‘Far worse’

Dave took this picture while walking his pooch this morning in North Vancouver. “In loving memory of Jezzie,” it says. “Please help yourself to a tennis ball for your dog to play with. Keep it or drop it back in the bin for another dog to enjoy. Remember to cherish your time together.” Amen.

_______________________________________

Someday soon we’ll be able to ignore the Toronto and Vancouver housing markets. But not yet. After all, who can stop staring at a car crash?

Looks like total monthly GTA sales will come in around the 4,000 market for August. Yikes. Compare that with 6,000 in July (which was down 40% from last year), 8,000 in June (down 37%), 10,000 in May (down 20%), 11,500 in April (down 3%) and 12,000 in March (up 18% from 2016).

See the pattern? Even accounting for seasonality and string bikinis, the market’s dying before our very eyes. Last August a whopping 9,800 houses sold, up 23% from the summer before. So if the 4,000 mark holds this month, the decline will be 60%. There’s just no barking your way out of this bag. The GTA is pooched. Buyer sentiment has turned negative. Most importantly, the speculators have left the building, and “facts” everyone used to believe have turned out to be fake news. Like, “immigration will always keep real estate afloat” and “there’s not enough supply of houses.”

First, here’s GreaterFool realtor-correspondent Old Ron, with a fresh report from the field:

“Hi Garth: This market is far worse than anyone is talking about. The MSM is soft soaking this crash. It is like two agents on a putting green while a giant Mushroom cloud rises in the background. Even Old Ron, who is good shape financially, thought it was prudent to scrub his fishing trip to Montana, and hunker down.

“Here are some facts. $920,791. That is the high water mark – the average price in April 2017. The question is when will the average price in the GTA reach that number again? Clue: The crash of 1989 took 14 years for the prices to recover and exceed the previous high.

“The realtor haters on your blog will be pleased to know sales have dropped by about 66% from the peak. If that happened to GM, they would be in Chapter 11 within a year. Then consider that the average price is down about 20% or more depending on the region of TREB. Given that realtor income is a percentage of sale price, the agents have taken a further hit here.

“Finally, I have noticed that commissions are getting much softer. Basically Sellers don’t mind forking over $40K in fees to sell a house when they receive  a million dollar cheque. But when the Seller has just been kicked in the teeth by the market, they are not in a generous mood. The agents are starving from 1) Absurdly high number of realtors. 2) A 66% crash in number of sales. 3) A  20%+ decline in sale prices,  and 4) a softer commission picture. A perfect storm.

“It gets worse, many agents are in the bad habit of paying for their previous years Income taxes with a good spring market. I have spoken to several agents who are in the hole for $60,000 or more to the Revenue Agency, with no deals in the pipeline to pay the Government. These are not big hitters, just average people who thought that absurdly high sales and price numbers would last for ever.

“This can all be summed up @ a lunch I had on Friday with a 30 something agent. It was his turn to pay, so when the bill came, and he plunked down three credit cards on the waiters tray. “One of these should work,” he said blithely.”

As the frothiest housing market in Canadian history unwinds at the fastest pace ever experienced, more ugly (for realtors) truth emerges. Like the latest Stats Canada census numbers which just shattered the belief GTA real estate a slam-bunk forever because home construction can’t pace population growth. Well, forget that. Remember all the comments here about 100,000 new immigrants swelling the region annually – adding half a million house-horny, monied interlopers over the last five years?

Bunk.

The population increased by 146,200 households between 2011 and 2016 (1.3% a year), during which time 175,825 new houses were built. Yup, more new properties became available than there were new families to buy them. So much for this statement which local real estate board poohbahs fed the public back in March to explain 30% annual price increases:

“Over the past year, we have reached a point where government policies that target only the demand side of the market, whether we’re talking about foreign buyers or further changes to mortgage lending guidelines, will not be enough to balance market conditions and moderate the pace of price growth.

“In 2017, policymakers at all three levels of government must turn their attention to the supply of homes available for sale. They should consider revisiting land-use designations in built-up areas to allow for a greater diversity of home types, streamlining development approvals and permitting processes, and looking at ways to incentivize landowners to develop their land.”

Turns out we didn’t have too many immigrants or too few houses. Just too many realtors and a local population that swallowed the Kool-Aid and turned into delusional house-lusty speculators. The number of households owning multiple properties exploded to about 9%. Billions of dollars in down payments came out of home equity through the Bank of Mom. HELOCs exploded nationally to $210 billion, most of it going back into speculative real estate investments. And the debt-to-income ratio of most people buying $1 million houses bloated to 450% or more.

Old Ron is right. The property market isn’t coming back any time soon. Nor has it toed bottom. There’s no reason to expect a rebound in September, and many to anticipate new declines. Listings will swell again. Mortgage rates will increase. Closings will be missed. The bank rate will rise. The new stress test may arrive. And thousands of terrified, squeezed amateurs landlords and speckers will keep throwing equity overboard as they try to get out.

There may be some good, though. We might stop believing what they tell us.

189 comments ↓

#1 TurnerNation on 08.14.17 at 5:32 pm

God told me to short sell Bitcoin/USD now.

#2 Don't Believe The Hype on 08.14.17 at 5:36 pm

Look out belooooooowww!

#3 Mike on 08.14.17 at 5:40 pm

[email protected]
Reminder: Deadline is August 17th, 3 more days.

——–
Rumor is that OSFI might NOT implement its proposed changes to Mortgage regulations due to immense pressure from Mortgage guys and Realtors. They are sending letters to consultation email address a lot seems like.

I suggest instead of writing comments here today, send a Consultation email to:
[email protected]

Subject: Implement proposed changes to B-20 ASAP

Content: ()

#4 nelson from The Simpsons on 08.14.17 at 5:40 pm

Ha Ha!, while I point my finger at all you Toronto Yuppies, Millennials, Realtors and Baby Boomers! Good for you!

Toronto is way too expensive that I bully Officer Wigam’s son for his lunch money, until Office Wigam pick-pocketed me because he is bankrupt and still owes a mortgage on a Toronto house in a suburb called Springfield.

Lisa Simpson wanted to become an SJW in Toronto, until she found out that the place to be for real artistic culture is Montreal, not Toronto.

#5 lumpia on 08.14.17 at 5:45 pm

Thank goodness I found this pathetic blog. Garth is the breaker of chains.

#6 AGuyInVancouver on 08.14.17 at 5:46 pm

Despite the lead paragraph, this post seems really to just apply to Toronto. Sadly, Vancouver continues to bubble along.

#7 Jules in Vancouver on 08.14.17 at 5:47 pm

Garth, how about an update on Vancouver RE…. Still no correction here. Prices in the GTA still have a looong to come down to get back to where they were in 2015. I think this is a blip that will stabilize once people stop freaking out. Vancouver is seeing price gains again for anything under $1M,still bidding wars going on here, no? Prove me wrong pls.

#8 westcdn on 08.14.17 at 5:48 pm

It looks like the price of crude is taking a hit today. I don’t why but it is not good for Alberta. My interest sensitive equities are rebounding. I think the market believes interest rates will not explode higher anytime soon and I agree. I still see deflation as a threat. I don’t like the sound of NAFTA discussions and jobs (income) drive the economy. I have budgeted 5.5% investment returns (not adjusting for inflation) for the next decade.

Life goes on and I do the best I can. If anyone thinks I am racist or misogynist, you are wrong. I call a spade a spade. I often spout stupid ideas and have hard core conservative beliefs but they are not with evil intent. Few are fixed in stone. I go by my own compass and am loaded with empathy. More than a few people have taken advantage but I remember (my strongest attribute for better or worse). I don’t need someone to fight my battles but I will stand aside because I have other things to deal such as making dinner.

#9 Mike on 08.14.17 at 5:49 pm

Oh, the GTA market, it will be yanking and spanking again because Canadians just cant resist paying what their realtors say.

Its going to be up and up again. Canadians are rich with high wages. They can afford anything. They can pay over the asking like a ..puff….

#10 Bob on 08.14.17 at 5:53 pm

I guess the next guessing game for many will be how long it takes (e.g. years) to reach the price top in Toronto once again after this crash.

Anyone? 14 years?

#11 Keith in Calgary on 08.14.17 at 5:59 pm

It took 25 long years for Calgary RE prices to start appreciating significantly again after the mid 80’s collapse.

25 years.

That is about how long it takes to breed an entire generation of ignorant and naive first time buyers, who willingly drink the Kool-Aid because they don’t know any better, as the cult only tells them what they need to hear, in order to get them to sign on the bottom line.

If people in Toronto are misarable about their commutes, you ain’t seen nothing yet.

#12 paracho on 08.14.17 at 6:03 pm

Old Ron is correct !
I have notice this for a couple of years now . I sold 2 years ago and am glad I did . Was ridiculed by mane up to April of this year. I now feel vindicated .
The scary thing is… this is just the beginning with tightening mortgage regulations , higher interest rates and wages not rising to the occasion !most of these new homeowners , speculators and landlords are living under a heavy debt load which will put them in jeopardy.

#13 Howard on 08.14.17 at 6:03 pm

I did my part to alleviate the (mythical) supply squeeze. Left Toronto in 2014 for Paris. Not exactly the cheapest place in the world (haha!), but at least the money here buys a more interesting lifestyle and I no longer have to listen to inane chatter about what colour carpeting to put in the newly-finished basement in McMansion-ville….

#14 Paul on 08.14.17 at 6:05 pm

No worries. Move to Kelowna. It can’t happen there.

#15 Happy Housing Crash Everyone! on 08.14.17 at 6:08 pm

Happy HAPPY Housing Crash Everyone ! :-)

#16 Vanecdotal on 08.14.17 at 6:10 pm

Vancouver lower mainland also does not have a supply problem despite relentless propaganda to the contrary, it has a serious supply management problem. Free up unoccupied units, restrict de-facto exporting of housing stock and let market forces play out to return to a balanced market.

On a related note, it’s shingle-city in White Rock. Hard to find a residential block without 1-3 for sale signs. Mostly low-end sfh holding properties, and empty luxury builds, never lived in. Builders are trying to liquidate.

To Flop: White Rock & immediate area would make an interesting pink lemonade study if so inclined.

#17 Im Therious on 08.14.17 at 6:11 pm

Is there any where we can get monthly total dollar volumes for transactions per dwelling type, per city? Or even province?

This is the sum of all sales prices of each dwelling sold over a month.

I’d be interested to see how detached, condos and the like have done, and how much realtors are “missing out” on as prices and sales drop…

#18 Willy H on 08.14.17 at 6:12 pm

“It gets worse, many agents are in the bad habit of paying for their previous years Income taxes with a good spring market. I have spoken to several agents who are in the hole for $60,000 or more to the Revenue Agency, with no deals in the pipeline to pay the Government. These are not big hitters, just average people who thought that absurdly high sales and price numbers would last for ever.”

___ ___ ___ ___

Who exactly is the Greater Fool?

I won’t be losing a moments sleep for “starving realtors”, the english language’s newest oxymoron!

#19 Rickydanny on 08.14.17 at 6:14 pm

“It gets worse, many agents are in the bad habit of paying for their previous years Income taxes with a good spring market.”

This was very common here in the US during our crash. A lot of Realtors lost everything.

#20 saskatoon on 08.14.17 at 6:15 pm

best place in canada at the moment to buy a fourplex?

anyone?

#21 bdwy sktrn on 08.14.17 at 6:16 pm

gta was always a poser 604 wanna be.

not gonna happen. too sweaty.

#22 Shawn on 08.14.17 at 6:20 pm

Any data on the Niagara Region?

#23 TortyPapa on 08.14.17 at 6:22 pm

What’s the word on the street in Vancouver? I see no news about any correction except on Zolo (which prices have taken a beating).

#24 Matt on 08.14.17 at 6:23 pm

> The population increased by 146,200 households between 2011 and 2016

> Remember all the comments here about 100,000 new immigrants swelling the region annually

I don’t have the average immigrant household size over that time period, but assuming a conservative 3 individuals per household, we get 438,600 individual immigrants, vs the estimated 100,000 per year for a grand total of 500,000 over the 2011 to 2016 time period. Not far off after all.

The interesting piece of data is 175,825 new houses being built over the same time period. I’m curious as to the source of this number. If true, this is additional strong evidence of pain to come.

#25 Howard on 08.14.17 at 6:23 pm

Garth, the numbers look almost *too* bad at this point that I think we may be due for a dead-cat-bounce where the Greatest Fools of All will breathe a sigh of relief “Whew! Back to normal!” and then buy just in time for the final death drop.

Hard to beat Anna’s $900K mortgage in the realm of greater fooldom, mind you.

#26 messages on 08.14.17 at 6:34 pm

#1 TurnerNation on 08.14.17 at 5:32 pm

God told me to short sell Bitcoin/USD now.

—-

I got the message to go long when BTC was 300 CAD.

#27 diesel8019 on 08.14.17 at 6:39 pm

It’s still different in Vancouver.

#28 bdwy sktrn on 08.14.17 at 6:39 pm

howard, you need a TRUCKLOAD of cheese to go with that epic whine!!!!! WOW!!!!

(i’m not a boomer)
————————

…wages stuck in the dark age (no real wage gains since the 90s), increased education costs, and credential inflation forcing young people to spend more of their best earning years in a classroom because BOOMER BOSSES will not hire them otherwise. And did I mention that the same Boomer bosses have gutted corporate training programs so that young workers now need to self-fund virtually all of their skills development, the same training that Boomers themselves got, like almost everything else, for free?

#29 Lee on 08.14.17 at 6:39 pm

Gary Marr of Financial Post says there have been no real price decreases in TO. Party on Garth.

#30 Lulu on 08.14.17 at 6:40 pm

DELETED

#31 oopswediditagain on 08.14.17 at 6:42 pm

#3 Mike on 08.14.17 at 5:40 pm
[email protected]
Reminder: Deadline is August 17th, 3 more days.

——–
Rumor is that OSFI might NOT implement its proposed changes to Mortgage regulations due to immense pressure from Mortgage guys and Realtors. They are sending letters to consultation email address a lot seems like.

I suggest instead of writing comments here today, send a Consultation email to:
[email protected]<<<<<<<<<<<<<<<<<<<<<<

Ahh, Mikey, you are not going to like this one. OSFI is not going to change their mind.

Although Garth references the legislation as the new stress test, it is really more about protecting the very banks that sucked everyone into their mortgage wars.

Personally, I think that OSFI is introducing horses out, barn door closed legislation but that is only in respect to homeowner mortgage lending. The application of this legislation will severely curtail lending in the major centres and have a very meaningful impact on mortgage renewals. Yes, this will exacerbate the crash in Toronto and hasten the other major markets demise.

OSFI isn’t interested in the boom or bust of the real estate market as long as the “financial system” (banks) are fine regardless of direction of that market.They are really making sure that the banks will be in a position to weather the upcoming storm.

Again, OSFI has seen the writing on the wall and their new legislation is really about plausible deniability. They will be able to say : “in retrospect, we were able to see where previous legislation had not been effective so we closed that loophole permanently. Moving forward, potential threats to bank lending integrity by housing “bubbles” will be countered by the legislation we introduced in the Fall of 2017 regarding prudent residential mortgage underwriting.”

This legislation will be heralded by the media as the market killer and that will simply be icing on the tombstone as potential buyers back off their purchase decisions even further. Credit Unions and alt lenders will be too busy dealing with defaults to worry about further loans.

#32 bdwy sktrn on 08.14.17 at 6:44 pm

…wages stuck in the dark age (no real wage gains since the 90s)

————————–
most gen x i know (my cohort) make 250-500% of what they made in the late 90’s.

we are your new bosses so shut up and get in line, whiners to the rear.

#33 Dolce Vita on 08.14.17 at 6:51 pm

#6 AGuyInVancouver
#7 Jules in Vancouver
#21 bdwy sktrn
#23 TortyPapa

And again:

Today, Zolo.ca – the trend is negative monthly AND quarterly in the major cities.

City | Monthly | Quarterly | Yearly Selling Price Change, %

Vancouver, -18.6, -20.7, -2.5
North Van, -7.9, -13.2, +8.3
Burnaby, -1.3, -7, +19.9
Richmond, -6.5, -10.3, +21.1
Delta, -2.8, +3.4, +13
West Van, -1.7, -18.2, -3.3
New West, -14.1, -16.1, +3.1
Surrey, -16.2, -17.3, -1.3
Coquitlam, -11.9, -10.9, +6.4
White Rock, +7.5, -10.3, -13.5 #16 Vanecdotal (up/down here?)
Langley, -2.9, -3.1, +9%
Maple Ridge, -2.7, +5, +8.9

FURTHER evidence, List Price Changes for August, 2017 for GVRD (My Realty Check):

Average Change: -1.90% Up:206 Down:548
Monthly ist price changes all negative since Oct. 2016
_____________________________

GVRD correcting in the last quarter, Vancouver clobbers the biggest monthly 416 RE drop (no bubble along here).

No soft landing.

No sticky prices.

No sweaty either.

Oct. 17 rate increase & OSFI will make it worse.

Pray for a Sept. miracle.

And stop believing sloppy, lazy &/or Realtor advertising fed local MSM.
_____________________________

I’ll let Happy Housing Crash Everyone! dole out the greetings.

#34 Howard on 08.14.17 at 6:58 pm

#32 bdwy sktrn on 08.14.17 at 6:44 pm
…wages stuck in the dark age (no real wage gains since the 90s)

————————–
most gen x i know (my cohort) make 250-500% of what they made in the late 90’s.

we are your new bosses so shut up and get in line, whiners to the rear.

————————

LOL. You don’t understand the concept of wage growth related to cost of living.

Your friends earn more money because they have presumably risen through the ranks. This is not the same as overall wage growth relative to cost of living.

I’ll put it in words you might be able to understand. In the late 90s, an entry-level junior analyst perhaps earned $30-40K. That same position nets roughly the same salary in 2017 vs a much much higher cost of living.

#35 Guy in Calgary on 08.14.17 at 6:59 pm

I think this is pretty telling:

$1.4M in Calgary:

http://www.sellingcalgary.pro/search/elbow-valley-real-estate

$1.4M GTA:

https://www.royallepage.ca/en/property/ontario/burlington/4084-spruce-avenue/6576888/mlsw3897856/

Crash and burn.

#36 Dolce Vita on 08.14.17 at 7:05 pm

Forgot, great post Garth about the truth and some good old fashioned research that most are loathe or too lazy to do (or RE Cult members refusing to accept and seek out the truth).

Old Ron hit the hammer on the nail today.

A lot of YVR and 416 Realtors praying to whatever upper deity they can think of for a Sept. miracle (or if atheist, they can pray to George Carlin’s “The Big Electron”).

#37 Howard on 08.14.17 at 7:08 pm

#28 bdwy sktrn on 08.14.17 at 6:39 pm
howard, you need a TRUCKLOAD of cheese to go with that epic whine!!!!! WOW!!!!

(i’m not a boomer)
————————

…wages stuck in the dark age (no real wage gains since the 90s), increased education costs, and credential inflation forcing young people to spend more of their best earning years in a classroom because BOOMER BOSSES will not hire them otherwise. And did I mention that the same Boomer bosses have gutted corporate training programs so that young workers now need to self-fund virtually all of their skills development, the same training that Boomers themselves got, like almost everything else, for free?

————————–

“Whining”. Right. Apparently any mention of inconvenient facts that dash the Boomers’ myths about themselves now counts as “whining”.

I was simply responding to someone else’s laughable claim that high interest rates in the early 80s were a singular scourge that independently negated the dirt cheap housing, nearly-free education, high interest on savings, generous pensions, limitless funding for skills training, and yearly salary raises that that particularly fortunate generation enjoyed.

If the truth isn’t palatable, suck it up snowflake.

#38 Randy on 08.14.17 at 7:12 pm

RIP Jezzie

#39 whinger on 08.14.17 at 7:13 pm

8 bdwy sktrn on 08.14.17 at 6:39 pm

howard, you need a TRUCKLOAD of cheese to go with that epic whine!!!!! WOW!!!!

(i’m not a boomer)
————————

…wages stuck in the dark age (no real wage gains since the 90s), increased education costs, and credential inflation forcing young people to spend more of their best earning years in a classroom because BOOMER BOSSES will not hire them otherwise. And did I mention that the same Boomer bosses have gutted corporate training programs so that young workers now need to self-fund virtually all of their skills development, the same training that Boomers themselves got, like almost everything else, for free?

++++++++++++++++++++++++++++++++

This must be some sort of troll post. A person who has lived in Canada and had the benefit of a decent education shouldn’t have such a simplistic and myopic view of how the world works. Substitute the word “Jew” or “Freemason” for the word “boomer” and this sounds like a second rate conspiracy rant. Bloody shameful, really.

People are born when they’re born, and do the best with what they’re given. The accumulation of wealth takes time and a willingness to defer gratification. Of course someone who is 20 or 30 years older than you has accumulated more wealth. A little less time on the internet, change your friends (if they’re of a like mind), spend more time working and you’ll get there too. If your parents did well you’ll inherit their wealth as well, so no need to come here and snivel about your lot in life.

In regards to today’s fine column, the tsunami of suffering has yet to hit Vancouver. I used to be convinced that we are exceptional here, but this blog is beginning to convince me otherwise. We shall see.

#40 Smartalox on 08.14.17 at 7:14 pm

If I understand the correct use of the term ‘sold’, these stats refer to accepted offers, not closed and completed transactions.

The number of ‘sales’ may yet be revised lower, still. And Agents don’t get paid if the deal falls through.

As for the Agents that are keeping the taxmen (and women) waiting, maybe they can be persuaded to provide the names and information of any and all of their clients who flipped properties or assignments for easy money to the CRA, in order to receive a reduction in penalties and interest.

#41 Big bark, no bite on 08.14.17 at 7:17 pm

#31 oopswediditagain on 08.14.17 at 6:42 pm
#3 Mike on 08.14.17 at 5:40 pm
[email protected]
Reminder: Deadline is August 17th, 3 more days.

——–
Rumor is that might NOT implement its proposed changes to Mortgage regulations due to immense pressure from Mortgage guys and Realtors. They are sending letters to consultation email address a lot seems like.

I suggest instead of writing comments here today, send a Consultation email to:
[email protected]<<<<<<<<<<<<<<<<<<<<<<

Ahh, Mikey, you are not going to like this one. OSFI is not going to change their mind.

Although Garth references the legislation as the new stress test, it is really more about protecting the very banks that sucked everyone into their mortgage wars.

http://www.osfi-bsif.gc.ca/Eng/Pages/default.aspx

OSFI is a fear factory designed to scare half wits

Borrower credit worthiness is not and has never been a problem with the non cmhc loans.
Read their web site, they specialize in hoax management

'terror' 'risk'
'terror' 'risk'
'terror' 'risk'

#42 Dolce Vita on 08.14.17 at 7:17 pm

For those estimating how long it takes for a RE market in Canada to recover after a correction or crash, well, it’s local.

Here is a chart for major Canadian Cites, HPI (I know, HPI sucks but illustrative as to the duration) from 1980 to 2011 – copy the whole URL and paste to see the chart image:

https://www.google.co.uk/search?biw=1522&bih=710&tbm=isch&sa=1&q=canada+hpi+real+estate+price+history&oq=canada+hpi+real+estate+price+history&gs_l=psy-ab.3…28212.32336.0.32736.18.18.0.0.0.0.126.1780.3j13.16.0….0…1.1.64.psy-ab..2.0.0.hzuLFC9jApw#imgrc=l82tTRtQImsCuM:

Estimate away with actual historical data.

#43 vulcan without ears on 08.14.17 at 7:29 pm

Governments have favored the emergence of the housing bubble. Since the last months, they have favored its breakup. Without measures to curb the market, it would have corrected itself but less violently in Toronto and possibly Vancouver. During this time in Montreal, life is good despite the fact that we will not win the Stanley Cup after 25 years!

#44 bdwy sktrn on 08.14.17 at 7:30 pm

dolce,
careful how you read those #’s, mixing sfh and condo can make for big swings in the avg.

for example , look here grandview woodlands, van

-9.2%
Monthly change
-6.2%
Quarterly change
-11.5%
Yearly change

yet if you look at the same #’s for each group
condos +10%
Town +15%
detached 0%

———————
so no group went down, some went up, some went way up, but the averages are strongly negative.

93.4% of statisticians say beware of statistics.

#45 DON on 08.14.17 at 7:35 pm

7 Jules in Vancouver on 08.14.17 at 5:47 pm

Garth, how about an update on Vancouver RE…. Still no correction here. Prices in the GTA still have a looong to come down to get back to where they were in 2015. I think this is a blip that will stabilize once people stop freaking out. Vancouver is seeing price gains again for anything under $1M,still bidding wars going on here, no? Prove me wrong pls.
*************
Why should Garth prove you wrong – what proof did you give for being right?

#46 joblo on 08.14.17 at 7:39 pm

Can’t wait to see just how crazy this can get.

#47 Lillooet, BC on 08.14.17 at 7:39 pm

#20 saskatoon on 08.14.17 at 6:15 pm
best place in canada at the moment to buy a fourplex?

anyone?

**********

hint: your screen name

#48 Ex-Cowtown on 08.14.17 at 7:40 pm

“Here are some facts. $920,791. That is the high water mark – the average price in April 2017. The question is when will the average price in the GTA reach that number again? Clue: The crash of 1989 took 14 years for the prices to recover and exceed the previous high.

++++++++++++++++++++++++++++++++++

In 1989 five year fixed mortgage rates were 12.24% (yes, you read that right Millenials!). By 2003 rates had been cut almost in half to 6.26%. Guess what happened? You got it, house prices rose.

By spring 2017, it was possible to get a variable rate mortgage below 2%. And house prices skyrocketed.

Anybody want to guess what’s likely to happen when mortgage rates go back to 5% or 6%? My guess is that housing will drop back to it’s long term average and GTA houses will again be around $450K.

That works out to a 50% hit. Math is hard.

#49 devore on 08.14.17 at 7:41 pm

$920,791. That is the high water mark – the average price in April 2017

Some 2 years ago I thought TO market wouldn’t run out of steam until it hit the same highs as Vancouver, a bit over 1 mill. The regulations and rest of the environment killed it a bit early. Oh well. There might still be a last gasp spike, maybe if spring was still ahead not behind us, but house buying season is pretty much over for the year. At least now we have something new to talk about.

#50 Howard on 08.14.17 at 7:42 pm

#35 Guy in Calgary on 08.14.17 at 6:59 pm
I think this is pretty telling:

$1.4M in Calgary:

http://www.sellingcalgary.pro/search/elbow-valley-real-estate

$1.4M GTA:

https://www.royallepage.ca/en/property/ontario/burlington/4084-spruce-avenue/6576888/mlsw3897856/

Crash and burn.

——————————

Scrolling through the photos in the ad for the Burlington hovel, you’d think the dim realtor would have figured out how to rotate images 90 degrees.

It’s not as if they’re busy these days.

#51 TurnerNation on 08.14.17 at 7:42 pm

I know, Smoking man can set up an hideaway colony in St. Mart. for Those Kanadians Which Wish to Escape Closing Their Home Purchase.
Reasonable weekly rates.
Contact Captain Morgan for ferry passage.

#52 anc0dia on 08.14.17 at 7:45 pm

#22 Shawn on 08.14.17 at 6:20 pm
Any data on the Niagara Region?

Volume down almost 50% on the outskirts (Port Colborne/Ridgeway/Fort Erie) and spreading. Prices are dropping all over. Buyers are disappearing. Agents sending out emails to clients saying sellers are desperate. If you planning to sell in the area best do so now especially if you are hold property in Niagara Falls. Houses will be going for around MPAC assessed values by the end of the year, maybe sooner.

#53 bdwy sktrn on 08.14.17 at 7:47 pm

(maui?) howie
our friends earn more money because they have presumably risen through the ranks. ///// – this is partly true (did i mention where the line started?)

I’ll put it in words you might be able to understand. In the late 90s, an entry-level junior analyst perhaps earned $30-40K. ////- uh, no. that’s what i made with a mech eng degree. 29k was my first job in 93. in 97 i got 45k +comission for fortune 50 technical industrial sales. i was well paid then. that job is 120-150k gross today.

it’s a looooong tough slog, esp when blaming others for everything.

#54 Royal City Dweller on 08.14.17 at 7:57 pm

NOT ON CBC PLANET!
Not at all! Actually, all is cool and dandy.
Prices in TO up 15% in July!!!!.
What housing crash? No crash me thinks.
http://www.cbc.ca/news/business/teranet-national-bank-resale-housing-market-prices-1.4246507

Teranet is an excellent indicator of what a bad indicator indicates. — Garth

#55 Perspective on 08.14.17 at 7:57 pm

There is 3 years of inventory in West Vancouver and around 16 months in Vancouver. Think if all the money these folks will make waiting for their homes to sell.

#56 acdel on 08.14.17 at 7:57 pm

#32 bdwy sktrn

What?? Seriously!! If that is true which I think is complete B.S. you must hang around an exceptional very small percentage of Gen-X that were spoon fed, the rest of us had to deal with numerous recessions, high interest rates and a*hole bosses who were so dam miserable in their personal lives that they took satisfaction on laying it out on the rest of us; so seriously: give me a fricken break!!!

#57 Royal City Dweller on 08.14.17 at 8:06 pm

Or This:
TO home prices – HUGE GAINS IN JULY

http://news.buzzbuzzhome.com/2017/08/toronto-home-prices-huge-gains-heres-weak-spot.html

“Huge”
Why worry?

#58 Oopswediditagain on 08.14.17 at 8:09 pm

Barking: “Borrower credit worthiness is not and has never been a problem with the non cmhc loans.”<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

Okay, let's try again. OSFI is THE financial regulatory body for the banking system.

They know that non cmhc loans spiked after their last rules were introduced. They spiked because borrowers couldn't qualify at the BOC qualifying rate and they went to Mommy or a subprime lender to make up the 20% down payment.

So, they know that all of those buyers are f****d in a correction and that's stress on the bank. Ergo the new rules. They couldn't care less about your worries.

Now, have your Daddy explain this to you.

#59 Dolce Vita on 08.14.17 at 8:13 pm

#44 bdwy sktrn

What are these %’s of, represent, city in GVRD, your neighborhood, what, be specific?

condos +10%
Town +15%
detached 0%

and if related, how do you get 2 positive %’s and a 0% resulting in numbers that are negative below; thus, they cannot be related or 1 of your above %’s must be negative and so heavily weighted so as to result in these overall negative changes; otherwise, mathematically impossible):

-9.2%
Monthly change
-6.2%
Quarterly change
-11.5%
Yearly change

BTW, I taught Stats and Engineering Economics at University, but go ahead, impress me.

#60 Danny on 08.14.17 at 8:17 pm

Garth
Just did a Google search “Toronto housing prices trends ”
and sorry to say….your blog did not come up.
Too bad I am sure that prospective buyers are struggling for honest and unbiased…opinions….to balance the misleading sales pitch by Realtors…who hide after deals are made.
Wondering if your computer knowledgeable friends can provide advice to make your Site show up on an Internet search…..more easily
Shame to not have your honest words of wisdom shared with more folks in need…especially housing….most of us are ignorant when it comes to making the biggest purchase of our life.
Good stuff when CBC interviewed you last time though.

Great idea. Just what I need. Another boatload of horny moisters. — Garth

#61 X on 08.14.17 at 8:20 pm

“The new stress test may arrive”

It isn’t a done deal yet? Too bad Harper didn’t intro it years ago to protect people from making such emotional financial decisions.

Hoping for a rate increase in Oct and Dec…which would mean the economy is still chugging along.

Thinking there is going to be a flood of listings this fall, all of the people who pulled their listings this summer, hoping for a better turn in the housing marktets….doubtuful it is going to happen.

Curious to see the spin put on it on Hot Property.

And aren’t any of these RE experts held accountable. I mean….even the boards releases are misleading…who are they accountable to? Not responsible for any fines? Should be just as accountable as the financial industry, perhaps the argument could be made for more, in the sense that most Canadians have most of their net worth in RE.

#62 OttawaMike on 08.14.17 at 8:20 pm

Au contraire mon frère–Bloomberg Media begs to differ.

Toronto has reached the highest density ever with 1000 people /sq. kilometer and SFD are still the shizzle.

Basement dwelling millennials will feed the next wave of buying.

#63 Arctic Gringo: Qalunaaq on 08.14.17 at 8:21 pm

Re: #22 Shawn

From land of real estate agents near grape vines and horseshoe falls…

August 8th, 2017, Niagara – The Niagara Association of REALTORS (NAR) reported 652 property sales processed through the NAR Multiple Listing Service system in July. This represents a 27.5% decrease in sales compared to July of last year. The residential average sale price of $375,903 was 14.4% higher than last July. The average days on market decreased from 36 to 26 in the residential freehold market and decreased from 71 to 39 in the condominium market. “Once again in July we saw an increase in inventory and a decrease in the number of homes sold in Niagara, compared to July of 2016,” said Randy Mulder, President of the Niagara Association of REALTORS. “We are experiencing a market shift that has moved strongly from a “Seller’s Market”, to a balanced market. Home buyers now have greater selection, and a less frenzied marketplace throughout the Niagara Region. Well priced, well presented homes are still very popular. The advice of a REALTOR is crucial to both buyers and sellers, ensuring a smooth transaction.”

Sales-to-New Listings Ratio:

July 2017: 0.615
July 2016: 0.943
July 2015: 0.709
July 2014: 0.661
July 2013: 0.587

-AG: Q

#64 Dolce Vita on 08.14.17 at 8:28 pm

#44 bdwy sktrn

Re-read you Woodlands example. I think you are saying selling price drops vs. unit sales increases?

That is a non sequitur in logic. They are unrelated.

All your example illustrates is that prices are dropping in Condos and Town homes since Detached unit sales increases are 0%. If that is what you are saying?

Hard to believe since most GVRD cities are showing increases in price for Condos and Town homes, but will accept your down neighborhood stats.

I do not care what statisticians say. The data presented by me is very simple: calculate an average and then a %.

That is high school math at best.

#65 crowdedelevatorfartz on 08.14.17 at 8:32 pm

@#37 How Weird
“I was simply responding to someone else’s laughable claim that high interest rates in the early 80s were a singular scourge that independently negated the dirt cheap housing, nearly-free education, high interest on savings, generous pensions, limitless funding for skills training, and yearly salary raises that that particularly fortunate generation enjoyed.”
++++++

Yes the interest rates for loans were hovering at the 20-22% range.
Housing wasnt “dirt cheap”.
It went from $240k to 100k because of the aforementioned high interest rates and the fact that no one could afford a mortgage(sound familiar).
“Nearly free education”
My how convenient. As opposed to what? Today? Sorry to drag YOUR earlier arguement about inflation back around but the people I knew that were in university struggled….I couldnt afford Uni so I worked….when I could find work.
“High Interest on savings”
What savings? everyone was unemployed of paying off exorbitant car, house, whatever loans…. again high interest rates work both ways.
“Generous Pensions”
News to me. Any money I will live on will be what I have saved through hard work and struggle( a foreign idea to our Parisian struggling artiste) supplemented by a CPP payout that will be clawed back by CRA due to my saving and “earning” too much.
“limitless funding for skills training”
What decades are we talking about? My cohort ( born 1961 at the end of the boom) experienced bulging classrooms, portables, incredible competition for few jobs and the decade long recession from 1973 to 1985.
‘Yearly salary raises’
I remember working from 1982 til 1986 before I was given a “raise” …50 cents more an hour. I quit.

I find it somewhat ironic that you have run to Paris , the land of bankrupt socialism, big unions and Marie Antoinette’s head to bitch and moan about a cohort you know little about and can do even less to change.
Stop sucking your thumb and go eat some cake……..

#66 Jeff on 08.14.17 at 8:35 pm

Hi Garth,

When I read stories like the one about the realtor putting three credit cards down, I feel entertain, but I don’t know if it’s anything but entertainment. The dangerous thing is that some people start to project this case into a common place reality. This is the problem right now. A lot of people are sharing anecdotes, manipulated statistics (TREB) and lots of #fakenews (realtors trying to maintain this beast going).

200 billion in HELOC sounds big, but is it? How much is to do renovations, versus investing, versus spending?

#67 Tony on 08.14.17 at 8:39 pm

Re: #10 Bob on 08.14.17 at 5:53 pm

I’d be guessing two and a half years or forty years but noting in-between. Everything is negative for residential real estate except interest rates but when we get zero and negative interest rates like Japan and German and real estate finally falls in price even with negative interest rates that’s where the forty year figure comes from. That and basically zero GDP and zero inflation rate for the next generation in Canada.

#68 Dee on 08.14.17 at 8:40 pm

You know all the realtors and industry insiders (and it’s a lot lf them) will be reaching out to osfi to prevent the stress tests. Do like many others are doing, click on the link and let osfi know you support additional stress tests for borrowers.

http://www.osfi-bsif.gc.ca/Eng/Docs/B20_dft_let.pdf

#69 Howard on 08.14.17 at 8:45 pm

#53 bdwy sktrn on 08.14.17 at 7:47 pm
(maui?) howie
our friends earn more money because they have presumably risen through the ranks. ///// – this is partly true (did i mention where the line started?)

I’ll put it in words you might be able to understand. In the late 90s, an entry-level junior analyst perhaps earned $30-40K. ////- uh, no. that’s what i made with a mech eng degree. 29k was my first job in 93. in 97 i got 45k +comission for fortune 50 technical industrial sales. i was well paid then. that job is 120-150k gross today.

————————————–

All well and good for your little anecdote of dubious validity, but the median after-tax income in Canada rose a paltry 17% in constant dollars between 2000 and 2013, and even this figure is heavily skewed by Alberta. Looking at BC and especially Ontario, the percentage is miniscule. Source: http://www.statcan.gc.ca/daily-quotidien/151217/dq151217c-eng.htm

And: https://beta.theglobeandmail.com/globe-investor/personal-finance/household-finances/why-canadians-cant-stop-borrowing/article33627676/?ref=http://www.theglobeandmail.com&amp;

What did housing do during that same time period?

All of which is to say – housing in much of Canada has never been less affordable than it is today. High interest rates, even 20%+, are very much preferable to an asset price bubble.

————————————–

it’s a looooong tough slog, esp when blaming others for everything.

You seem to be confused. Who’s blaming anyone for EVERYthing?

#70 Chaddywack on 08.14.17 at 8:46 pm

9% of people own multiple properties. I believe it!

My aunt and uncle have 3 each, a guy at my old work owns a home in West Van and is heavily mortgaged in 3 additional East Van homes he now rents out (haven’t talked to him in ages….should check in and see how he’s doing!) All these people are born and raised Canadians.

The guy at my old work is Chinese background, but he and his parents were both raised in Canada. He joked to me at work how the neighbours asked if he was an “FI” (Foreign Investor). He laughed and said he found their silly assumptions funny, but I don’t know how much he’s laughing now since he’s in for about $1.2M on each house….could probably get his money back if he sold now.

Then again there are 300,000 immigrants and refugees per year and the clear majority of them move to Toronto or Vancouver, so we cannot ignore immigration as a pressure on housing either!

The real answer is likely a balance between high immigration rates and high speculation rates in these two cities.

#71 jess on 08.14.17 at 8:52 pm

CBA announces it has reported 12 advisers to police for fraud or forgery since 2011
Commonwealth Bank staff were allegedly complicit in a $76 million Ponzi scheme and received secret commissions for their role in the alleged fraud, which was ignored by the bank’s management for almost five years – until police were alerted.

Commonwealth Bank will refund about $10 million to more than 65,000 customers after selling them unsuitable insurance when they applied for credit cards and home loans.

The Australian Securities and Investments Commission (ASIC) on Monday said CBA sold CreditCard Plus insurance for credit card repayments to 65,000 customers between 2011 and 2015 who were either students or unemployed.
http://www.smh.com.au/business/banking-and-finance/cba-to-repay-65000-customers-about-10m-for-unsuitable-insurance-20170814-gxvma6.html
https://interactive.guim.co.uk/embed/aus/2015/oct/old-timeline/index.html?key=1dR65uMgz7ga55IKgu45eYKF8TyZZNOci83_mE3vA2Ts

========
From Wall Street On Parade:

…”Financial dealings with a Russian bank that remains under U.S. sanctions can result in serious penalties – or not. Wall Street On Parade conducted research into filings made at the Securities and Exchange Commission for fixed income securities issued by Vnesheconombank and found that some of the biggest names in Wall Street banking and mutual funds in the U.S. hold, cumulatively, hundreds of millions of dollars in notes and bonds issued by the Russian bank.

Fidelity Advisor’s Emerging Markets Income Fund shows it held more than $62 million in VEB fixed income securities as of December 31, 2016. Various Deutsche Bank mutual funds that operate in the U.S. own tens of millions of dollars of VEB debt securities. JPMorgan’s Emerging Markets Debt Fund shows that as of November 30, 2016, it held $20.5 million in VEB debt securities, although, curiously, it has the position assigned to its Ireland holdings. Other big mutual fund names showing VEB assets are PIMCO, Putnam, and Vanguard.

The U.S. mutual funds are apparently able to continue to hold these assets because of the wording of the U.S. Treasury’s sanction announcement that was issued on July 16, 2014. The sanction order prohibited “new financing” to VEB but was silent on what banks should do with the hundreds of millions of dollars of VEB securities already in their portfolios.”

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

#72 acdel on 08.14.17 at 8:56 pm

#65 crowdedelevatorfartz

Thank you, you get it, my frustrations at times does not allow me to elaborate what I wish to; what you said in your post I could not have said it better! Wow hey!!!!

It’s not us versus them, I wish all to be successful, but I feel the current generation (not all) just does not understand what the past was like, what we had to sacrifice and how much abuse we had to endure.

I would be interested to see what the average lifespan is for a gen-x, just curious, let’s not make a molehill out of this, I just know out of life experiences on how many friends and family I have lost at a general young age!

#73 the Hammer on 08.14.17 at 9:11 pm

Howard,
I turned 18 in 1972. Worked since I was 14. First adult job was $1.80 an hour. At 18, got 5 bucks and a kick in the ass. I am a tradesman. I have probably averaged about 50G the last 15 years. No pension. Never had a paid holiday or sick day. No debt since 1978. Currently, liquid assets are more than sufficient to see me out. I don’t think you have a clue what you are talking about. As it was pointed out to you it takes time and discipline and work and luck. Too many wienie boys today.

#74 Sam on 08.14.17 at 9:19 pm

It always amazes me when I go across the border. I can’t resist to not observe and compare with Americans. Just looking at the clothes they wear, their big spending style, flashy cars, big salaries, big tipping in restaurants, they fancy houses that we cannot even imagine to buy at that price her in Canada. When I am back, I feel very sorry to see my fellow Canadian wearing Walmart clothes, driving honda civic,little flash, little cash in the pocket,frugal and pinching pennies every single day- yet they own houses worth million dollars. I always tell me wife that we are a no frill version of the united states in every way and yet got so outline when it comes to buying housing and spend way more than our actual worth.

#75 oopswediditagain on 08.14.17 at 9:20 pm

#68 Dee

Dee, nobody has to contact OSFI to support these changes. Read the page you linked to. You know where they say they will be making CONEQUENTIAL AMMENDMENTS.

Once the changes to Guideline B-20 are finalized, OSFI intends to make consequential amendments to Guideline B-21 – Residential Mortgage Insurance Underwriting Practices and Procedures.

Again they are not a regulatory body for the frickin housing market. They are in place to protect the banks interests. They want to ensure that the banks have proper systems in place to provide proper recourse when you default on your mortgage.

The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada, established in 1987 to contribute to the safety and soundness of the Canadian financial system. OSFI supervises and regulates federally registered banks and insurers, trust and loan companies, as well as private pension plans subject to federal oversight.

#76 Jeremy on 08.14.17 at 9:21 pm

I read this blog everyday. I’m an index investor. I put half my money in fixed income and I’m only 38. But I still think this opinion on Toronto housing is BS – even at these prices and these falling sales numbers, those who play the long game will win.

#77 Smoking Man on 08.14.17 at 9:27 pm

I’m going doom and gloom. No real estate recovery.

Tone of Boomers at or near retirement want out of real estate. Buy that ice cream store in the tropics. Tax free profits. Or what ever a million or so buys you.

The second real estate starts to make a comback boomers will list in mass flooding the market with inventory.

They ain’t going to wait around to catch the next wave.

The Canadian economy is going to go to shit. Communist government now attacking small business.
Wastefull spending. GDP heading for the toilet. Cultural wars. Identity politics. It’s going to get nuts here.

Hopefully for you guys who missed the boat to cash in at the top you get a dead cat bounce and free your selves.

Still not sure what we’re doing yet. Living at Seneca 4 days a week and visiting the kids for overnight stays the other 3 days.

You can rent really nice houses hamilton stoney creek for 2k a month.

Resuming road trip Wed. Atlantis seaboard .

#78 NoName on 08.14.17 at 9:29 pm

Is a HST rebate for new condo taxable in any way?

#79 Capt. Serious on 08.14.17 at 9:29 pm

I can’t get the thought out of my mind that next year could be worse, much worse. As people get tapped out by their leveraged situations they’ll get forced into selling and taking what they can get. As Boomers realize their chance to cash out for big bucks is fading, many will list hoping to score, ironically sowing the seeds of their own disappointment.

#80 Gursharan Panesar on 08.14.17 at 9:38 pm

There are some other factors. First of all, population count is not including foreign students (more than 300,000) who purchased thousands of homes with their parents money, mostly from China. These forign students will become permanent residents in few years. Nothing wrong in this and most of these students came to Vancouver or Toronto and still coming in thousands.

Vancouver and Toronto are also becoming IT hubs. These IT hubs are attracting talent and money from outside Canada. Wherever IT goes, prices of Real Estate goes up (just like San Francisco or Seattle)

#81 jess on 08.14.17 at 9:39 pm

undeclared rent income …the uk wales experience

Half of landlords in one London borough fail to declare rental income

Newham council says HMRC may be losing £200m a year in London alone after finding half its 27,000 landlords failed to register for self-assessment guardian uk patrick collinson

HMRC’s Let Property Campaign

https://letproperty.campaign.gov.uk/
HMRC is currently contacting local landlords who have failed to register their rental revenues. The tax authorities have the power to claw back unpaid tax over 20 years, with penalties of up to 100% of the tax demanded. ”

was launched in 2014 amid concerns that up to 1m buy-to-let landlords are not declaring their rental income. HMRC said at the time that it believed landlords were avoiding around £550m in tax, although Newham’s experience may suggest that the figure could be much higher.

https://www.theguardian.com/business/2017/aug/13/half-of-landlords-in-one-london-borough-fail-to-declare-rental-income

All Landlords in Wales must register with Rent Smart Wales.
https://www.rentsmart.gov.wales/en/

#82 TOrenter on 08.14.17 at 9:40 pm

I really hope all this bubble bursting is happening like you say but honestly I don’t see prices go down in Toronto as of yet.
Did a little search on Realtor.ca last night and all I can see is crappy houses for little under a million.
I know it’s early in the game and I do believe things are gonna be getting much worse but the prices haven’t changed yet. At least from little research I did.

Btw Garth, if you do want a better website and more exposure, I can help. You got my email.

#83 the ryguy on 08.14.17 at 9:40 pm

#76 Jeremy

I guess that really depends on what you mean “long game”.

How long can a person be cash flow negative on a (or multiple) rental properties?

How long can a family plunk down 70% of their earnings on a mortgage and still be happy?

How long can people tap into their equity to stay afloat for another mortgage payment or two?

You’re and index investor..great so you should be able to identify trends and read balance sheets.

-The average Canadians are overwhelmingly in debt, and the biggest reason it hasn’t mattered yet, is because of HELOCs and equity.

-There is almost a 1 correlation between house prices and interest rates.

-Interest rates are at all time lows and have been for some time, that is changing.

– Approx 65% of Canadians own their homes..so approx 35% don’t. That 65% figure btw is one of the highest on the planet. The banks and Gov’t have been pushing ownership for the last 6-7 years. That tells me that the other 35% really don’t want to own property. They either legit just don’t care, or are like myself (and many others on this blog) that can see what is happening and will just wait.

This is a really simple puzzle, I don’t understand how people can’t see it for the house of cards it is.

Unless you see an incredible increase in very well paying jobs in the GTA, I can’t see how one wins with TO real estate.

#84 For those about to flop... on 08.14.17 at 9:41 pm

LS in Arbutus 08.14.17 at 10:58 am
FLOP

Good luck not losing money on this one. At 10% discount to assessed, sales price would be $3.610. $75k in property transfer tax paid and $100k in realtor fees. Thus they would net approx $3.430 and they paid $4.100. For a projected loss of $665k. ‘Nice’ 1.5 year return. I wonder if CRA will start allowing people to claim these were investments (and thus allow a capital loss?)

3236 W 35TH AVE

Bought Sep 2015 $3.460
Bought Mar 2016 $4.100
Now asking $4.398
Assessed $4.020
https://tinyurl.com/yavak6fj

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

Hey LS,just catching up on the mail and I put this one in the Pink Folder.

Also just want to thank all the people who took time yesterday to thank me for my efforts in trying to document what is going on in Vancouver real estate at the moment and made some suggestions.

Many hands make light work…

M43BC

#85 Toronto1 on 08.14.17 at 9:49 pm

#2 Mike

The OFSI ruke changes are a done deal. No matter how much fake news you spread

Prices follow volume expect some catastrophic numbers in the next few months.

We will see multiple double digit drops before the year is out.

Forgot that were just peak, forgot about the OFSI rule changes, higher mortg rates, peak debt, stagnating incomes, overcapcity of RE available, tighting credit and availability. Foreign buyers tax, Forgot about all of it.

The massive drop in sales volume MoM for a period of 6 months or more in itself is singularly enough to crash the market. Buyers strike

Thing is in those 6 months the amount of forced sales from divorces, deaths, job loss, financial stress etc.. starts to set floors. Then the sideline filksvwho are thinking of selling rush en masse to list because. The drops gain velocity and its apparent to everyone that next year will be worse. Thats when things turn ugly.

These false hope of all these sideline buyers is fading fast, but dont worry just like all those pump and dumps, nortel, brex crypto currencies, the turn is just around the corner……

#86 Paddler on 08.14.17 at 9:56 pm

#80 Vancouver and Toronto are also becoming IT hubs. These IT hubs are attracting talent and money from outside Canada. Wherever IT goes, prices of Real Estate goes up (just like San Francisco or Seattle)
===========================================%=

The problem is a lot of these IT companies have a hard time to find employees because nobody wants to move to Vancouver. Always the same answer to expensive and nothing to rent.

#87 YVR Update on 08.14.17 at 9:57 pm

I betcha if anyone tries to challenge the immigration/population growth numbers, they will be deleted into oblivion.

Lets see if house prices are lower in 2 years in YYZ. And YVR up 60% over last 24 months.

But lets see who’s right. People posting here been wrong for a decade.

#88 Another Deckchair on 08.14.17 at 9:58 pm

To all those arguing with our young friend Howard:

Has there ever been a generation where the youngsters say things like Howard is saying? I doubt it.

I’ve done it. I’m a tail-end boomer, but, let me tell you – those guys that I know that are in their mid-60s to 80’s – boy – did they luck out with pensions (these friends of mine – they all basically stopped work between the ages of 50 and 55. I’ll be 60 or so if I’m lucky).

These guys don’t know how easy they had it compared to the tail-end boomers….

So, cut Howard and his ilk a break; I’m sure we’ve all done it.

And, Howard, cut the boomers a break, too. Not everybody has gold-plated pensions, or even a pension at all.

Everybody’s trying to stay alive and eat, but the smart ones (no matter what age) are reading this blog…

#89 rental property math on 08.14.17 at 10:06 pm

I’m going doom and gloom. No real estate recovery.

Tone of Boomers at or near retirement want out of real estate. Buy that ice cream store in the tropics. Tax free profits. Or what ever a million or so buys you.

The second real estate starts to make a comback boomers will list in mass flooding the market with inventory.

They ain’t going to wait around to catch the next wave.

The Canadian economy is going to go to shit. Communist government now attacking small business.
Wastefull spending. GDP heading for the toilet. Cultural wars. Identity politics. It’s going to get nuts here.

Hopefully for you guys who missed the boat to cash in at the top you get a dead cat bounce and free your selves.

Still not sure what we’re doing yet. Living at Seneca 4 days a week and visiting the kids for overnight stays the other 3 days.

You can rent really nice houses hamilton stoney creek for 2k a month.

Resuming road trip Wed. Atlantis seaboard .

————————
If you’re looking to rent in Hamilton look south of main street. Delta West and Stinson areas and you can get something nice for 2k. North of main street can be sketchy. North of Cannon St.. maybe come back in 5 years.

#90 rental property math on 08.14.17 at 10:14 pm

All you homeowners who are up at night because you bought way too much house that you can afford I have a mind blowing discovery for you…

Thompsons WaterSeal Deck Wash and Olympic® Premium Deck Cleaner that retail for about $19.99 is the exact same as buying $1.99 Great Value Bleach at Walmart.
Same stuff!!

Now have a slice of avocado toast that you miss so badly since you won that bidding war.

Better start getting handy soon!

#91 acdel on 08.14.17 at 10:15 pm

#85 Another Deckchair

Good post!

It’s not about the Howards per say, but Gen-X’s and Boomers trying to prepare the youngsters through past experiences; just like Garth and his guests are doing providing us with valuable info on this Blog and as
well allowing all generations to comment, we are learning from each of us. Hopefully it is for the better!

#92 Mohammed on 08.14.17 at 10:21 pm

Even accounting for seasonality and string bikinis
======================
u r one funny mofo.

#93 bdwy sktrn on 08.14.17 at 10:25 pm

#59 Dolce Vita on 08.14.17 at 8:13 pm
#44 bdwy sktrn

What are these %’s of, represent, city in GVRD, your neighborhood, what, be specific?
////////
read the post again, slowly if needed. keywords – zolo, grandview.

////
and if related, how do you get 2 positive %’s and a 0% resulting in numbers that are negative below; thus, they cannot be related or 1 of your above %’s must be negative and so heavily weighted so as to result in these overall negative changes; otherwise, mathematically impossible):
///////////
wrong.

see zolo , above. they even put a big fat notice on every page for the math challenged.

even if sfh went up as well the avg can go down if it’s more 500k condos and fewer 1.7m sfh.

see this : https://en.wikipedia.org/wiki/Arithmetic_mean
/////////

BTW, I taught Stats and Engineering Economics at University, but go ahead, impress me.
/////////////
are you going to embarrass youself further?

grade 7 math;

last year
10 condo 500k
10 sfh 1.5m

avg = 1.0m

this year
20 condo 550k
5 sfh 1.6m

avg= 760k

all types up, average down
tough math , i know, esp for an econ teacher!!!

#94 For those about to flop... on 08.14.17 at 10:27 pm

Hey Dolce, I see your doing some good shadow boxing with my buddy Broadway.

I first remember noticing Broadway when he chirped me when I asked the crew if it was a good time to buy some Europe based funds.He suggested I buy a gold bar while I was at it, and I replied that he could shove his gold bar up his backside!

We both had a laugh and have been blog buddies ever since.

I had to stop using him as contact for realtor information though as sometimes his stuff has a bit of funk to it.

I wouldn’t go as far as calling the guy a liar , he just doesn’t always tell the truth…

M43BC

#95 jim on 08.14.17 at 10:39 pm

#76

“I read this blog everyday. I’m an index investor. I put half my money in fixed income and I’m only 38. But I still think this opinion on Toronto housing is BS – even at these prices and these falling sales numbers, those who play the long game will win.”

Brilliant. So you buy something at 900k today that you could buy for 700k next year. Over long long time horizons you might eventually catch up and overcome your immediate loss in equity.

Note: given the crappy quality of Toronto condos, there is no ‘long haul’ with condo purchases. UofT experts think many of those buildings won’t last 30 years.

#96 NoName on 08.14.17 at 10:45 pm

everyone is departing from trupms manufacturing council…
ceo of merck 1st, now ceo of under armor and ceo of intel…

How about that HST rebate, anyone.

#97 jim on 08.14.17 at 10:45 pm

#80

“There are some other factors. First of all, population count is not including foreign students (more than 300,000) who purchased thousands of homes with their parents money, mostly from China.”

There are 300,000 foreign students from China who purchased homes???? Evidence please.

I’m sure every foreign student from Peru and Senegal arrives with 200k for a down payment on a Toronto bunghole.

“Vancouver and Toronto are also becoming IT hubs.”

Really? What evidence do you have?

I’ve been hearing that for 20 years. You forgot Waterloo… Silicon Valley North. Or wait, was that Ottawa? Or Vancouver? Grandiose delusions have been so common of late that I can’t keep track.

What exactly are the big IT firms in Vancouver? (Hint: Microsoft, Amazon etc only have small holding pens there).

“These IT hubs are attracting talent and money from outside Canada. Wherever IT goes, prices of Real Estate goes up (just like San Francisco or Seattle)”

How interesting. So you should be able to show a clear correlation between IT investment in Vancouver and house prices. Link please.

I don’t think you know much about the Silicon Valley or SF housing markets. Nor are you aware that some cities with significant IT sectors (e.g., Columbus Ohio, Pittsburgh PA) haven’t experienced the same rise in house prices.

In fact, you appear to be pulling this out of your nether regions.

#98 Happy Housing Crash Everyone! on 08.14.17 at 10:45 pm

68 Dee

I have . I use realtor propaganda articles as proof the housing market is over heating and these rules changes have to be implemented. I EMAIL Kathleen with the same articals telling her that her 16 point plan isnt enough. Use realtor lies against them as proof. Happy Housing Crash Everyone Everyone!:-)

So many realtors will lose EVERYTHING! :-) we all know many are maxed out on debt and haven’t even paid their taxes. :-))

#99 Lee on 08.14.17 at 10:48 pm

If Toronto sales are really off 50% for the year toronto loses probably $300,000,000 in land transfer tax. This for a city that’s probably already hiding a $300,000,000 deficit.

#100 garth fan on 08.14.17 at 10:58 pm

Well, if there is excess supply as Garth said, then there are, ahem, people who could be housed…

Like these people discussed here:

http://dailycaller.com/2017/08/14/illegal-refugees-complain-about-housing-in-montreal/

#101 Smoking Man on 08.14.17 at 11:22 pm

Jordan bro. For being so smart you don’t see the big picture.

Individualism rocks. Being a tribsmen not so much.

https://youtu.be/HxfFxhERMYY

All this going down is deversion created by Shlong Zumanga.

My dad , mentally hadicaped ww2 vet bought a house on a sweepers wage. Cottage and had two cars.

The machine has taken that all away. Today two PhD grad couples with jobs can barley get buy.

The distractions of today’s world is to divide the masses while taking even more from them.

That’s globalism.

#102 You're The Best Garth on 08.14.17 at 11:24 pm

Garth your daily updates on the housing market are greatly enjoyed!!!

Given I live in the GTA and have many friends and family here either selling or buying I can confirm you’re dead bang on.

#103 joe on 08.14.17 at 11:27 pm

#76 Jeremy
even at these prices and these falling sales numbers, those who play the long game will win.
================================
Eminem bought in 2003 for $6 Mill now selling for $2.

http://www.huffingtonpost.ca/2017/08/14/eminem-selling-detroit-area-house-for-less-than-half-what-he-pai_a_23077315/

#104 paulo on 08.14.17 at 11:33 pm

#85 Toronto 1

you are correct: i have also seen the new directives outlining changes that have been sent to real estate attorneys.

possibly some last minute adjustments,otherwise a done deal.

much tougher than most expect,due diligence provisions are something else.

#105 Happy Housing Crash Everyone! on 08.14.17 at 11:35 pm

bdwy sktrn

Keep screaming in horrible financial pain. We are enjoying every scream we hear. Lies = screams. We all have to start wearing earplugs with all those screams. Happy Housing Crash SHYSTERS . Your lies have been exposed

#106 Smoking Man on 08.14.17 at 11:36 pm

I’ve never had a rasist thought in my head, ever.

Sexist, yeah I’m guilty. I love staring at hot woman.

But there is definatly a hate on by globalist mind twisted despiles a madness toward straight white men. Especially those who own guns. Makes an orderly take over by down rifht theives difficult.

https://youtu.be/RPGXkPVw93A

#107 NoName on 08.14.17 at 11:58 pm

#77 Smoking Man on 08.14.17 at 9:27 pm

You can rent really nice houses hamilton stoney creek for 2k a month.

—-

stay away from stoney creek, you dont like it here.

#108 DON on 08.15.17 at 12:03 am

#56 acdel on 08.14.17 at 7:57 pm

#32 bdwy sktrn

What?? Seriously!! If that is true which I think is complete B.S. you must hang around an exceptional very small percentage of Gen-X that were spoon fed, the rest of us had to deal with numerous recessions, high interest rates and a*hole bosses who were so dam miserable in their personal lives that they took satisfaction on laying it out on the rest of us; so seriously: give me a fricken break!!!
*********

Broadway: This could be the piece you are missing – you are thinking ‘happy path’ – These days even the smart kids are having issues finding liveable employment. Not everyone lives the same life – when these first time buyers can no longer compete, things change and it becomes cool to rent ‘just like in Germany’ provides freedom – can leave on a whim to go on an adventure, internship, opportunity abroad etc. Vancouver is not the be all end all. Shifts happen fast with human nature. Just like when people finally fall out of love with Justin long enough to ask him what he has done.

I do agree with your 90s wage and today’s certification overload (balance experience with knowledge – that’s what the boomer bosses should be looking for in the best interest of their organizations).

Note: For all the Justin followers, I mean no harm. I expect all Politicians to provide regular and meaningful status reports.

#109 Newcomer on 08.15.17 at 12:08 am

#70 Chaddywack on 08.14.17 at 8:46 pm

Then again there are 300,000 immigrants and refugees per year and the clear majority of them move to Toronto or Vancouver, so we cannot ignore immigration as a pressure on housing either!

————-

This is true, but an important consideration to keep in mind is that the rate of growth (around 1% per year in both places) is not higher than it usually is. In fact, in Vancouver, it is well below average. That rate of growth is also standard in all large North American cities. For example, Saint Paul Minneapolis has been growing at 1 bit over 1% for the past 30 years. And in places like Dallas, with twice our growth, prices are no higher than they were ten years ago. In short, the population growth in GTA and YVR is a price support factor, but it is not a factor that would support higher than ordinary price growth.

#110 MF on 08.15.17 at 12:10 am

#82 TOrenter on 08.14.17 at 9:40 pm

I did the same. Everything livable is still close to a million for a dump during this so called “crash”.

Condos (all any can afford) are still rising in price. More importantly, so are rents.

I also believe the demand for housing has not disappeared. A decade and a half of the houses only go up mentality doesn’t just disappear. Buyers are simply on the sidelines waiting.

IF you can afford it, the next few months to a year may be a good time to buy SFH in Toronto. That is my belief.

MF

#111 Much Maligned far too often deleted and still not politically correct....the unafraid stock pickwr on 08.15.17 at 12:11 am

Rotation be upon us…..note the rise of bitcoin. Bubbles are human nature . Long live bubbles and greed. Yes…I’m also a thorn in the side of the CBC and all other liars.

#112 DON on 08.15.17 at 12:12 am

@ FLOP

The disbelievers are starting to lash out. But do try to spill corroctly so the grammare kings and qeetns have no reason to comment. lol

Keep up the good work – much appreciated! The real time show of declines is helpful. Shows change in the direction of decline which should make most sane people a little concerned and starting to pay some attention. Then again that youthful Vancouver trendy culture is easy to get sucked into and hard to leave.

#113 NoName on 08.15.17 at 12:17 am

Interesting read, shell is venturing into electricity production.

“Shell’s move should raise a flag of concern for investors in the other oil and gas majors. The company is positioning itself for change. It is sending signals that it is now viable even if oil and gas prices do not increase and that it is not resisting the energy transition. Chief executive Ben van Beurden said last week that he was looking forward to his next car being electric. This ease with the future is rather rare. Shareholders should be asking the other players in the old oil and gas sector to spell out their strategies for the transition.”

https://www.ft.com/content/6c9a9626-ad82-3ca5-854c-424ddd187be2

#114 YYC Geer on 08.15.17 at 12:26 am

Teranet is an excellent indicator of what a bad indicator indicates. — Garth

—————————————————————–
Garth, this retort of yours made me literally LOL. :)

Keep up the great work!

#115 Long-Time Lurker on 08.15.17 at 12:28 am

Garth Turner’s: The Greater Fool Blog!

The litigators
August 13th, 2017

On Sunday I received this note, from Anna:

“First time home buyer and we had a good down payment, but not qualify for funding from the big banks, the mortgage was for $900,000.00 Surprised, when a mortgage broker easily approved it, my understanding is that the mortgage brokers are regulate under federal legislation.

“Since the closing in May, the prices in Richmond Hill are going down. What is very concerning is that we put all of our saving down, no emergency fund. We are not able to save at all. Since 2006 were waiting for a correction, you know the rest. We bought the house because we thought is going to go up or at least stays the same.

“I wish the lender did not approve our mortgage that easily, we never got any red flag. Mr. Turner I know you can’t look in your Chrystal ball, but what do you think the housing is going to be in 3 years?”

Beats me, Anna. But you have no savings, one falling, illiquid asset, a $900,000 debt and nobody to blame but yourself. Well, almost.

Get a lawyer.

Thinking about Anna.

I’m thinking that Anna could re-sell immediately. Let’s say it sells for $800k. She’d then only have a $100k loss to recover from. If she waits longer then her losses could increase. If the house value drops to $450k, she’ll have a $450k loss.

Let’s say that she doesn’t sell. She’ll be shackled with a $900k mortgage for the rest of her life and won’t be able to accumulate any savings. Bad move.

Another option is she could stop making her mortgage payments and default on the house.

She’ll lose the house and mortgage, pay compensation and possibly go bankrupt; but she’ll recover faster from bankruptcy (7 years) than hold a life-long money pit.

She could also increase her income but since she made this really bad market move, I don’t think she can do so without stepping up her game.

You’d better make a move soon, Anna. Your gallows rope is running out of slack.

#116 Bob Dog on 08.15.17 at 12:30 am

Sorry to trash the immigration theory but Canada has had an obscene immigration rate for at least 30 years.

Problem is the cities are filling up and nobody seems interested in building new ones.

Perhaps it is time for immigration reform if no expansion is planned. It’s not 1970 any more.

Annual immigration is stable at less than 1% of the population, without which our numbers would decline. We all came from somewhere else. — Garth

#117 DON on 08.15.17 at 12:37 am

#76 Jeremy on 08.14.17 at 9:21 pm

I read this blog everyday. I’m an index investor. I put half my money in fixed income and I’m only 38. But I still think this opinion on Toronto housing is BS – even at these prices and these falling sales numbers, those who play the long game will win.
*************

Life throws a lot of curve balls, can you survive with big debts long enough to reap the future benefits. Things change.

#118 DON on 08.15.17 at 12:43 am

#60 Danny on 08.14.17 at 8:17 pm

Garth
Just did a Google search “Toronto housing prices trends ”
and sorry to say….your blog did not come up.
Too bad I am sure that prospective buyers are struggling for honest and unbiased…opinions….to balance the misleading sales pitch by Realtors…who hide after deals are made.
Wondering if your computer knowledgeable friends can provide advice to make your Site show up on an Internet search…..more easily
Shame to not have your honest words of wisdom shared with more folks in need…especially housing….most of us are ignorant when it comes to making the biggest purchase of our life.
Good stuff when CBC interviewed you last time though.

Great idea. Just what I need. Another boatload of horny moisters. — Garth
**************

You could rename the blog to “The Greater Parent” and write a whole new series of books.

#119 cd on 08.15.17 at 12:57 am

#74 Sam… I suspect you have the full Canadian experience (things are a little more balance here anyways) and you probably haven’t had the full and complete American experience. While it is true that some do have a fair bit of money and a high standard of living, a lot of Americans are in a very bad state financially. It has become an hourglass society. They have plenty of people that wear Walmart clothes, have no flashy items, and would be happy driving a third hand honda civic.

As with your example of people leaving big tips… on the opposite side of the equation, the servers in the US get very low base wages and it is almost expected for one to give large tips since they know how bad it is. Currently, Michigan’s restaurant owners are permitted to pay a tipped minimum wage of $3.38 per hour provided the restaurant worker makes at least $8.90 per hour (the state’s hourly minimum). If workers do not make at least $5.52 in tips per hour on average, employers are required to pay the difference.

#120 cd on 08.15.17 at 1:16 am

From today’s article I was wondering who buys houses anyways…

1. People who really need to (for the space, location…)
2. People who just want to (material consumption)
3. Speculators, investors, amateur landlords, flippers…

So… as things unwind are we mainly seeing people from groups 2 and 3 leave the market and the people that remain the ones from group 1? With this idea and the numbers in the article, does that make the market to something like people who need:investors => 40%:60%.

Or perhaps it is simply a case of the don’t catch a falling knife idea and everyone is leaving the market except for the brave few or the dumb.

I don’t know…

#121 Dolce Vita on 08.15.17 at 1:37 am

#93 bdwy sktrn

You exasperate me but, at least you try to make yourself understood.

What you finally provide is the PREVIOUS period information to calculate percentages, well for Condos anyway and only yearly, in your example.

Go back and look at your original #44 bdwy sktrn post. You had 3 period percentages (monthly, quarterly & yearly):

-9.2%
Monthly change
-6.2%
Quarterly change
-11.5%
Yearly change

Then you had 3 other percentages, what they were for was unknown, presumably unit sale % increases for a specific time period but we do not know for which of the 3 periods (monthly, quarterly or yearly?) that is nor do you provide unit sales for 2 time periods:

condos +10%
Town +15%
detached 0%

Apparently this was your evidence that Stats are manipulative while those of us that can calculate these things must DIVINE missing information.

Now you chortle away, with your Grade 7 math comment, and FINALLY provide the MISSING 2 period information, AND ONLY yearly, to calculate a % change in price and unit sales in your example…clearly missing in the original post for your actual Woodlands data.

You withhold information, then provide the information and finally self-congratulate yourself on a job well done and maintain Stats bad.

Unbelievable.

And “no” in your example, “all types up”, SFH unit sales were down, 10 units to 5 – “all” means everything in your data, not just the parts you like.

Mercifully for you, I have taught RE Program people before (for a short time) and I am used to their brand of Realtor math, typically, that includes withholding information.

In your Woodlands example, #44 bdwy sktrn, here is what was missing:

-Avg. prices for Condo, Townhome and Det (yearly, quarterly and monthly)
-Unit sales for Condo, Townhome and Det (yearly, quarterly and monthly)
-Period not specified (yearly, quarterly and monthly)

You cannot jump to some final numbers and not provide your base data so others may agree with you.

#122 Sir James on 08.15.17 at 1:51 am

#22 Shawn – A house on my street in Welland similar to what I paid $120k for in December just sold for $205K.

#123 Dolce Vita on 08.15.17 at 2:12 am

I know seasonally, July to August sales lower, but in concert with what Old Ron was saying about sales and commission losses in 416, except here, Vancouver for this year.

Ran the Vancouver numbers for total sale value drop over a quarter (May 17 to Aug 11, again from Zolo.ca – they do not provide the May 11 data, so numbers will be slightly off, 6 days more data needed, to Aug 17 to precisely compare numbers):

3 mo ago, May 17:

Property Type | Unit Sales | Avg. Selling Price | Total $ Value Sales

Condo, 679, 839K, 569.7 MM
Town, 121, 1.3 MM, 157.3 MM
Det, 323, 2.7 MM, 872.1 MM

Total $ value sales, approx. = 1.6 Billion
Avg. selling price = 1.42 MM

Aug. 11 data:

Condo, 467, 847K, 395.5 MM
Town, 86, 1.3 MM, 111.8 MM
Det, 113, 2.1 MM, 237.3 MM

Total $ value sales, approx. = 745 Million
Avg. selling pirce = 1.12 MM
__________________________________

Total Quarterly $ value sales drop = $854.4 Million (May 16 to Aug. 11, 2017)

Quarterly % drops in total sales by property type:

Condo = -44%
Town = -40.7%
Det = -267.5%

Those drops and the resulting Vancouver Realtor commissions that go along with them (and related activities finance activities) seem very large to me.

Maybe Old Ron can comment on these numbers?

Then again, I am not familiar with the magnitude of seasonal sale drops (i.e., -41% to -267.5% may well be the norm).

From the Aug. 11 data, suffice to say, the only thing supporting Vancouver’s RE market are Condo sales and even those are, on a total dollar volume, way down. Yet, I read here about the “frenzy” in the Vancouver Condo market, it is hardly that (quarterly $ total sales down from $570 MM to about $400 MM).

This is chilling data to me. Someone with Vancouver RE seasonal sales drop knowledge care to comment?

#124 Made For TV Actor on 08.15.17 at 4:14 am

Garth, if you had to calculate an educated guess, how much nation wide equity has been lost since peak prices in April? And I don’t just mean the average price drop in houses for sale, I mean all housing equity Canada wide?

I remember reading something like trillions were lost in the first few days of the US crash in 2008/09.

#125 Arne on 08.15.17 at 4:18 am

#59 Dolce Vita
Geez, with that cryptic shorthand, it’s no wonder you’re a university professor.

Gz w/that cryptic <hnd, it's x wonder ur a uni prof.

#126 Dolce Vita on 08.15.17 at 5:05 am

#94 For those about to flop…

Thanks for the heads up Flop. I obviously do not know this person as well as you; however, I agree with your assessment.

Keep posting Flop.

BTW, more bad news and this from a Realtor, Steve Saretsky, whom I believe to be in general honest, from his VanCityCondoGuide yesterday (follow him on Twitter):

Headline:

Total Dollar Volume Falls 19% Across BC Real Estate

http://vancitycondoguide.com/total-dollar-volume-falls-19-across-bc/

He does some very impartial analyses here based on MLS data – kudos to him. If I come back to YVR, I will hire him as my Realtor.

I cannot wait to read how REBGV decides to spin this data.

#127 Arne on 08.15.17 at 6:06 am

RE: #82 TOrenter

Garth, please don’t change the site. If I see another HTML 5 slide wipe, or have to sit for 5 minutes while Google Analytics and a bunch of other crap loads, I’m going to snap.

Nice clean sites like this that put the information first are a dying breed. Don’t change the site!

#128 Wrk.dover on 08.15.17 at 7:02 am

Lots of argument about boomer vs loser corps last night, regarding tough times getting started. I am glad I was around (me boomer) back in the day to see how it was.

Opportunities Everywhere!

Examples? When I found Metro Phoenix in ’87, the pop was 1mil. Now? try 6mil. Too late now to get in on that growth train.

Closer to home, in ’75, I knew a guy that bought a freshly subdivided lakefront cottage lot SW of Bancroft for 3 grand. Equals $1.50/hour per one work year.

In ’75 I rented a farm stead in Grand Valley for $100, under a weeks take home of minimum wage. A drive from Guelph to Kitchener was on a country road. Bolton was a hick town in a valley. No subdivisions north of Maple. QEW still half lined with farms.
In ’76, I rented an excellent apartment in New Toronto for $165. A week of chump pay.
In those days, you could still buy a lake in Halifax County NS. I have been told.

Most consumer goods were made in Canada, jeans cost the same or more back then though.

I am half asleep here, not really articulating this in eloquence, but come on boomers, the population has doubled in our time. Of course there is less of everything to go around. It sucks to be young now. Accept that. Show some compassion at least.

#129 anc0dia on 08.15.17 at 7:35 am

#22 Shawn – A house on my street in Welland similar to what I paid $120k for in December just sold for $205K.

Welland, where dreams and hope go to die. Nobody looks happy in the town. Nobody.

#130 TheoryAndpractice on 08.15.17 at 8:01 am

If everything else fails, play with numbers :)

Secretive Changes to Benchmark Home Prices. Ross Kay – August 14, 2017
https://www.youtube.com/watch?v=cDgT48xGJPA

#131 String bikinis (typo) on 08.15.17 at 8:17 am

1.
“Even accounting for seasonality and string bikinis,…”

Facepalm – good one Sir Garth!

2.
“It gets worse, many agents are in the bad habit of paying for their previous years Income taxes with a good spring market. I have spoken to several agents who are in the hole for $60,000 or more to the Revenue Agency, with no deals in the pipeline to pay the Government. These are not big hitters, just average people who thought that absurdly high sales and price numbers would last for ever.”

I doubt it. CRA is good at what they do. There is no way they are not on quarterly payments.

Quarterly payments are voluntary. — Garth

#132 neo on 08.15.17 at 8:29 am

#6 AGuyInVancouver on 08.14.17 at 5:46 pm
Despite the lead paragraph, this post seems really to just apply to Toronto. Sadly, Vancouver continues to bubble along.

#7 Jules in Vancouver on 08.14.17 at 5:47 pm
Garth, how about an update on Vancouver RE…. Still no correction here. Prices in the GTA still have a looong to come down to get back to where they were in 2015. I think this is a blip that will stabilize once people stop freaking out. Vancouver is seeing price gains again for anything under $1M,still bidding wars going on here, no? Prove me wrong pls.

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

https://www.zolo.ca/vancouver-real-estate/trends

Average prices:

Down 17.7% monthly change
Down 20.9% quarterly change
Down 1.5% YOY change

#133 Spaccone on 08.15.17 at 8:36 am

I guess my lifetime Toronto/GTA experience has made me cold-blooded with age but I couldn’t have less sympathy as the walls fall around all the $50k millionaires, with $100s of thousands in equity draining from households. With the cheap borrowing, you pretty much had everyone artificially limiting their own supply or play the part of a well-off house buyer/owner with even the average cubicle-jockey wanting nothing less than a brand-spanking new custom-made home, or if it’s used it gets renovated from top-to-bottom. I had one of these types tell me once that they can’t stand people who are grubby or tight with their money–oh, you mean the type whose savings supply your loans!?

It couldn’t be a better suited karma and/or culture-influencing event than for the market to be virtually flat for the next generation. Still way, way too many regular joe’s who salivate at buying a condo(s) or McMansion as an “investment” or perpetual ATM in spite of a negligible rent return. Still have my FOB-ish Italian mother who gets into her female “button-pushing” mode a couple of times a year parroting how an over-leveraged house purchase is the best investment, why leave money languishing in the risky stock market (you know, in 1,000s of the best companies around the world) and put it all on a physically and cosmetically depreciating pile of bricks, dead trees, and chalk walls in soft servitude to the local city hall, utilities (heating/cooling 1,000s of sq ft), hardware stores, and to whatever GTA weirdo I may be renting to. She knows it’s a lost cause but does it anyway like a cat releasing scratching urges on a carpet post.

#134 maxx on 08.15.17 at 8:43 am

“We might stop believing what they tell us.”

People always pucker up when tsh their wallets.

Far too many Canuckleheads will end up realizing the heavy cost of playing a grand game of romancing the brick with realtards and their support teams of the BOC, gubbmint, CMHC and finance.

Too late for loss prevention, though.

Cue the permanent loss of actual wealth for those who bought at peak, and the crumbling of the “wealth effect” for the greedy, who so enjoyed rocking their overly confident butts on the front porch, awaiting bidding wars.

As for realtards and their imminent cash-flow problems, up yours. The last group most will ever feel sympathy for is this sleazy, in-your-emotional-pants pile of mind manipulators. A predatory bunch of creeps deserving of a real taste of what it’s like to have its finances messed with.

Whether popcorn or bubbly, schadenfreude is here for those who knew better.

#135 Darryl on 08.15.17 at 8:52 am

#78 NoName on 08.14.17 at 9:29 pm
Is a HST rebate for new condo taxable in any way?
————————————————————-
You can probably use it as an ITC if you have a business . But you would need to have billed HST to use this offset .

#136 Herb on 08.15.17 at 8:56 am

“Quarterly payments are voluntary.” — Garth

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/making-payments-individuals/paying-your-income-tax-instalments/you-have-pay-tax-instalments.html

So you’re a fisher? — Garth

#137 NIMBY on 08.15.17 at 9:18 am

#107 NoName on 08.14.17 at 11:58 pm

#77 Smoking Man on 08.14.17 at 9:27 pm

You can rent really nice houses hamilton stoney creek for 2k a month.

—-

stay away from stoney creek, you dont like it here.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Crap he is getting close to us here in Burlington. Glad a bridge separates us. Go back to the city Smoky where all the whack jobs live.

#138 Facts on 08.15.17 at 9:30 am

I love facts and math. This guy does a great job breaking it down! Not a RE guy!

” the average value of residential real estate in Toronto has increased by 97% over the last 9 years (from 2008 to 2016). That’s almost double. It sounds impressive, but if you actually compare Toronto residential real estate to other investments, then 97% over 9 years works out to an annual “rate of return” of just under 8% per year. In happier times, a gross return of 8% per year would have been considered a reasonable stock market return. Mind you, economists and investment gurus will say that generally, real estate is less risky than stocks, which means real estate is “outperforming” expectations if it’s earning a rate of return similar to what would be expected of stocks.However, note that 8% is the “gross” return – prior to taking into account expenses. It’s more costly to buy and sell real estate than a stock. In order to quantify this, we looked at expenses (maintenance & repairs, insurance, and property tax) which typically run about 1.5% per year (more for older homes), and transaction fees (land transfer tax, and realtor and legal fees), which can easily add up to 6% of the purchase price of a property – that is, roughly 0.7% per year over 9 years. This brought the annual “net rate of return” (after annual expenses and transaction fees) down to roughly 6% per year. Not bad, but not as high as one would assume for an asset that virtually doubled in value over 9 years.”

“Here’s a breakdown of how these two factors contributed to the average price increase:1. Inflation was responsible for roughly 19% of the increase (out of a total of 100%).2. Mortgage interest rates decreased by roughly 3% per year during the period. Mathematically, this means that for the same monthly mortgage payment (based on a 25 year amortization), a buyer can now afford a mortgage loan amount that is 60% higher than before! So, between inflation and lower mortgage rates, we could now explain almost 80% of recent price increases. At this point we got lazy and decided that all “other” factors (including foreign money) were responsible for the remaining 20% of the increase. But why would buyers be willing to agree to a 60% higher purchase price for the same property? One could argue that the majority of buyers look only at their initial monthly payment and tend to ignore the risk of rising interest rates. While this may not seem like rational behaviour for an investor, buying a home (especially for personal use) is often an emotionally charged decision. ”

conclusions:
1. Prices have been materially impacted by lower interest rates.

2. The impact of “value-added” activity (House Flipping), which has been sorely left out of any mainstream media analysis, is a significant contributor to price increases and general unaffordability.

3. Foreign buyer taxes may cause a temporary decrease in home prices (as we have seen in other cities), but the data does not point to foreign buyers as a major factor in these recent price hikes. Unfortunately, these are the issues our government has decided to focus on (perhaps because they are easier to deal with), while ignoring the real issues.In the long-term, I believe housing prices will be tempered by other more general technological and societal advances.

#139 Facts on 08.15.17 at 9:30 am

The link to the data: http://www.torontosun.com/2017/08/14/sorry-to-burst-your-bubble

#140 NoName on 08.15.17 at 9:49 am

Amazon, funny company. According to YouTube dude it’s losing xxx amount of dollars per prime customer, and charging only 100 for prime service… Now brilliant move to cut cost, “why wait, pick it your self”. Not long from now I can see prime more expensive and designated picking locations.
First they built user base, slowly but surely time to capitalize on them is just around the corner.

https://www.amazon.com/gp/help/customer/display.html?nodeId=201955010

#ImpulsivnesOverload

#141 Victor V on 08.15.17 at 10:11 am

Canada home resales drop again in July: CREA

http://www.bnn.ca/canada-home-resales-drop-again-in-july-crea-1.830463

OTTAWA – The Canadian Real Estate Association says the national average price for homes sold in July fell compared with a year ago, the first year-over-year drop since February 2013.

The association says the average price for a home sold last month was $478,696, down 0.3 per cent from July 2016, due to fewer sales in Toronto and Vancouver compared with last year.

#142 JD on 08.15.17 at 10:12 am

To #33 Dolce Vita and all who just rubbing stats and tickling own emotions!
Yep, all good numbers in the stats to talk about and tickle your “inner mini me” that supports the opinion that GVRD is crashing!
I have no stats to back me up no objective pieces of evidence to support what we have experienced in YVR area this summer during our passive and active hunt for a home for my family.
The moment you mention the stats and any references to the downturn trend, we got ridiculed and presented with listed /sold facts. I do not know what to believe anymore, but Vancouver, Richmond, Surrey and further out, all are out of reach for professional families and both members working full-time raising a couple of kids!
Since May we were not able to find any acceptable home, not price-wise nor the condition relative to the asking price!
Revivewd all options proposed:
a) Buy run down shack and rebuild – not economically feasible nor practically achievable in our situation. – always scooped up by some one instantly if priced a bit even with today’s trend – only 3 were presented.
b) A one in liveable condition & a lot of continuous reno projects – was not able to find – I guess this one is my fault as I am too picky! – can not stand main level depressing shacks, I wouldn’t be able to find the stamina to drive me to do the reno on those dog house size hobbit houses!
c) Went along with all RE agent proposals which were not many to go with.
In last four month, we definitely did not notice any crush nor inventory improvement on the dwelling quality side of things. The only short moment we observed that in June-July was some kind of pose in the musical chair game and back it was again in August. Prices did not move down! We have seen listing with gambling prices but that is evident at the time I guess not for the statistician working with or Computer that computes it.
It is absolutely impractical for the buyer to use these stats in any form.
I am not pumping RE in this post! I am the utterly frustrated peasant who worked and saved 20 years diligently & painstakingly, guided by “supposedly” proper source of information resulted in the inability to buy a home with 25% DP in the area where the roots one’s where! That is it!

#143 Victor V on 08.15.17 at 10:23 am

Year-over-year, average price for homes fell in July: CREA

https://www.thestar.com/business/real_estate/2017/08/15/average-home-prices-down-since-this-time-in-2016-real-estate-association-says.html

#144 The real Kip on 08.15.17 at 10:26 am

Well let’s hope all the above is true because, if it is, I’m gonna try and get my taxes lowered. Us Boomers pay too much tax on all this property we own! Thanks for the great info!

#145 Howard on 08.15.17 at 10:40 am

#118 DON on 08.15.17 at 12:43 am

You could rename the blog to “The Greater Parent” and write a whole new series of books.

———————–

I was thinking Garth would do nicely were he to pen a Wealthy Barber-type guide to financial independence. David Chilton’s book is great but is now somewhat outdated for the times we live in.

#146 Howard on 08.15.17 at 10:48 am

#116 Bob Dog on 08.15.17 at 12:30 am
Sorry to trash the immigration theory but Canada has had an obscene immigration rate for at least 30 years.

Problem is the cities are filling up and nobody seems interested in building new ones.

Perhaps it is time for immigration reform if no expansion is planned. It’s not 1970 any more.

Annual immigration is stable at less than 1% of the population, without which our numbers would decline. We all came from somewhere else. — Garth

—————————–

The difference, Garth, is that a large proportion of previous immigration waves populated the nearly-uninhabited West and rural Ontario, creating new towns and cities. Today, 40% of immigrants go straight to the GTA and another 20% to Vancouver.

Why can’t the federal government encourage settlement in smaller centres? I’m sure Lethbridge, Windsor, and Trois-Rivieres would like some immigrants and economic expansion. If diversity is our strength (truly cringe-inducing platitude from PM Peter Pan), why not spread the diversity around and give the metropolises some breathing room?

#147 Penny Henny on 08.15.17 at 10:48 am

#129 anc0dia on 08.15.17 at 7:35 am
#22 Shawn – A house on my street in Welland similar to what I paid $120k for in December just sold for $205K.

Welland, where dreams and hope go to die. Nobody looks happy in the town. Nobody.
//////////

Not true.
Come to the West Side.

#148 SAM on 08.15.17 at 10:52 am

https://www.simcoe.com/news-story/7500970-fallout-has-arrived-from-spring-housing-boom-in-simcoe-county/

#149 nejonuw on 08.15.17 at 11:00 am

#139 Facts on 08.15.17 at 9:30 am
The link to the data: http://www.torontosun.com/2017/08/14/sorry-to-burst-your-bubble

Good article but that formatting makes it so difficult to read.

#150 Mike in Edm on 08.15.17 at 11:08 am

A family member’s 19 year old waitress girl friend is apparently buying a $500k house in Edmonton in January with a $25k downpayment from the bank of Mom.

LOL. That will not end well

#151 IHCTD9 on 08.15.17 at 11:13 am

#113 NoName on 08.15.17 at 12:17 am
Interesting read, shell is venturing into electricity production.
____

They probably got a look at a typical Hydro One electricity bill and realized they’re in the wrong game.

#152 Herb on 08.15.17 at 11:16 am

“So you’re a fisher?” — Garth

No, Garth, I’ve merely gone from frequent commenter to distant observer, except when I see something that sticks out as factually wrong.

#153 IHCTD9 on 08.15.17 at 11:20 am

#99 Lee on 08.14.17 at 10:48 pm
If Toronto sales are really off 50% for the year toronto loses probably $300,000,000 in land transfer tax. This for a city that’s probably already hiding a $300,000,000 deficit.
____________________________

Tory’s on it – business property taxes up 100%:

http://www.cbc.ca/news/canada/toronto/yonge-businesses-tax-increase-1.4233145

More stupidity to come guaranteed.

#154 Keith in Calgary on 08.15.17 at 11:29 am

http://www.zerohedge.com/news/2017-08-15/doomsday-trainwreck-coming-manhattan-luxury-real-estate-barry-sternlicht-warns

Here’s a very good and quick read about the RE problems in NYC.

#155 45north on 08.15.17 at 11:37 am

Old Ron: This market is far worse than anyone is talking about.

as the realization of how the housing crash hits them personally they stop talking. like of wave of silence.

Toronto1: Thing is in those 6 months, the amount of forced sales from divorces, deaths, and financial stress starts to set floors. Then the sideline folks who are thinking of selling rush en masse to list. The drops gain velocity and its apparent to everyone that next year will be worse. That’s when things turn ugly.

that got my attention

#156 IHCTD9 on 08.15.17 at 11:58 am

#37 Howard on 08.14.17 at 7:08 pm

“Whining”. Right. Apparently any mention of inconvenient facts that dash the Boomers’ myths about themselves now counts as “whining”.

I was simply responding to someone else’s laughable claim that high interest rates in the early 80s were a singular scourge that independently negated the dirt cheap housing, nearly-free education, high interest on savings, generous pensions, limitless funding for skills training, and yearly salary raises that that particularly fortunate generation enjoyed.

If the truth isn’t palatable, suck it up snowflake.
____________________________________________

While I know Millennials do have some challenges, a lot of their biggest challenges are self inflicted by paying to get 3 degrees and trying to start life in a metropolis.

Let me offer a bit of perspective:

Out my way in the wind swept tundra, Millennials have it better than any generation before them by a wide margin.

They buy really nice newish homes on an acre plus for 3-4X local average household income. Needs some TLC starter homes are ~2X income. In a lot of cases, it’s less expensive to make a mortgage payment than to rent, and the relationship between incomes and monthly mortgage payments (all in) well favours 2017 over 1997.

Globalism has pushed price on any consumer good you care to name DOWN – and 2017 buyers are spoiled for choice compared to 20 years ago. Local 30 somethings have garages and houses full of toys many of which never even existed a scant 2 decades ago.

Cheap credit and insane financing. Today, you can walk into a Yamaha dealer and buy a brand new Grizzly 700 and can finance for 1.89%, or stretch payment out for 5 years. Trucks and cars can be financed out 10 bloody years (insane) for 5% and less. Electronics are so cheap grocery stores sell the stuff. Online sales via EBay, Kijiji, Amazon etc.. further make consumption easier and cheaper than in all recorded history of the universe. A good used car costs the same today as it did 20 years ago, if not less.

So Millennial driveways have $50K trucks in the driveway with 12K toys in the garage. On top of that, a decently employed Millennial couple could easily make these payments and MORE, with room to spare at local average family incomes. Add another ATV and a Bass boat and it’s still easily done with today’s low rates, easy credit, and decade long financing terms.

I am surrounded with Millennials who got paid to go to school, have zero debt, and make 50-60K per year after their apprenticeship is done. Married and decently employed Millennial couples are the first generation to get it all “right now”. 4 years after high school at 22-23 years old, they’ve got newer nicer everything than I do, and they’re not struggling with buying it either, not even close.

IMHO, the so called “Generation Screwed” is a fabrication of Urban Millennials. The small town ones working outside the influence of large Urban centers are more like “Generation WIN!”

#157 Ian on 08.15.17 at 12:02 pm

#3 Mike on 08.14.17 at 5:40 pm
[email protected]
Reminder: Deadline is August 17th, 3 more days.
————————————
Thanks!! Let’s all write OSFI and tell them to implement the stress test as soon as possible!!!!

They’re going to anyway. Those thinking they might not are in dreamland. Now we’re just waiting on the timing.

#158 Rational Optimist on 08.15.17 at 12:03 pm

89 rental property math on 08.14.17 at 10:06 pm

“If you’re looking to rent in Hamilton look south of main street. Delta West and Stinson areas and you can get something nice for 2k. North of main street can be sketchy. North of Cannon St.. maybe come back in 5 years.”

Five years is wildly optimistic. Your advice about looking south of Main is right. I am guessing you can get something pretty amazing for $2,000 in Stinson or Delta West, though. You can rent in the west end for that. Here’s a place near Locke: https://www.kijiji.ca/v-house-rental/hamilton/stunning-3-bed-1-5-bath-home-with-parking-by-locke-st-south/1289469485?enableSearchNavigationFlag=true

Here’s a townhouse in Dundas: https://www.kijiji.ca/v-house-rental/hamilton/dundas-executive-3-bedroom-townhouse-for-rent/1285978440?enableSearchNavigationFlag=true

Here’s a brand-new 4 bedroom home in Waterdown for $2,000: https://www.kijiji.ca/v-house-rental/hamilton/brand-new-4-bedroom-detatched-home-for-rent-free-tv-internet/1285034964?enableSearchNavigationFlag=true

Plus, all of these property owners will be willing to lower their rent if someone like Smoking Man shows interest.

#159 Flawed facts on 08.15.17 at 12:04 pm

@ Facts:

I believe they may have not looked at the effect of leverage. I mean, if the home buyer paid 100% cash for it, then it is fair to compare this “investment” with investing in securities.
However, if the home buyer put down say 20% of the house price, then the return must be calculated on that amount only, plus any expenses and such.
And then, the picture changes a bit, doesn’t it?

#160 Stan Broock on 08.15.17 at 12:22 pm

Eminem’s place sells for under 2 mills, 1/2 of the price of decent house on a ‘golf course’ on Bathurst, north of Steeles.

http://www.realtor.com/news/celebrity-real-estate/eminem-michigan-mansion/

https://ca.yahoo.com/finance/news/eminem-lists-suburban-michigan-estate-42-paid-14-181108739.html

Comparable homes in GTA:
https://www.realtor.ca/Residential/Single-Family/18472653/127-BIRCH-AVE-Richmond-Hill-Ontario-L4C6C5-South-Richvale

#161 Ian on 08.15.17 at 12:24 pm

I happened to catch Patricia Lovett-Reid on CP24 this am discussing housing in the GTA, you know, their resident “expert financial advisor and economist”. Her comments were all rosy like “things not down so much”, “September could be OK”, etc. No mention of Happy BoC Day October edition, nor Happy Stress Test, nor the Zolo GTA graphs that look like the burning machine on a Led Zeppelin album cover.

Complete and utter horse____ from the MSM!!! Farcical!

#162 Stan Broock on 08.15.17 at 12:29 pm

Another beauty in GTA: a 2 mil CAD house ‘with a lot ot potential’

https://www.realtor.ca/Residential/Single-Family/18361240/138-GOULDING-AVE-Toronto-Ontario-M2M1L6-Newtonbrook-West

and more:
https://www.realtor.ca/Residential/Single-Family/18461944/148-MCKEE-AVE-Toronto-Ontario-M2N4C4-Willowdale-East

this one at 2.7 mil is more expensive than Eminem’s mansion:

https://www.realtor.ca/Residential/Single-Family/18448073/146-MCKEE-AVE-Toronto-Ontario-M2N4C4-Willowdale-East

It probably features transgender washrooms.

#163 Doghouse Dweller on 08.15.17 at 12:30 pm

If you received an instalment reminder and you are required to pay instalments but do not comply, you may have interest and penalty charges.
————————————————————
They have send me installment reminders and I am not a farmer or fisher.
From what I remember it was more like ” Pay Up or Else MF ” so I stay under the limit with pension deductions.

#164 oncebittwiceshy on 08.15.17 at 12:52 pm

142 JD: “I do not know what to believe anymore, but Vancouver, Richmond, Surrey and further out, all are out of reach for professional families and both members working full-time raising a couple of kids!”

JD, clearly you are not comfortable using realtor.ca. There are over 90 single family homes, not dumps, under $600,000 between Vancouver and Abbotsford.

Unless you and your spouse are professional baristas you shouldn’t have a problem buying one of these homes.

If you are reading about the dropping prices why would you be in any hurry to buy. You know, catching the falling knife.

Then again, this sounds like the bleating of a realtor or a specuvestor trying to counter the dropping market numbers presented by several blog dawgs.

Spend less time on here and more time in community college. There will be a lot of realtors enrolling soon.

#165 Asterix1 on 08.15.17 at 12:52 pm

Canadian real estate websites are the worst! Name me any other country that does not list the total sqf or sqm of a listed property next to its price and address?

It’s the most BASIC info that any potential buyer would want to see! But no, not here, MLS does not show it. For Zolo, its much better, at least they give you a range such as, 2000-2500sqf.

Hey, you lazy realtors, stop hiding this BASIC info and give us the square footage right next to the price!

#166 oopswediditagain on 08.15.17 at 1:19 pm

#157 Ian on 08.15.17 at 12:02 pm
#3 Mike on 08.14.17 at 5:40 pm
[email protected]
Reminder: Deadline is August 17th, 3 more days.
————————————
Thanks!! Let’s all write OSFI and tell them to implement the stress test as soon as possible!!!!

They’re going to anyway. Those thinking they might not are in dreamland. Now we’re just waiting on the timing.

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

You are right Ian. They will do it. The realtors, specuvestors and brokers say: why would they crash the market?

OSFI is far more concerned with the amount of consumers/banks/subprime lenders working around their previous legislation.

All of those unqualified buyers are a huge concern for OSFI. Without the CMHC guarantee those mortgages become a very big risk.

Too many fraudulent uninsured mortgages will be a lot more destabilizing to the banking system. They will risk crashing the market now to ensure that the banks don’t pay too heavy a price later.

#167 Howard on 08.15.17 at 1:22 pm

#156 IHCTD9 on 08.15.17 at 11:58 am
#37 Howard on 08.14.17 at 7:08 pm

“Whining”. Right. Apparently any mention of inconvenient facts that dash the Boomers’ myths about themselves now counts as “whining”.

I was simply responding to someone else’s laughable claim that high interest rates in the early 80s were a singular scourge that independently negated the dirt cheap housing, nearly-free education, high interest on savings, generous pensions, limitless funding for skills training, and yearly salary raises that that particularly fortunate generation enjoyed.

If the truth isn’t palatable, suck it up snowflake.
____________________________________________

While I know Millennials do have some challenges, a lot of their biggest challenges are self inflicted by paying to get 3 degrees and trying to start life in a metropolis.

Let me offer a bit of perspective:

Out my way in the wind swept tundra, Millennials have it better than any generation before them by a wide margin.

They buy really nice newish homes on an acre plus for 3-4X local average household income. Needs some TLC starter homes are ~2X income. In a lot of cases, it’s less expensive to make a mortgage payment than to rent, and the relationship between incomes and monthly mortgage payments (all in) well favours 2017 over 1997.

Globalism has pushed price on any consumer good you care to name DOWN – and 2017 buyers are spoiled for choice compared to 20 years ago. Local 30 somethings have garages and houses full of toys many of which never even existed a scant 2 decades ago.

Cheap credit and insane financing. Today, you can walk into a Yamaha dealer and buy a brand new Grizzly 700 and can finance for 1.89%, or stretch payment out for 5 years. Trucks and cars can be financed out 10 bloody years (insane) for 5% and less. Electronics are so cheap grocery stores sell the stuff. Online sales via EBay, Kijiji, Amazon etc.. further make consumption easier and cheaper than in all recorded history of the universe. A good used car costs the same today as it did 20 years ago, if not less.

So Millennial driveways have $50K trucks in the driveway with 12K toys in the garage. On top of that, a decently employed Millennial couple could easily make these payments and MORE, with room to spare at local average family incomes. Add another ATV and a Bass boat and it’s still easily done with today’s low rates, easy credit, and decade long financing terms.

I am surrounded with Millennials who got paid to go to school, have zero debt, and make 50-60K per year after their apprenticeship is done. Married and decently employed Millennial couples are the first generation to get it all “right now”. 4 years after high school at 22-23 years old, they’ve got newer nicer everything than I do, and they’re not struggling with buying it either, not even close.

IMHO, the so called “Generation Screwed” is a fabrication of Urban Millennials. The small town ones working outside the influence of large Urban centers are more like “Generation WIN!”.

—————————–

Great idea. Vancouver youth should pick up and move to Fort St. John and Toronto youth to Moosonee. Then when there are no jobs or economy for 98% of them, what then? Live off the land? Starve?

Your comments about “toys” and interest rates are so trite and beside the point that they aren’t even worth addressing. Prices of “wants” have gone down while prices of “needs” have gone up, way up, while median salary to pay for those needs are up only marginally since 1980 in constant dollars. That’s the issue.

#168 Ian on 08.15.17 at 1:33 pm

#166 oops

Exactly!! Although, why they waited until 21 years into a bull market is beyond me. Same comment for the Ontario rules back in the spring. Sooo late and so asleep at the switch. Typical reactionary government instead of proactive, planning government.

#169 Headhunter on 08.15.17 at 1:56 pm

yes the great generation fight is on! Makes me laugh.

Smokey is correct his dad could make a good life for his family back in the day.. with a regular blue collar job… the machine for sure has changed it all.

Its hard for my generation.. (im at the tail end of the boom) to admit we had and have had an easier go in the general sense then the new kids on the block. We didn’t have it hard at all.

TTC, POLICE, Fire, Banking, Insurance, GM,FORD, Carlings, Molson, Labbatt, Stelco, TRW, Hayes-Dana, Atlas Alloy, Mac Blodel, CP, CN. Education, Civil Gov’t work, Hydro, I could go on all week…all u had to do was have a pulse and you got a good job.

There was cradle to grave work back then. Out of school 1 job. retire. I have friends whose parents (mainly dads) who are almost at the point where they have been retired almost as long as they were working. Never missed a pay period in 60 years.

#170 IHCTD9 on 08.15.17 at 1:56 pm

#146 Howard on 08.15.17 at 10:48 am

The difference, Garth, is that a large proportion of previous immigration waves populated the nearly-uninhabited West and rural Ontario, creating new towns and cities. Today, 40% of immigrants go straight to the GTA and another 20% to Vancouver.

Why can’t the federal government encourage settlement in smaller centres? I’m sure Lethbridge, Windsor, and Trois-Rivieres would like some immigrants and economic expansion. If diversity is our strength (truly cringe-inducing platitude from PM Peter Pan), why not spread the diversity around and give the metropolises some breathing room?
________________________________________

If it won’t happen on its own, it’ll never happen. Don’t count on our bird brained PM to do anything other than smile and hand out money.

Todays non-Western immigrants don’t come here to start farms or businesses for the most part. They come here and start competing for existing jobs from existing companies. They move to an enclave to get started. It takes a while for them to get on their feet/oriented to get a business going if that is their plan. I see them around here in the boonies working in agriculture, Food Service, Health Care, Government, and the odd Corner store start up.

IMHO, the brand new non Western Immigrants who eventually do boldly step into the Hinterland are emboldened more so than other non Westerners through shared Faith.

We’re talking about Filipinos, Koreans, South Americans, Africans. These are the ones we see most – probably because it is much easier for them to hook up with the existing community through social functions at Churches and Charities. Things are more familiar in that regard – it’s a connection to the townsfolk where few others exist. Integration of kids and job hunts are handled much easier this way as well. It’s the same system that worked for the Westerners who came here after WW2. This system also encourages and supports intermarriage between the existing Citizens and the newcomers later on down the road. This goes on a lot right now with the WMAF coupling being the standout.

Interesting note regarding the WMAF trend: A casual observation of the local non-western influx indicates a vast majority of single Women compared to single Men. Non-Western Single Men influx borders on non-existent. The only Men that show are already married (and often with kids). Yes, these are the East Asian Women. They fit in easy, make friends no problem, get married to one of the locals, have kids and live happily ever after.

I think things will eventually get so intolerable in the GTA that more families will start leaving the safety of the enclaves looking for a better life. This is the beginning of real integration and is best done at a trickle.

Believe me, the last thing you want is a dork like Trudeau haphazardly dropping thousands of new folks here and there in all the wrong places where no one wants them, and where they don’t want to be. Natural migration for real world reasons is the only way.

#171 anc0dia on 08.15.17 at 2:13 pm

Welland, where dreams and hope go to die. Nobody looks happy in the town. Nobody.
//////////

Not true.
Come to the West Side.

Where all the Niagara College students live packed in 10 a house. Nice area.

#172 DON on 08.15.17 at 2:27 pm

#121 Dolce Vita on 08.15.17 at 1:37 am

Can’t expect a rational unbiased conversation with Broadway. He changes the rules of the game and cherry picks information at will. He must have a lot of skin in the game. Face-palm is the only viable action.

#173 NoName on 08.15.17 at 2:45 pm

#158 Rational Optimist on 08.15.17 at 12:03 pm

Lockie St. is nice, got merried there at St. Jo. and my favorite store is on same street. He can’t handle Lockie St.
overrun by hipsters now days.

#174 Penny Henny on 08.15.17 at 2:51 pm

#171 anc0dia on 08.15.17 at 2:13 pm Welland, where dreams and hope go to die. Nobody looks happy in the town. Nobody. ////////// Not true. Come to the West Side. Where all the Niagara College students live packed in 10 a house. Nice area.

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

So true. But no not there. South of Thorold around Chippawa Park. Look for me I’ll be the one smiling. And why wouldn’t I? After all I just got the hell out of Toronto.

#175 IHCTD9 on 08.15.17 at 2:53 pm

#167 Howard on 08.15.17 at 1:22 pm

…Prices of “wants” have gone down while prices of “needs” have gone up, way up, while median salary to pay for those needs are up only marginally since 1980 in constant dollars. That’s the issue.
____

LOL! Easy Bro…

My point was said “issue” only exists where debt is high, wages are low, and shelter is expensive – ie big cities.

My point was said “issue” does not exist in places where debt is low, wages are decent, and shelter is affordable – ie small cities.

If a young couple gets themselves 100G’s in school debt, then moves to a city where houses cost 1 Million, fully understanding they’ll struggle to make 100K household income – that’s not a Millennial problem.

That’s like me entering a horse race sitting on the back of an Ox, then choosing the outside lane, then after being told I don’t have a chance in hell, going after it anyway (and losing big of course)

That’s just being stupid…

#176 Chaddywack on 08.15.17 at 3:00 pm

@131 and 136

I think what Garth means by voluntary is that if your income suddenly drops, for the sake of argument lets say your realtor friend made $0 this year. If he didn’t make instalments and didn’t owe tax there would be no interest or penalty.

You only really need to make instalments if you’re going to owe tax and if you don’t make sufficient instalments to account for the taxes owing then you would be charged instalment interest or a penalty possibly per CRA rules.

All I know is that if you make CRA mandatory minimum instalments and you STILL owe even though you made what they asked you to, you won’t be charged anything more (other than the additional tax owing at tax time obviously) because you “did what you were told”

#177 anc0dia on 08.15.17 at 3:07 pm

#171 anc0dia on 08.15.17 at 2:13 pm Welland, where dreams and hope go to die. Nobody looks happy in the town. Nobody. ////////// Not true. Come to the West Side. Where all the Niagara College students live packed in 10 a house. Nice area.

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

So true. But no not there. South of Thorold around Chippawa Park. Look for me I’ll be the one smiling. And why wouldn’t I? After all I just got the hell out of Toronto.
///

Who can smile when they see the sub-par rating on the all public schools in the area, or have to drive to Hamilton to see a specialist, or commute to the GTA everyday because of the high unemployment in Niagara and dead-end low paying jobs. The entire region is turning into a place where old people to go and die. Place reeks of misery and death. That’s why all the young people have been leaving for decades.

#178 Myra Andrews on 08.15.17 at 3:51 pm

Installment interest and penalties.

You pay a penalty only if the INTEREST charged is more than $1,000. Phew! Had me worried.

“We apply this penalty only if your instalment interest charges for 2017 are more than $1,000.”

#179 Asterix1 on 08.15.17 at 4:12 pm

Must be nice getting paid to be a “journalist” and all you have to do is copy and paste propaganda pieces from the RE industry!

http://business.financialpost.com/personal-finance/mortgages-real-estate/toronto-casts-shadow-over-nations-home-sales-but-realtors-see-signs-market-bottoming-out/wcm/110503ca-ca12-4a47-89e9-f41e350310da
“Toronto casts shadow over nation’s home sales, but realtors see signs market bottoming out”
– Home sales in the Greater Golden Horseshoe just saw the smallest decline since Ontario’s housing clampdown, suggesting the market may be stabilizing
___________________

Oh yeah!! Realtors see things getting better! Ha, ha! What a bunch of self serving liars. Same for National Post and the rest of those rags, you guys have sold your credibility to the highest paying advertiser (RE industry).

#180 JD on 08.15.17 at 4:16 pm

My wife has 11 years (BD) and (MD). So your insinuation was ill-spirited I guess. And I forgive you if so!
Perhaps, in this instance, flea bitten Blog Dog (BD) may have confused Bachelor’s for Barista in an attempt to decipher common abbreviation, I shall easily let go such an illiterate mishap.
And again you demonstrated the same “low quality” information suggesting that we can buy suitable SFH for 600K. That means that you have no reality check recently conducted and leave under the sarcophagus formed by irrelevant statistics catered for the certain mind.
Anyway, I shall finish this pointless debate. I suspect that you have no touch with reality here in BC and driven by different agenda.
Again I am not the realtor nor a gambler, so my suggestion to you is, to have an open mind approach to the comments in this blog. It may actually breathe some sense of reality into your “itchy mind” Professor!
I also learned the lesson in this short exposure that there was no value for me nor anyone else on this blog in my post.
I quit posting, keep reading….
Cheers

#181 bdwy sktrn on 08.15.17 at 4:29 pm

any van ppl driving down to portland to see the total eclipse next week?

I wanna see it painted, painted black
Black as night, black as coal
I wanna see the sun blotted out from the sky
I wanna see it painted, painted, painted, painted black

i think it will be very cool, dodging the traffic will be the challenge.

#182 OttawaMike on 08.15.17 at 5:10 pm

Realtors®
Can’t even organize a piss-up in a brewery:

http://www.cbc.ca/news/canada/british-columbia/solar-eclipse-glasses-candace-rohrick-1.4247260

#183 okay on 08.15.17 at 5:14 pm

Old Ron is correct !
I have notice this for a couple of years now . I sold 2 years ago and am glad I did . Was ridiculed by mane up to April of this year. I now feel vindicated .
The scary thing is… this is just the beginning with tightening mortgage regulations , higher interest rates and wages not rising to the occasion !most of these new homeowners , speculators and landlords are living under a heavy debt load which will put them in jeopardy.

………..

why do you feel ‘vindicated’? does the opinion of others strangle you so?

that’s sad.

you did what you had to do at the time. Move forward.

#184 TheDood on 08.15.17 at 5:25 pm

#142 JD on 08.15.17 at 10:12 am
____________________________

Patience…….

Lots and lots of YVR inventory is sitting on the sidelines waiting for that last push – or the “dead cat bounce” as has been mentioned here previously. Listings which were present 1, 2, or 3 months ago pulled by sellers and realtors who didn’t like the idea of selling at anything other than peak price, or close to it. Everyone waiting to see what happens in September – holidays over, back to school, etc. – because historically, prices always bounce back in September, right? (because its different here and prices always drop in summer and bounce back in September !!!).

The upcoming hike in interest rates and the additional stress testing for buyers will probably exert further downward pressure on already falling pricing. People who are managing two or three (or more) mortgages will feel the bite (there are lots of those!), particularly when it comes time to renew. In addition, there are a large number of realtors sitting on multiple properties (waiting for that dead cat bounce) making a fraction of the commissions they were a year ago. How long can they hold on? Depends what they did with all those fat cheques they’ve been cashing for the last 8 or 9 years!

Nobody can say for sure what’s going to happen or when. Most unbiased opinions (this does NOT include those with skin in the game – realtors, developers and amateur speculators) generally agree the scam is up and the house of cards is set to take a tumble. YVR’s price increases have unfolded over years, so any decrease may take at least as long. My guess is it won’t, debt pressure will force many to sell at whatever a buyer is willing to give them at the time of the sale.

#185 fishman on 08.15.17 at 5:48 pm

I agree with you JD. As a Van west side R/E owner, I figure if you ain’t in, your not getting in. I’m sitting on cash just like a lot of my buddies & when the froth comes off this baby we are going to pounce on quality.
Your up against formidable equity,cash & experience.

#186 aa6 on 08.15.17 at 5:49 pm

The endgame for that $900,000 mortgage woman is if housing does not keep rising, she won’t be able to refinance out home equity. Without that ability she will not be able to make the mortgage payments & pay for the cost of living.

So before long she will stop making the mortgage payments and she will default on the mortgage.

And then she will go through bankruptcy, which will clear her debts, and she will be right back where she started, minus whatever down payment she had.

The banks and economist people I read, all say the Millennials will never default, no matter how large the monthly mortgage payments or how underwater they are on the house, as it is allegedly Canadian culture to not default.

Of course, what else are they going to say at this point.

#187 Vanrenter on 08.15.17 at 6:49 pm

Hey Happy Housing Crash Guy, here is a shyster for you.

http://bc.ctvnews.ca/realtor-being-investigated-over-20-000-commission-fee-on-243-000-condo-1.3545413

#188 Truenorth on 08.15.17 at 8:13 pm

Aerospace engineers at Bombardier start in the $50-60k range. This is at Downsview. I know several who work there and still live with their parents.

Meanwhile, realtors make six figures. Bankers who had 15 hrs of class a week in college, make even more.

That right there tells you everything that is wrong with Canada. I tell every talented Canadian to make a run for the border. Canada hates talent and hard work.

I hope there’s lots of realtors going bankrupt. At least some basement dwelling engineer will be able to get a repo BMW for cheap, and some small glamour after all that hard work.

#189 Renter in YVR on 08.17.17 at 8:50 pm

Yes please, would love your analysis on the Vancouver market. Left GTA in May ’16 for job transfers only to learn we could never in our lifetime afford, a house here-or think it a good use of money. We are mid/late 50’s executives, bottom off the top 1%–and we can’t buy here. Pay $5G/month to rent 2000 sq ft! No garage, +$575/mth for storage locker for all the furniture that doesn’t fit.