The next 90

“Hi Garth,” says Dan the east-end Toronto realtor. “Even the little deals aren’t closing.”

So, this house on Chadwick – your typical, ugly, garage-snouted, suburban, 1980s place in Ajax – passed into the hands of new buyers in a fog of emotion a few months ago. In fact, it was a bully offer that won  – when a desperate purchaser forked over 126% of the list price in order to avoid an expected bidding war just a few days later.

As it went to market, this is what the realtor had to say about a thoroughly unremarkable house:

Client Remks:Prime Central Ajax Location!! Walk To Go Station, Shopping, Transit. Situated On A Quiet Court, Close To Great Schools And Parks. Solid 3 Bedroom Brick Home With Nice Curb Appeal, Finished Basement With Walkout To Private Fenced Backyard. Roof Reshingled Approx 8 Yrs Ago, Updated 2nd Floor Windows. Add Your Own Personal Touches. Don’t Miss Out! Extras: Ss Fridge, Ss Stove, B/I Dishwasher, Washer, Dryer, Gdo & Remote, All Electric Light Fixtures, All Window Coverings, Rough In For Bathroom In Basement. Appliances Are As Is. No Survey. Brkage Remks:Sentrilock For Easy Showings. Hwt Is A Rental. Please Include Schedule B & Offer Summary. Offers To Be Viewed On Monday May 1 @ 6:30Pm, Seller Reserves Right To Pre Emptive Offer.

Appliances as it. 8-year-old roof. Bathroom roughed-in. No survey. Add your personal touches. You get the picture. Expensive fixer-upper. But back in the third week of April, when listings were scarce and hormones plentiful, with the GTA coming off back-to-back months of 30%+ annual price increases, FOMO was in the air. Even the ugly ducklings looked like voluptuous movie stars. It was realtor game on.

So Chadwick, listed for $499,000, sold in two days for $630,000. Then the Ontario anti-bubble measures started to bite. The Bank of Canada increased its key rate for the first time in seven years. Five-year mortgage rates were hiked. Twice. The cost of lines of credit and variable rate home lines swelled. We heard about the bank regulator’s new stress test for all house buyers. Sales volumes began to collapse. Then prices followed. Fear of missing out turned into fear of not getting out. Scared buyers starting walking. Deals crumbled. And the Ajax house came back on the market.

What sold for $630,000 at the end of April is listed at $589,000. No sale yet. Odds are the final price will be significantly lower and, meanwhile, wall-to-wall stress. The average sold price in this once-affordable, distant Toronto burb was $762,000 in the spring, and has drifted down to $631,000 now – a 17% plop. It’s typical of what’s happening, and continues to unfold.

As I told some kid reporter from a house-pumping web site (BuzzBuzz something or other…) the declines experienced so far are but a prelude to events of the next 90 days. Things may get better for real estate in a dead-cat-bounce kinda way, but it’s a lot more likely they’ll get worse. The universal stress test will be in place before the end of 2017 and mortgage brokers expect it to restrict overall credit by about 18%. In other words, buyers will qualify for 18% less financing, which means they have 18% less to spend. So guess what happens to prices?

At the same time the Bank of Canada seems ready to inflate rates again in the third week of October and, unless Trump blows up, the Fed will also push the cost of money higher – the fourth act of tightening in one year.

The single greatest factor in shoving house prices skyward in Toronto, Vancouver, Victoria, southern Ontario and the Lower Mainland has been the historically-low cost of money. So as rates slowly normalize, and incomes stay stuck, the pendulum will swing back. Add in universal rent controls, vacant house taxes, the CRA’s war on speckers, foreign buyers’ taxes, the new mortgage stress test and a tax sledgehammer on small business and this market is pooched.

“Here’s some great advice,” Gill says in a note to me, “from a realtor in Alberta.”

Want to qualify now for a mortgage you won’t get later, in order to rush-buy a house that’ll likely decline immediately after you close? Good. Call today.

Never underestimate what living on commission will do to a man.

172 comments ↓

#1 Howard on 08.21.17 at 5:05 pm

Finally a cat pic.

#2 viorelli on 08.21.17 at 5:16 pm

The smell of desperation is in the air! Smart money already cashed out and is sitting pretty in good, diversified portfolios, foreign real estate / businesses, local rental properties acquired cheaply year ago, bitcoins, gold, TFSAs. But some are still peddling these “news” that one should buy now or be priced out forever!

#3 Paulo on 08.21.17 at 5:29 pm

The Controlled Crash: trying to control the damage of poor economic policy gone terribly wrong.

expect real estate values in Ontario to decline between 50 to 65% over the next 18 monthes.

The fall out will be a loss of GDP value of between .50 to .75 in 2018 a acceptable hit on the economy as determined by the powers that be,as it will be far less than the damage caused by a broad based outright collapse of real estate values in a far shorter period of time.
this situation in addition to others effecting the general economy create a risk on investment environment.

we will likely see a mild recession in q3 2018 through q4 2019 as the real estate correction continues to hit the economy ,there will plenty of casualties on the way and a re alignment of many households that are forced to face reality,and actually live within there means.

this period in real estate appreciation will be remembered as epic and not repeated in our life times

defensive and diversified investing will be a important part of engaged individuals lives,planning for your kids schooling and retirement read,learn and play cautiously and invest carefully.

#4 Dogs Lives Matter Too! on 08.21.17 at 5:34 pm

Garth, you’ve become such a SJW posting cat pics now? stop listening to those whiney Cat Lives Matter people, and just be yourself!

#5 Ian on 08.21.17 at 5:34 pm

The next 90d will be a complete gong show!

Happy BoC Day!!

Happy Stress Test!!

I still know so many property bills!!! When does their mentality change? Will be fascinating to watch.

#6 SimplyPut7 on 08.21.17 at 5:36 pm

I noticed they left out the pictures of the kitchen in the new posting, in the past 90 days in this area, homes with updated kitchens have sold for less than the new asking price. With the fall housing market coming soon, more listings in better condition will be available.

Competition will be fierce for the few brave buyers that are left. Good Luck.

#7 Janet Yellen will not Hike on 08.21.17 at 5:37 pm

At the same time the Bank of Canada seems ready to inflate rates again in the third week of October and, unless Trump blows up, the Fed will also push the cost of money higher – the fourth act of tightening in one year.”

Have you looked at the USDollar index lately? It’s going to trend below 90%; that’s even lower than the few months when it was at 100-103%.

The US Fed will not raise rates unless they see a US dollar valued at $0.70 Euro and $0.50 Sterling Pounds. Trump complained that the “high” dollar was not making America great again for The Rebel Media fans in Ohio.

#8 FLHTK on 08.21.17 at 5:38 pm

Oh ya she’s going to come crashing down even more……back to reality folks

#9 TurnerNation on 08.21.17 at 5:40 pm

Sheeet…Chadwick lies within the bailiwick.

#10 Dean Kamen Hons. on 08.21.17 at 5:41 pm

So with financing drying up now…where will all that money go? To apartment rents? Can the sudden downturn in housing suddenly be a growth catalyst for REITs? Garth and company, are you slightly edging up your REIT allocations with the recent turnover in the market? Mark, can you confirm with me what you have done as well?

#11 Danny on 08.21.17 at 5:44 pm

Report from Toronto Bloor Street West and Islington Ave: .5 km radius 20 listing with hardly any movement….over 1/2 been listed for 8 weeks….BUT….still prices are not dropping….some very stubborn sellers and agents
3 km listings growing like wild fire..real estate site chocked as reached limit of over 200 listing and could show more on my tablet….never happened before.

#12 Gardenmaven on 08.21.17 at 5:49 pm

I had lunch today with a realtor friend from Hamilton. She told me that five deals in her office that were inked in April/May had gone bad in the past week.

#13 Perspective on 08.21.17 at 5:52 pm

There is 3.4 years worth of single detached houses for sale in West Vancouver.

#14 anc0dia on 08.21.17 at 5:56 pm

Price reductions all over Niagara. Dropping asking by 15% doesn’t even attract a buyer. Everything is grinding to a halt. Buyers are nowhere to be found. You can smell the fear in the air. If you hold property in Niagara Falls in any of the new builds near McLeod road and you’re thinking of selling, you should get out now, you’ll be lucky to get assessed value by end of the year.

#15 Ponzius Pilatus on 08.21.17 at 5:57 pm

#148 Eaglebay on 08.21.17 at 4:27 pm
Minimum wage at $15.00 isn’t working in Seattle.
What makes people think it will work here.
———–
Too many right wing classic armchair economists on this blog.
Workers are a funny bunch, their behavior is often influenced by other things than pay.
But this is hard to show on a graph.
————
Btw, 15 greenbacks is about 20 Canadian.

#16 M42BC Where do you get those sold prices from? on 08.21.17 at 6:14 pm

I wish i had access to this, i could write some code to crunch some neat stats!

#17 Penny Henny on 08.21.17 at 6:17 pm

Hi gartho,
I must say that you attract a large group of hating and disrespectful people to this blog.
Piece!

#18 Mike on 08.21.17 at 6:18 pm

.
I thought OFSI was backtracking.

When are they implementing, if they are?

#19 Network Admin on 08.21.17 at 6:21 pm

A similar message from friendly Ontario mortgage broker “The home that you can buy today, may be out of reach by the Fall 2017”
https://hippocontact.com/newsletter/article/10537/

#20 InvestorsFriend on 08.21.17 at 6:21 pm

What a Man Believes…

Never underestimate what living on commission will do to a man.

********************************
True. It is said that a man will believe almost anything when his livelihood depends on him believing that thing.

The best sales people are always true believers.

But what of it? Caveat emptor.

#21 paracho on 08.21.17 at 6:22 pm

Love the quote : ” Never underestimate what living on commission will do to a man .”
All the points Garth named are and will decimate any gains made over the last 5 plus years in real estate in the GTA and especially the burbs such as Brampton, Milton, Georgetown ..etc Plus jobs will be lost as these new taxes on entrepreneurs are introduced..there are not any incentives to add jobs.

#22 Ponzius Pilatus on 08.21.17 at 6:23 pm

Garth,
I just can’t see rising rates and collapsing RE ever meeting on the dance floor.
Too risky, politically.

#23 Nick on 08.21.17 at 6:24 pm

“Never underestimate what living on commission will do to a man.”

Doesn’t the “Financial Advisor” industry work solely on commissions?

You’re almost right. 95% of advisors collect commissions from the providers of financial products they sell. I don’t. — Garth

#24 Nonplused on 08.21.17 at 6:25 pm

Perhaps the solar eclipse today will come to be noted as the celestial event that marked the end of the housing bubble.

I watched the whole thing today using the projection method with a small telescope and it was super cool. Even saw sunspots. But without the telescope it was pretty anticlimactic at this latitude. Some people say the projection method isn’t safe but NASA says it’s ok just don’t be an idiot and look through the eyepiece at any time or certain blindness will result. I can still see so it must havw vwwb ij,

#25 Dolce Vita on 08.21.17 at 6:36 pm

Listings.ca for Toronto Detached:

April Peak:
Avg. Sold Price = $1,275,000,
1274 Sales.

August, 3 weeks in:
Avg. Sold Price = $927,994,
172 Sales.

27% drop, $-347,006 from April peak.
August Unit Sales at 13.5% of April peak.
Days on market up from 7 to 19.

Not a thing to cheer about here. Chilling numbers.

#26 mouldyinYVR on 08.21.17 at 6:38 pm

“Want to qualify now for a mortgage you won’t get later, in order to rush-buy a house that’ll likely decline immediately after you close? Good. Call today.”
Love it!
Well, I’m leaving YVR after being a renter for 18+ years. Now retired and moving to a town in BC (pop. 35,000) where my rent is still just 1/2 of my net income! How’s that for a bargain…..!
Garth, we all wait with baited breath for a change in YVR land, (sky high housing costs for renters and owners) , but it ain’t coming any time soon and in the mean time the locals are leaving town…….(too bad, so sad).

#27 the Jaguar on 08.21.17 at 6:39 pm

to #1 Howard on 08.21.17 at 5:05 pm
Finally a cat pic.

Shush, Howard! You’ll spook him! (Garth).
Not just one, but four!! A cat bonanza.

Of course you will also note the later reference he makes to ‘dead cat bounce’.
Speaking of ill tidings, maybe it was the eclipse thing today or other celestial goings on, but seems to me more and more the ‘professional classes’ are leaving Calgary these days…..not the oil & gas ones, but others who can pick up and practice their gig elsewhere. Not west, but east.
The cat with the dark face on the left of the cage seems the most intelligent. An explosion could go off and he wouldn’t even flinch. Eye on the prize.

#28 westsider on 08.21.17 at 6:39 pm

Check out 4826 Puget Dr, Vancouver, http://www.myrealtycheck.ca
Was listed at $9,988,880 but now $5,988,880 a drop of
$4 million or 40%. Still insane, but cracks are appearing. This house was bought in 2011 for 3,988,880, torn down and completely rebuilt. After holding this for 6 years, and the cost of rebuilding the all new mansion, the margin is not so big.

#29 Alberta Ed on 08.21.17 at 6:42 pm

Just wait until Beavis and Buttshead introduce the Big Screw.

#30 waiting on the westcoast on 08.21.17 at 6:42 pm

The mortgage broker is correct that many people may not qualify under the new regime and given that so many people only care whether they can buy something and afford the payment, he is really just helping them out. ;-)

I would say he is spinning the discussion to what serves his business best. It is accurate but definitely not a long-term view on how it will affect them. Then again, many of us never imagined that the market could have continued all this time (and outside events like oil crashing further fueled it). So – the mortgage broker may be doing his clients a service.

But that is what bothers me about the Millenials here… they want someone to do all their homework for them and tell them its ok. Instead of evaluating their choices and the risk associated with them and then moving forward with it. Ideally, they would then not blame everyone when it turns out there was more risk than their cursory review revealed.

#31 crowdedelevatorfartz on 08.21.17 at 6:44 pm

@#17 penny henny
“hating and disrespectful people to this blog…..”
======
I’d rather take a piece of peace……

#32 Ghost Town on 08.21.17 at 6:53 pm

#25 mouldyinYVR on 08.21.17 at 6:38 pm
“Want to qualify now for a mortgage you won’t get later, in order to rush-buy a house that’ll likely decline immediately after you close? Good. Call today.”
Love it!
Well, I’m leaving YVR after being a renter for 18+ years. Now retired and moving to a town in BC (pop. 35,000) where my rent is still just 1/2 of my net income! How’s that for a bargain…..!
Garth, we all wait with baited breath for a change in YVR land, (sky high housing costs for renters and owners) , but it ain’t coming any time soon and in the mean time the locals are leaving town…….(too bad, so sad).
———–

Yes, Vancouver is becoming a ghost town. The young, the old, the poor, and families are all being pushed out – and have been for years and years.

The second people get married and have a kid, the reasonable ones leave. The stubborn stick it out and try to raise a kid in a 600 sq ft condo. And then they stop having kids because they cannot move up.

The local economy is being hollowed out as nobody can recruit any talent other than kids out of university and double income no kids types. The second you mention the below average salaries with Vancouver along with the housing prices, people say thanks but no thanks.

Local schools have had to shut down due to a drop in enrolment.

Who could have thought that building a city around speculation and buying and selling condos to one another and overseas would have had such harsh social and economic consequences?

Apparently, everyone….

#33 Paul on 08.21.17 at 6:54 pm

It wasn’t a cat picture it is a gerbil!

#34 Goldie on 08.21.17 at 6:55 pm

Supposedly there is an 11 million dollar (asking price) house on Cambie street (Vancouver) which will be on the news tonight.
Regular detached on a regular lot, but in an area which is being developed. 15 years ago it would have been about 300-400 grand.

#35 Dan.t on 08.21.17 at 6:57 pm

Sad fact is that most Canadians are financial illiterates and actually believe that they should buy before rates rise and OSFI imposes regulations (hope they do).

Better buy that 650k townhouse you can hardly afford now because you qualify and when rates rise and whatever else happens you can’t afford it… well, that makes sense because all you have to do is flip it in 18 months for a cool 200k tax free money. Sweet.

You know how many boomer, millennial and every age group I heard talk RE in BC this past summer all thinking the same way and saying things like…

It’s different this time
Everyone wants to live here
this is my retirement
It’s only a 0.25% rate hike, nothing will change
it’s only debt (highlight).
I just bought a pre-sale

I gave up and tried to avoid all RE conversations…how do you think that worked out.

Extremely annoying so I hope BC is next. Debt pigs and lucky boomer owners who cashed in a once in a life time lotto ticket acting like they did something special being a home owner and the younger generation trying to do the same thing by gorging on debt.

Free money, lax credit, Fraud, scams, FOMO, Shyster realtors, horrible gov policies, I hope it all ends in tears. This is when the Happy Housing Crash guy pipes up!

#36 crdt on 08.21.17 at 7:06 pm

Listings in sleepy Langley BC are still getting those pesky sold stickers, however, the signs do not seem to get removed for some reason….

#37 Dolce Vita on 08.21.17 at 7:07 pm

Vancouver (not Lower Mainland) cooling as well (Zolo.ca today).

May 17 vs. Jul 21 to Aug 18 Unit Sales:

Condo down to 389 from 617, -58.6%.
Town down to 74 from 116, -56.8%.
Det down to 105 from 272, -159%.
Total Units Sold down to 568 from 1,005.

May 17 vs. Jul 21 to Aug 18 Avg Sell Price:

Condo down to $827 K from $840 K, -1.6%.
Town no change at $1.3 MM.
Det down to $2.4 MM from $2.7 MM, -12.5%.

May 17 Avg. Sell Price = $1.4 MM
Jul 21 – Aug 18 Avg. Sell Price = $1.18 MM
Down -18.4%

More importantly the Realtor Commission base:

May 17 Total $ Sales = $1,403,480,000
Jul 21 – Aug 18 Total $ Sales = $669,903,000
-52.3%

If September miracle sales do not develop, you have to wonder how Vancouver Realtors will fare with that big of a commission drop?

Numbers down from even a week ago. Vancouver Detached skewing market numbers, still, a grim 6 months overall. Nothing to cheer about here.

#38 InvestorsFriend on 08.21.17 at 7:22 pm

Show Me The Money!

#9 Dean Kamen Hons. on 08.21.17 at 5:41 pm asked:

So with financing drying up now…where will all that money go?

***************************************
Financing creates money. And yes, fractional reserve alarmists, that is a good thing. With financing (possibly) drying up the money that would have bought houses will simply never be created.

If you refer to the payments that won’t be made, yes a few consumers who would have bought a house at high payments will have more money to spend elsewhere.But the home sellers will have less.

Lower credit is directionally a clear negative for economic activity. If you think credit is drying up be a bit cautious with investments of any kind. There may be bargains ahead.

#39 Irish Stew on 08.21.17 at 7:31 pm

Are these numbers of decline applicable to Toronto region only – what about SW Ontario – London and South?

#40 crowdedelevatorfartz on 08.21.17 at 7:32 pm

@331 Ghost Town.

Well.
If the lowerbrainland is a “ghost town” I assume all the horrendous traffic I deal with daily is………the exodus?

#41 -=jwk=- on 08.21.17 at 7:32 pm

@ #19
similar message from friendly Ontario mortgage broker “The home that you can buy today, may be out of reach by the Fall 2017”
https://hippocontact.com/newsletter/article/10537/

The disillusionment defies belief. it’s all about getting the msot money you can because sellers won’t sell for less.

One small flaw: sellers don’t set the prices. Buyers do.

Guy looks young enough that he has never seen a long term dip – to date his track record of calling temporary dips is perfect…

#42 Willy H on 08.21.17 at 7:36 pm

“In other words, buyers will qualify for 18% less financing, which means they have 18% less to spend. So guess what happens to prices?”
___ ___ ___

This is exactly what this market requires. This will be particularly hard on homes previously valued at $750K+ in the 905 area of the GTA. First time buyers will be contained, finally, which will most certainly impact thousands of over-valued cookie-cutter homes that make up the soulless GTA’s ubiquitous strip-mall infested urban sprawl. Hard for the Volvo set to move up to their next McMansion when first-time buyers have been fiscally gelded!

The south of France is still cheaper!

#43 TurnerNation on 08.21.17 at 7:40 pm

What terrifies people: business taxes rising by 100% and losing your business (under way on toronto’s Yonge St.)
A CRA audit where you bankrupt yourself fighting for what’s right.
Being held at the border crossing without charge in a black hole.
(Our own governments)

Not so scary…alleged crowd driving accidents. Funny, Intel bought Moble eye self driving car chips ago..some say we are today being conditioned.
And they have no demands. Figure it out.

#44 jess on 08.21.17 at 7:44 pm

“as is”

https://www.nytimes.com/2017/05/23/business/dealbook

The Housing Trap
In the wake of the housing crisis, low-income families have turned to seller financing to buy homes but these deals can be a money trap.

#45 Howard on 08.21.17 at 7:51 pm

#31 Ghost Town on 08.21.17 at 6:53 pm

Yes, Vancouver is becoming a ghost town. The young, the old, the poor, and families are all being pushed out – and have been for years and years.

The second people get married and have a kid, the reasonable ones leave. The stubborn stick it out and try to raise a kid in a 600 sq ft condo. And then they stop having kids because they cannot move up.

The local economy is being hollowed out as nobody can recruit any talent other than kids out of university and double income no kids types. The second you mention the below average salaries with Vancouver along with the housing prices, people say thanks but no thanks.

————————————————

Some stats pertaining to this here: https://thetyee.ca/News/2017/07/25/Housing-Crisis-Is-Harming-Employers/

However some of these numbers seem too low be credible. According to the author’s source, Vancouver’s median salary among university graduates aged 25-55 is only $42,000! That can’t possibly be accurate can it??

If that is even close to accurate, who the hell would want to build any sort of professional, upwardly-mobile career in such an oppressively low-wage place? Get the hell of there and leave it to the speculators. With any luck an earthquake will level it in our lifetimes.

#46 HoweStreet.com on 08.21.17 at 7:53 pm

Ross Kay on HoweStreet.com Radio:
Canadian Economy Taking Huge Hit from Declining Real Estate.
How to get the best bargain when house hunting.

http://www.howestreet.com/2017/08/21/canadian-economy-taking-huge-hit-from-declining-real-estate/

#47 MF on 08.21.17 at 7:56 pm

#24 Dolce Vita on 08.21.17 at 6:36 pm

Condos still up higher. They are all anyone can afford and prove that demand is still present.

Lots of people on the sidelines waiting for this “correction” where houses still cost 1 million to stop.

I still see a recovery.

MF

#48 And I Quote on 08.21.17 at 7:56 pm

“No one knows what’s next, but everybody does it.”

“Just when I discovered the meaning of life, they changed it.”

George Carlin

#49 Dissident *meow* on 08.21.17 at 8:00 pm

Finally, cats!

So yeah, if there’s a 18%-less qualifying stress test then won’t that stimulate people to buy before end of 2017? And then once that’s in place, prices will plop down further again, to some extent. It all depends on whether or not these people learn of this fact in time to ‘take advantage’ of it.

Some guy I know is making a chart with MLS data showing how the line of list prices is going down and the line of actual sold prices is meeting that line somewhere…meaning that fantasy is finally colliding with reality.

#50 Gravy Train on 08.21.17 at 8:06 pm

Hope everyone enjoyed the solar eclipse today. In my part of the world, we only saw 55% of totality at its midpoint. Through my solar glasses, I could see several colours: red, orange, yellow, even green. Amazing!
https://en.m.wikipedia.org/wiki/Solar_eclipse_of_August_21,_2017

For the solar eclipse on April 8, 2024, the path of totality will pass over Hamilton, Niagara Falls, Kingston, Cornwall, Montreal, Sherbrooke, Fredericton, Miramichi, Tignish, Summerside, Grand Falls-Windsor, and Gander.
https://en.m.wikipedia.org/wiki/Solar_eclipse_of_April_8,_2024

Hope these cities are preparing now for the onslaught of tourists in seven years.

With apologies to Nassim Nicholas Taleb, this black swan event is one that can be predicted accurately well in advance by a very specialized group of scientists: astronomers.

#51 BK on 08.21.17 at 8:09 pm

Ok we get it. The GTA is pooched. Old news, but what about YVR???? Can anyone explain what’s going on there……

#52 Just Around the Corner on 08.21.17 at 8:10 pm

“In other words, buyers will qualify for 18% less financing, which means they have 18% less to spend. So guess what happens to prices?”

—-

This EXACTLY what was said with the new ‘moister millennial killing stress test’ in the fall of last last year. It was supposed to wipe out 15-20% of the buyers with the same price decreases as it was the equivalent to rates rising 2% points.

How did that turn out? Right, prices went through the roof as did sales.

Its always just wait a few more months for a new provincial measure, federal policy change, interest rate hike. Of course, that time buying has cost 10 years so far….

I have no faith that another measure to cool the market will do anything after 10 years of failed measures. Sorry. History is on my side this time.

The moister stress test came in and CMHC-insured loans plunged ore than 40%. Why? Because the kids went to the Bank of Mom or subprime lenders for their down payment money. This is exactly why everyone will soon be tested – and why its potential impact is terrifying realtors. — Garth

#53 For those about to flop... on 08.21.17 at 8:15 pm

M42BC prices from? on 08.21.17 at 6:14 pm
I wish i had access to this, i could write some code to crunch some neat stats!

///////////////////////-//

Thanks for the question, I’m actually 43 now but I still don’t act a day over 16.

I have been doing my study into Vancouver real estate for around 7 months now and I have yet to find a reliable source to report transactions in real time to gauge how the market is doing, which is what a lot of people on here seem to want.

I get the occasional response from a realtor and then it’s like they feel like they betrayed the real estate board and then won’t help me again.

I am a construction guy with a conscience and I am yet to find a realtor on here with one.

I’m reporting 850k losses on here and the media couldn’t give a shit ,so no one besides us regulars are going to see you guys help me and you know by now that I’m going to post it eventually so you might as well help a few people on here out.

Another person today asked me if I have my own blog, the answer is a solid no.I don’t report on any other platform and have no social media accounts as I do not want fame and Garth’s groupies ,all I want to do is to give something back to this blog and so all my findings are posted on this blog and then belong to you guys.

I’m pretty sure he is going to send me some ice cream in the mail at some stage.

To finish up and get back to your original question, if the realtors won’t help me I have to wait 3 or so months and wait for the assessment site to update things and then I confirm the sale.

By then it’s a little stale but it’s still a recent sale…

#54 Smoking Man on 08.21.17 at 8:20 pm

No dead cat bounce. Listing starting to hit the MLS hard again. Expect MSM to blow sunshine on the market.

Pre September listing spree.

#55 The Accountant on 08.21.17 at 8:24 pm

Re #15 ” 15 Greenbacks is about 20 Canadian”

BOC posted closing CDN/USD exhange rate today was 25.75% or $1.2575 CDN for 1 USD . 15 US dollars for 20 USD is an exchange rate of 33.33%. Not quite that bad . FYI

#56 waiting on the westcoast on 08.21.17 at 8:28 pm

#22 Ponzius Pilatus on 08.21.17 at 6:23 pm days… “Garth,
I just can’t see rising rates and collapsing RE ever meeting on the dance floor.Too risky, politically.”

I guess you didn’t live through the early 80s… I saw a lot of my parent’s friends (many very successful entrepreneurs) lose investment properties as interest rates rose and house prices collapsed. The government didn’t help those snowflakes either…

#57 Re., Paulo on 08.21.17 at 8:30 pm

‘…invest carefully’

Spit out my water !!

No such thing . You’re at the mercy of your fellow man . When you grasp that , the fear disappears

#58 Boucher on 08.21.17 at 8:35 pm

House prices will go up. The MSM will report them going up even if they don’t go up. It’s a win win! No one knows the truth and it makes Canada look STRONG!

#59 Hans on 08.21.17 at 8:36 pm

Out of curiosity, I wonder how Wynne will deal with the cannonball sized hole that the real estate slow down has put in her “balanced” budget? Every time I hear “All is good” Souza talk, I wonder what other accounting tricks they can use to claim more govt sponsored pension gains as asset side ledger additions. Good luck on the upcoming election!

#60 Andrew Woburn on 08.21.17 at 8:40 pm

– Uncovering a Hidden Junk-Bond ETF Fee

https://www.bloomberg.com/gadfly/articles/2017-08-18/an-extra-fee-may-be-hiding-in-that-junk-bond-etf-cost

#61 mortgageman on 08.21.17 at 8:44 pm

The crap is starting to hit the fan now. Currently have 2 clients whose realtors encouraged them to buy over asking with no conditions.

Now their houses are not selling. I would not be surprised to see panic selling in September. Another 20-30 percent drop can happen very soon.

Get ready for a show!!!!

#62 akashic records on 08.21.17 at 8:54 pm

#41 Willy H on 08.21.17 at 7:36 pm

“In other words, buyers will qualify for 18% less financing, which means they have 18% less to spend. So guess what happens to prices?”
___ ___ ___

This is exactly what this market requires. This will be particularly hard on homes previously valued at $750K+ in the 905 area of the GTA. First time buyers will be contained, finally, which will most certainly impact thousands of over-valued cookie-cutter homes that make up the soulless GTA’s ubiquitous strip-mall infested urban sprawl. Hard for the Volvo set to move up to their next McMansion when first-time buyers have been fiscally gelded!

The south of France is still cheaper!

That depends… prices are on a wide range.

Mind you, the climate and the ocean is priceless… cost of living was surprisingly good this summer.

Soldiers patrolling the beaches and promenades with machine guns needs a bit of getting used to it. But as Macron says “it’s the new reality”.

#63 dr. talc on 08.21.17 at 9:08 pm

OSFI is a joke.
They say the problem they want to address is an ‘overheated’ market, OK, the obvious solution to that problem is to increase supply, but the UN won’t allow that. So while the UN sticks us with green belts and smart growth, the OSFI takes aim at every Canadian who wants to buy a house, and some people come here and type that they agree with that.
Go to their web site, plug your nose, and watch your tax money being wasted.

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

#64 Blacksheep on 08.21.17 at 9:08 pm

Flop #51,

“all I want to do is to give something back to this blog”
————————————
We have all read over and over, your comments about your purely altruistic intentions, all for the benefit of the Dogs or this blog.

With your working in construction, I think its more than reasonable to ask about a potential bias and if you actually have a dog in this fight? (like I and many openly admit to having)

Do you personally, own RE in Van?

Just looking for a Yes or No answer, details beyond that is none of anybodies business.

Thank you in advance.
BS

#65 Small Biz affected by crazy RE prices on 08.21.17 at 9:08 pm

Vancouver small biz decimated: Small businesses pay the (or%) property taxes of the units they lease. How do expect small businesses to employ people when lease rates go up anywhere from 3-5 times due to property tax increases!!!!

The gov’t has sold out this city and who will rent these retail place or have people employed?

#66 Happy Housing Crash Everyone! on 08.21.17 at 9:13 pm

This housing crash is going from bad to worse. Remeber shysters use inflated sales for the month against revised sales for the same month from last year (which realtor never point out). Realtors are evil shyster who are now financially suffering . Hey can anyone confirm if realtors who owe the government 50-60k in back taxes can claim bankruptcy and not pay the government? Happy Housing Crash Everyone! :-)

#67 ShowBiZZa on 08.21.17 at 9:15 pm

I will share my post again that I put up Friday night as a few posters said they don’t believe a word of what I said. What is not believable about this story? Pertinent to tonight’s post – we went to a realtor brokerage customer appreciation night on Saturday (the day after we closed) and the broker (not our agent) came up to us and said ‘you guys closed yesterday? Wow – that is a rarity nowadays’.

Without further ado – here is our real story and to add a further detail that I didn’t mention before it was actually the HAM bank of mom that provided the cash to close the deal.

From Friday’s post:
I have been a regular blog dog for at least 9 yrs and only ever commented twice. I recall arguing with people at dinner parties since 2008 saying that Toronto prices will go down.

We starting looking to purchase a bung or a semi in 2008 and I remember thinking that it is too expensive to pay $280k on a home. We held off and waited until 2014 to seriously look at purchasing again. By then the exact houses we were looking at had doubled in value. Although thinking we might possibly be buying at the peak we purchased a bung in an amazing neighbourhood just shy of $600k.

I also remember thinking when we bought that Garth would approve of this buying decision. Real estate 101 – buy one the smaller homes in an expensive neighbourhood. After we bought prices started to increase at an unsustainable amount as you all know. We decided around Nov 2016 that it might make sense to sell soon as we might be reaching tulip mania. All booms have a bust in the classic cycle. Some last longer than others. By the time March and April hit we started thinking we better list. We listed in May and sold in June. Took a price cut and adjusted our expections as the market chilled super quick. We only had one offer in a month. We took it … to the bank today. We closed. A 350k price increase in 3 years. Best part is we don’t have to move as we are leasing our home back from the buyer. The deal works perfectly for both parties. We will finally be debt free with a nice down payment for the next house.

I have to give Garth props for his education. Part of my real estate savvy has come under the tutelage of GT. Thanks Garth for all the time and effort you put in this.

For those on the sidelines – my take is that the market will see an unprecedented explosion of listings in September for those wanting to cash out at spring prices. They will be sadly disappointed when they realize that that ship has sailed. I think the shit hits the fan around Oct-Jan with interest fees increasing, out of control debt levels, OFSI changes, FONGO, HAM gone to Ottawa/Montreal, buyers not wanting to catch a falling knife, MSM starting to get negative.

However as prices and sales collapse watch for the Wynne government to try and prop up the spring market so they get re-elected.

Might be a buying opportunity Oct-Jan.

I might vultch or wait for the knife to fall further.

Things are getting interesting but let’s face it – we need a correction in this super bloated market.

I’ll be celebrating with the boys tonight for an actual done deal. Grateful that it don’t fall through.

Cheers!

Happy housing correction ;-)

#68 Happy Housing Crash Everyone! on 08.21.17 at 9:23 pm

52 Just Around the Corner on 08.21.17 at 8:10 pm
“In other words, buyers will qualify for 18% less financing, which means they have 18% less to spend. So guess what happens to prices?”

—-

This EXACTLY what was said with the new ‘moister millennial killing stress test’ in the fall of last last year. It was supposed to wipe out 15-20% of the buyers with the same price decreases as it was the equivalent to rates rising 2% points.

How did that turn out? Right, prices went through the roof as did sales.

Its always just wait a few more months for a new provincial measure, federal policy change, interest rate hike. Of course, that time buying has cost 10 years so far….

I have no faith that another measure to cool the market will do anything after 10 years of failed measures. Sorry. History is on my side this time.

The moister stress test came in and CMHC-insured loans plunged ore than 40%. Why? Because the kids went to the Bank of Mom or subprime lenders for their down payment money. This is exactly why everyone will soon be tested – and why its potential impact is terrifying realtors. — Garth

______________________________________________________

LOL.. Garth you wasting you time on these terrified shysters who are financially screaming in horrible financial pain. They know it and we know it. The housing crash over the next few months will result in minimum 20%more drop in prices. Happy HAPPY Housing Crash Everyone!

#69 Happy Housing Crash Everyone! on 08.21.17 at 9:26 pm

Happy HAPPY Housing Crash
nothing is selling
nothing is selling

Happy HAPPY Housing Crash
Prices are going Down
DOWN DOWN DOWN!

Happy HAPPY Housing Crash
nothing is selling
nothing is selling

Happy HAPPY Housing Crash
Prices are going Down
DOWN DOWN DOWN!

Happy Housing Crash Everyone!

#70 cramar on 08.21.17 at 9:27 pm

Neighbour here got a call from a RE agent he knows in Kitchener-Waterloo. My friend asks, why are you calling, is business slow or something?

Agent tells him yes very slow, the bottom has fallen out of the market. He says it is everywhere in Ontario except where you are in Essex Country where prices are up 28% in the last 6 months.

The question of the day is will it remain this way or drop back here also.

The good news is we are fuelled by immigration! Immigrants from Toronto, K-W, Golden Horseshoe, etc.

#71 ABFROMBC on 08.21.17 at 9:31 pm

Hi Garth,

This is a comment related to yesterday’s post about the change of tax rules for small business. I am intending to send in a letter of comment/suggestions as you advised a couple of weeks ago, but wanted to see if you or any of the other blog dogs had comments. Here is what I have written:

——

I am a small business owner based in British Columbia. I have been in business since 2011, and have 2 contract employees. The vast majority of my clients are Canadian companies, although I do now have a US division and have started to generate business from that entity which funnels US$ back into the Canadian system. To the best of my understanding, it is exactly my kind of business that will be directly and adversely impacted by the suggested changes to the tax code.

I have read your proposed revisions to the tax legislation, specifically as it relates to accumulating funds in privately owned corporations and your desire to create fairness across the tax code foe those that are employed. While I am in support of fairness in taxation, I believe a bigger picture needs to be considered. As a self-employed person I have little to no job security. No benefits provided, no retirement plan, and as well, risk my own money and capital in the self-employed endeavor (not to mention work generally more hours, for less pay, than my employed counterparts). Are these risks worth nothing in the eyes of the tax code? If we talk about fairness, with the changes to the code, will I now receive the same rights as an employed person such as the ability for my company to contribute to a pension plan on my behalf, and EI should my business go through a tough patch? I have not seen or heard any suggestion of this?

For myself, the accumulation of money in my company serves three purposes:

1. ‘Contingency’ money for periods when receivables do not cover expenses.
2. Saving for future larger investments (I would like to buy an office at some point), or perhaps purchase another company to expand my business. Both of these purchases would require more capital than I could accumulate within a one-year period.
3. Retirement savings.

With the proposed changes to the legislation, all three of these areas would suffer if you start to tax company profits at the same rate as personal taxes, essentially motivating me to take the monies out of the company and spend them on personal things rather than leave them in the corporation. How can a company like mine save for expensive equipment, or real-estate, if at the end of each fiscal year profits are taxed at rates as high as personal taxes? How do I accumulate money in the company for such things?

For me, the result of the changes you propose would be that I would actually reduce my effort within my business to only earn the minimum amount of money required for me to live comfortably. I would end up working longer (more years), which may mean that over the course of my lifetime the impact in taxation would be minimal, but it essentially incentivizes me to stay small rather than grown my business aggressively which is what I have been trying to do over the past few years.

I have a suggestion. Would it be possible to implement the legislation substantially as it is, but to have an exempted amount (say $50,000 – $100,000 per annum, or even a % of net profits that, while still taxed as they are now ass retained earnings,, could be retained in the company, and then used for the purposes above. This would discourage excessive accumulation of capital (the new rules could apply to all amounts outside of the allowance) that way the company can retain and pay tax at the standard corporation tax rate (like it is now). Then, profits above that amount are taxed at the personal rate per your proposal? This would allow small business owners to still accumulate money for re-investment over time, save for retirement etc, but would yield the tax revenue you are looking for from those small business that are retaining ‘excessive’ profits?

For example

• Gross Revenue $348,000
• Net Revenue $200,000
• Retention allowance @25% = $50000 (this is taxed at current corporate rate (13%?)
• Remaining profit of $150,000 must be taken as income to the shareholders and is taxed the same as everyone else. (i.e the new system)

To me a solution like this would allow some element of answering the needs business have as identified above (Contingency, Major Purchase, Retirement) but would also meet the requirement for equalizing the playing field and getting more tax revenue.

#72 For those about to flop... on 08.21.17 at 9:32 pm

As I drove to work this morning, I noticed the Chevron at Oak and 41st has been shut down and was starting to get dismantled.

I guess most likely ,like the two gas stations downtown,which it wouldn’t have fetched the same price for the land, but likely will be replaced by a condo tower…

M43BC

#73 jay #2 on 08.21.17 at 9:36 pm

Saw this post on reddit Toronto ,I think it might be a real estate agent looking for a new line of work ,hilarious. https://www.reddit.com/r/Torontoevents/comments/6v7m1u/aug_21_the_drinking_buddy_in_session_tonight/

#74 Ret on 08.21.17 at 9:41 pm

This should get interesting. Glen Abbey could be toast in the name of more development.

http://www.cbc.ca/news/canada/toronto/oakville-glen-abbey-vote-1.4252829

This will surely get stalled until after the next provincial election.

#75 heyoka on 08.21.17 at 9:59 pm

#69 Happy Housing Crash Everyone!

When is your next check up? You need professional help.

#76 ANON on 08.21.17 at 10:07 pm

CATS! You have been warned. Doom is here.

#77 Smoking Man on 08.21.17 at 10:13 pm

To the 50 or so blog dogs that got a copy of my book.

You got to admit, pretty impressive for sight on current unfolding events.

I’m taking it down soon, scared actually.

It might get me killed in the near future. I see how things are evolving well into the future, it’s what I do.

Calling you the lucky 50.

Me not so lucky. 1 new death threat a week.
I’ve made it to the suppream lonney lefts shit list. No job for me but that’s not enough to satisfy hate of a difference of opinion.

Kind of proud here. You had your chance when you knew where I lived. Not making that mistake again.

Next book. Knitting safe space blankets for the oppressed.

That one would be a best seller. Huge market potential.

#78 Happy Housing Crash Everyone! on 08.21.17 at 10:34 pm

new subdivision, Stanley Greene, which, though unfinished, is already home to hundreds of residents. Not only are many unhappy, so are some of their neighbours from the area. They feel betrayed because the park they expected is being turned into housing.Occupants of the homes tell stories of flooded basements, black mould, blocked pipes, garbage-strewn streets, wobbly railings, leaky walls and ceilings, warped floors, missed construction deadlines . . . But when some of the garages turned out to be too shallow to accommodate a car, the spit hit the fan.

“Residents have been forced into car culture, but given no place to park their cars,” declares local Councillor Maria Augimeri. “Shoddy doesn’t come close to describing the situation. There are hazard issues. My office has had more than 500 complaints. Some residents are living in hotels because the city won’t sign off on a certificate of completion.”

The builder, Mattamy Homes — five-time winner of the Home Builder of the Year Award — says it’s aware of the complaints about the garage doors and other things and is committed to addressing “both individual and community issues.” The company says it’s made significant progress in the past few months and is “looking forward to working co-operatively with the city” to find solutions.

https://www.thestar.com/news/gta/2017/08/21/downsview-parks-enormous-potential-is-being-squandered-hume.html

Another cheap cookie cutter POGarbage.

#79 Happy Housing Crash Everyone! on 08.21.17 at 10:38 pm

What would a shyster say?????

Back to the artical

David Anselmi, real estate director at Canada Lands Corporation, the federal agency that owns Downsview, insists “the majority of the feedback we have received has been positive.
https://www.thestar.com/news/gta/2017/08/21/downsview-parks-enormous-potential-is-being-squandered-hume.html

Happy Housing Crash Everyone!

#80 Palmateer on 08.21.17 at 10:43 pm

Smoking Man is having impure thoughts about the German Chancellor….

#81 S.Bby on 08.21.17 at 10:48 pm

Asking prices on SFH in South Burnaby are definitely dropping over the last few months. Nothing much selling either. We’ll see how the RE board spins this.

#82 Gravy Train on 08.21.17 at 10:49 pm

Never underestimate what living on commission will do to a man. — Garth

#20 InvestorsFriend on 08.21.17 at 6:21 pm

“True. It is said that a man will believe almost anything when his livelihood depends on him believing that thing.”

Here’s another variation on a theme:
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
― Upton Sinclair

#83 Palmateer on 08.21.17 at 10:52 pm

Message to Smoking Man and the alt.right Trump-tards:

“Trump is a fantastic liar who is only interested in; and has only ever been interested in one person: himself.

He doesn’t serve the Rothschilds, the deep state, the globalist conspiracy, the GOP or the Kochs. He also sure as hell doesn’t’ serve ‘the little people’ , the working class, the ‘forgotten / overlooked / take-advantage of’ people who voted for him.

He serves himself.

He told you and everyone else like you that believed in, and advocated for, and voted for him exactly what you wanted to hear.

And it was all lies.

All of it.

He has never hid what he was, you just chose not to see it. Don’t blame this on some hidden, mysterious global forces.

Trump is a Trumpist. His agenda and his motivations are simple: do whatever is in his own best interests, all the time, always.

And do so whilst lying about everything – tell the person right in front of you exactly what they want to hear; rinse and repeat through every interaction you have with every person you meet.

Trump started with a pretty clean slate but has methodically alienated:

• The public: Gallup has his approval at 34%, down from 46% just after the inauguration. 
• Republican congressional leaders — Senate Majority Mitch McConnell in particular.
• Every Democrat who could help him do a deal.
• The media.
• CEOs.
• World leaders.
• Europe.
• Muslims.
• Hispanics.
• African Americans.
• Military leaders.
• The intelligence community. 
• His own staff. 

And who’s happy?

• Steve Bannon.
• Saudi Arabia.
• Breitbart.
• David Duke.

Trump is isolated because he thinks he needs no one besides himself. He’s just not as good as he thinks he is. And no one can tell him.”

#84 Fish on 08.21.17 at 10:52 pm

Where is the Mayor from Milton?

#85 Lee on 08.21.17 at 10:53 pm

Was just wondering, when Canada goes full socialist, how do we decide who gets to live in the mansions in Forest Hill? How do we decide who gets Platinums at Leaf games? Oh yeah. Justin’s friends will get them.

#86 For those about to flop... on 08.21.17 at 11:11 pm

U.S based article from howmuch ,but someone on here will get something out of it…

M43BC

The Rising Costs of Sending Your Kids to a Private School

“The average cost of private school tuition has grown at a rate that is higher than inflation over the past 20-years. While there are several cost increases that have led to the rise in private school tuition, administrative employee compensation has been the main catalyst for the increases in private school expenses. The rise in the volume of employees who have a larger compensation package than a typical teacher has created the upward trajectory in private school tuition costs.”

https://howmuch.net/articles/average-private-school-tuition-cost

#87 Re., showpiza on 08.21.17 at 11:16 pm

Are you going to share your story tomorrow as well ?

That would be three days in a row .You’d feel great three days in a row .

#88 Andrew Roberts on 08.21.17 at 11:25 pm

#83 @Palmateer

Shut up.
Go moan and whine about politics elsewhere. Trump won. Deal with it.

#89 Andrew Roberts on 08.21.17 at 11:29 pm

So many realtors. Talked to my hairdresser person today and they are a realtor as well.

Everyone and their mother is a realtor.

Not really sure how these people survive especially now that the housing boom is dead.

#90 Gurps @ Brampton on 08.21.17 at 11:33 pm

Hello Garth,

The wife & I went to look at new home developments today just for kicks. We saw some 2750 sq. ft. homes on 38′ lots selling for $1.3 million (!!) on the border of Brampton and Georgetown (Development will be completed next August near Mississauga Rd. & Williams Parkway).

My question is, are new home development prices not affected by changes in the real estate market price? Thank you.

#91 Ways Around on 08.21.17 at 11:36 pm

#52 Just Around the Corner on 08.21.17 at 8:10 pm
“In other words, buyers will qualify for 18% less financing, which means they have 18% less to spend. So guess what happens to prices?”

—-

This EXACTLY what was said with the new ‘moister millennial killing stress test’ in the fall of last last year. It was supposed to wipe out 15-20% of the buyers with the same price decreases as it was the equivalent to rates rising 2% points.

How did that turn out? Right, prices went through the roof as did sales.

Its always just wait a few more months for a new provincial measure, federal policy change, interest rate hike. Of course, that time buying has cost 10 years so far….

I have no faith that another measure to cool the market will do anything after 10 years of failed measures. Sorry. History is on my side this time.

The moister stress test came in and CMHC-insured loans plunged ore than 40%. Why? Because the kids went to the Bank of Mom or subprime lenders for their down payment money. This is exactly why everyone will soon be tested – and why its potential impact is terrifying realtors. — Garth

———

And who is to say that there will not be a way around this new test just like the failed stress test brought in last year? As an example, shadow banking is big in China – could easily emerge.

Or you could see a provincial stimulative measure like BC implemented to counter federal cooling measures – like its BC Home Buyer program that gives up to 37.5k as a down payment to 42,000 people.

The reality is that someone will find a way around the OSFI changes – IF, and big IF, they get implemented, or a provincial government will do something to counter any declining market. Remember, the Ontario provincial government could rescind the 16 point fair housing plan which has caused the TO collapse, and the up go prices again.

I guess we will know in a few short months if low interest rates and domestic speculation is really the cause of this bubble.

#92 Long-Time Lurker on 08.22.17 at 12:10 am

#71 ABFROMBC on 08.21.17 at 9:31 pm
Hi Garth,

This is a comment related to yesterday’s post about the change of tax rules for small business. I am intending to send in a letter of comment/suggestions as you advised a couple of weeks ago, but wanted to see if you or any of the other blog dogs had comments. Here is what I have written:

——

I am a small business owner based in British Columbia. I have been in business since 2011, and have 2 contract employees….

This is pure speculation on my part but let’s say you treated your business corp solely as “the business”. You do not treat it as a retirement vehicle or an re-investment vehicle. You optimize “the business'” payout to you in salary and dividends taking into consideration taxes. You then take “the payout” and optimize it in your own personal investments utilizing TFSAs and RRSP. Now your retirement fund is covered in your own personal portfolio.

The next issue is reinvesting in “the business”. When sufficient capital has grown in your personal portfolio, you take out some cash then invest in “the business” in terms of office, equipment, etc., and award yourself more shares as an investor. This allows you to grow your business as well as your personal holdings.

The benefits of incorporating for small business is being neutered. So now you just leave the business corp as the legal entity and use your own personal portfolio for retirement and reinvesting.

Any comments?

#93 Dee on 08.22.17 at 12:26 am

The moister stress test came in and CMHC-insured loans plunged ore than 40%. Why? Because the kids went to the Bank of Mom or subprime lenders for their down payment money. This is exactly why everyone will soon be tested – and why its potential impact is terrifying realtors. — Garth

————————————

Garth is 100% right on this. The famous line is “can your mother, sister etc help with the deposit?” And yes those working with and for the sub primers found ways to make things happen….but that was then

#94 Tony on 08.22.17 at 12:58 am

I don’t see interest rates going up in America for years to come especially with Yellen and her speech this Thursday to Saturday. The consensus of a October hike in rates in Canada presently is 67 percent. I put it at half that or about 33 percent. The stress test is to protect the Canadian taxpayers so it may pass, hopefully. Dead cat bounce in GTA house prices will take place this October (9th and 10th) and accelerate when Poloz doesn’t increase interest rates this October.

#95 jas on 08.22.17 at 1:27 am

Don’t forget that RE prices are very local phenomenon.
Things are still hot in Surrey, BC
Anyone, how are things in and around Victoria?

#96 Rexx Rock on 08.22.17 at 2:01 am

Ontario is flat broke.Soon the provincial pensions will be clawed back.Wait and see.I know it sounds scary but its whats going on in the USA.Good luck all you goverment pensioners.

#97 Construction Checker on 08.22.17 at 2:09 am

#53 For those about to flop… on 08.21.17 at 8:15 pm

Flop, you said you were in construction. I need to ground truth a construction salary.

My sister lived with a boyfriend who she claimed was making over 250k as a ‘foreman’ of a small construction company in Toronto. He is 26 now – he trained as a carpenter but never finished his ticket. He was working since 20 and supposedly making this money for the past couple of years. Working 8 hours a day and 5 or 6 days a week only.

My instinct says its a lie, but I don’t know the construction industry. It does not even seem plausible for a Fort Mac situation when it was peak oil prices.

Any thoughts?

#98 Dolce Vita on 08.22.17 at 4:57 am

#47 MF

I just crunch the numbers as I have an Excel Spreadsheet that I use to track GVRD sales data and that I can quickly update in minutes using actual/timely data from Zolo.ca.

My interpretation is that of a lay person without access to MLS data.

Show your numbers where you assert “Condos still up higher”.

None to be found in yesterday’s, or last quarter for that matter, sales data.

“Lots of people on the sidelines” – have no data to substantiate what you say, one way or the other.

However, from the actual data I can say that the last 6 months provides no evidence of increased demand…look at Unit Sales for all 3 property types over the past 3 months – all are much less (a > 50% drop for all 3) than the Mar to May 2017 quarter.

Again, comparing a peak sales quarter (Mar-May) to a low seasonal sales quarter (June-Aug).

The next quarter (Sep-Nov) impact from new OSFI rules and another rate increase to come, unknown.

As a layperson I suspect those 2 events will not bode well for the Vancouver RE market or anywhere else in Canada for that matter.

#99 Dolce Vita on 08.22.17 at 5:07 am

#36 crdt

Per Zolo.ca, you are correct. Do not track them as < 100,000 population.

Something is going on there for certain in the past month, a recovery of sorts from prior months data, good for Langley:

Jul 22-Aug 19:

Avg. Price $744 K
Avg. price +6.5%
Qtr. price -0.9%
Yr price +12.1%

Jun 24 to Jul 21:

Avg. Price $691 K
Avg. price -12.7%
Qtr. price -4%
Yr price -1.4%

#100 Dolce Vita on 08.22.17 at 6:06 am

Because the kids went to the Bank of Mom or subprime lenders for their down payment money. This is exactly why everyone will soon be tested – and why its potential impact is terrifying realtors. — Garth

It is also terrifying OSFI:

50% of new mortgages are JUST over 20% down.

To make payments more affordable amortization periods are stretched out to 30 years.

The trend is growing at a rate of 14% y/y.

450% loan-to-income up from 19% to 27% in 2 years.

Half of Big 6 Bank mortgages are now uninsured.

https://www.canadianmortgagetrends.com/2017/07/b-20-bombshell/

Add to that:

Canadians refinancing existing mortgages for more money to tap into “new found wealth” of a higher priced home (35% of all mortgages in 2016 were Refinances or Multiple Mortgage Holders) renewing single property mortgage(s) for 10% or more.

https://www.cmhc-schl.gc.ca/en/hoficlincl/observer/observer_171.cfm

#101 Gravy Train on 08.22.17 at 6:08 am

#80 Palmateer on 08.21.17 at 10:43 pm

“Smoking Man is having impure thoughts about the German Chancellor….”

Merkel or Hitler? :)

#102 Reality 1 on 08.22.17 at 7:20 am

to # 52 Just around the corner

Put simply;

The original stress test applied ONLY to mortgage applications seeking CMHC INSURANCE (less than 20% down payment) – about 1 in 5 buyers.

To avoid this stress test, many people who had less than 20 % down payment went and borrowed the shortfall from parents or other private lenders.

Armed with this BORROWED DOWN PAYMENT MONEY, they then went and applied for an UNINSURED mortgage as if the down payment was their money.

This was done in CONTRAVENTION TO OSFI REGULATIONS.

In order to enforce these OSFI REGULATIONS, a subsequent stress test was created.

This subsequent stress applies to ALL MORTGAGE APPLICATIONS INCLUDING RENEWALS which account for the 4 out of 5 mortgage applications which had not been covered by the first stress test.

Ergo, now ALL mortgage applications are subject to the same stress test.

The amount buyers can borrow (and therefore the price people can buy at), has thereby been significantly reduced.

Whether or not you understand this is immaterial – it is how the credit dynamic will reduce RE prices substantially and perhaps very quickly.

#103 fancy_pants on 08.22.17 at 7:32 am

If it is not the risk of housing prices falling, it will be the sharp rise in everything else. QE in debt driven economies will eventually blow the doors off the non-inflation numbers they keep feeding us.

#104 maxx on 08.22.17 at 8:00 am

#2 viorelli on 08.21.17 at 5:16 pm

Yes indeed. Cash and cash flow are the new re.

Given increased focus on automation, zero-hour contracts, low-wage jobs eclipsing good jobs with benefits, minimum wage increases which will usher in hiring reductions and retail tax increases, unprecedented debt levels accompanied by an increasing pan- Canadian undercurrent of re malivestment….. cash, as always is king. Cash flow is queen. If you acquired either, you win. If you managed both, you rock.

Debt holders are pawns and the future is not that friendly in terms of servicing costs.

FOGO and trashing debt have now moved into the red zone.

#105 MF on 08.22.17 at 8:16 am

Dolce Vita,

Don’t care about Vancouver because I don’t live there but here are the TREB stats on condos:

http://www.trebhome.com/market_news/release_market_updates/news2017/nr_condo_report_Q2-2017.htm

-Price up over 20% from last year.

The fact that prices for SFH have “dropped” from 1.3 mil to 1.2 mil doesn’t mean anything considering they went up 200%.

No one I know is talking about a crash. Everyone still wants to buy.

Don’t see it sorry.

MF

#106 crowdedelevatorfartz on 08.22.17 at 9:01 am

@#97 Construction Cheque’r

$250k per year in a small construction company?
What is he building? Grow Ops?

#107 Lee on 08.22.17 at 9:09 am

#97 and #106,

Construction foreman of Ontario small construction companies can pull in $175,000-$200,000 a year. $250,000 is a stretch. But a very profitable small construction company might pay a foreman $200,000 inclusive of all benefits, bonuses, car expense and perks. Just car expense could run $15,000 a year. This would be for a very capable and experienced foreman who can yell really loud, and one who likely works 60-70 hours a week.

#108 crowdedelevatorfartz on 08.22.17 at 9:12 am

@#72 Flop.
“I noticed the Chevron at Oak and 41st has been shut down and was starting to get dismantled….”
******

When the last gas station in the LowerBrainland has been sold off for its real estate “value”.

The Gregor Greens will clap their little hands with glee and cut the ribbon on yet another bicycle route. ”We won!” they shrieked, “The whole world is Green and we’re the Best place on Earth”.

It would be frightening if it wasnt so pathetic.
The Real estate meltdown cant come soon enough and hit hard enough for my liking in this self absorbed “city of mirrors”.

#109 crowdedelevatorfartz on 08.22.17 at 9:21 am

@#107 Lee
“and experienced foreman who can yell really loud, and one who likely works 60-70 hours a week….”
+++++++
I hope you read prints better than you read posts.
It was stated he’s 26 and started 6 years ago ( hardly “experienced”) and worked 5-6 days a week, 8 hours a day. Which doesnt add up to 60-70 hours a week in my mathmatically challenged world.
But I suppose its possible some idiot might pay him $250k per year. Not likely but possible.
After all Real Estate agents with 6 weeks “experience” get paid more to flap their gums like used cars salesmen.

#110 For those about to flop... on 08.22.17 at 9:43 am

09 am
#53 For those about to flop… on 08.21.17 at 8:15 pm

Flop, you said you were in construction. I need to ground truth a construction salary.

My sister lived with a boyfriend who she claimed was making over 250k as a ‘foreman’ of a small construction company in Toronto. He is 26 now – he trained as a carpenter but never finished his ticket. He was working since 20 and supposedly making this money for the past couple of years. Working 8 hours a day and 5 or 6 days a week only.

My instinct says its a lie, but I don’t know the construction industry. It does not even seem plausible for a Fort Mac situation when it was peak oil prices.

Any thoughts?

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

I think you guessed right.

All I can say on the matter is that a foreman of a small construction company here in Vancouver I sometimes help out makes $55 an hour and that is on high end detached housing.

I only know this information because a house I was working on last year had a flood and when the insurance person was on site they started talking replacement costs right next to where I was working…

M43BC

#111 Smoking Man on 08.22.17 at 9:44 am

#83 Palmateer on 08.21.17 at 10:52 pm

Individualism over confiscation

It’s about as simple as that. I’m sorry your a poor shlep with no creativity to figure out capitalism. The fact that you visit this financial blog is a good thing , there might be some promise for you in the future.

Quit trolling me. Not going to work. I’ve pissed off much bigger leaches than you and I’m still going strong.

I’ve been posting on here for a zillion years. People know me. Your futal attempt to brand me a rasist because I support Jobs, grouth and prosperity that I know Trump can deliver is rediculos.

A bit of advice, so long as you lefties keep pushing identy politics. The more you will keep losing at the ballot box.

No one cares.

Dr Smoking Man
PhD Herdonomics

.

#112 Oakville Rocks! on 08.22.17 at 9:49 am

I salute all those who sell for a living (on commission or not) because we all depend on them for our livelihoods. Some 25 years ago, after graduating university, I realized two things when I entered the working world. Voting NDP was not a smart move (Bob Rae taught me that). And sales is a noble profession pursued by people like my father ( a salesman all his life ) who are very smart business people at heart. Like all professions, there are some who behave poorly but they should never be used to generalize and demean the majority. Because the majority of hard working sales people take their profession seriously and their contribution to our economy is beyond measure.

Hats off to all who sell and I know when Garth wrote that last sentence he meant never underestimate what a man on commission can achieve.

#113 Stan Broock on 08.22.17 at 9:49 am

#3 Paulo on 08.21.17 at 5:29 pm
The Controlled Crash: trying to control the damage of poor economic policy gone terribly wrong.

expect real estate values in Ontario to decline between 50 to 65% over the next 18 monthes.
———————–

The Irish property prices deflated by 62 %+

In GTA it will be between 70 and 80 % in real terms.
At least. Nothing to justify even 500 k for SFH in Vaughan or Mississauga or even 300 k in Aurora.
Nothing.

If prices revert to the mean and overshoot on the downside it would be worse.

There is no reversal of the current downward trend.
The horses have left the barn.

#114 Stan Broock on 08.22.17 at 9:53 am

#102 Reality 1 on 08.22.17 at 7:20 am
to # 52 Just around the corner

Put simply;

The original stress test applied ONLY to mortgage applications seeking CMHC INSURANCE (less than 20% down payment) – about 1 in 5 buyers.

—————————————-
This is fake news.

Majority of new loans are insured by CMHC

The comment as stated is 100% correct. — Garth

#115 cd on 08.22.17 at 9:54 am

Not sure if anyone studied pendulums in classical dynamics or perhaps pid control theory but there are some great parallels with the current state of the housing market. Things will keep swinging in the current direction for quite a while yet.

#116 InvestorsFriend on 08.22.17 at 9:55 am

House Construction Still Booming

The latest from Statistics Canada for July:

Released: 2017-08-22

“Investment in new housing construction rose 7.2% from June 2016 to $4.7 billion in June. The increase was mostly attributable to higher investment in single family dwellings (+$257.9 million).

All but one province (Newfoundland) saw an increase in new housing investment in June 2017.”

http://www.statcan.gc.ca/daily-quotidien/170822/dq170822b-eng.htm?CMP=mstatcan

Doomers may read it and weep.

#117 InvestorsFriend on 08.22.17 at 9:57 am

My last post should say that was for June house construction, not July

#118 InvestorsFriend on 08.22.17 at 10:05 am

Alberta single family new home construction investment in June remains 23% below the June 2014 peak but is above the 2011 level.

Not bad, just 23% below the year of $130 peak oil…

Alberta is climbing out of recession and GDP will clearly be higher in 2017 versus 2016.

#119 Rabbit One on 08.22.17 at 10:37 am

97

I know a couple of foreman in B.C., they are making close to $200K per year.
Don’t hear about perks, believe “all in” deals.
Both driving all optioned fancy trucks.

Foreman with carpenter training background must be respected position plus foreman has a lot of dominant power at the site.
I doubt a bit though, because of his short experiences in construction.

So, if in B.C., $120K~$150K is very possible wages for his experiences and position.

#120 Ian on 08.22.17 at 10:59 am

Hey you dogs remember this hit song from the late 70s right?

Everyone sing along now…

“FONGO is in the air, la-la-la, la-la-la”

https://youtu.be/NNC0kIzM1Fo

#121 Renter's Revenge! on 08.22.17 at 11:05 am

#115 cd on 08.22.17 at 9:54 am
Not sure if anyone studied pendulums in classical dynamics or perhaps pid control theory but there are some great parallels with the current state of the housing market. Things will keep swinging in the current direction for quite a while yet.

I like the “dog on a leash” analogy for markets. When you walk your dog, sometimes your dog runs ahead of you, and sometimes it lags behind. But by the end of the walk, you and the dog have walked at the same average speed (you arrive home at the same time). The dog is the market. You are some fundamental aspect of the economy, like earnings, income or rents.

#122 Paulo on 08.22.17 at 11:08 am

97 & 107 Construction foremen;

talked to a couple of foremen that i know. they are suspect of this story the money is to high and the guy to young. normally these positions go to seasoned trades people with completed tickets and many years experience including demonstrated abilities to manage trades and sites. top money is around 200k average 150k ++ . so unless special circumstances ie the kid is close to the check book this is likely a story

#123 Vanrentor on 08.22.17 at 11:19 am

http://www.theonion.com/article/real-estate-insiders-keep-close-eye-newborn-sired–56708

#124 TheDood on 08.22.17 at 11:24 am

#36 crdt on 08.21.17 at 7:06 pm
Listings in sleepy Langley BC are still getting those pesky sold stickers, however, the signs do not seem to get removed for some reason.
________________________________

I guess that means lots of dummies are moving to Langley.

Leaving the ‘sold’ sign on for weeks/months after is a ploy to make everyone think the market is still moving. It works for the lemmings among us.

#125 TurnerNation on 08.22.17 at 11:26 am

SM’s ‘buddy’. Key in life is in knowing where you stand with somebody. Are you a hunter or the hunted?
Look into his eyes…

http://www.cbc.ca/beta/news/politics/rana-sarkar-trudeau-appointment-salary-1.4256445

#126 Linda on 08.22.17 at 11:29 am

Out of curiosity, what would it matter if ‘Trump blew up?’. Seriously, would the real estate market be meaningfully impacted if the current POTUS was replaced ‘early’ for any reason? Short of actual war, that is – & if war did break out, I sort of think RE isn’t going to be the main concern on most people’s minds, other than whether it will be glowing or not.

#127 Ponzius Pilatus on 08.22.17 at 11:31 am

#56 waiting on the westcoast on 08.21.17 at 8:28 pm
#22 Ponzius Pilatus on 08.21.17 at 6:23 pm days… “Garth,
I just can’t see rising rates and collapsing RE ever meeting on the dance floor.Too risky, politically.”

I guess you didn’t live through the early 80s… I saw a lot of my parent’s friends (many very successful entrepreneurs) lose investment properties as interest rates rose and house prices collapsed. The government didn’t help those snowflakes either…
—————–
Thanks for the flattery.
Actually, I was a loans officer at the local Credit Union during the early 80s.
Lots of heartbreak, divorces due to defaults.
Did not look forward going to work every morning.
But, at least in BC, the Government provided rebates to struggling home owner.
I know because I was one of them.
And BTW, times were much different then.
No comparison.
Run away inflation had to be brought under control.
And I sure remember Nelson Skalbania.

#128 IHCTD9 on 08.22.17 at 11:37 am

#96 Rexx Rock on 08.22.17 at 2:01 am
Ontario is flat broke. Soon the provincial pensions will be clawed back. Wait and see. I know it sounds scary but its whats going on in the USA. Good luck all you goverment pensioners.
____________________________

Never happen here, we’ll be more like Greece and drive everything straight into the ground.

Look at Wynne. When high hydro costs started threatening her second term, did she go out looking for efficiencies, and areas to trim the considerable fat to bring costs in line? Nope, she borrowed said cost “savings” from 5 years hence. IE, she put the hydro up even higher, but kicked the fallout from her blockheaded plan down the road just outside her current mandate. Just like every other problem that she’s ever dealt with.

When the SHTF in Ontario, lefties and public union members will be tossing Molotov cocktails in the streets, and our Provincial Leadership will negotiate with Ottawa for a bailout while refusing to cut anything at all in the public sector. Citizens will see massive cuts and huge tax increases throughout all of it.

Now is a good time to start insulating yourself. No matter if Ontario crawls out of its hole by itself, or if Ottawa winches it out.

Either way, you’re the one who’s going to be paying for it.

#129 Guy in Calgary on 08.22.17 at 11:40 am

“#30 waiting on the westcoast
The mortgage broker is correct that many people may not qualify under the new regime and given that so many people only care whether they can buy something and afford the payment, he is really just helping them out. ;-)

I would say he is spinning the discussion to what serves his business best. It is accurate but definitely not a long-term view on how it will affect them. Then again, many of us never imagined that the market could have continued all this time (and outside events like oil crashing further fueled it). So – the mortgage broker may be doing his clients a service.

But that is what bothers me about the Millenials here… they want someone to do all their homework for them and tell them its ok. Instead of evaluating their choices and the risk associated with them and then moving forward with it. Ideally, they would then not blame everyone when it turns out there was more risk than their cursory review revealed.”

What millennial want their homework done for them? What kind of a ridiculous generalization is this? You are an idiot. How the hell did that broker’s attempt at generating business turn into millennial’s bothering you? We bother you then you call us when your record player and VHS player won’t turn on. Turns out they weren’t plugged in. Goddam some members of your generation are ignorant.

#130 Moike on 08.22.17 at 11:45 am

Montreal.

Considering there was no upside gains relative to the other metro areas, what should be expected from increasing rates, stress tests, TO/Van correction?

QC has rent controls, high taxes and language barriers

Nothing? Something? Bubble moves east regardless of stress tests etc?

#131 hard cost on 08.22.17 at 11:48 am

#113 Stan Broock on 08.22.17 at 9:49 am

#3 Paulo on 08.21.17 at 5:29 pm
The Controlled Crash: trying to control the damage of poor economic policy gone terribly wrong.

expect real estate values in Ontario to decline between 50 to 65% over the next 18 monthes.
———————–

The Irish property prices deflated by 62 %+

In GTA it will be between 70 and 80 % in real terms.
At least. Nothing to justify even 500 k for SFH in Vaughan or Mississauga or even 300 k in Aurora.
Nothing.

====

Post seems to disappear… sorry if double…

Have you seen construction cost lately?
How is that going to drop and deflate?

That’s the hard low limit of SFH.

#132 Victor V on 08.22.17 at 11:54 am

https://beta.theglobeandmail.com/real-estate/the-market/fewer-smaller-mortgages-seen-in-vancouver-after-cooling-measures-enacted/article36049598/?ref=https://www.theglobeandmail.com&service=mobile

Vancouver home buyers took out smaller and fewer mortgages after the government imposed measures to cool the province’s fiery housing market.

The average size of a new mortgage in Vancouver was $517,415 in the first quarter of this year, compared with $553,719 a year earlier, according to a TransUnion report released on Tuesday.

Not only were mortgages smaller, the number of mortgage originations in the city dropped to 6,226 from 9,162 over the same time period.

#133 the ryguy on 08.22.17 at 11:56 am

Investorsfriend;

Lol,

Sure, just keep slapping them together, eventually everyone will have a $2 million house right?

Doesn’t take a whole lot of brains to see that the fundamentals behind the Canadian RE market are out of whack.

I remember back in, 05 or 06-ish, Putin visited the USA. I don’t think it got picked up by the mainstream, but overseas he made a comment when asked about the american economy; paraphrasing a bit but “it seems like their economy is selling houses to each other”.

I lived in Phoenix from 07-11, so I was in the belly of the beast. Let me tell you, once sentiment turns, it gets really bad. Suddenly the houses all look the same, you really notice how cookie cutter they are. Easy little fixes that you overlook in a good economy suddenly become deal breakers as you know its likely a long time before you ever see a return. The shift has barely started in Canada outside of this blog, but once OFSI implements, its over Johnny.

#134 IHCTD9 on 08.22.17 at 11:58 am

#93 Dee on 08.22.17 at 12:26 am

Garth is 100% right on this. The famous line is “can your mother, sister etc help with the deposit?” And yes those working with and for the sub primers found ways to make things happen….but that was then
________________________________________

I’m always amazed at the lack of self-temperament displayed by todays RE buyers when it comes to borrowing.

When the wife and I bought, we got pre approved for an amount, and immediately set a hard line that we would not spend more than half of what we were approved for.

Todays wild eyed buyers shakedown the entire spectrum from family to [email protected] and beyond into the wild blue of private lenders. Going for broke and maxing out every line they’re offered.

It’s like someone has a gun to their heads, they’re out of options, and it’s buy or die.

#135 waiting on the westcoast on 08.22.17 at 12:03 pm

#129 Guy in Calgary says… “What millennial want their homework done for them? What kind of a ridiculous generalization is this? You are an idiot. How the hell did that broker’s attempt at generating business turn into millennial’s bothering you? We bother you then you call us when your record player and VHS player won’t turn on. Turns out they weren’t plugged in. Goddam some members of your generation are ignorant.”

Hey – I guess I trolled you to a degree. Just the past few weeks here on the blog, many of the millennials have talked about more regulation, blaming other people for situations they find themselves in, etc. So yes, I should have tied it to this post. Hope you weren’t too offended.

Not needing help with a VHS, this GenXr uses a Plex system that I put together myself… ;-)

#136 Capt. Serious on 08.22.17 at 12:07 pm

#112 Oakville Rocks! on 08.22.17 at 9:49 am

Because the majority of hard working sales people take their profession seriously and their contribution to our economy is beyond measure.

Sales people get a bad rep sometimes, but good sales people are essential to a successful business.

#137 Doug t on 08.22.17 at 12:22 pm

I just spent a week in Welland – driving from the airport in Toronto was an eye opener – I use to live in St. Catharines and now reside out west – the “golden horseshoe” has turned into a bloody mess. Truly sad the way it is being transformed into a soulless wasteland

RATM

#138 Smoking Man on 08.22.17 at 12:24 pm

Meet the communist that brought in the DR Tax
https://research.uottawa.ca/people/wolfson-michael
Call him if you like, I’m going too.

His Articles
http://ipolitics.ca/author/michael-wolfson/

He is a long term lefty academic with zero business experience. He doesn’t get basic science, for every action, there is an equal and opposite reaction.

Brain Drain 2.0

#139 IHCTD9 on 08.22.17 at 12:45 pm

#119 Rabbit One on 08.22.17 at 10:37 am

Foreman with carpenter training background must be respected position plus foreman has a lot of dominant power at the site.
I doubt a bit though, because of his short experiences in construction.
______________________________

There’s no way a seasoned Tradesman would work under a 26 year old who couldn’t have been an actual ticketed Tradesman himself for more than 4 years max. Putting a kid just out of the gate in charge of a crew who have spent decades on the front lines is a good way to lose your best workers.

Not happening unless said foreman is the son of the owner.

#140 IHCTD9 on 08.22.17 at 12:56 pm

#125 TurnerNation on 08.22.17 at 11:26 am
SM’s ‘buddy’. Key in life is in knowing where you stand with somebody. Are you a hunter or the hunted?
Look into his eyes…

http://www.cbc.ca/beta/news/politics/rana-sarkar-trudeau-appointment-salary-1.4256445
________________________________________

There’s just no end to the reasons you should be off-setting your tax remittances as much as possible. Buddy gets to live in SF making near 100% more than the last guy, and Butts is tweeting his ass off (pun intended) trying to convince all the boneheaded Canadians there’s no buddy-buddy stuff going on.

Good grief, I will be trying even harder in 2018…

#141 jess on 08.22.17 at 1:02 pm

Samantha Bee Takes On Phony ‘Identity Politics’ Meme
identity politics its just another word for civil rights

for you smoking man ; )
http://crooksandliars.com/cltv/2016/12/samantha-bee-takes-phony-identity

#142 Not a lefty on 08.22.17 at 1:18 pm

#111 Smoking Man on 08.22.17 at 9:44 am

#83 Palmateer on 08.21.17 at 10:52 pm

Individualism over confiscation
It’s about as simple as that. I’m sorry your a poor shlep with no creativity to figure out capitalism. The fact that you visit this financial blog is a good thing , there might be some promise for you in the future.
Quit trolling me. Not going to work. I’ve pissed off much bigger leaches than you and I’m still going strong.
I’ve been posting on here for a zillion years. People know me. Your futal attempt to brand me a rasist because I support Jobs, grouth and prosperity that I know Trump can deliver is rediculos.
A bit of advice, so long as you lefties keep pushing identy politics. The more you will keep losing at the ballot box.
No one cares.
Dr Smoking Man
PhD Herdonomics
………………………………………………………………
Your absolutely correct you waste of human life. You have been here too long. Now go piss off unless you have something better to add. BTW Get a job maybe then you can get a life.

#143 Wrk.dover on 08.22.17 at 1:25 pm

My, my how things change. When I did construction in the seventies, carpenters got double minimum, foremen got a couple extra on top of that, and the job site superintendent, crusty old guys with a lifetime of experience got the real dough, maybe six times minimum.

This is why I support a living minimum, all pay is based on a percentage more than it, except for loser employers whom take all the gravy and meet the law paying long term workers below poverty levels.

Yesterday n1tro even admitted minimum is too low by more than half, in his final backpedal on the topic.

#144 Tbone on 08.22.17 at 2:00 pm

Remember, as I always say …. nothing happens until somebody sells
Something . Nobody gets to work until that sale is made …

#145 anc0dia on 08.22.17 at 2:04 pm

I just spent a week in Welland – driving from the airport in Toronto was an eye opener – I use to live in St. Catharines and now reside out west – the “golden horseshoe” has turned into a bloody mess. Truly sad the way it is being transformed into a soulless wasteland

RATM

Anyone with an ounce of ambition moves out of Niagara. The only people left are the ones who never leave their town thinking ‘it is the greatest place ever’ because they’ve never travelled anywhere else on the planet and retired people who go to Niagara to die (which will happen prematurely due to the low quality hospital system).
Otherwise it’s a great place to coast aimlessly, underachieve and amount to nothing.

#146 n1tro on 08.22.17 at 2:10 pm

#143 Wrk.dover on 08.22.17 at 1:25 pm

Nice try old man. When did I backpedal? My position has always been that the market should set minimum wage and not the government. If the market sets that a non skilled person flipping burgers should get $15/hr, then so be it.

I further expanded on my argument that setting a minimum wage doesn’t necessarily benefit the people it intended to help in the real world.

The same reason why the government shouldn’t set a maximum wage for doctors is the same reason why they shouldn’t do it for non skilled labor. If what you do isn’t enough to live on, then that is on you because you can quit and get another job or upgrade your skills for more pay.

Your position is to come back with sarcastic remarks which make no sense.

#147 Howard on 08.22.17 at 2:11 pm

#129 Guy in Calgary on 08.22.17 at 11:40 am

What millennial want their homework done for them? What kind of a ridiculous generalization is this? You are an idiot. How the hell did that broker’s attempt at generating business turn into millennial’s bothering you? We bother you then you call us when your record player and VHS player won’t turn on. Turns out they weren’t plugged in. Goddam some members of your generation are ignorant.

——————————–

I have worked with many Boomers who were blithering idiots but nevertheless convinced that they had all the answers. I used to think their refusal to learn new things (like, oh, how to type using more than one finger on each hand) was just pig-headedness. But I’ve come to the conclusion that the issue isn’t stubbornness but intelligence. Simply put, they’re too stupid to learn, perhaps from all the coddling over the decades.

It goes without saying that our generation will never be given that kind of leeway. Either upgrade your skills, or you’re fired.

#148 n1tro on 08.22.17 at 2:18 pm

Anyone who is cheer leading the government setting minimum wage….

I guess you have no problems with them setting a wage outside the maximum either??

http://www.cbc.ca/beta/news/politics/rana-sarkar-trudeau-appointment-salary-1.4256445

Yeah, that’s what I thought.

#149 Stan Broock on 08.22.17 at 2:22 pm

https://ca.finance.yahoo.com/news/rising-old-age-security-spending-080004161.html

Expect inter-generational war.
Probably people refusing to pay taxes.

Baby boomers had it easy – cheap houses, big spending, little savings.

Now the next generations must pay astronomical house prices, supporting baby boomers retirement and health care with higher and higher taxes, while taking care of their kids in inflationary stagnation!

Sure, where do I sign (not)?

Only complete idiots will accept this ‘contract’, in reality – inter generational theft. Smart people will revolt.

#150 waiting on the westcoast on 08.22.17 at 2:25 pm

#143 Wrk.dover on 08.22.17 at 1:25 pm says… “This is why I support a living minimum, all pay is based on a percentage more than it, except for loser employers whom take all the gravy and meet the law paying long term workers below poverty levels.”

If people feel they deserve more, they should demand it. They should not take those minimum wage jobs. But just like with housing prices, they hurt themselves while claiming it is some 3rd party who is taking $$$ from them when they enter into an agreement at that price.

No one wants to believe that they ARE the market….

#151 Stan Broock on 08.22.17 at 2:26 pm

Ah, and I forgot automation.

By 2025-2030 there will be virtually no jobs in the private sector. All the work done by robots.

At the same time government is planing for everybody to keep paying increasing CPP (by 2060!). Paying it from what income? From the winnings from the Lotto?

#152 Perspective on 08.22.17 at 2:27 pm

I am no socialist and I support a much higher minimum wage in concert with much tougher welfare and EI rules, and perhaps much lower benefits to make entitlement programs less attractive. You don’t want to work, fine, starve.

#153 crowdedelevatorfartz on 08.22.17 at 3:10 pm

@#147 How Weird
“It goes without saying that our generation will never be given that kind of leeway. Either upgrade your skills, or you’re fired.”
*******

You can fire people in the new millennia? I thought HR would just lay you off from your contract job and outsource your job to Asia….

*******************************
@#151 Spring Bock

“By 2025-2030 there will be virtually no jobs in the private sector. All the work done by robots. ”
++++

In less than 10 years ALL jobs will be gone from the private sector…….

BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA.

“automation” Is that what we’re calling “outsourcing” now?

#154 Entrepreneur on 08.22.17 at 3:24 pm

#97 Palmateer…time will tell and the truth will prevail about Trump, but right now, there seems to be so much hate flying around, unbelievable.

Bwts, people in a nation that have borders need jobs, and btw, stand by a flag and fight for it. And need leaders who fight for them.

#102 Reality 1 on OSFI on regulations…It seems to me they should have done this years ago. Another controlled group sleeping at the wheel or?

#155 saskatoon on 08.22.17 at 3:29 pm

#152 Perspective

you are a socialist.

#156 Reality 1 on 08.22.17 at 3:39 pm

to # 131 hard cost

I take it you have never been through a TRUE real estate price CRASH.

That is when you can buy houses or commercial RE below the cost of the MATERIALS , never mind the labour to build it.

I know, I have done it and so have many others.

#157 NoName on 08.22.17 at 3:58 pm

#110 For those about to flop… on 08.22.17 at 9:43 am
#97 Construction Checker on 08.22.17 at 2:09 am

If you guys work out math for 55 an hour it checks out to 240k working 28 OT. I remember working 28 hrs OT a week after early 2000 i was similar age as that dude, but lot less an hour (22-ish), i slowed down when we got our 1st child, Back then i knew nothing about investing, i wish i did, two market bust and steady very good employment… I remember friend now, co worker back then telling me how single share of BRK is trading 64k. Just checked chart it could be late 2002 or early 2003. First i started reading and buying book about investing late 2007 maybe 2008.

So to get to point someone on a big project i can see him making “major” money for working stiff, late fees are huge on big construction projects, i can see formans and usles project managers aka gantt chart paper pushers working around clock.

#158 Zed in Geneva on 08.22.17 at 4:07 pm

How come the TSX is so far behind the Dow Jones? The economic news in Canada are good, the bond market recognizes it. Why are the canadian banks not moving up? Lots of profits, no scandals. CNR and CP are doing business both sides of the border and can’t trade at all-time high. Our PM is better looking than their POTUS.

#159 NoName on 08.22.17 at 4:29 pm

You cant make this stuff up.

german police seized ecstasy pills that resemble shape op president trupm.

https://twitter.com/Breaking911/status/900069672204324864

#160 Bytor the Snow Dog on 08.22.17 at 4:51 pm

IHTCD9 sez:

“1. The government is not broke because everyone is cheating on their taxes, they’re broke because they are blowing piles of tax revenue on ideological crap that provides no financial return back to them. ie. they are spending more than they take in.”

You and I are on different planes of the political spectrum and we can see this. Why is there no great political will to fix it?

#161 Howard on 08.22.17 at 4:54 pm

#158 Zed in Geneva on 08.22.17 at 4:07 pm
How come the TSX is so far behind the Dow Jones?

———————————-

Oil and other commodities. Not doing well. Duh?

Are you new to the markets?

#162 Simon on 08.22.17 at 5:04 pm

No Bubble? Garth, can you comment on BMO’s economics team saying that the Toronto housing bubble vanishing?

http://business.financialpost.com/investing/trading-desk/canadian-housing-market-bubble-has-ceased-without-a-crash-landing/wcm/f1e899d9-1f98-4513-94ab-f7a5fce42b82

#163 young & foolish on 08.22.17 at 5:04 pm

Don’t buy RE … rent … it’s the better way.

#164 Stan Broock on 08.22.17 at 5:08 pm

“By 2025-2030 there will be virtually no jobs in the private sector. All the work done by robots. ”
++++

In less than 10 years ALL jobs will be gone from the private sector…….

BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA.

“automation” Is that what we’re calling “outsourcing” now?

————————————
Outsourcing is nothing.

It is still traditional economy, just redistribution of jobs/wealth due to the world integrating.

Automation is when ALL the work is done by robots – self driving cars, so no taxi drivers,
automated checkouts, so no retail clerks,
automated coffee shops, so no baristas,
automated assembly lines, so no auto workers.
Amazon is automating pharmacy Business.
Banks will be virtual. All Canadian banks are planning significant reduction of branches.

In 10 years there will be AI – Artificial Intelligence, easy to replicate, far more powerful than any human brain.

What you saw with Blockbuster and the disappearance of the VHS/DVD renting Business was just the beginning.

Then who needs our sorry behind? What would you do that a robot can’t do demand pay?

Jobs will be gone folks. Along with traditional capitalism. Price of labour gone to zero.

In 10 years.

#165 Reality 1 on 08.22.17 at 5:09 pm

to # 158 Zed in Geneva

They can read the writing on the wall when it comes to Canada.

Outside of oligopolies like the big 5 banks , foreign income earners and a few special situations, why would they be interested in an overtaxed, over indebted and overly regulated and socialistic country like Canada at anything but a huge discount. Which is where the TSX is heading.

#166 young & foolish on 08.22.17 at 5:14 pm

“No one wants to believe that they ARE the market….”

Exactly true. If you think stocks or RE are too expensive, then don’t buy.

And so many armchair economists predicting a 60% drop in prices here so their hopes of buying can be virtually realised .

#167 Stan Broock on 08.22.17 at 5:15 pm

Electric Tesla has 20 (twenty) moving parts, including the wheel. How complex is the assembly compared to traditional engine cars?

Much simpler.

In 10 years there will no auto manufacturer jobs in Ontario.

#168 Stan Broock on 08.22.17 at 5:20 pm

Oh, I forgot (lmfao).

Real estate jobs can’t be automated folks….

#169 young & foolish on 08.22.17 at 5:21 pm

” …. I have yet to find a reliable source to report transactions in real time to gauge how the market is doing, which is what a lot of people on here seem to want.”

Houses are not like TD Bank shares (all the same) … each place is different, found in differing neighbourhoods, with different characteristics which appeal to different people.

#170 Dan on 08.22.17 at 5:39 pm

Real estate will not come down as much. Unless new war prop up oil prices. This little whoring party which celebrated 150 years can function without constitution and therefore is not prone to rules of established countries.
Anyway Queen of England is the owner of the land and shacks built of dust and glue are amusement of her objects, not subjects of course…. Eat your hearts out renters… Paupers are just decorum of society easy replaced by refugees….

#171 Willy H on 08.22.17 at 5:46 pm

IHCTD9 on 08.22.17 at 11:37 am

… Look at Wynne. When high hydro costs started threatening her second term, did she go out looking for efficiencies, and areas to trim the considerable fat to bring costs in line? Nope, she borrowed said cost “savings” from 5 years hence. IE, she put the hydro up even higher, but kicked the fallout from her blockheaded plan down the road just outside her current mandate. Just like every other problem that she’s ever dealt with. …
___ ___ ___ ___

Amazing how short and selective our memory has become.

The Harris government in Ontario did nothing with hydro for both terms, other than toying with privatization. They failed to invest in hydro, failed to reign in costs, and they kicked the can down the road with regards to reconditioning our nuclear plants. This mess all fell on McGuinty’s lap.

Ontarians had never paid the true cost of hydro in the province because successive governments failed to raise rates because of the potential political fallout.

The nuclear power plant reconditioning was no sooner finished and the 2008 WFC hit. Demand for hydro from the auto-makers would plummet as manufacturing was scaled back with little hope of it ever returning to pre-2008 levels in the near or distant future. Almost overnight we went from a potential hydro shortfall to oversupply. No one could have predicted this.

It was a perfect storm for electricity in Ontario.

Under serviced hydro debt, bloated hydro salaries, cash-for-life post-retirement benefits, costs of nuclear power plant reconditioning and the gas plant scandals all came home to roost.

Voila – market rates for hydro the highest in North America.

We should have been linking our hydro grid to Quebec’s and buying our power from La Belle Province all along.

This mess has a much longer history than most are willing to admit.

With all the Liberal waste in Ontario, and there has been a great deal of it, nothing comes remotely close to the fiasco created by Bill Davis – the funding of the Separate School system which created a complex myriad of expensive school boards and resulted in billions in spending on new Catholic schools. The duplication and cost of overlapping school administrators has cost this province a dozen gas plant scandals.

#172 Smoking Man on 08.22.17 at 11:15 pm

After the statues are gone.
The constitution is next. A globalist wet dream.

Garth grow a set Coward.