Are we there yet?

Next week a shocking event will occur.

Well, it would have shocked you in March. Now it’s akin to watching Houston fill up with water. A disaster in slow-mo, but without the tragedy.

In seven days the nation’s largest real estate board will be forced to admit year-over-year house prices have gone down. What an astonishing reversal from five months ago when real estate values in the GTA were romping higher by more than 30% y/y each month, when 90% of new listings sold in the same week they came to market, when bidding wars were rampant, arrogant realtors were holding blind auctions, bully offers were flying and people were desperate to buy at any price for fear of being locked out of the market forever.

This blog said pshaw. Don’t be a moron. It’s peak house.

And, lo, ‘twas so.

August numbers will show a price decline in the neighbourhood of 20%, while sales continue to run 40-60% below last year’s levels. For real estate agents, this is an event never before witnessed – sales falling by half in just a few months, buyers retreating and commissions evaporating. There are over 80,000 realtors in Ontario, more than 48,000 of them in the GTA alone. Their ranks have bloated 41% in the past five years, making this the fastest-growing employment category in the nation. Just like FOMO-infused, house-lusty buyers, they wanted to straddle the real estate rocket. Now the ride’s over. It blew up.

“I have noticed that my local 9 hole public golf course located near the real estate board’s offices in central Toronto has been very quiet recently,” says one veteran agent.  “For years, the little course has been a favourite for real estate agents who would drop in for a quick round, between appointments. In times past the lot was full of Mercedes, Audi’s and Lexus, many with a real estate branded personal license plates.

“This summer the parking lot has been almost empty. On two occasions this week, I walked on with no reservation, and played 9 holes by myself !  That has never happened since I started playing there in 1999. On Friday I had time to drop 3 or 4 balls on a green and practice putting in the middle of my round, because there was nobody behind me to hurry me along. Now if an agent hasn’t generated a pay cheque since April, survival instincts kick in and the first thing that gets chopped are the optional expenses.

“My totally unsupported hypothesis ponders this question :  If every home owner took a $200,000 hair cut in the past 5 months, and many agents haven’t sniffed a deal in a similar length of time, maybe Toronto is not feeling as financially frisky as last March.”

As reported here, the average detached home which commanded $1.205 million in April, and was swarmed with horny buyers, is now available in the $900,000 range, and open to a conditional offer. Inventory in July jumped almost 20% while the sales-to-listing ratio crumbled. The same emotional excess that pushed people to extreme buying in the winter has them running as prices decline. Yes, we leap in when risk is highest and quiver when it fades. Genius.

So where are we now? Has the market bottomed? Is it anywhere near? Time to move in and bargain hunt?

Nah, doesn’t look like it.

The two shoes yet to drop are a few weeks away. Interest rates go up again in the third week of October, increasing the prime rate to 3.2%, taking secured HELOCs to 3.7% and adding about a quarter point to all fixed-rate mortgages, which are already hovering at the 3% mark. If the Bank of Canada’s on a tightening trajectory consistent with the past, four or five more increases are to come over the next 18 to 24 months. That would lift the five-year fixed to 4% in 2019. By historic standards, dirt cheap. For Moisters who thought 2% loans were their birthright, it’s a mess.

The second shoe makes it worse. The universal stress test. All borrowers will be required by the end of 2017 to qualify at the current rate + 2%, regardless of down payment heft. It means mortgage rates will have gone from 2% to 5% in less than a year – precisely what the housing bulls, who like to come here to paw, pee and snort, said would never happen.

How much more will this depress prices?

The mortgage dudes have settled on 18%, the amount by which they think credit will be reduced when the test is in place. People will qualify to borrow that much less, on average, which would push down prices equally. Thus, another $175,000 off the average GTA detached, taking it to about $800,000. That, by the way, would wipe out 2.5 years of price increases. Yup, back to the spring of 2015.

TD Bank is less flummoxed, saying prices could be depressed as much as 10% by the test. Of course, when you add in the Bank of Canada’s tightening thrust, the impact of the coming draconian tax changes this blog has been obsessed with, and the circus of US politics, it could all get more extreme. It is precisely this uncertainty which has kept buyers on the sidelines, sensing there are lower prices and more desperate sellers ahead.

So, no, not the bottom. We have not yet landed. It won’t be apparent until the event is past. But if you need a house, can afford it, plan to be there a decade, hate stress tests and higher rates you will fare better than the fools of April.

196 comments ↓

#1 Jenny on 08.28.17 at 5:38 pm

Are you specifically talking about Toronto. I don’t see much change in Vancouver/Victoria in the places under 1 million.

#2 Mike on 08.28.17 at 5:39 pm

.
Good Garth.

Lets talk RE again and be, or feel, united again.

#3 Gyga on 08.28.17 at 5:39 pm

Spring 2015?
Still too expensive

#4 dakkie on 08.28.17 at 5:41 pm

Why Real Estate and Stocks Will Crash REGARDLESS of Supply and Demand!

http://investmentwatchblog.com/why-real-estate-and-stocks-will-crash-regardless-of-supply-and-demand/

#5 Sebee on 08.28.17 at 5:45 pm

“Yup, back to the spring of 2015.”

If memory serves me right, in 2015 the fundementals did not underpin the values either. Or is my memory failing me?

#6 Linda on 08.28.17 at 5:45 pm

‘in 7 days the nations largest RE board will be forced to admit….’ Maybe. Seems like they are working hard at claiming the title of ‘King of Denial’. After all, there will be that bounce back in RE prices come autumn, you just wait & see!

#7 The Crash That Wasn't on 08.28.17 at 5:48 pm

Looking at the zolo stats, the T.O. “crash” has slowed greatly (if not stabilized completely).

Inventory is dropping fast, sales appear to have bottomed and prices are flat-lining.

Yes, YoY Detached prices are down 3%. But Townhouse prices are up 16% and Condos up 21%.

Hardly a “crash”, if this where things stabilize. Housing is still grossly un-affordable in T.O and Van.

Is this it for the housing ‘pop’? Or is there more to come?

p.s. Where is the BC NDP??? They won their votes on promises of popping the Vancouver speculation bubble. Since they won the election, they seem to have gone into hiding.

#8 T.J.BONES on 08.28.17 at 5:51 pm

Sir Garth:

” And it came too Pass “

#9 Smoking Man on 08.28.17 at 5:51 pm

I sold in April. What’s that make me.
An Alien with amazing for sight.

Here’s one for you. Dr tax. Thousands of small corps and doc say f it. No HST or Payrole remittance till this confiscation law is revoked. Only need 5% to say screw you T2

The whole house of cards comes crashing down. I’m thinking it’s going to be like 25%.

Bill and T2 the definition of insanity.

I’ll start a Facebook group after my 11 casino road trip where all my loot will vanish.

Bring it Antifa. Soros tiny stupid children. Prey you never meet a drunken Smoking Man on a mission.

#10 Arun on 08.28.17 at 5:53 pm

first :)

#11 tccontrarian on 08.28.17 at 5:55 pm

How much more will this depress prices?

“The mortgage dudes have settled on 18%, the amount by which they think credit will be reduced when the test is in place. People will qualify to borrow that much less, on average, which would push down prices equally. Thus, another $175,000 off the average GTA detached, taking it to about $800,000. That, by the way, would wipe out 2.5 years of price increases. Yup, back to the spring of 2015.” –GT
—————————————————————

Prices have to fall to 2000-2002 levels (adjusted to inflation and CAD:USD exchange), to make things ‘normal’ again.
The centuries-old 3-4x gross family income as the fundamental true measure of affordability, it’s coming back.

TCC

#12 Rainclouds on 08.28.17 at 5:55 pm

Mortgage dudes say 18%, Major Bank says 10% bringing us to 2015 pricing. I say 2015 is just a year they watch go by as the slide gathers momentum

Of course I’m wrong because quaint notions like Price to Rent/Income have no bearing on housing prices in the new paradigm.

Jeeeesus H Christmas

#13 Ak on 08.28.17 at 5:55 pm

Garth what will in your prediction happen in 4 years time. I am on a fixed rate 2.49% 4 more years to go. Mortgage balance now is 168000. I have been doing minimum 500 prepayment each mortgage payment. My target in 2021 is the balance will be at around 90K. I do have about 75K sitting the bank currently.

#14 Bay St Banker on 08.28.17 at 5:55 pm

Then what explains the sudden rise of the CAD$, other than Trump causing a sell-off of the USD$ because he is a racist doofus?

Mark predicted a $1.25 CAD$, and he is right on target because spot price of CAD$=1.2528

It was only in May that the CAD$ was treading below 73 cents, now it’s at 1.2528.

What does that mean for the housing bubble in Canada? I thought that housing crashes devalue a currency?

#15 Edmonton on 08.28.17 at 5:58 pm

I wonder how much the price of houses will decrease in Edmonton? it seems to be holding at present time.

#16 yorkville renter on 08.28.17 at 5:59 pm

As a renter… I’m in NO RUSH to buy.

and why would I? even if the price of my house dropped (based on asking for a similar one) 50%, it would STILL be cheaper to rent.

As such, I’m writing this post from sunny and hot Europe where I sit on the beach, splash around with my infant, and enjoy dinner out every night.

Life is good.

#17 Irent2017 on 08.28.17 at 6:01 pm

May be another 10-18% decline to Spring 2015 level. So the end is near and we may be landing soon. That’s not too bad. Its just the ones who bought after 2015 spring will feel the pain. But Toronto will stay a very expensive city to buy!

#18 the ryguy on 08.28.17 at 6:01 pm

No, we are nowhere near the bottom.

A large chunk of Canadians have never lost money on a house. Way too many people think that RE is bulletproof, and who can really blame them? for almost 2 decades now there has been but a tiny hiccup, but other than that its been astronomical gains.

Smarty pant realists like Garth might have been early, but thats only because he’s used to the markets being rational, only problem is people aren’t. Sprinkle that in with:
-foolish monetary policies
-IMHO a HUGE influx of foreign money (sorry Garth, this is the only thing you and I disagree on)
-A government all too willing to turn a blind eye

What did people expect to happen?

And still Winter is coming (couldn’t resist). There will be no september recovery, there will be no more ridiculous bidding wars. If you are like me & have waited this long, no way you’re jumping in now. The lack of buyers will be startling to the market. Come november once rates are up again you will start to hear about people that haven’t paid their mortgage in a few months. Thats when sentiment will turn, and then its going to get really really bad.

The numbers don’t lie. Up until march of this year annual sales were through the roof, which means there is a TON of people holding multiple properties. How long can they carry those? How leveraged were they to begin with? How quickly will the dominos fall once they realize it can’t be flipped? Im sure all the bears on here will be more than happy to share the stories of their cousins/neighbours/whatever when the axe falls.

It sucks for everyone, but its time. Having a populace that thinks in absolutes does no one any good. Maybe once this illusion is shattered we can move onto some other ones that have absolutely infected this country.

#19 Smoking Man on 08.28.17 at 6:05 pm

You guys got to know T2 Wynee and all the CEOS at the big banks read this pathetic blog. They focus on the comments section and do a ctr f SMO

They hate my guts. Wynee realizing I was listing on the 20th of April moved up here screw the real estate market a week early. The thought of Smoking Man making an extra 200k well she was not going to allow that.

Listen up DM T2 Wynee. I’m really an Alien from Nictonite with shape shifting skills. And the power to explode your head on a wim and a thought.

Start listining to me and don’t be such spiteful golbalist lunatics.

Did you not read my book. Biography of sorts.
DO I need to buzz your homes in my orange plasma flier. Buzzed the general store on the trip back from Cuba.

He’s gets it

Zeez O

#20 MF on 08.28.17 at 6:05 pm

My bottom guess is November.

Here’s why I think so:

1) By then it will become apparent that OSFI’s stress test had minimal effect and was nothing but hot air.

2) The BoC will “revise” their interest rate outlook (downward of course) due to some manufactured excuse.

Then it’s up she goes in the GTA.

MF

#21 Danny on 08.28.17 at 6:10 pm

Yes the numbers you point to are very revealing..in real time….maybe people are avoiding being fooled by aggressive real estate agents.
Yet the condo market seems to be developing its own bubble of sorts.
Probably showing that many are looking at what they can more likely afford and lowering their standards for investing in the housing market and buying condos.

In Etobicoke still seeing very large number of existing condo units for sale….yet taking much longer to sell over 6 weeks and listing prices not going down. I know that by end of 2018 over 2,000 condo units will be ready for occupancy within a few blocks of Bloor and Islington in Etobicoke….and many will be for resale then.
Do we need an increase in supply to burst the condo bubble?
I guess many hearing about the condo bubble and just hanging in with high prices….obviously these sellers are in no rush to sell….maybe it’s because many condos are an investment, owned by speculators and they don’t need to buy another place to live.
Any thoughts from anyone on where the condo bubble is heading towards or what is driving it?…just lowest price for investment real estate type?
Maybe a future blog on the Condo trend and future bubble condition? It’s the only healthy trend talked about in TO.

#22 The real Kip on 08.28.17 at 6:10 pm

It’s all the fault of the Boomers!

#23 Tangerine Guy on 08.28.17 at 6:11 pm

DELETED

#24 jim on 08.28.17 at 6:18 pm

#7

“Looking at the zolo stats, the T.O. “crash” has slowed greatly (if not stabilized completely).”

Really? You are in a position to declare a housing market ‘stabilized’ are you? A complex adaptive system with a ton of actors, feedback loops, etc etc?

How odd. Even Isaac Newton famously remarked that he was unable to predict market behaviour. I guess you are a cut above the inventor of classical physics.

The probability that the market has ‘stabilized’ and reached a plateau after historically abnormal runups in prices approaches 0. Markets (and other complex systems) don’t tend to reach nice equilibria after such unusual patterns of activity.

#25 Spock on 08.28.17 at 6:20 pm

An article on yesterday’s topic by Garth:

http://www.hilltimes.com/2017/08/28/senate-banking-committee-considering-hold-hearings-finance-minister-morneaus-propose-controversial-tax-reform-measures-sen-tkachuk/117190

#26 Lead Paint on 08.28.17 at 6:22 pm

Here is my email to Bill Morneua, I also sent one to my MP. Where is yours?

To the Honourable Bill Morneua,

Ten years ago I started a business on my own, and now employee nineteen people. Instead of reaping profits or buying real estate, I have applied our profit in to R&D and building products and now have clients all over the world. Over this time I have not received one penny in government funding or loans, and provided many services, such as collecting HST and income tax from our employees, for the government, along with paying EHT.

If these tax proposals come to fruition I will do the following:

Cancel my membership with the Liberal party of Canada and for the first time join the PCs
Look to conduct future product development and R&D outside of Canada
Advise anyone who asks me to not start a business but instead look for a government job with a defined, secure pension

You need to realize that private businesses risk all of their wealth to reap the rewards, and sometimes they fail. Employees have access to pension plans and don’t risk losing all their wealth every day they go to work.

Unlike you, who stands to reap millions of dollars in tax-free capital gains the sale of your primary residence, I and 33% of Canadians do not own real estate, and do not get access to the real estate tax-free bonanza. If you are looking for tax ‘fairness’ I suggest that is the place to look.

Thank you.

#27 Islander of Van on 08.28.17 at 6:23 pm

No slow down here on Vancouver Island despite the much anticipated NDP housing measures.

Houses listed 20% higher than last year, and even last fall, are still selling in days for full price or 98% of the price ( I have access to the sold prices). Some places have sat since May, but then resisted at the same price, and they sell within that 3 weeks of new listings golden time slot.

There was a temporary lull following the election in May, but since the new government has done nothing, its game on again with prices.

#28 TheDood on 08.28.17 at 6:25 pm

#18 the ryguy on 08.28.17 at 6:01 pm
______________________________________

Ryguy’s comment is right on the money. I would be willing to bet there are tens of thousands in this country who are sitting on multiple properties leveraged to the max, and hundreds of thousands stuck in mortgages they cannot afford. All of them waiting and waiting for the “blip” to disappear and prices to start rising again.

The “non-lemming” types who’ve sat on the sidelines and ignored the real estate marketing nonsense and fake nightly news will be feasting on the buffet to end all buffets………………….

…..sad for those in massive debt, but it had to end sometime.

#29 Smoking Man on 08.28.17 at 6:26 pm

#20 MF on 08.28.17 at 6:05 pm
My bottom guess is November.

Here’s why I think so:

1) By then it will become apparent that OSFI’s stress test had minimal effect and was nothing but hot air.

2) The BoC will “revise” their interest rate outlook (downward of course) due to some manufactured excuse.

Then it’s up she goes in the GTA.

MF
….

Oh, Grasshopper leave the forcasting to me.
Three years away from a bottom

#30 Spock on 08.28.17 at 6:29 pm

#14 Bay St Banker on 08.28.17 at 5:55 pm

Using your logic, CAD should have been higher than parity to the US considering how much more homes have gone up in Canada.

#14 Bay St Banker on 08.28.17 at 5:55 pm
Then what explains the sudden rise of the CAD$

I thought that housing crashes devalue a currency?

#31 peak house on 08.28.17 at 6:29 pm

This blog said pshaw. Don’t be a moron. It’s peak house.

Seems like it, for Toronto, yes.

But to be fair, didn’t this blog declare peak-house before, once or twice?

So what? You were warned fully. — Garth

#32 cad on 08.28.17 at 6:32 pm

It was only in May that the CAD$ was treading below 73 cents, now it’s at 1.2528.

Uh… try again.

Hint: 1 / 1.2528 is 79.8 cents.

#33 Hear yea Hear yea on 08.28.17 at 6:35 pm

A bit of volatility is ok, then back up once the new welcomed taxes start to help everyone.

#34 Stone on 08.28.17 at 6:36 pm

Currently renting. I’ll reconsider things when home prices drop 75% from the peak. Not before. That might be crazy but hey, I’m not concerned. Portfolio continues to pay those lovely dividends so it’s quite irrelevant to me. I’m sure I’m not the only one to feel this way. Just watch the carnage from a distance. Well, only time will tell.

I will say this. A colleague of mine aprroached me and let me know her cousin had bought 3 spec houses in the Markham, Newmarket, and Vaughn area within a year or so ago. The first one will be ready at the end of 2017, the 2nd in 2018 and the 3rd in early 2019. They expected to pull equity from their existing home to use to cover their downpayment for the house due at end of 2017 and then do the same for the next house and so on but now they have no equity to pull based on the appraisal done by the bank. They’re actually in the hole now and they can’t sleep at night.

She mentioned that another friend has 5 spec houses and they are in the same boat. They have no idea how to fix this.

My thought was: Wow!!! Greed’s a bitch!

#35 Rob JM on 08.28.17 at 6:37 pm

People forget how leverage works on the way down. On the way up the increased equity (paper gains) allows you to take on more debt which fuels more price growth. A positive feedback loop. Same loop applies on the way down except now the difference has to be paid back with real money, while real incomes decline due to recession as everyone tightens their belt, including the banks that fuelled the whole thing with cheap credit.

#36 Ian on 08.28.17 at 6:38 pm

Not even CLOSE to bottoming!!! This show is just getting started!

I see many more bearish factors for the GTA than Happy Stress Test and Happy BoC Day. The thousands of people working as realtors, and thousands of tradespeople. I have a good friend who’s a glazier and normally works on new condos, new TTC stations, things like that. How will he find work when this rolls over? All those people will have to sell if they own their house (he rents).

Then there are the banks and other big firms firing people, and automation. So much job loss coming. All this will hugely affect GTA property.

#37 Ian on 08.28.17 at 6:40 pm

Oh and almost forgot…gold past 1300 today, and that was BEFORE North Korea flew a missile over Japan!!

#38 Dave on 08.28.17 at 6:47 pm

Only $900,000 for a house! What a great deal. One can probably buy 3 in many other cities in North America for this price.

#39 HereIsNow on 08.28.17 at 6:50 pm

Any comments on the US dollar? It has broken a technical level and would appear to now be in a bear market. So far down 10% this year and appears to be headed lower. Could be a leading indicator of a broader trend change in the US. We are seeing steep decline in new homes built, sub-prime auto and student loans, and a $20 T dollar debt. Perhaps the anemic rate hikes are now supportable by the current state of the economy?

#40 HereIsNow on 08.28.17 at 6:51 pm

Rate hikes are not supported by current economy

Best growth in G7. — Garth

#41 wallflower on 08.28.17 at 6:54 pm

yup #18 the ryguy on 08.28.17 at 6:01 pm
This is what I am watching. All the shiny brains holding 3+ properties beyond their domicile, thinking, rich, richer, and richest.
Gonna be totally wild ride as these units
-do not rent
-do not sell
-deflate (squealingly)

#42 Damifino on 08.28.17 at 6:54 pm

#7 The Crash That Wasn’t

p.s. Where is the BC NDP??? They won their votes on promises of popping the Vancouver speculation bubble. Since they won the election, they seem to have gone into hiding.
————————————

No they haven’t. They’re dealing with higher priority items first. They’ve just removed tolls on the Port Mann and Golden Ears Bridges. There are some iffy provincial seats south of the Fraser River. That ought to help.

#43 Grantmi on 08.28.17 at 6:58 pm

#8 T.J.BONES on 08.28.17 at 5:51 pm
Sir Garth:

” And it came too Pass “

So let it be written.. so let it be done!!

https://www.screencast.com/t/aPgEK4WUt68x

#44 Pete from St. Cesaire on 08.28.17 at 7:01 pm

I’d say expect a drop of 50% or more. Remember these are the days of extremes: Weather, Trump, Terrorism, Brexit, etc. Seriously indebted, totally undisciplined millenial know-nothings who are just starting to figure out how the real world is actively ruining them by design aren’t going to do anything by half-measures. Having a house has now become non-PC. There will be an epidemic of bankruptcies.

#45 Happy Housing Crash Everyone! on 08.28.17 at 7:04 pm

A record number of speculators many of them realtors in the GTA trapped and running out of money as the housing market crashes. It’s just a matter of time til they run out of credit and fire sales begin. Everyone wants out of this housing bubble before they lose it all. Like the .com if you don’t sell you made nothing but paper gains that can vanish in an instant.
Happy Housing Crash Everyone! :-)

#46 cd on 08.28.17 at 7:06 pm

I think coming up with a numerical way to forecast the housing market shouldn’t really be taken too seriously. Give the answer a big margin of error and not a lot of weight. You know when the market is over when you see agents driving hondas and working part time at tim hortons.

#47 And I Quote on 08.28.17 at 7:07 pm

Anyway, no drug, not even alcohol, causes the fundamental ills of society. If we’re looking for the source of our troubles, we shouldn’t test people for drugs, we should test them for stupidity, ignorance, greed and love of power.

P.J. O’Rourke

#48 VICTORIA TEA PARTY on 08.28.17 at 7:11 pm

BLACK SWANS…AND MR. MARKET

The horrific storm that is still sinking Houston, Texas, the oil/natural gas capital of the world, is heading back inland from a brief refuelling stop in the GOM.

Forecasters say this storm is charging into territories accommodating nine key American refineries south and east of Houston.

Already, apparently, about 10 per cent of US gasoline supplies have been “negatively” affected by the storm.

Worries are that this figure could increase and bring gasoline shortages to the eastern American Seaboard, that would include New York and Philadelphia in the days to come.

Then there is North Korea. Earlier this date it fired a guided missile that flew “over” Japan and splashed down into the Pacific Ocean off the eastern coast of Japan’s Hokkaido Island. Talk about a ramp-up of tensions.

North Korea’s dictator must have done this because of the Houston floods, right?

Of course.

As the floods expand and costs increase, while various geopolitical events (North Korea) also impact the US, we look elsewhere to find if something else bad could soon come into play.

That something bad is US interest rate hikes should there be an international lack of confidence in the US economy and its markets.

Why?

Principally if the US Congress fails to raise the debt ceiling, at the president’s request, in the next few weeks. That increase simply HAS to happen, because the amount of money coming in to the US is swamped by the amount going out.

The US debt is beyond huge and it is expanding at a frightening rate and Canada is not in the clear.

If there is no Congressional support for that debt increase watch for the US currency to be taken to the cleaners and bond rates to increase across the board.

It means mortgage rates will go up in the US and Canada by an alarming rate. Soon.

Those recent real estate buyers, especially in Toronto and YVR should dig out the worry beads right about now.

There is nothing worse than Mr. Market “getting angry” about how badly countries spend their money, especially borrowed loot at low rates.

The repercussions will be sudden and brutal, as St. Garth of Watch Your Back, mentioned the other day, don’t mess with Mr. Market.

Yepper.

#49 Pete from St. Cesaire on 08.28.17 at 7:15 pm

LEAD PAINT: Cancel my membership with the Liberal party of Canada and for the first time join the PCs
————————————————————-
Just what they want to hear. You still believe in the false left-right, liberal/conservative, good guys/bad guys paradigm. Your still with the “system”. What they wouldn’t want to hear would be you saying that you advocate the people of Canada establishing a parallel system of government of, for, and by the people and disestablishing the current system.

#50 self-interest on 08.28.17 at 7:18 pm

When have you ever been to a doctor’s office where there was no receptionist/admin person? Employees. Overhead. Such a load of crap on here today. — Garth

How many of them are spouses?

If they perform the job, what business is it of yours? Sheesh. — Garth

—-

As long as I pay taxes, everything that influences even the most remotely how much I pay is my business. That includes all forms of income splitting, sprinkling.

Better question: how is this not obvious for a former politician? Shees.

There’s no ‘income sprinkling’ when a spouse performs a legitimate job. She’s an employee, and you sound like a sexist. — Garth

#51 Reality 1 on 08.28.17 at 7:23 pm

to # 18 ryguy

First off, very good post.
Thank you for posting your thoughts – and so well.

Bit afraid you might be right.

I never really thought that the price / fundamental value metric could /would get that distorted and grotesque – regardless of the interest rates or whatever – it just “did not compute” in my mind.

I felt that some semblance of sanity would kick in – any day / year now and buyers would see it for the circus it had become – replete with the carnival barkers to convincingly seduce you into their artfully rigged games.

I gave my fellow (Canadian) people too much credit for rational thought / critical thinking to believe that they could be so imprudent with the biggest financial commitment of their lives.

We joke here sometimes about millennials with their “face buried in their ‘smart’ phone (that ironically, dumbs them down), their and their parents permissiveness,- “everyone gets a trophy” (in reality negating the concept of ‘winning’ and success) mentality and ethos.

NO JOKE.

This is the attitude / mentality / reasoning they brought to real estate buying !!!

Distracted and self absorbed – spouting easily memorized truisms that were driven into their DNA by their experience of “real estate only goes up”.
Denying the reality of history of a ‘crash’ only 3 decades ago in their own front yards.

And …

Well, now we get to see if their unicorns really do poop rainbows, don’t we ?

Let’s see how “committed” they are on the downside.

That test will take some time, but ultimately will determine the trough pricing.

#52 Jeremy on 08.28.17 at 7:26 pm

The moment I can buy a detached house in the Toronto subway range I’m buying , for the long-term.

#53 HoweStreet.com on 08.28.17 at 7:26 pm

Ross Kay on HoweStreet.com Radio:
TD Housing Report Full of Flaws and Unreliable Data.
Why Vancouver Condo Prices Seem Higher.

http://www.howestreet.com/2017/08/28/td-housing-report-full-of-flaws-and-unreliable-data/

#54 BK on 08.28.17 at 7:26 pm

Garth, would you mind commenting on Vancouver RE for a change? No slow down, just higher prices. GTA prices at peak were not even in the same ballpark as YVR. What’s going on or are you stumped too?

Deluded moisters are buying condos. Move-up buyers have disappeared. Detached are falling. The top end is crumbling. It’s a trap. — Garth

#55 Jeremy on 08.28.17 at 7:28 pm

All the comparisons of house prices in one city for another, or speaking about value based on sticker price, is stupid. It has nothing to do with any of that. Toronto will continue to be a good buy for people that hold long-term.

And if you’re tempted to call me a realtor, I’m not. 39 – $600k in ETFs and $350k in house equity.

#56 Reality 1 on 08.28.17 at 7:29 pm

to # 20 MF

I’d like $ 400 of whatever it is you are smoking.

You are incorrigible.

#57 Darryl on 08.28.17 at 7:40 pm

#22 The real Kip on 08.28.17 at 6:10 pm
It’s all the fault of the Boomers!
——————————————–
Is that a song Kip ?

#58 Reality 1 on 08.28.17 at 7:41 pm

to # 20 MF

Lest you think I am a person who not would enjoy a rosy outcome for real estate, let me assure you that I still am involved financially in some significant land holdings in the Golden Horseshoe.

But, first and foremost, I am a REALIST.

But, for sure I wish for a good outcome like you do here, ad nauseum – it’s just that’s not what my businessman “gut” is telling me after decades of experience – not in the face of the current dynamics and facts.

#59 FOUR FINGERS WATSON on 08.28.17 at 7:44 pm

Best growth in G7. — Garth
……………………..
Hahaha. Isn’t at least 20% of that growth the most humungous housing bubble the world has ever known ? And isn’t it sort of falling apart now according to your blog ?

Learn the difference between growth and GDP composition. — Garth

#60 HereIsNow on 08.28.17 at 7:51 pm

“Rate hikes are not supported by current economy

Best growth in G7. — Garth

What are you basing that on? Last year US GDP growth was 2% and Canada has better GDP growth than the US this year? And have you looked at the US annualized GDP growth in Q1 and Q2?

Ever heard of Google? — Garth

#61 mouldyinYVR on 08.28.17 at 8:02 pm

#18 the ryguy
#28 TheDood
#35 Rob JM
‘So true’ to above posts

Sitting at my local coffee shop……..3 at a table near me chatting ‘real estate’ ……..the loudest was a lovely lady….35+, agent, owner of 5 condos/houses bought on spec’……rented out…..lots of talk with her clients (just arrived from Britain) about interior decoration , staging etc….how much you can get in downtown Vancouver for rent these days…… (astronomical rents, considering local salaries)………
[renters in YVR are being taken to the cleaners…..NDP is not about to do anything to rock the status quo….neither is any other level of government. Maybe if the rates rise we will see some reduction in this mania…….until then ‘adios amigos’……..]

#62 Old gringo on 08.28.17 at 8:08 pm

Time to make another decision!!!!!
Okay lock it up for another 360 days.
Investing on the other side of Trump’s wall

Your CD matures Wednesday, the rates to renewal are:

6.61 % 70 days
6.87 % 120 days
7.04 % 210 days
7.29 % 360 days

Wait for instructions
Happy week

#63 Reality 1 on 08.28.17 at 8:10 pm

to # 48 VICTORIA TEA PARTY

Some interesting and provocative thinking and insights.

Making your readers rethink / reassess / retest their own ideas / theories / conclusions is what I believe to be the true value of this blog.

The rest is just noise and ego exercise.

So, long Euro, CAD, Swissie against USD ?

#64 Bob Dog on 08.28.17 at 8:11 pm

Now that we have established without doubt that thousands of worthless parasite Realtors® have been committing fraud on a massive scale over the last several years, I am very interested in when the criminal trials will begin and will they be televised. It will take years to process and incarcerate that many criminals.

Perhaps we can save the economy by pivoting form building condos for psychopath speculators to building jails for worthless parasite Realtors®.

#65 For those about to flop... on 08.28.17 at 8:12 pm

I see there are a few people on here asking about the Vancouver situation.

Instead of telling you ,I am going to show you with an exercise I do about once a month.

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

What the link shows you is that in Vancouver proper there are 42 houses under 1.3 million.

Of these 42 cheaper options ( there are people spending twice this on condos) you will see that 14 of them have marked reduction stickers on them.

Meaning officially 33% of the cheaper houses can’t get what they want or need.

I have been following the market closer than most because of my side gig as a volunteer reporter on here and a handful of these are on their second or third go-round with reductions in-between so I suspect the number to be closer to 50%

There is a slow melt going on in certain segments of the market in Vancouver.Too slow for some people’s liking but it will take a while for a change of mindset in this city.
Some of the developers that I work for have the pedal to the metal and others seem to be reducing risk by not getting too far ahead of the market…

M43BC

#66 Smoking Man on 08.28.17 at 8:18 pm

DM ,T2, Wynne, and you Butts. So funny how you let a drunken alien get under your skin so much.

Soros is history. Find another moron to guide you.

https://youtu.be/SRvCvsRp5ho

#67 where is your? on 08.28.17 at 8:20 pm

#26 Lead Paint

… Unlike you, who stands to reap millions of dollars in tax-free capital gains the sale of your primary residence, I and 33% of Canadians do not own real estate, and do not get access to the real estate tax-free bonanza. If you are looking for tax ‘fairness’ I suggest that is the place to look.

—-

Dude… you are not helping here.

Honourable Bill Morneua will conclude that you are a sore loser who drunk the wrong cool-aid and now blames everyone else but himself for failing to profit. Everything else you wrote before will be just ignored accordingly.

#68 FOUR FINGERS WATSON on 08.28.17 at 8:21 pm

Best growth in G7. — Garth
……………………..
Hahaha. Isn’t at least 20% of that growth the most humungous housing bubble the world has ever known ? And isn’t it sort of falling apart now according to your blog ?

Learn the difference between growth and GDP composition. — Garth
………………….
Denial : it’s in the dictionary between deflation and “done like dinner “.

Read this. — Garth

#69 Felix on 08.28.17 at 8:22 pm

More dog porn pics today, huh Garth?

Here’s the REAL truth about dogs, captured in a photograph in the Houston disaster.

While thousands are suffering and starving, this dog stole a bag of desperately needed food and ran off with it, leaving humans in anguish.

https://www.facebook.com/photo.php?fbid=10155437802501839&set=a.10150293372646839.352788.509421838&type=3&theater

They say his name is Otis.

More like Odious.

Despicable.

#70 the ryguy on 08.28.17 at 8:24 pm

#51 Reality 1 on 08.28.17 at 7:23 pm

—————————————————–

Distorted & grotesque…that is the best description.

Just an FYI, in the GGH there was 922 NEW single family homes listings above 950K THIS WEEK. In one week.

Good luck all.

#71 praire person on 08.28.17 at 8:24 pm

Only one comment so far about the disaster in Texas. Insurance companies sell policies, then hedge their risk by selling off a percentage of those policies.
Are Canadian insurers going to take a beating because they’ve bought up American policies to spread their risk? Will Manulife, for example, have exposure to Texas? Or other Canadian companies? This disaster is massive. Will it affect Canadian companies for good or ill? Texas is going to be buying a huge amount of bldg materials.Will this affect the softwood lumber tariff? There are people doing a lot of overtime trying to figure out just how impacted their Canadian compant or subsidiary will be affected.

#72 AGuyInVancouver on 08.28.17 at 8:26 pm

#1 Jenny – That’s the big question. My theory is that a popular myth took hold in the GTA that once BC enacted a foreign buyers tax, those hordes of offshore buyers would flock to TO looking for their Canadian crash pad. Buy now, or lose out to the foreign buyer! Only it didn’t actually happen.

Vancouver is a different story. Because no Canadian has ever seen this level of foreign money flow into a single market before, the pundits, including Garth, still dismiss the impact of offshore money in Vancouver. That money doesn’t need to sell property to pay off a HELOC or another mortgage. That empty house can sit and wait for a couple decades, their planning is longer term.

#73 HereIsNow on 08.28.17 at 8:27 pm

“Ever heard of Google? – Garth

I have but maybe you haven’t? The US is not leading G7 growth….far from it. More recent data suggests trend is continuing. Imagine what will happen to employment numbers if Obamacare is repealed as the current numbers is inflated due to employers incentivized to turn 1 full time job into many part time.

https://www.google.ca/amp/s/www.theglobeandmail.com/report-on-business/economy/growth/imf-maintains-global-growth-forecasts-china-eurozone-revised-higher/article35779415/%3fservice=amp

I said Canada is currently leading G7 growth, not the US. — Garth

#74 the Jaguar on 08.28.17 at 8:33 pm

“This is a shearing after the animals have been gathered in an inescapable corner of the pen.” –
Another Albertan, from yesterdays post.

So true. And applicable to the realtors Garth’s source refers to in today’s post. The reckoning is always greater when the stakes are higher by participants in the game that don’t have the capital or deep pockets.
Those who fly to high and close to the sun….well you know how that one goes.
Will be interesting to see how the Banks get around the new rules at year end. They will play along to an extent as I think even they realize the state of real estate in Canada can only be described as ‘beyond the pale’. But if you want to throw the word ‘Cartel’ around don’t use it in sole reference to the realtors, developers, and speculators. The big 5 are in a class of their own. Some Banks are older than this country and they are still around making money for shareholders in 2017 because they are smart operators. Like great white sharks. They know to survive they need to keep swimming. Never underestimate their cunning. Never count them out. Secretly we are all quite proud of them.

#75 Dee on 08.28.17 at 8:33 pm

Home cap marked the top. Decline will be disorderly. Cant expect decline to be rational when the run up was manic. The big 20% drop in prices demonstrates what’s to come. Movements like that plus the previous 33% run up are things you see when trading spec bubble stocks. Canada was/is obsessed with the asset. Pain always comes when that happens. 45-60% drop top to. Ottom

#76 MSM-Free Zone on 08.28.17 at 8:34 pm

Guess we’ll witness soon the true lobbying power of CREA and CAAMP.

Will Morneau show some spine and stand up for the interests of all Canadians, allowing true market forces to price home ownership back toward affordable levels?

Or will he cave in to special interest groups, return us to zero down/40 year mortgages, making Canadian home ownership more ‘affordable’ for everyone.

#77 the ryguy on 08.28.17 at 8:36 pm

#69 Felix on 08.28.17 at 8:22 pm

—————————————

Thanks Felix.. I did a legit spit take!

#78 Smoking Man on 08.28.17 at 8:37 pm

When Zumanga tired of waiting
for a rescue went to the dark side.
Soros is his grand child. It’s all in my worthless book.

https://youtu.be/xvaEJzoaYZk

#79 Trading Naked on 08.28.17 at 8:38 pm

Because housing always goes up, right?

https://www.youtube.com/watch?v=3CaQb9eYwGc

Back in 2013, 490 South Drive in Summerside, PEI was listed at $169,888 (to attract Anne of Green Gables fans from China?). Then it was reduced to $164,888.

It sold recently for $149,900.

#80 };-) on 08.28.17 at 8:38 pm

Fear and greed drive the market. You’re either one or the other. Both cloud objective judgement.

#81 HereIsNow on 08.28.17 at 8:41 pm

“I said Canada is currently leading G7 growth, not the US. — Garth”

Ok…:fair enough. My initial post asked for your comments on the US dollar….down 10% YTD and having now broken a technical level would suggest has entered a bear market. Leading economic indicators would suggest that US may be struggling with recent rate hikes?

#82 Reddit0r_Anonymous on 08.28.17 at 8:45 pm

Flipper is trying to get his/her money back? Or a buyer walked away?

Listing #W3908996
525 Meadows Blvd, Mississauga

Listed for $0.55M April 2017 Sold
Listed for $0.62M August 2017

#83 april on 08.28.17 at 8:51 pm

$65 Hey Flop ” slow melt in certain segments of the market in vancouver”. Curious to know what segments? Condo prices look to have increased so far?

#84 self-interest on 08.28.17 at 8:56 pm

#50 self-interest on 08.28.17 at 7:18 pm

When have you ever been to a doctor’s office where there was no receptionist/admin person? Employees. Overhead. Such a load of crap on here today. — Garth

How many of them are spouses?

If they perform the job, what business is it of yours? Sheesh. — Garth

—-

As long as I pay taxes, everything that influences even the most remotely how much I pay is my business. That includes all forms of income splitting, sprinkling.

Better question: how is this not obvious for a former politician? Shees.

There’s no ‘income sprinkling’ when a spouse performs a legitimate job. She’s an employee, and you sound like a sexist. — Garth

You are funny, but how could you forget so soon that pathetic Ottawa decides not pathetic blogs.

Let’s hope Antifa won’t hunt me down to serve justice for your thorough judgement because I failed to condemn that someone was daring to wonder how many of the receptionists at the doctor’s office are spouses, working as employees or employees hired outside of the family.

#85 Tony on 08.28.17 at 9:00 pm

Re: #15 Edmonton on 08.28.17 at 5:58 pm

Take another look on mls if you can even find any sales. Detached homes are finally following townhouses and condo prices down the drain. Look for a big decrease in detached home prices in the near future in Edmonton. Oil can’t even rally with a plunging U.S. dollar. A higher Canadian dollar is even worst news for all of Alberta.

#86 Pelican on 08.28.17 at 9:00 pm

Thanks for the link to Bill Morneau yesterday. I sent in my opinion about my concerns regarding the discrepancy between private business, working class people, and union sponsored government employees regarding the outrageous differences in their health and pension benefits. I also expressed my disgust that our government has not challenged the demands of the various unions and there has never been a proposal to reduce the size of the ever expanding public service.
There were other points also, for example, the increased child benefits that were unnecessary , etc., but the main concern was the control that the public service unions had over the government and the lack of financial constraint that has been exhibited. Again, thank you for the link.

#87 Exilled on 08.28.17 at 9:03 pm

Sir Garth:

How is the Hurricane Harvey, going to impact the price of oil? Meaning the Canadian crude, part of the equation. Will CDN sky rocket, or slump due to the lack of refinery capacity?

#88 joblo on 08.28.17 at 9:19 pm

Home ownership and Investments its like the movie Ground Hog Day in Kanada.

“Far too late most understand the missed aims in life: Joy, beauty and nature, health, travel and culture. Therefore, man, be wise early! Time has come! Travel, travel!”

Wilhelm Busch (1832-1908)

#89 akashic records on 08.28.17 at 9:21 pm

#71 praire person on 08.28.17 at 8:24 pm

Only one comment so far about the disaster in Texas. Insurance companies sell policies, then hedge their risk by selling off a percentage of those policies.
Are Canadian insurers going to take a beating because they’ve bought up American policies to spread their risk? Will Manulife, for example, have exposure to Texas? Or other Canadian companies? This disaster is massive. Will it affect Canadian companies for good or ill? Texas is going to be buying a huge amount of bldg materials.Will this affect the softwood lumber tariff? There are people doing a lot of overtime trying to figure out just how impacted their Canadian compant or subsidiary will be affected.

—-

Still busy praying for the victims of the disaster, maybe donating for them.

Come back later, there will be plenty of time to make profit of the misery.

#90 DON on 08.28.17 at 9:23 pm

#68 FOUR FINGERS WATSON on 08.28.17 at 8:21 pm

Best growth in G7. — Garth
……………………..
Hahaha. Isn’t at least 20% of that growth the most humungous housing bubble the world has ever known ? And isn’t it sort of falling apart now according to your blog ?

Learn the difference between growth and GDP composition. — Garth
………………….
Denial : it’s in the dictionary between deflation and “done like dinner “.

Read this. — Garth
******************

Give it up Mr. Fingers (the smell but be nasty).

You appear to be HUGELY misinformed! They have adult google classes now.

#91 DON on 08.28.17 at 9:30 pm

It went up in extreme and will come down in an extreme. What happens if Canada hits a temporary recession. Time to read about the tipping point, folks.

Your house is only worth what someone is willing to pay – at a point in time. Credit card debt (slowdown in spending) could be the catalyst, that and rising rates, tighter credit, stress test, etc.

Lots of variables in the air…this could get really nasty fast. The US went through theirs and we’ll do it the Canuck way.

#92 Last of the Boomers on 08.28.17 at 9:35 pm

@ Flop

My good friend in West Vancouver, GlenEagles area was advised by her realtor NOT to list her place until next spring. I am surmising there are two objectives in this recommendation:

1. West van realtors are concerned about an over flooded Market.

2. They want to restrict new listings to achieve a dead cat bounce this Sept.

She really needs to sell cause it’s her retirement plan.

Curious what other blog dogs advise.

LOTB

#93 Ben on 08.28.17 at 9:36 pm

> rate hikes are not supported by the economy

Rate hikes *lead* to a good economy because people stop misallocating resources when credit has a cost. You have it back to front.

Also to those who think supply/demand sets the price of houses you are forgetting the cost of credit. Seems kinda obvious now?

The boomers aren’t getting paid out. Party stops here. That makes you the greater fools, along with some greedy youngsters.

#94 Tony on 08.28.17 at 9:39 pm

Re: #39 HereIsNow on 08.28.17 at 6:50 pm

I think they’ll kill the U.S. dollar to prevent a stock market crash next month. With commercial and residential housing on the decline in America it would appear there will be no more interest rate increases.

#95 akashic records on 08.28.17 at 9:40 pm

“Ever heard of Google? – Garth”

Have you?

http://www.zerohedge.com/news/2017-08-28/how-cia-made-google

“A new crowd-funded investigative journalism project, breaks the exclusive story of how the United States intelligence community funded, nurtured and incubated Google as part of a drive to dominate the world through control of information. Seed-funded by the NSA and CIA, Google was merely the first among a plethora of private sector start-ups co-opted by US intelligence to retain ‘information superiority.”

#96 genbizx on 08.28.17 at 9:40 pm

sent one off to bill…not that the snotty nosed little weasel cares one iota about the people he and his silver spoon crew say they care so much about so i doubt he’ll read it..

real estate prices right now are kinda like ice melting in the spring….some warm days, some cooler but you know summer is inevitable and that ice will be gone. so too will the silly prices and weird obsession with low quality shite boxes in cramped, un-liveable neighbourhoods..

#97 crdt on 08.28.17 at 9:42 pm

#11 tccontrarian

Prices have to fall to 2000-2002 levels (adjusted to inflation and CAD:USD exchange), to make things ‘normal’ again.
The centuries-old 3-4x gross family income as the fundamental true measure of affordability, it’s coming back.

TCC

TCC, we are in an unprecedented re-alignment of the societal structure itself. Toronto and Vancouver are world class cities with art, incredible opportunities, especially Vancouver with natural beauty that is beyond a dollar value. We need to stay at this level, and indeed go at least triple to reflect the true fundamentals. Nothing, not interest rates, regulation, taxes can keep the savage wealthy hordes from pouring gasoline on this fire…

#98 Leo Trollstoy on 08.28.17 at 9:44 pm

I looked into buying homes in Houston.

Someone was looking out for me

#99 Ponzius Pilatus on 08.28.17 at 9:48 pm

Hurrican Harvie is a small but significant Black Swan event.
Higher oil prices wil cut into US and Canadian GDP.
No rate hike for you.

#100 knock knock, whose there? your honest realtor. on 08.28.17 at 9:48 pm

a real estate agent in disguise.
ppl like MF make the bubbles and im not talking about the bubbles from down below

#20 MF on 08.28.17 at 6:05 pm
My bottom guess is November.

Here’s why I think so:

1) By then it will become apparent that OSFI’s stress test had minimal effect and was nothing but hot air.

2) The BoC will “revise” their interest rate outlook (downward of course) due to some manufactured excuse.

Then it’s up she goes in the GTA.

MF

#101 NoOneOfConsequence on 08.28.17 at 9:50 pm

Things have only just begun to get started with the housing “melt”.
History is filled with examples: when prices revert to mean, they usually drop below it first. I’m calling another 25% drop from here.
I fully expect the ‘underground economy’ to surge given the precipitous drop in real estate business, and the attack on the self-employed being undertaken by the Trudeau government.
I am officially ashamed to say I voted for this government. Sigh. What a mistake. Never again.

#102 Vision on 08.28.17 at 9:58 pm

“When the wind blows hard, even turkeys fly”

#103 paulo on 08.28.17 at 9:58 pm

#92 last of the boomers:

Bird in hand V 2 in the bush comes to mind.

there is a 100 percent probability that prices next spring will be at least 30% lower than today.

get it listed asap and prey that some greater fool steps up for the falling knife!

#104 Dissident on 08.28.17 at 10:01 pm

Thanks for acknowledging this – it makes your post more balanced:

“But if you need a house, can afford it, plan to be there a decade, hate stress tests and higher rates you will fare better than the fools of April.”

#105 For those about to flop... on 08.28.17 at 10:05 pm

Lotb pm
@ Flop

My good friend in West Vancouver, GlenEagles area was advised by her realtor NOT to list her place until next spring. I am surmising there are two objectives in this recommendation:

1. West van realtors are concerned about an over flooded Market.

2. They want to restrict new listings to achieve a dead cat bounce this Sept.

She really needs to sell cause it’s her retirement plan.

Curious what other blog dogs advise.

LOTB

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

All I can say on the matter is that I wrote a post a couple of weeks ago saying that I am looking more forward to seeing next years Spring Fling with a bunch of motivated buyers and sellers that have yet to offload their Spring 2016 speculations after a winter of discontent,than what happens this fall.

Personally,if it was so important to your friend I think they should list in the fall and can always come back and have a second crack at it next Spring.If it goes missing for a few months in between no one will care, especially if we have another session of Salt Wars of the Century.

Houses over there are taking longer to sell and so the realtors probably know that it will be a bit more work, but like I said if it is your friends number one priority then you have to be in it to win it as they say.

I just witnessed and elderly neighbor go through a similar process.

She had been talking about selling and moving back east with family for a while.

Could have got 1.6 from a developer in Spring 2016 ,waited a year too long and after approximately 3 months on the market and two price reductions,had to settle for 1.2.

Not only that she had to pay to get a new roof on to appeal to the fixer upper crowd and a paint job ,where the year before she would have only had to get out of the way of the bulldozer.

More work for the realtor could mean less stress for your friend…

M43BC

#106 Dolce Vita on 08.28.17 at 10:07 pm

Vancouver Zolo.ca Stats:

Mar/Apr/May 17 vs. Jun/Jul/Aug 26
(basically, changes in last 102 days)

Unit Sales, comparable to REBGV Listed vs. Sold
Condo 426, down from 607, -30%
Town 64, down from 115, -44%
Det 114, down from 271, -58%

Total unit sales 604, down from 993, -39%

Avg. Price
Condo $825 K, down from $839 K, -1.7% (+17% y/y)
Town $1.4 MM, up from $1.3 MM, +7.1% (+15% y/y)
Det $2.5 MM, down from 2.7 MM, -8% (-5% y/y)

Avg. Price = $1.2 MM, down from $1.4 MM, -14.2% (+4.4% y/y)

Total $ Sales = $726 MM, down from $1.39 Billion (-48%)
__________________

MyRealtyCheck, YVR List Price Changes:

Down 1173, Up 425, Average Change: -2.39%

And for Victoria, List Price Changes not quite enough for relevant sample size (rule of thumb = 35); however:

Down 30, Up 2, Average Change = -4.63%
__________________

Vancouver stats are positively skewed:

Average or Mean = $1.2 MM
Median = $833 K
Mode most likely < $833 K
__________________

Last 102 days not looking good for Vancouver RE; still, prices ridiculously high.

For example, under OSFI B-20 an income of $300 K gross/yr (top 1% income), no other debt, results in a maximum home mortgage of:

$1.837 MM, now at $2.5 MM in Vancouver…price drops inevitable.
__________________

Toronto Realtors are not the only one's in trouble, so are YVR Realtors with total unit sales of -39% and total $ sales of -48% in the last 102 days…OUCH.

#107 DON on 08.28.17 at 10:08 pm

#29 Smoking Man on 08.28.17 at 6:26 pm

#20 MF on 08.28.17 at 6:05 pm
My bottom guess is November.

Here’s why I think so:

1) By then it will become apparent that OSFI’s stress test had minimal effect and was nothing but hot air.

2) The BoC will “revise” their interest rate outlook (downward of course) due to some manufactured excuse.

Then it’s up she goes in the GTA.

MF
….

Oh, Grasshopper leave the forcasting to me.
Three years away from a bottom
*******************

I have a feeling you are right! Could be faster (social media and extreme debt?).

#108 MF on 08.28.17 at 10:12 pm

#51 Reality 1 on 08.28.17 at 7:23 pm

Lol Never touched a cigarette or drug in my life..weed is for losers.

Anyways,

The mood on the ground has not changed in the GTA from what I can see/hear, anecdotally at least.

Houses still cost 1.1 million + for anything decent. The economy is supposedly doing well. Condos still up shows demand is still present. People have a revulsion to renting (me included). The BoC is incompetent, OSFI is a non event, no one trusts “stocks”, and interest rates will stay historically low.

Those are still strong tailwinds.

What are you smoking :)

MF

#109 zend on 08.28.17 at 10:14 pm

#93 Ben on 08.28.17 at 9:36 pm

Rate hikes *lead* to a good economy because people stop misallocating resources when credit has a cost. You have it back to front.

Also to those who think supply/demand sets the price of houses you are forgetting the cost of credit. Seems kinda obvious now?

How is using interest rate to influence supply/demand not the similar mentality as centrally planned state economy?

Setting interest rate is basically deciding what wealth level of the population is able to conduct what kind of financial activities, from purchases to investing or starting up businesses.

The higher the interest rate, the larger segment of the population is restricted to have access to finance various potential wealth creating activities, investments.

It creates less competition and favors the wealthier.

#110 paulo on 08.28.17 at 10:17 pm

based on observing 3 previous corrections, i expect that sept,oct,nov will record the most significant month over month price declines. by December 31 of this year the gta
will be slightly past the 60% correction factor with the remaining declines to come to pass in 2018 to the first or second quarter of 2019
values will be stable thereafter for 2 decades
liquidity and mortgage availability will be challenged for about five years.
the correction will shave .50 to .75 of Canadian GDP per year for 2019 and 2020
interest rates will continue there return to historic norms with at least 3 x .25 increases by the BOC in each of the next 5 years.
personal bankruptcy rates will increase by 700% in 2019, 1100% in 2020 than slowly decline thereafter

#111 Cool story, Bro on 08.28.17 at 10:19 pm

RE: #9 Smoking Man on 08.28.17 at 5:51 pm

“I’ll start a Facebook group after my 11 casino road trip where all my loot will vanish”

Are you trying to be all Hunter S Thompson in Fear and Loathing in Las Vegas? With oddly purposeful spelling mistakes?

https://media.giphy.com/media/76dX1wy9elm0g/giphy.gif

#112 45north on 08.28.17 at 10:19 pm

The Jaguar: Will be interesting to see how the Banks get around the new rules at year end. They will play along to an extent as I think even they realize the state of real estate in Canada can only be described as ‘beyond the pale’.

“even they realize the state of real estate” – here’s what they are saying:

RBC’s CEO, David McKay, was loud and clear about the housing market in southern Ontario and the GTA. “It’s not sustainable,” he said, and called on governments to bring the hammer down.

They did, barely 50 days later.

Dave’s happy.

“We welcome the changes that have happened so far,” he just said, “and the slowing.”

http://www.greaterfool.ca/2017/08/24/the-big-hairy-deal-2/

“beyond the pale”

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

#113 Andrewt on 08.28.17 at 10:29 pm

“You won’t be able to see when trouble is starting just from the delinquency rate. Delinquency is after trouble’s already happened,”
http://www.cbc.ca/beta/news/business/canadians-prioritize-mortgage-payments-over-other-debts-say-experts-1.4261141

#114 paulo on 08.28.17 at 10:29 pm

Expect a major change in the way real estate and mortgages are structured and treated for tax purposes
after the current ponzi fiasco has played out, i expect that the rules will change with the adoption of a us style structure of 30 year fixed mortgages,you will be able to write off interest in some cases,but the life time exemption from being taxed on capitol gains from sale of primary residence is a endangered species ,and will be gone when the changes come into play.

There will never be 30-year fixed-rate Canuck mortgages, nor interest deductibility. — Garth

#115 Dolce Vita on 08.28.17 at 10:38 pm

#107 DON

Disagree on universal stress test “minimal effect”.

TransUnion Aug. 22, 2017 comparing new mortgages in Vancouver before/after Morneau Oct. 17, 2016 measures on the < 20% down, insured mortgage crowd:

Number of…
1st Qtr 2016 = 9,162
1st Qtr 2017 = 6,226
-32%

Average Amount…

1st Qtr 2016 = $553,719
1st Qtr 2017 = $517,415
-6.6%

Total $ [Number of x Average Amount]…

1st Qtr 2016 = $5,073,173,478
1st Qtr 2017 = $3,221,425,790
-36.5%

Half of Big 6 Bank mortgages are currently uninsured.

Therefore, unlikely OSFI B-20 will have a minimal effect.

#116 45north on 08.28.17 at 10:43 pm

Stone: her cousin had bought 3 spec houses in the Markham, Newmarket, and Vaughn area within a year or so ago. They expected to pull equity from their existing home to use to cover their downpayment for the house due at end of 2017 and then do the same for the next house and so on but now they have no equity to pull based on the appraisal done by the bank.

that got my attention

Smoking Man: Grasshopper leave the forecasting to me. Three years away from a bottom

Ian: Not even close to bottoming!

Hurricane Harvey in Texas is described as unprecedented, historic. Those words also apply to the housing bust in the GTA. It’s too late to evacuate. Shelter in place.

#117 Dipu on 08.28.17 at 10:53 pm

What about townhouse and condos in gta? They are still way up and for condos people have to compromise space but pay more fees and purchase price 2 bedroom 3washroom with 650 square feet has become common in gta. It’s insane

#118 zend on 08.28.17 at 10:54 pm

I just witnessed and elderly neighbor go through a similar process.

She had been talking about selling and moving back east with family for a while.

Could have got 1.6 from a developer in Spring 2016 ,waited a year too long and after approximately 3 months on the market and two price reductions,had to settle for 1.2.

Timing markets is supposedly a fools game.
What would you witness in the neighbors investment ac counts?

#119 Costco Nation on 08.28.17 at 10:59 pm

Foreclosures wave coming. Things have not even begun. Banks will tiptoe with these to not scare the market even more. Plus the CMHC will be slowly drawn. Moarer taxes to cover the drainage. It’s like a dream.

#120 MF on 08.28.17 at 11:03 pm

#100 knock knock, whose there? your honest realtor. on 08.28.17 at 9:48 pm

Knock knock you must be new around here.

MF

#121 akashic records on 08.28.17 at 11:03 pm

There will never be 30-year fixed-rate Canuck mortgages, nor interest deductibility. — Garth

Carved in stone by the First Nations.
Approved by the Queen.
A fail or pass question at the citizenship exam.
As Leonard Cohen put it “everybody knows”.
A safe place.

#122 knock knock, whose there? your honest realtor. on 08.28.17 at 11:14 pm

its the calm b4 the storm. the week sept 25th explosion of listings goin to hit the market.
my neighborhood, where i rent a 2900sqft brand new built home for 2650 a mnth. 23 houses for sale 1 sold in the last 3mnts but they haven’t moved out yet.
house across from me went from 1.88m to 1.28 and back to 1.58 and finally pulled out of the market.
my brother inlaw bought teardown in hoggs hollow in march for 2.98m planing to build and flip. hes on suicide watch now

#108 MF on 08.28.17 at 10:12 pm
#51 Reality 1 on 08.28.17 at 7:23 pm

Lol Never touched a cigarette or drug in my life..weed is for losers.

Anyways,

The mood on the ground has not changed in the GTA from what I can see/hear, anecdotally at least.

Houses still cost 1.1 million + for anything decent. The economy is supposedly doing well. Condos still up shows demand is still present. People have a revulsion to renting (me included). The BoC is incompetent, OSFI is a non event, no one trusts “stocks”, and interest rates will stay historically low.

Those are still strong tailwinds.

What are you smoking :)

MF

#123 Edmonjon on 08.28.17 at 11:17 pm

Checking the source on TD’s statement I read something even more modest that what the blog reads:

“In the year of implementation, we estimate that this new rule could depress demand by 5% to 10%, and shave 2% to 4% off of our current forecast for the average price level in 2018”

Note they estimate that sales will drop by upwards of another 10%, and prices by upwards of 4%.

http://business.financialpost.com/personal-finance/mortgages-real-estate/new-mortgage-rules-could-depress-housing-demand-by-another-10-td

Not as scary, but sellers are still screwed…

#124 InvestorsFriend on 08.28.17 at 11:46 pm

The Latest Mortgage Arrears Figures Are Just Out

It seems to have been established that these figures don’t matter but in any case the June figures are out.

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

Ontario 90 day delinquencies actually ticked down another basis point to 0.10%.

So, precisely only one mortgage in a thousand in Ontario is at least 90 days overdue.

I find that extraordinarily hard to believe. How can there be any power of sales / foreclosures when there are essentially not even any delinquencies??

My suspicion has long been that the banks now hide delinquencies by agreeing to let home owners skip payments or some kind of leniency. Something has made these delinquency figures totally meaningless.

I mean, I know they are a lagging indicator, but seriously only one in a thousand is 90 days behind in Ontario? It beggars belief.

#125 Sues on 08.28.17 at 11:47 pm

Hold on to your hats. Djia futures down 98 as of 9:39pm. But since i’m a glass half full kinda gal…morneau will have less to tax…bring it on!

#126 DON on 08.28.17 at 11:52 pm

#115 Dolce Vita on 08.28.17 at 10:38 pm

#107 DON

Disagree on universal stress test “minimal effect”.

%%%%%%%%%%%%%%
Agreed.

Still one of many variables that may contribute to changing buyer/seller sentiment.

#127 Sold out in Vancouver on 08.28.17 at 11:55 pm

@ 92…

If you want my 2 cents…
Get a different realtor, list it right away, 60 day listing will take you till the end of Oct. If it hasn’t sold by then, it won’t.
Cancel the listing and re-list in spring, when the weather gets nice.

#128 Owl Eyes on 08.29.17 at 12:06 am

And then this
http://www.zerohedge.com/news/2017-08-28/stevenson-yang-warns-china-about-hit-wall

#129 the ryguy on 08.29.17 at 12:12 am

#119 Costco Nation on 08.28.17 at 10:59 pm

——————————————————–

The banks might have their fill without foreclosing. Granted only AB & Sask are non recourse. Still when I hear lunacy like “sold for 300k over asking” that just tells me that the general public has lost their minds. These are not likely multi millionaires making these decisions, these are fools that have completely bought into “It always goes up”.

If they are so reckless as to bid that much over, they will absolutely walk away when they see they can’t flip it. Especially when you consider its entirely possible they are paying 7-12% on whatever they borrowed to get to 20% down in the first place. Sure the bank can try to recoup in the future, but in the immediate they still have to try and sell/rent (do banks rent houses?) the asset.

Good luck all

#130 Joe2.0 on 08.29.17 at 1:26 am

No brainer put in laymans terms.
Banks get everyone in debt via low bank rates, incentives, sucker loans, manipulative tactics..,
And then, drum roll………
Up the rates.
Rinse and repeat.
It’s called getting you in the end.

#131 Mark on 08.29.17 at 1:37 am

“Oil can’t even rally with a plunging U.S. dollar. A higher Canadian dollar is even worst news for all of Alberta.”

I’ve pointed this sort of problem out many times. As the housing market collapses, there will be a lot of deflation in Canada, and the CAD$ likely will shoot sky-high in response (you ain’t seen nothing yet!). The Bank of Canada can (and will) cut to 0%, but beyond that, they’re pretty powerless to depreciate the dollar.

The result is that Canada’s exporters will be sacrificed. While US exporters, which have long been dormant, will enjoy the best of times.

This is intuitively obvious as there is significant over-capacity in Canada’s export sector, while there is obvious severe under-capacity in the USA’s export sector relative to US imports.

Businesses that cater to high-end consumption in Canada will do well in the Canadian deflation (and the likely outperformance of the precious metals market that accompanies deflation). Businesses that have built themselves up on mass middle class consumption will have a lot of problems going forward. Structural problems, not just one-off businesses failing because of mismanagement (such as Sears).

A decade from now, Canadian stock investors will clearly be on-top, never again taking a back seat to people who merely own homes.

#132 So glad I sold on 08.29.17 at 2:10 am

Thanks to comment 65 from For those about to flop
Checked for sales from Zolo and there are lots of assignments and other condos for sale on recent projects. Vancouver House downtown, 23 for sale, 1283 Howe St 8 for sale, 2220 Kingsway, 22 for sale and that was only the first few pages I reviewed.
I used to live in Richmond, BC and there are a number of condos for sale there at River Green, some are foreclosures for 2 bedrooms.
Wonder what will happen with the Woodwards residential building in Vancouver, BC with the 1 million dollar lawsuit that was filed for exterior concrete damage.
That building wasn’t completed that many years ago.

#133 juno on 08.29.17 at 2:27 am

Has the crash really started?

Speaking to local vancouverite’s many still think housing can only go up and this is only a blip.

It will take several iteration of price declines until they realize this is reality. Once their mindset changes, then its a race to the exits. Just like the previous house collapses.

As for agent, soon the starving agents will go into panic mode and require to sell , sell, sell.

The best way to get cash now (or divorce soon) is to convince the seller to lower the prices. This is where the beginning of the real exit will occur.

#134 Tony on 08.29.17 at 2:46 am

Re: #110 paulo on 08.28.17 at 10:17 pm

October could see an increase in home prices as Poloz probably won’t raise the Bank of Canada rate. Interest rates will never normalize in Canada for generations to come unless the dollar falls below 40 cents U.S. Historically interest rates have been about ten percent higher in Canada than in America.

#135 Dan.t on 08.29.17 at 3:37 am

#7 The Crash That Wasn’t

p.s. Where is the BC NDP??? They won their votes on promises of popping the Vancouver speculation bubble. Since they won the election, they seem to have gone into hiding.
———–

How do you know a politician is telling a lie…. their lips are moving.

Really, who cares that a YVR pos shack is down 1% and now only costs 1.7 mil? The problem is that every surrounding area that was somewhat affordable has gone up, so Now you no longer need 350k to find something in Abby, but 800k and all of Island on fire and prices rising- probably true in every town that still has somewhat affordable housing until speculation pushes those up too.

Even Merrit, and seriously, who lives there, you need 500k for a house. BC people are super super rich!

NDP , well they are busy studying the situation. Won based imo, solely on telling pissed off and priced out voters they would do something about housing crisis- to date- nothing.

Wouldn’t you have some kind of plan to implement if you won? Nobody wants to mess with people’s hard earned equity- look at Clark solution, just let people start life with 2 mortgages = condo prices explode.

Real estate or, Canadians selling houses to each other is all Canada has as an economic model, that and selling off resources overseas (house stock included) so no political party wants to be responsible for stopping it.

Just buy a house, use equity one year later to tap into HELOC, pay down credit card debt with that and use house as ATM. Since houses go up forever, especially in BC, you never need to worry. For every dollar earned you owe 170$ who cares . Joke will be on stupid prudent savers and the tax payer anyhow if there is fallout …

or just tax small business more- oh right, that’s coming. But leave tax free massive housing gains alone and ignore all real estate fraudulent activities. That seems fair.

#136 ANON on 08.29.17 at 6:06 am

Are we there yet? (#3)

Looks like it. Third time is the charm.

#137 Dharma Bum on 08.29.17 at 6:24 am

“Just like FOMO-infused, house-lusty buyers, they wanted to straddle the real estate rocket. Now the ride’s over. It blew up.”
——————————————————————–

Ha ha! Just like Slim Pickens!!!

Check it out:

https://www.youtube.com/watch?v=wcW_Ygs6hm0

#138 Wrk.dover on 08.29.17 at 6:50 am

FELIX: I don’t see cats being rescued in Houston, on either Fake or Faux TV.

Are they all perched in the treetops, awaiting fire department ladder trucks?

What is it with you cats and boats anyway?

#139 neo on 08.29.17 at 6:54 am

Garth,

I have a question I haven’t seen asked here before. We know that in the last housing crash in 1990 that homes decreased 30% in the GTA. However, what happened to underlying land values from 1990 – 2002? Did they continue to rise as the house prices went down? Were they flat? Did they decline but not as steeply?

What would happen to land prices nowadays during a housing crash? House prices are down 20% from their peak. Have land prices decreased 20% as well?

#140 Reality 1 on 08.29.17 at 7:08 am

to # 108 MF

Let’s see ;

Haven’t tried smoking anything- but you “know” it’s for losers.

Haven’t bought a residence – but you “know” the prices are going up.

Guess experience doesn’t count in your opinion.

You have the same old tired DENIAL argument.

You should review the classic diagram that shows the different psychological phases of ALL bull / bear market unwinds.

It has been posted on this blog before several times – go google it and inform yourself.

By the way, buyers reneging on deals is not an indication of bullishness nor a ‘healthy’ market – and those are the anecdotes that I am hearing / seeing.

I was giving you an excuse for you viewpoint – because you’d have to be high to DENY the change in market place / price dynamics.

Fundamentals are re-asserting themselves as buyers run into the wall of financial REALITY.

Given your bullish take on things – have you bought yet ?

Why not ?

I mean…. you “hate renting” and all and you are convinced things are / will be on the ascendant again – what’s stopping you ?

Can’t be investment experience nor common sense – so why aren’t you in there buying ?

#141 Reality 1 on 08.29.17 at 7:31 am

to # 124 InvestorsFriend

Now you get it – the “creativity” of the lenders in full court press mode.

Iron rule of LEVERAGED investing;

NEVER MEET A MARGIN CALL !!!

And that is what I too believe is happening / will happen.
The lenders / OSFI has issued the mother of all MARGIN CALLS to buyers / owners that have no idea of what that means nor the destination to which this leads – insolvency of the position holder.

Workouts, skipped payments, pay with HELOC funds, borrow from friends and family, etc., etc.

All just really trying to meet a MARGIN CALL.
Historically, a bad move.

#142 Reality 1 on 08.29.17 at 7:36 am

to # 130 Joe2.0

Bingo !
Very concise and very correct.

Hope you didn’t fall for it, but I suspect with your obvious powers of analysis, there is no chance of that.

#143 Old Ron the Reltor on 08.29.17 at 7:48 am

To all of those forks from Vancouver who frequently post: “what about us”

The fact is that the Toronto Real Estate Board punches out more real estate deals in a typical year than the entire province of British Columbia. So by any measure (especially its influence on national GDP), Toronto is a big deal, even with currently depressed volume and valuations.

Further, Vancouver in particular and British Columbia in general are still positively influenced by Asian investment, which has insulated the “City in the Rain” from the negative fluctuations in the market place for many years.

P.S. Just got back from YVR, and in fairness it hasn’t rained there much this summer.

#144 TurnerNation on 08.29.17 at 8:08 am

From the Crapto Currencies dept.
Possible batman ears on daily BTC/USD chart.
Cash is king!

#145 Born To Be Wild on 08.29.17 at 8:21 am

The Smoking Man makes me smile with his video presentations like he’s the expert on rock and roll, but his silence is telling. On Sunday evening an event took place, and he missed it all at the CNE for free. An international star of worldwide fame, and his band played the performance of a lifetime from the 1960’s and where was he? It was historic which may never take place again, as might be the last. John Kay the original star was there with his band Steppenwolf.

#146 Smoking Man on 08.29.17 at 8:28 am

Keith Olbermen has completely lost his marbles on twitter

Halarious to see a high ranking leftey loon totaly lose his mind. No wonder millenials are so full of hate. They listen to this guy.

#147 Reality 1 on 08.29.17 at 8:30 am

to # 133 Juno

Very good points you make – another perceptive person making some very cogent observations on how REALITY will assert itself.

The realturds will have to make those Audi payments / spec condo mortgage payments / botox injections somehow!

Once again their ‘clients” will pay the price.
Most realturds, in my long experience, really are scumbags.

They’ll start by whispering in the sellers’ ears and end up shouting SELL, SELL, SELL as their collective economic vises start squeezing.

#148 Trumpocalypse2017 on 08.29.17 at 8:32 am

NK missile launch over Japan.

http://www.cnn.com/2017/08/28/politics/north-korea-launch-unidentified-projectile/

“all options on the table” says Trump

Prepare.

As soon as Trump returns from Texas, this will hit the fan.

Gas up. Stock up. Get cash.

Plan your travel. North, not west if in Ontario.

We’re all coming to your house. Get the Storm Chips. — Garth

#149 crowdedelevatorfartz on 08.29.17 at 8:41 am

@#108 MF
“Lol Never touched a cigarette or drug in my life..weed is for losers….”
++++++

Please inform our Prime Minister.

You know the guy…. shirtless, tattoo’ed, selfie absorbed, mirror loving, dope legalizing, politically correct, “because its 2016” former drama teacher that stutter’s with more “ums” and “ahs” in every interview than Forrest Gump on a bad day……

#150 crowdedelevatorfartz on 08.29.17 at 8:47 am

@#98 Leo Tolstoy
“I looked into buying homes in Houston.”
*******

Well, if you’re looking for rental investment property for desperate people…..Why Texas?
Might I suggest any small town in eastern Quebec along the US border?

#151 Tater on 08.29.17 at 9:00 am

How much more will this depress prices?

“The mortgage dudes have settled on 18%, the amount by which they think credit will be reduced when the test is in place. People will qualify to borrow that much less, on average, which would push down prices equally. Thus, another $175,000 off the average GTA detached, taking it to about $800,000. That, by the way, would wipe out 2.5 years of price increases. Yup, back to the spring of 2015.” –GT
—————————————————————

Prices have to fall to 2000-2002 levels (adjusted to inflation and CAD:USD exchange), to make things ‘normal’ again.
The centuries-old 3-4x gross family income as the fundamental true measure of affordability, it’s coming back.

TCC

—————————————————————–

2012 or 2013 levels are where the long term trend is. We aren’t going back to 2002 levels. 500K for the average home in Toronto is about right. The 3-4x income rule gets warped when rates are this low. If rates got back to 7-8% that would make sense, but that doesn’t seem very likely.

#152 yorkville renter on 08.29.17 at 9:40 am

#140 — YES! 100% agree.

recency bias comes to mind too.

#153 Gravy Train on 08.29.17 at 10:00 am

#137 Dharma Bum on 08.29.17 at 6:24 am

Just like FOMO-infused, house-lusty buyers, they wanted to straddle the real estate rocket. Now the ride’s over. It blew up. — Garth

“Ha ha! Just like Slim Pickens!!!”

I wonder if Trump has seen the movie Dr. Strangelove or: How I Learned to Stop Worrying, and Love the Bomb. I doubt he’d ever understand the plot! :)

#154 MF on 08.29.17 at 10:04 am

Reality1,

It’s not hard to understand.

I would like to buy but I am priced out like a lot of millennials who were prudent and screwed over. I don’t want tons of debt either so I continue renting, which I cannot stand.

Tons of people in this position all hoping for deals and adding to demand.

I have realized it’s time to face “reality”. This bubble is not going anywhere but up. Too many tailwinds.

Not hard to comprehend.

MF

#155 crowdedelevatorfartz on 08.29.17 at 10:11 am

@#147 Born

” It was historic which may never take place again, as might be the last. John Kay the original star was there with his band Steppenwolf….”
*******

Yawn.
Former 60’s and 70’s rock “legends”.

I saw 3 Dog Night a few years ago performing for free at a car show. A band that used to pack 50,000 seat stadiums….Their audience. Parents sitting in the bleachers with their obese prepubescent pimply faced kids. Barely a handful of people. Sad….
But the stands filled for…..a Michael Jackson imitator with recorded music.

#156 Dissident on 08.29.17 at 10:31 am

Exactly – #130 Joe2.0 on 08.29.17 at 1:26 am

Once the banks saw that the house prices were getting out of most average people’s reach to buy into safely, they pull out the rate raise, and snared all the people who bought in already. They got a nice pool of ‘subscribers’, now time to up the membership fees…on an already over-stretched purchase.

#157 Reality 1 on 08.29.17 at 10:35 am

to # 152 Yorkville Renter

You are so correct.
Sorry I wasn’t more concise.

“Recency bias” is all I should have written because this may be the biggest factor relied upon to formulate these clearly uncompromising denials like MF’s.

It might best explain their dogged adherence to the “real estate only goes up mantra” in the face of widely reported record drops in price and volume and the importance of factors like the new OSFI and 16 point Ontario regulations in changing the market dynamics.

#158 Reality 1 on 08.29.17 at 10:40 am

to # 155 and other crowdedelevatorfarts comments

I don’t always agree with your postings 100 %, but damn you are funny at times.

Thanks for the levity – keep it coming please.
I think we’ll all need a little humour in the days ahead.

Cheers !

#159 Kool Aid on 08.29.17 at 11:02 am

All down hill from here, really? 2018, 2019, 2020, down, down, down, hmmm, not so sure about that.

How about some nasties in NK or Wash press a big red button?

Then what, RE prices up or down? I can think of a scenario where values half or double with a singular geopoli-act.

Bonds up or down, will history repeat?

Who’s ready for the technicolor swans parade, it will surely be unimaginable.

Brave new world like the cold, stark old one.

#160 MF on 08.29.17 at 11:02 am

Crowdedelevatorfartz,

He probably rides an elevator many times a day.

You know what that means. He is probably inhaling lots of “other” fumes as well.

MF

#161 Good move Donald WTF on 08.29.17 at 11:12 am

Just 10 days before Hurricane Harvey descended upon Texas on Friday, wreaking havoc and submerging hundreds of miles of land under water, President Donald Trump signed an executive order revoking a set of regulations that would have made federally-funded infrastructure less vulnerable to flooding.

The Obama-era rules, which had not yet gone into effect, would have required the federal government to take into account the risk of flooding and sea-level rise as a result of climate change when constructing new infrastructure and rebuilding after disasters.

Experts are predicting Harvey — the most powerful storm to hit the US since 2004 — will cost Texas between $30 billion and $100 billion in damage.

And in the coming days, Congress will be called upon to send billions of federal dollars to help with the state’s recovery and rebuilding efforts.

But because of Trump’s rollback of Obama’s Federal Flood Risk Management Standards, experts across the political spectrum say much of the federal money sent to Texas will likely be wasted on construction that will be insufficiently protected from the next storm.

#162 Frank on 08.29.17 at 11:18 am

#9 Smoking Man on 08.28.17 at 5:51 pm
I sold in April. What’s that make me.
An Alien with amazing for sight.
Here’s one for you. Dr tax. Thousands of small corps and doc say f it. No HST or Payrole remittance till this confiscation law is revoked. Only need 5% to say screw you T2
The whole house of cards comes crashing down. I’m thinking it’s going to be like 25%.
Bill and T2 the definition of insanity.
I’ll start a Facebook group after my 11 casino road trip where all my loot will vanish.
Bring it Antifa. Soros tiny stupid children. Prey you never meet a drunken Smoking Man on a mission.
——————————————————
Now lets be frank, your not an alien with amazing foresight, your a drunken looser and compulsive gambler with a wife that is pretty much a carbon copy of you.
You ran out of money and had to sell your boat, your home, your cottage and your self respect.

#163 Gotta Get Out of Calgary on 08.29.17 at 11:20 am

#69 Felix:
While thousands are suffering and starving, this dog stole a bag of desperately needed food and ran off with it, leaving humans in anguish.

________________________________

Felix, did you actually read the text above the photo?

“This dog is walking around Sinton TX carrying a entire bag of dog food with him. ”

The dog is carrying DOG food. (Smart dog, actually.)

#164 Reality 1 on 08.29.17 at 11:28 am

to # 154 MF

On a sincere note, perhaps examine why you find renting so distasteful.

And, no, I am not talking about the obvious reasons.

With some people, for example, it is the perceived lack of status that being a renter in a superficial society confers upon them.

Their egos are just too fragile and their identity too wrapped up in the props they rely on to play their part on the stage of life (think Shakespeare – “…all the world’s a stage”).

For others it is pressure from a partner / spouse with the same shortcomings – guard against this in your life. It leads to true unhappiness for YOU. I don’t care how ‘hot’ you think that person is – some sacrifices are just not worth making.

Freedom First is not wrong – he has honestly analysed his life, motivation and needs and come away with a formula and rules that work for him. Not everyones’ cup of tea – but he lives for himself and not others and I applaud that.

Please understand that I am definitely not suggesting that this is your situation nor am I trying to be personal in these comments to you nor do I have any interest in doing so.

I engage posters like yourself to help myself and others here to understand what kind of factors creates these mindsets in people, how they manifest and how they persist. And how we can benefit from that knowledge.

For the record, I don’t own a residence and have no interest in buying one again unless it is at a very opportunistic price point.

I own NO built form (houses. commercial or professional rentals) any longer. It is strictly development land for me. I can have both, but frankly a house is anathema to my lifestyle. I live abroad and have for many years and I like to move to different countries and cities every couple of years. It is the best route for ME.

So, take a good hard look at your life – perhaps a little introspection will give you the answers.

Best of luck in finding your OWN way.

#165 TheDood on 08.29.17 at 11:46 am

#154 MF on 08.29.17 at 10:04 am
Reality1,

It’s not hard to understand.

I would like to buy but I am priced out like a lot of millennials who were prudent and screwed over……..
________________________________________

Prudent and Screwed Over??
Exactly how were you screwed over by not landing yourself in a lifetime of debt?

Give yourself a pat on the back and a ccceeegggaaarr! By avoiding a RE purchase, you’ve avoided a lifetime of debt and a possible upcoming bankruptcy which could ruin you for the next 20 years of your life.

Young people (lets just say 30 and under are young!) don’t need real estate! What you need is a 6 figure financial portfolio that’s growing! Get your head out of the sand!

#166 Deplorable space dust on 08.29.17 at 11:57 am

#162 Frank on 08.29.17 at 11:18 am
#9 Smoking Man on 08.28.17 at 5:51 pm
I sold in April. What’s that make me.
An Alien with amazing for sight.
Here’s one for you. Dr tax. Thousands of small corps and doc say f it. No HST or Payrole remittance till this confiscation law is revoked. Only need 5% to say screw you T2
The whole house of cards comes crashing down. I’m thinking it’s going to be like 25%.
Bill and T2 the definition of insanity.
I’ll start a Facebook group after my 11 casino road trip where all my loot will vanish.
Bring it Antifa. Soros tiny stupid children. Prey you never meet a drunken Smoking Man on a mission.
——————————————————
Now lets be frank, your not an alien with amazing foresight, your a drunken looser and compulsive gambler with a wife that is pretty much a carbon copy of you.
You ran out of money and had to sell your boat, your home, your cottage and your self respect.

He’s a forex billionaire living tax free in the Caribbean.

#167 Victor V on 08.29.17 at 12:11 pm

CMHC releases 2017 second quarter financial report

https://www.cmhc-schl.gc.ca/en/corp/nero/nere/2017/2017-08-29-1200.cfm

Mortgage loan insurance enables Canadians to purchase homes with a down payment starting at 5%. CMHC is also Canada’s only provider of mortgage loan insurance for multi-unit residential properties, facilitating the creation of rental housing options for Canadians.

CMHC continues to see an improvement in the quality of its mortgage loan insurance portfolio, which is reflected in the overall arrears rate of 0.29%.

During the first half of 2017, the typical CHMC-insured homebuyer had, on average, a mortgage of $255,014 with an average credit score of 752. The average gross debt service (GDS) and total debt service (TDS) ratios were 26.7% and 36.5% respectively. At June 30, 2017, CMHC’s total insurance-in-force was $496 billion, below CMHC’s legislated insurance-in-force limit of $600 billion.

New regulations introduced in the fourth quarter of 2016 have decreased the size of the insured mortgage market. During the second quarter, CMHC provided mortgage loan insurance for nearly 79,000 units across the country, while on a year-to-date basis CMHC has provided mortgage loan insurance for more than 125,000 units. Volumes decreased largely as a result of the new regulations announced by the Government in the fourth quarter of 2016.

#168 Victor V on 08.29.17 at 12:18 pm

Coming soon, another costly burden on harried homeowners — mandatory energy audits

http://business.financialpost.com/opinion/mandatory-energy-audits-would-impose-costly-time-consuming-burden-on-home-sales

#169 MF on 08.29.17 at 12:29 pm

Reality1,

Thanks for the great posts.

I don’t worry about status or perceptions and my gf is happy with our place now.

What bothers me is rents are too high (and rising). You can be renting and investing the difference and do well. You can buy RE, pay a mortgage, hope it goes up in value and do well.

But you cannot spend all your income on rent and do well.

I also hate the idea of a landlord.

Then there is the impracticalities of renting. For example when my previous landlord sold the unit I am living in, we had people coming by for a few weeks at the worst times. We also were afraid of eviction.

Also, I do want more space for when I start a family, and renting houses is even more expensive.

Lastly, I created a balanced portfolio in 2015. It was right before the oil crash, so bad timing. No ones fault just bad timing/luck. It took about 2 years to see my “worth” come out even. The process scared me away from investing even though I know it’s irrational. Still can’t pull the trigger even though I’ve managed to save 6 figures working 6-7 days a week for years.

No sob story or pity piece just the truth.

MF

#170 Ian on 08.29.17 at 12:34 pm

Guess what tomorrow is dogs??!?

The day the US revises Q2 GDP downwards. Next stop zero and then negative numbers.

#171 Victor V on 08.29.17 at 12:47 pm

Ontario condo builder charged with 160 counts of illegal vending: Admirals Walk Residences Inc. and Sandro Sordi, an officer/director of the company, have each been charged with 80 counts of selling homes without being registered with Tarion

http://nationalpost.com/news/canada/ontario-condo-builder-charged-with-160-counts-of-illegal-vending

#172 MF on 08.29.17 at 12:48 pm

TheDood,

That’s easy.

Missed out on the biggest housing bull run ever. Aided and abetted by the BoC and CMHC.

You are right though, there are some over leveraged speculators at risk. But the guy who bought in 2010 in the GTA is most likely not one of those people.

MF

#173 CHERRY BLOSSOM on 08.29.17 at 12:53 pm

Well Trudeau has just lost the next election. Whether he goes through with this tax on corporations or not. He wanted to do it. He ran on helping the middle class. Doctors, engineers, architects etc are not the 1% We are all middle class. That is ‘not poor’ and sucking off the government coffers.

Canada is operating on financial fumes, hopefully enough to go down in flames. Enough that the politicians might stop spending money we don’t have. By taxing us into oblivion they take spending money out of the economy. Already we pay 43% of our income in taxes, income tax, fuel tax, Gst Pst, Liquor tax Land Transfer Tax, Property Tax etc etc. That is all the gov’t knows how to do.. Tax Tax Tax

875 car accidents a day in BC so our auto insurance is going up. 6 hour waits in hospital emergency rooms. Signs on medical clinics “Closed due shortage of Doctors”
Rents are out of site as we cannot afford to purchase a house. To pay these rents takes spending money out of the economy.
Credit card debt is to the moon cause Millennials never got any financial education. And they want instant gratification. Servicing their debt will take money out of the economy.
5 Sailing waits on the Ferries to Victoria too many people suddenly. Ferry rates are going up.
Mortgages will soon be defaulting all over Canada
Auto Loans default rates are escalating.
Infrasture is crumbling because it just cannot take the # of people using it. Human densification is escalating in cities so we will soon see the crime rates rise. If there are too many rats in a cage they start killing one another. It is instinct. Studies have been done on this.

I am watching my Country that we all used to be so proud of crumble and people seething with anger. And the government cannot instruct us not to be racist. We are angry not because of racism but too many people too suddenly and the destruction of our way of life and the ability to afford a life.

#174 jess on 08.29.17 at 12:54 pm

Houston’s flooding shows what happens when you ignore science and let developers run rampant
https://qz.com/1064364/hurricane-harvey-houstons-flooding-made-worse-by-unchecked-urban-development-and-wetland-destruction/

plunging real estate values?
https://qz.com/1063985/hurricane-harvey-why-85-of-homeowners-in-houston-dont-have-federal-flood-insurance/

#175 oopswediditagain on 08.29.17 at 1:23 pm

#135 Dan.t on 08.29.17 at 3:37 am

But leave tax free massive housing gains alone and ignore all real estate fraudulent activities. That seems fair.
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

Ah, Danny, you were doing so well before you started up on the bull memes again.

I'm not sure whether you are a bull, a recent buyer or a specuvestor but even your most bearish posts are followed up with nonsense like this wrapped in a very thin veil of sarcasm.

Perhaps this is a result of short term memory issues because you have conveniently forgotten about the OSFI regulations coming this fall.

I'm not sure that we will hear from you over the next few months as all of the major markets "correct" (politically correct for crash), but if you are simply a schizophrenic bear you will be much happier when March rolls around.

Good luck.

#176 nick on 08.29.17 at 2:27 pm

#154 MF on 08.29.17 at 10:04 am

Reality1,

It’s not hard to understand.

I would like to buy but I am priced out like a lot of millennials who were prudent and screwed over. I don’t want tons of debt either so I continue renting, which I cannot stand.

Tons of people in this position all hoping for deals and adding to demand.

I have realized it’s time to face “reality”. This bubble is not going anywhere but up. Too many tailwinds.

Not hard to comprehend.

MF

___________________________________________

Its been going down. People used to say “If theres ever a drop in the GTA then buyers are going to pounce right back in driving prices back up!”. Well, how far down are we now? If you want a house, go outside and buy one without bidding wars and no conditions. Whereas all the demand you speak of?

“Nowhere but up” is clearly false because we’re going down right now, which destroys your “Theory”.

Only sith deal in absolutes.

#177 MF on 08.29.17 at 2:53 pm

nick,

You are right. Prices have dropped from 1.2 million to 1.15 million. Still way overpriced. Buyers are just waiting.

MF

No, they’re just scared. — Garth

#178 Rant Off Danny Boy on 08.29.17 at 3:06 pm

#135 Dan.t on 08.29.17 at 3:37 am
#7 The Crash That Wasn’t

p.s. Where is the BC NDP??? They won their votes on promises of popping the Vancouver speculation bubble. Since they won the election, they seem to have gone into hiding.
———–

How do you know a politician is telling a lie…. their lips are moving….

——

Dan T, you are a self professed returnee to BC after being away for years. You thought the market would correct while you were away doing who knows what. Now that you have returned, and things are even worse price and rent wise, your posts are anger filled rants that lack substance or merit.

The majority of people here are ticked that prices have go up in a parabolic fashion but this site is not a venting ground for daily rants.

You are like the beta male version of Victoria Real Estate Update, with the same powerless and meaningless diatribes. I think ANTIFA is calling you…

Try coming to the table with relevant stats or articles because while you were away, everyone came up to speed with the affordability crisis, and now seek empirical and grounded data…

#179 Smoking Man on 08.29.17 at 3:34 pm

#177 MF on 08.29.17 at 2:53 pm
nick,

You are right. Prices have dropped from 1.2 million to 1.15 million. Still way overpriced. Buyers are just waiting.

MF

No, they’re just scared. — Garth
….

Check our Shlong Branch Ave price is now 675k from hight of 950k in April. Zolo.com

I think you’re nuts to buy. Huge number of boomers over 60 is looking to cash in the second we get a minor price spike.They don’t want to miss the boat a second time. That’s were you will see the biggest flood of inventory in your life time.

#180 James on 08.29.17 at 3:36 pm

#174 jess on 08.29.17 at 12:54 pm

Houston’s flooding shows what happens when you ignore science and let developers run rampant
https://qz.com/1064364/hurricane-harvey-houstons-flooding-made-worse-by-unchecked-urban-development-and-wetland-destruction/

plunging real estate values?
https://qz.com/1063985/hurricane-harvey-why-85-of-homeowners-in-houston-dont-have-federal-flood-insurance/
……………………………………………………………………
If Toronto had the same amount of rain as Houston apparently downtown would be 9 metres deep. The Don and Humber would crest over 3 metres and most of the lower city would be wiped out. Better get a pump anyway just to be sure cause global warming is a myth as we all know.

#181 Damifino on 08.29.17 at 3:54 pm

#179 James

Better get a pump anyway just to be sure cause global warming is a myth as we all know.
———————————-

In 1900 the town of Galveston, Texas was literally wiped off the map by a horrific hurricane. In those days there was no global warming. I think they blamed God.

https://www.1900storm.com/photographs/

#182 Gravy Train on 08.29.17 at 3:57 pm

#172 MF on 08.29.17 at 12:48 pm

“Missed out on the biggest housing bull run ever. Aided and abetted by the BoC and CMHC.”

You also missed out on the biggest stock market and bond market bull runs, too! Oh, well! :( Someday you may wise up—although I doubt it! :)

You’re so much fun to mess with, MF. I love it when Garth gives you body blows, and you just keep coming back for more punishment. When will it ever end? :)

#183 Gravy Train on 08.29.17 at 4:26 pm

#162 Frank on 08.29.17 at 11:18 am

“You [SM] ran out of money and had to sell your boat, your home, your cottage and your self respect.”

Do you mean that SM had self-respect once upon a time? Such a shame!

#184 Happy Housing Crash Everyone! on 08.29.17 at 4:41 pm

Gravy Train on 08.29.17 at 3:57 pm
#172 MF on 08.29.17 at 12:48 pm

“Missed out on the biggest housing bull run ever. Aided and abetted by the BoC and CMHC.”

You also missed out on the biggest stock market and bond market bull runs, too! Oh, well! :( Someday you may wise up—although I doubt it! :)

You’re so much fun to mess with, MF. I love it when Garth gives you body blows, and you just keep coming back for more punishment. When will it ever end? :)
—————————————————————-
MF is you typical dirty lying SHYSTER scumbag who tricks people into committing financial murder. Now the housing market is CRASHING hard and yet the greedy evil lying dirty shyster continues lying as prices have crashed 20-30%. Sales are down 50+% which means many realtors are financially hurting with some having tens of thousands in back taxes due with no money to pay it. What dirty scum.

#185 Smoking Man on 08.29.17 at 4:46 pm

#180 James on 08.29.17 at 3:36 pm
#174 jess on 08.29.17 at 12:54 pm

Houston’s flooding shows what happens when you ignore science and let developers run rampant
https://qz.com/1064364/hurricane-harvey-houstons-flooding-made-worse-by-unchecked-urban-development-and-wetland-destruction/

plunging real estate values?
https://qz.com/1063985/hurricane-harvey-why-85-of-homeowners-in-houston-dont-have-federal-flood-insurance/
……………………………………………………………………
If Toronto had the same amount of rain as Houston apparently downtown would be 9 metres deep. The Don and Humber would crest over 3 metres and most of the lower city would be wiped out. Better get a pump anyway just to be sure cause global warming is a myth as we all know.
…..

Bull on climate change. Hurricanes usally keep moving. This one got stuck between two cold fronts. Acting like a huge water pump. Once in a centry event.

#186 MF on 08.29.17 at 5:02 pm

Gravy Train

Lol I’m glad you like it.

We get a lot of arrogant blow hards on here. The second you challenge them out come the insults. I’m not like that.

Renting is still crap though!

MF

#187 Dan.t on 08.29.17 at 5:50 pm

oopswediditagain Haha, I’m just happy the Happy housing crash guy doesn’t pick on me. And I’m an insanely baffled bear- waiting for years for debt pigs to get their dessert, but apparently gorging on debt was the smart move … to date. And the mentality in BC is baffling. Maybe it is different there:-)

#188 Willy H on 08.29.17 at 6:22 pm

The mortgage dudes have settled on 18%, the amount by which they think credit will be reduced when the test is in place. People will qualify to borrow that much less, on average, which would push down prices equally. Thus, another $175,000 off the average GTA detached, taking it to about $800,000. That, by the way, would wipe out 2.5 years of price increases. Yup, back to the spring of 2015.
__ __ __ __

Probably going to get worse.

Likely a recession late 2018/2019 related to housing sector downturn. Housing currently accounts for well over 10% of our GDP which is way out of sync with most western nations. Totally unsustainable with nothing in sight to replace it in the short-term (manufacturing has declined to almost historic lows in Canada and the energy sector is limping back at a snail’s pace!).

All the king’s horses and all the king’s men
Couldn’t put Humpty together again
– English Nursery Rhyme

http://www.cbc.ca/news/business/real-estate-fees-home-sales-1.4226630

http://business.financialpost.com/personal-finance/mortgages-real-estate/the-housing-markets-oversized-contribution-to-canadas-economy-is-about-to-shrink

#189 Gravy Train on 08.29.17 at 7:57 pm

#185 Smoking Man on 08.29.17 at 4:46 pm

“Once in a cent[u]ry event.”

I think you’ll find that these one-off black swan events will be recurring with far greater frequency and intensity over the next century (at least according to the climate scientists). I’m glad I didn’t become an insurance actuary!

#190 Gravy Train on 08.29.17 at 8:41 pm

#186 MF on 08.29.17 at 5:02 pm

“Renting is still crap though!”

I agree. That’s why I bought in 2011 a three-bedroom, a den, two-bathroom house for 190 grand. My monthly mortgage payment is just under 600 dollars. I also own a rental property—both sides of a semi-detached I bought in 2009 for 170 grand. I won’t mention my investment portfolio (as it’s not relevant).

How did I pull this off, you ask? Hint: I don’t live in Toronto or Vancouver! :)

#191 Lady G on 08.29.17 at 8:56 pm

I choose the puppy with the lime green bandana. I like lime green, and he has the most optimistic smile. Bill Morneau needs to GO! Worse than Harper. And I’m not even an entrepreneur!

#192 M on 08.29.17 at 10:21 pm

Gartho baby…those shoes to drop you mentioned are more like…slippers :)
The next shoe to drop is when Poloz will admit he’s an idiot and worse…he can not be any other way, because he has to STOP raising rates (The market WILL rise the rates for him)
The next real shoe to drop comes next year when morons that bought 4 years ago will have to renew. By next year hosing would ve lost another 15 to 25 % puting almost all those idiots under water at renewal.

..and..the last shoe to drop will be the bank stoks down 80%. No..they will not “fail” since T2 but especially the Fed (yup ..I-wet-my-depends-Jenny) will have to bail them out. Canada financial collapse will mean an instantaneous US financial collapse considering that most ownership in this country is Uncle Sam. So they will prop the canadian financial system.

these are the 3 shoes to drop

#193 Exurban on 08.30.17 at 12:44 am

So, precisely only one mortgage in a thousand in Ontario is at least 90 days overdue. I find that extraordinarily hard to believe. How can there be any power of sales / foreclosures when there are essentially not even any delinquencies??My suspicion has long been that the banks now hide delinquencies by agreeing to let home owners skip payments or some kind of leniency. Something has made these delinquency figures totally meaningless.

I have no inside information but I also find those numbers very hard to believe. And, which is more likely — politicians tell Canadian banks what to do, or the banks tell the politicians what to do?

#194 Rational Optimist on 08.30.17 at 2:04 pm

170 Ian on 08.29.17 at 12:34 pm

“Guess what tomorrow is dogs??!?

The day the US revises Q2 GDP downwards. Next stop zero and then negative numbers.”

Here’s the revised estimate: https://bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

Real GDP “increased at an annual rate of 3.0 percent in the second quarter of 2017. In the advance estimate, the increase in real GDP was 2.6 percent.”

Whoops.

#195 Bengals on 08.30.17 at 9:25 pm

House closed today and the $$$ is in the bank.
Thank God that is done.

#196 YVR renter on 08.31.17 at 12:41 am

What about Vancouver? Please post on it, interpret the insanity for us!