm

No crash. At least not in the next 5 years. Modest price increases, higher interest rates. Yes, it get’s worse if you haven’t bought.

Stunning how willfully blind (or ignorant) people are to monetary policy. — Garth

___________________

Monetary policy that has barely budged in ten years….

#196 waiting on the westcoast on 07.28.17 at 3:32 pm

#188 Potatoe Head on 07.28.17 at 3:08 pm
Re:SM “And lets not try to compare your dried up, has been, drunken poor self with a CEO or president….”

I hate to tell you but I could see SM running a startup… Maybe not a larger org because he would probably explode while observing all the bullshit.

As for the Presidency, I think both the leadership of Canada (PM) and the US demonstrate that no particular skill except theatrics are required. And SM has theatrics (at least in his writing here) down…

#197 Alistair McLaughlin on 07.28.17 at 3:34 pm

Garth, do you know if Morneau’s plans to quash “income sprinkling” will include shutting down the use of family trusts? Right now you can hold a corporation in a family trust, and use that trust as a flow-through entity to distribute corporate income to any beneficiary named in the trust. It’s a strategy that was confirmed as legal by the Supreme Court in 1998. That case arose the last time the government tried to shut it down. I’ve seen Morneau talk about “corporations” a lot, but he hasn’t mentioned family trusts.

Yes. count on it. — Garth

#198 Leo Trollstoy on 07.28.17 at 3:55 pm

Common sense is what ppl use to remain common

#199 AGuyInVancouver on 07.28.17 at 3:58 pm

#72 DON on 07.27.17 at 9:40 pm
Re post – spelling, yes I need to slow down

71 DON on 07.27.17 at 9:36 pm

General question to all: If foreign buyers are driving the market, where did they go? Why the pause/decline in sales, prices etc? Did their perceptions change? Why isn’t the market still rocking like it once was? Why aren’t we experiencing new highs month over month? We haven’t gone through a financial crash like 2007. SO why are things still stalling? What is the catalyst?

Just a few questions.
_____________________
“Strict new government scrutiny on Chinese people who want to convert their money into other currencies threatens to slow the rush of foreign property buying that has stoked sky-high home prices in Canada and around the world.

For months, China has sought to dam the flood of money pouring out of its borders, which has rapidly diminished its stockpile of foreign reserves.

It has raised new barriers to companies buying abroad and moving money out of the country..”
https://www.theglobeandmail.com/real-estate/china-canada-foreign-buyers/article33485996/

Asked and answered.

#200 Invisible Hand on 07.28.17 at 4:24 pm

#153 IHCTD9
These two houses never would have even been listed at all if that first house went for ask, so that one sale prompted at least two new very high priced listings. Call it greed, call opportunism, call it capitalism,

I call it a free market.
And one that is working.

Price will regulate supply.
As prices go up, more sellers come to the market.

The invisible hand pushing the baby boomers to the market.
A beautiful mechanism that is proven to work.

#201 Fiction on 07.28.17 at 4:37 pm

#158 Braj
A non-clear divide between fiction and non-fiction in SM’s writing is what keeps SM interesting to us I think.
My 2¢:
Smoking Man is not, and never was, interesting.

#202 Reality 1 on 07.28.17 at 4:39 pm

reply to comment # 193 JESSICA LAUREN ANNIS

Thank you very much for your ‘most excellent’ reply.

You “know your onions” as they used to say.

Your information is totally consistent with the recent legal advice I have been given with respect to developing land holdings. ( including your thoughts / opinions on the process).

You are a rare bird that not only can opine on the facts of the legislation, but also on the agenda behind it – social engineering.

Perhaps at the next planning meeting you can inquire of these communists as to what style homes they live in and how they feel about re-zoning their SFH neighbourhoods to medium or high density for some nice infill multifamily towers ?

#203 SimplyPut7 on 07.28.17 at 4:41 pm

#137 oh my on 07.28.17 at 9:20 am
#170 TheDood on 07.28.17 at 1:01 pm
#174 Asterix1 on 07.28.17 at 1:10 pm

Looks like the buyers walked.

Since March 2017, very few homes in Vaughan sell for that price, and there are nicer homes that have better upgrades, on the market in that area for less, like this one below:

https://www.rew.ca/properties/N3885656/121-broomlands-drive-vaughan-on

Both 148 Caproni Dr and the one above are overpriced, especially if we get 3 more rate hikes before the end of 2018.

They may try to argue they are a 5 bedroom 5 bathroom house, but families with younger children with that type of budget, may prefer to live in Toronto to spend more time with family and save an hour each way commuting to and from work.

They may get $1.35 million if someone really needs a 5 bedroom 5 bathroom house, before the next rate hike. But if early September is flooded with better listings and they have to sell in the fall; I think they may get $1.1 million to $1.25 million.

Access to mortgages in the GTA is still easy and home values have not fallen drastically either.

#204 Stan Broock on 07.28.17 at 4:41 pm

#164 Ole Doberman on 07.28.17 at 12:35 pm
wow loonie just went parabolic:

http://www.bnn.ca/canada-posts-small-budget-surplus-to-start-fiscal-year-1.816292

no wonder T2 made Rolling Stone

—————————

The CAD went up because of the ‘good news’ of having lower deficit than expected for the first 2 months of the fiscal year.

The problem of course is that the deficit will show itself big time – almost 30 billions this year.

Plus the deficit of subprime CHCM loans that would never have been made if not for CMHC ‘insurance’.

I figure it out to be 70 billions + in real deficit annually which is hidden due to miss-priced risks.

So we are lying to our-selfs and the world on the true state of our affairs. How long could that go before blowing catastrophically?

Nobody knows but things will revert to normal and fake wealth will disappear at some point in time.

Just don’t use leverage if you short the economy/the loonie.

Nothing to do with the deficit. — Garth

#205 HaHaHa on 07.28.17 at 4:42 pm

Response to Investors friend…… Great rebuttal. So to answer my question then as an Albertan we should get our fiscal house in order again and eliminate services for us so the rest of the provinces spend like drunken sailors again? Spare the grade 2 history lesson as to ownership. I think the Cree, Sarcee, Peigan, Assiniboin, etc were here first. Then owned possibly by the Hudson Bay Company, thus Great Britain. Its the year 2017. Seems the general consensus is globalization works so why do I owe the dominion of Canada anything? Personally I could care less. Its the young Albertans who will get screwed again by another Trudeau. Just an opinion though so don’t flip out please.

#206 Potatoe Head on 07.28.17 at 4:43 pm

#195 waiting on the westcoast on 07.28.17 at 3:32 pm
#188 Potatoe Head on 07.28.17 at 3:08 pm
Re:SM “And lets not try to compare your dried up, has been, drunken poor self with a CEO or president….”

I hate to tell you but I could see SM running a startup… Maybe not a larger org because he would probably explode while observing all the bullshit.

As for the Presidency, I think both the leadership of Canada (PM) and the US demonstrate that no particular skill except theatrics are required. And SM has theatrics (at least in his writing here) down…

——-

I hate to tell you, but I could see SM has losing it on a group of social justice warriors and taking out a few, only be taken down himself and thrown in jail….

Maybe not a larhe group of SJWs, but maybe just a few…

And start-up CEOs are a dime a dozen…incorporate, say you have some disruptive technology, and call yourself a CEO.

#207 Reality 1 on 07.28.17 at 4:47 pm

to JESSICA LAUREN ANNIS

forgot to add;

You are one smart lady and anyone employing you is lucky to have you work with them if your comments at # 193 are anything to go by.

I do hope that you work for private industry as your type of zeal is / will be rewarded by private guys like me that seek balanced and informed, but also aware advice and direction.

The very best of luck to you.

#208 Stan Broock on 07.28.17 at 5:13 pm

Nothing to do with the deficit. — Garth

If not for the ultra-subprimes by CMHC we need to run 70 + billion deficit a year just to stay afloat.

now this is achieved through expansion of the insured mortgages balance sheet, e.g hidden liabilities.

at some point it will blow up.

#209 jess on 07.28.17 at 5:19 pm

fake accounts … and now this!

Wells Fargo Forced Unwanted Auto Insurance on Borrowers

By GRETCHEN MORGENSONJULY 27, 2017
https://www.nytimes.com/2017/07/27/business/wells-fargo-unwanted-auto-insurance.html?mtrref=undefined

…”pushed roughly 274,000 Wells Fargo customers into delinquency and resulted in almost 25,000 wrongful vehicle repossessions, according to the 60-page report, which was obtained by The New York Times.

=========================
Wells Fargo at It Again, Stuck Over 800,000 Customers With Unnecessary Car Insurance
Posted on July 28, 2017 by Yves Smith

#210 Toronto Dweller on 07.28.17 at 5:19 pm

#127 Ace Goodheart
I read mostly online as it’s free. Most paper magz these days consist of paid advertising that might take 1/2 the pages and paid content. In terms of Rolling Stone they did themselves in with the fake rape fiasco couple of years ago and had to pay out some litigation money. https://en.wikipedia.org/wiki/A_Rape_on_Campus

#211 Toronto Dweller on 07.28.17 at 5:22 pm

As a Millenial I would not touch modern built condos with the 10 foot pole. Visited a couple and was really “impressed” with craftsmanship. I could already see costly retrofits of the balconies and windows just 5 years down the line as they would leak. And what’s with the fire alarms going off at the middle of the night?

#212 DON on 07.28.17 at 5:23 pm

#191 Same Same on 07.28.17 at 3:27 pm

#183 rainclouds on 07.28.17 at 2:26 pm
Its official Christy Clark is done in couple of weeks.
Red/Greens will have a 2 seat cushion.

While I dont begrudge her wanting to move on the timing is auspicious. Apparently her caucus unloaded on her after the election. Today she decided to throw the whole party under the bus.

No doubt the skeletons in the closet that she helped hide will be rattling around soon. ICBC/HYDRO/Developer cash for access, likely the tip of the iceberg……

——-

No, a by-election will be called for her seat in 2 weeks and the Liberals will remain with 43 seats.

No change.

You do understand that her Kelowna riding was selected for the party leader because its a Liberal bastion right?
*****************

And you do know that she fled to Kelowna after being beaten in a Gordon Campbell’s strong liberal riding by David Eby of the NDP. A lot has happened since the election and more dirt will come out prior to the by election – it is called political strategy.

And you do know that the BC Gov has up until 6 months to call a by election. Wonder how long it took Christy to call a by election in the past.

#213 DON on 07.28.17 at 5:27 pm

#198 AGuyInVancouver on 07.28.17 at 3:58 pm

#72 DON on 07.27.17 at 9:40 pm
Re post – spelling, yes I need to slow down

71 DON on 07.27.17 at 9:36 pm

General question to all: If foreign buyers are driving the market, where did they go? Why the pause/decline in sales, prices etc? Did their perceptions change? Why isn’t the market still rocking like it once was? Why aren’t we experiencing new highs month over month? We haven’t gone through a financial crash like 2007. SO why are things still stalling? What is the catalyst?

Just a few questions.
_____________________
“Strict new government scrutiny on Chinese people who want to convert their money into other currencies threatens to slow the rush of foreign property buying that has stoked sky-high home prices in Canada and around the world.

For months, China has sought to dam the flood of money pouring out of its borders, which has rapidly diminished its stockpile of foreign reserves.

It has raised new barriers to companies buying abroad and moving money out of the country..”
https://www.theglobeandmail.com/real-estate/china-canada-foreign-buyers/article33485996/

Asked and answered.
***************

Yup – started happening months ago – articles in Aussie papers of a Chinese dude who may not pay his Australian mortgage payments for fear of being found moving money out of China. It wasn’t worth what the government would do to him.

#214 DON on 07.28.17 at 5:30 pm

#186 not going down on 07.28.17 at 2:45 pm

First of all I am surprised anyone reads smoking man’s post, I literally scroll past all of them. He’s a blowhard fool.

Secondly, I used to be a skeptical bear. I sort of read the news a lot and let my mood fluctuate with what I read. Sometimes I am more pessimistic and sometimes more optimistic.

But here is the thing. . .

No matter what I read now, I seem to be a real estate bull. Why? Because I just can’t see any end to it. Take it for what it’s worth. This is my gut feeling these last few years and it’s made me money. No matter how hard I try to be a skeptic “housing” is a necessity, and I can see that anything associated with it is booming. Whether you rent or own. A buddy of mine bought a rental and was amazed at the amount of people lining up for it. Likewise, a couple I know bought a house and was amazed at the amount of offers on it.

So. . .

Figure it out. Do you really think that all of a sudden everyone is going to realize they made a mistake investing in a house or apartment and they are going to sell it all at a huge loss (to who I have no idea) and then just try to start over? Grab a brain people, when your butt is over the fire you will do ANYTHING to keep what you have. The gov’t knows interest rates are not going back to anything above 4-5% probably ever again, and the smart people buying know this as well. In the meantime assume a mortgage you can handle at these historic low rates and use the benefit of these interest rates to pay down that mortgage. 2025 rates will not be above 4-5% and the mortgages will be eaten up by inflation and modest increases in home prices and some paid down too.

No crash. At least not in the next 5 years. Modest price increases, higher interest rates. Yes, it get’s worse if you haven’t bought.

Stunning how willfully blind (or ignorant) people are to monetary policy. — Garth
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Stunning is putting it lightly. This person must have just graduated from high school and I can forgive him/her for not understanding history or having no knowledge of it.

#215 DON on 07.28.17 at 5:36 pm

#194 Fake News Again on 07.28.17 at 3:31 pm

No crash. At least not in the next 5 years. Modest price increases, higher interest rates. Yes, it get’s worse if you haven’t bought.

Stunning how willfully blind (or ignorant) people are to monetary policy. — Garth

___________________

Monetary policy that has barely budged in ten years….
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“Monetary policy that has barely budged in ten years….”

Could that be due to a nasty Financial crisis…? Even with the power of google people still remain in the dark left to believe only their thoughts.

#216 Tony on 07.28.17 at 5:41 pm

Re: #186 not going down on 07.28.17 at 2:45 pm

There’s a lag period of time between when a house or residence falls in price and the rent consequently falls in price. That’s what has you befuddled. You’ll figure it out when you see residential rents drop wholesale.

#217 Reximus on 07.28.17 at 6:20 pm

There’s a lag period of time between when a house or residence falls in price and the rent consequently falls in price. That’s what has you befuddled. You’ll figure it out when you see residential rents drop wholesale.

====

But that won’t happen in a growing population area

#218 TheDood on 07.28.17 at 6:44 pm

#186 not going down on 07.28.17 at 2:45 pm

……The gov’t knows interest rates are not going back to anything above 4-5% probably ever again, and the smart people buying know this as well.
__________________________________________

Wow! Just Wow! I want to say “utter stupidity on display” but I just can’t bring myself to do it.

#219 A Reply to #188 Potato Head on 07.28.17 at 7:46 pm

“Show me any sociopath or serial killer and I will show you a narcissist. Does that equivalency work for you?”

Do you have a background in psychology or psychiatry? You have great instincts and intuition, and are, of course, correct in your assessment and evaluation.

Narcissism, Machiavellianism, and psychopathy make up the dark triad. “All three dark triad traits are conceptually distinct although empirical evidence shows them to be overlapping. They are associated with a callous-manipulative interpersonal style.”
https://en.m.wikipedia.org/wiki/Dark_triad

#220 Linda on 07.28.17 at 8:31 pm

When the people who sell houses & the institutions that loan the funds or insure the loan say to buy, run like hell. Because those folks are not looking out for your best interests, but are facing housing Armageddon regarding price drops & are seeing balance sheets/profit margins going up in flames. Run!

#221 Tony on 07.28.17 at 8:34 pm

Re: #216 Reximus on 07.28.17 at 6:20 pm

It’s etched in stone like death and taxes when house prices fall rents fall. It’s always been that way in the past and it’ll never change in the future. You’re just kidding yourself but only yourself.

#222 conan on 07.28.17 at 10:22 pm

#210 Toronto Dweller on 07.28.17 at 5:22 pm

Cheap hollow core doors do it for me. It is a good indication of a craptastic build. Also, kitchen cabinets designed to last 5 years , and lets not ever forget F.B.I crime scene paint. Cheap commercial paint coatings that retain dirt and finger prints. Non washable for your total inconvenience.

Best trick is to measure out the vestibule and see how out of line it is. It is a good indication of a bad framing job. Bad framing increases the costs of renovating dramatically. Just walk away, no bid.

https://www.youtube.com/watch?v=2oANV6SQhwI

#223 Cloudy on 07.28.17 at 10:33 pm

#125 Dan.t on 07.28.17 at 7:17 am

Yeah I agree it’s shocking how widespread the problem is. Seemingly zero enforcement and there would be a windfall of tax revenue if they would just start cross referencing addresses with other agencies. I am really starting to think they willfully look the other way on housing issues.

#224 Glengarry Girl on 07.29.17 at 9:33 am

#83 TO Renter

I am seeing a lot of similarities to 2008 – 2010 when I lived in Seattle WA. I sold my house in Ontario in 2008, things were bad when I left and I dropped the price 25% from peak to get rid of it. I have been living in all parts of the US renting 9 homes since. I have been living through the booms and busts of several States and am I am very observant of human behaviour. Now, vacationing back home in Ontario, there is some talk of Toronto prices dropping. Other than that my Friends and Relatives do not believe that Canada is in a Debt Crisis even though I believe it is obvious. From experience I can tell you that the denial of the facts will continue through all phases of this correction. People will not admit or talk about their financial decline, even as they move out of a foreclosure to become renters. There is great SHAME in this process. There was a very good BLOG called the Seattle Bubble that documented what was happening. It was excellent and had a great commentary that I enjoyed. However, it was the only place that I read actual data, real estate news and read comments that I could relate to. I think this Blog has similar qualities. The BIG difference is that the US has ZILLOW which shares data like past sales and sold and asking prices on any address. There was a lot of real time data analysed at all 3 price Tiers. This data is very important as the Highest Price Tiers, Medium and lowest all had price depreciations at different times and some more than others. One word of advice I have for all here is that even though you see what is obvious to you, you will not be able to share your views with the masses. If you are thinking this correction will vindicate your beliefs that all those that took on debt were irresponsible and should be punished with losses, you may be disappointed at what comes next. I have learned to keep my mouth shut because no one wants to hear bad news. I have been shunned for talking the truth too often. I have been getting my ducks in a row, waiting for some fiscal common sense to return to Ontario. Not seeing anything remotely close to that yet.

#225 Jessica Lauren Annis, BURPl, MCIP, RPP on 07.29.17 at 11:23 am

#206 Reality 1

Thank you for the kind words, they are much appreciated.

I believe that one of the most significant problems is that land use planning schools are indoctrinating their students into Marxism (without calling it that of course), then telling them that they have the power to change the world. That’s pretty heady stuff for a young adult to hear. I was a mature student, (and an American – we are born distrusting gov’t) so not easily indoctrinated. Here is an excellent video of Jordan Peterson, who explains the process better than I can. https://www.youtube.com/watch?v=IpXVoSZyHXM

I did work for the private sector, but I was/am considered “extreme” for pointing out that appeasement is not a good strategy, given that it has never worked in the history of the world. Most industries (except forestry/Resolute) attempt to appease NGOs/gov’t to avoid becoming a target. It’s sad really.

Eventually I landed a job at Queen’s Park, but, as you can imagine, truth is not a valued commodity there, so I left.

At the moment I am biding my time, but your post got me thinking that there may be an opportunity in finance, given that even my financial advisor is completely unaware of land use planning policy and the inherent danger it poses, not to mention water, air, biodiversity etc. policies. It will be interesting to watch the fallout from/reaction to the housing crash. The financial consequences for municipalities will be severe, given their dependence on Development Charges, MLLT and application review fees. The question is, will gov’t admit that they caused the crash? If I was a betting man, I’d bet no.

I’ve been trying to get word to The Rebel, (as I previously appeared twice on Sun News TV) but they don’t seem to be interested in my opinion anymore.

To answer your question, yes, the vast majority of people who push high density development policies live in single family dwellings. I was astounded to hear Hazel McCallion admit that the public hates high density development, so politicians who impose it are “brave.” So much for representative democracy.

I’ve very much enjoyed the back and forth, if you want to chat more, feel free to email me at [email protected].