‘My fear..’

“I’m not a millennial,” Andy says, “so be nice to me.” Well, that doesn’t stop the Victoria dad from whining like one.

“Garth, I feel stuck and need your help,” he moans. “I’ve been holding off buying a home for my family in Victoria for a number of years now. There are regrets as we have had opportunities for a decent house within our budget in good hoods but have held out as we thought prices were going to go down. Then 2015/16 happened and now our prospects have diminished considerably. I’ve always been happy renting, that is until the last few years. We’ve been booted out so many times because of landlords selling/moving in. We have moved 3x in the last 4 years with our rent going up considerably each time.

“My question is this: With the new OSFI rules coming down the pipeline, are we better of rushing in now with 20% down and buying some townhouse outside of town (guh…not ideal), or do we wait and hope that the rules bring in much lower house prices and jump in when prices drop to a sustainable level My fear is we do the latter and won’t qualify for a mortgage despite a correction in prices because of the new rules and higher interest rates. We are an average income earning nuclear family the city, like that means anything anymore.”

So I asked him about the family and its finances. Turns out Andy has two infant children, a stay-at-home spouse, $100k in income, $140,000 in total assets and wants a house listed for between half a mill and $600,000.

Can he afford it? How about after B-20 lands (the new stress test)?

Well, if Andy & his family put 100% of their savings towards a down payment and get a fixed-rate mortgage at 3.5% (25-year amortization) they can afford a property selling for $501,500. After mortgage payments, property tax, strata fees and food, they’ll have about zero a month left. A risky, one-asset strategy with no leeway for dealing with an event (job loss, another pregnancy, dead car) or an emergency. But, no moving.

After the stress test is a fact of life, big changes. Now they must qualify for a loan at the current rate + 2%. So, at 5.5% the amount of mortgage money offered would shrink by more than $160,000 (from $383,000 to $216,000), so the home they could afford to buy would be one selling for $336,500. In this scenario they have less house and a lower debt, but a far larger monthly financial cushion.

So is this an argument to rush out and buy now? “My fear,” Andy says, “is that by that time higher mortgage and the OSFI rules will close that door for us altogether.”

This is why people fail, of course. Emotion trumps logic. It leads to rash actions. Then tears and marital stress ensue.

Logic tells us that after B-20 takes effect, governing the rate at which every single borrower must qualify, credit will shrink in a hurry. After all, it’s equivalent to rates spiking 2% overnight. Since people’s incomes are static, and the cost of life keeps increasing, either sellers drop their price or the real estate market freezes. In Andy’s situation, his purchasing power crumbles by a third as the mortgage increases 2%. In other words, $500,000 properties in Victoria won’t stay at that level for long after the change. So the worst thing he can do is buy one today – at peak house – then suffer a loss big enough to nuke his equity.

Poor Andy might not only piddle away $140,000 in down payment and closing costs, but end up with a mortgage of $382,000 on a house worth $336,000. What a disaster. His kids could be in med school by the time he recovers. Meanwhile he’d be living in a place he compromised massively to get (and never really liked), just because he hated moving.

See how real estate messes up your head? The notion of a ‘forever house’ – even one that sucks and can wipe you out financially – can be destructive and irresponsible. Andy’s primary job is to save, ensuring his family is financially secure, can weather reversals and his kids have the pile of money they’ll need to get educated. By thinking his role is to lessen disruption by shoveling net worth into an inflated asset, leaving the door open to risk and uncertainty, he’s making a big mistake.

Secretly, he knows this. Why else would be write me? Pathetic.

If you think the stress test is a non-event and real estate will cost more in a year than it does now, go ahead and buy. But it better be the F-house.



#1 For those about to flop... on 10.09.17 at 5:40 pm

Pink Pumpkins being carved in Surrey.

I haven’t had much trouble finding much detached owners in trouble or taking losses ,same for condos although a lot of people still view them as safe.

Townhouses have been underrepresented in my study ,but I attribute that to a lack of volume and possibly even the price and square footage.

This case in Surrey sure seems like a candidate to change all that and as I found out with the condos in Richmond,when you tug on a thread you find yourself covered in wool from the sheep.

Picked up this year for 897k,the ink dried in July the assessment come in at a lowly 662 and if these guys manage to get out of it I’m sure someone in the same complex will not be so lucky as is the case wth the 3 million dollar condos in Richmond where one guy ran got the exit and now his former neighbours have an inconvenient comp.

Good to see it wasn’t only turkeys that got stuffed this weekend….


16 16261 23a Avenue, Surrey

Jul 8:$948,000
Oct 8: $918,000
Change: – 30000.00 -3%



#2 Doug t on 10.09.17 at 5:49 pm

I live in Victoria – it’s pathetic the way people talk about housing – I get so tired of listening to these boobs flapping their lips about what they have and how much it’s worth – SO pathetic – HGTV created a nation of house humpers.


#3 Joey on 10.09.17 at 5:56 pm

Hello Garth

The thing is prices have yet to drop by any significant amount for most to afford. If this new stress test causes prices to drop great. But I’ve heard this before with other stress tests, oil collapse, int rate hikes, amortization rollback, FB taxes, spec tax, rent controls, recession, China tightening outflow of money. I can go on. What’s different this time? If I were Andy I wouldn’t keep waiting. That’s how he got into this mess in the first place.

#4 bluesteel on 10.09.17 at 5:57 pm

I’ve been reading blog for years and as much as I believe a correction is sorely needed, have a feeling the following will happen:

After the OSFI brings in the new stress test in 2018, a combination of the BoC/federal and provincial governments will bring in measures to dull the effects of a +2% increase in interest rates for various political reasons (ie–upcoming elections). I can see one or a combination of the following things happening:

-BoC drops the prime rate citing anemic economic growth

-the federal finance minister will bring back longer max amortizations (hello 40 year amorts, it’s been awhile!)

#5 Howard on 10.09.17 at 6:05 pm

But there’s some evidence that banks have gotten ahead of the stress test and have been applying the +2 percentage points for some time. Which means it’s already at least partly baked into the decline in prices since April. Garth at this point you mention the stress test in practically every blog entry but I am skeptical that it will have even a fraction of the impact you predict.

#6 JJ on 10.09.17 at 6:17 pm

“If you think the stress test is a non-event and real estate will cost more in a year than it does now, go ahead and buy. ”

haha come on man didn’t we say this last year right before prices took off in the GTA?

My house in rural Durham region was appraised by three different sources in September 2016 at apx. 525k.

Decided against some people’s advice and waited a bit to sell….

List price in May 2017: 750k!, no that’s not a typo….

I was very nervous about listing so high, but sure enough the house sold in September for 675k. (yes it took 3 months…)

So I guess I missed the “peak”in April, poor me, only made 150k more than I would have last year.

I pity the greater fool but renting is no solution around here either for a single person, unless you are earning a large enough income to afford sky high rents.

Not meant to be a bragging post, really like this blog, I’m shaking my head also….

#7 Nic on 10.09.17 at 6:28 pm

Same boat here. Have put off buying for 4-5 years..regret it big time. Thought it was overpriced in the lower mainland then..it has DOUBLED. If we bought we would have massive equity in our home and unless prices drop by more than 50% we would be fine. So frusterating. This was the same advice 5 years ago and it has been so wrong..no one knew it could go parabolic like this but nonethe less homeowners that bought 4+years ago have done well. Still waiting and saving.

#8 MGTOW on 10.09.17 at 6:29 pm

I can’t wait for the real estate bubbles to collapse in Toronto and Vancouver.
The Manager of the Massage Spa I frequent told me that he has to relocate for the 5th time this year because the store that he rents is being demolished to build 50-storey condos and townhomes for Moisters.

Like your tweet Garth: $699,000 for a dog house in Toronto LOL.

#9 Greater Fool on 10.09.17 at 6:30 pm

I’ve heard this exact same story over and over here in the $77k family income city of Victoria. This guy is $20K above the average and probably $140k above in savings.
What can go wrong here in Victoria? Houses will go up forever!

#10 TurnerNation on 10.09.17 at 6:47 pm

Already he’s hit the jackpot. A majority of girls I know vastly lack skills needed to take care of a house plant.
Hardscrabble, hard drinking.
(For many of this blog’s bikers sounds like a dream I know…)

No wonder so many hire a TFW at min wage to perform their basic duties. Bonding with Ipads.
You’ve come a long way baby?


#11 Bezengy on 10.09.17 at 6:51 pm

In 1974 I drove into Vancouver for the first time with my dad. Terrible place to live my Dad said, rains all the time. 4 blocks later and we see an ambulance and my old man stops and asks a by-stander “Heh Mac …whats up?” and the guy says someone just jumped out of a window. Never forget that. So many nice places to live in Canada, and people gravitate to the ghettos. Get out Andy, and don’t look back.

#12 Jimmy Two Teeth on 10.09.17 at 6:51 pm

Victoria blog dogs should meet up sometime. Commiserate. Wail. Grump.

I don’t have a dog, am I still allowed?

#13 VICTORIA TEA PARTY on 10.09.17 at 6:56 pm


That meme has been floating around these parts like it’s a jingle of a religious cult that always sucks money out of peoples’ bank accounts.

To talk about even the POSSIBILITY of real estate prices declining is tantamount to “whispering” that the transgendered crowd is full of itself.

Owning real estate in this town, where home-owning and other snobberies just won’t ever go away, are people’s armour against “bad” things happening, whatever they may be including stock market losses or cranky neighbours.

So Andy who is anxious to sign up as the next real estate victim is himself a victim of “property propaganda.” Too much BS, not enough facts.

Fact is, this city “hosts” a huge number of the financially deprived, either many renters or a lot of the strapped middle class.

Those seeking to rent are generally in constant panic mode, while the “better people” stumble over the addled street beggers and sign up for the latest $500k 600 square footers that’re still either just noisy holes in the ground or are represented as ethereal plastic scale models in splashy showrooms managed by oily looking realtors.

The gulf between the haves and have-nots here, as I’ve mentioned before, gets wider by the day: genuine financial panic vs “I’m alright, and screw you, Jack.”

My advice to Andy is: follow Garth’s advice.

Don’t go and play in “our” real estate swamp with such little money.

You need either a whole pile or just keep renting.

The other option is to blow this pop-stand and find another place that’s cheaper and less stressful.

Jobs are plentiful and happiness might be attained.

You just never know.

I think that Victoria’s (and Vancouver Island’s) futures see only the rich and the poor living here.

The latter will be divided into two camps: the homeless and the low-wage types sucking up to the wealthy in our vast “service” industries.

The rich, like the poor, will always be with us.

Andy, get a grip and clear outta Dodge.

#14 Stone on 10.09.17 at 6:59 pm

I’ve now lived in 7 houses in my life and will probably be moving after my current lease goes month to month. There is no such thing as a “forever home”. Some of my homes were owned, some were rentals. 2 of those which were rentals was to ensure my employment as I had to move 3 and 5 hours away and maintain my current home. There was no choice as the income I make at that time and now is well above the average (just hitting 6 figures now) and would be tough to find a similar income elsewhere. I can say during those several years, I saved nothing and had to dip a bit into savings. When you realize where you live is just shelter, it makes moving often not too bad. I won’t say it’s ideal but it’s not the end of the world.

Considering Andy and spouse have saved $140,000, that represents the ability to open the door to financial independence. A post tax return annually of 5% is very realistic on that which is $7,000 every year. If that is reinvested annually and some savings are also added to that, that $7000 will grow larger every year. Plus, if that $140,000 is invested in ETFs in a balanced and diversified portfolio, they can be easily liquidated if a major emergency occurs. That $140,000 is Andy’s safety buffer.

On the other hand Andy, buy a house. Have no liquidity for emergencies, become a slave to your wonderful employer who will squeeze you like a pimple because they know they can (especially if you disclose at work how tight your financial situation is), become stuck to a certain location because the housing market turns and no one wants to buy your house is not anything ideal. What? A great offer comes along that pays way more with great perks but you have to turn it down because it’s too far away and you’re shackled. Ain’t that too bad. That’s very likely to happen.

Either way Andy, make a decision and accept the consequences. Stop whining. Nobody likes listening to that.

Now, at 42, with just under $1 million invested in a balanced and diversified ETF portfolio, it makes me bulletproof. Let’s replay the above scenario instead for me now while renting. Let’s say I net $50,000 from the million dollar portfolio. Let’s say I’m laid off. Let’s say there are no jobs locally when I get laid off because many others have also been laid off. What changes in my life? Nothing! All my housing and living costs are covered. How many fellow citizens can net $50,000 without making an effort? I’d have a lot more time on my hands to enjoy life and consider what else I’d like to do with my time. Take my time, find new work that suits me if I wish to. If it comes to it, move elsewhere. No big deal.

Andy, your first responsibility as the breadwinner is to provide financial security for your family. Nothing else matters. Be aggressive and grow that $140,000. Grow it, grow it and grow it! Eventually, become like me and laugh at your employer every time they try to squeeze you. The moment I realized that I didn’t care about potential threats made by an employer, I knew I was untouchable. It’s a fantastic feeling. You won’t regret it.

#15 marc on 10.09.17 at 7:00 pm

Will the same thing happen in Winnipeg? Will values decrease that much here, that one would lose that much money? Wpg market does not seem as inflated, so I am feeling the impact once the stress test kicks in may not be as bad on valuations.

#16 A123 on 10.09.17 at 7:01 pm

It is the sheeple that drive the house market up. If people keep thinking houses can only go up, then they will, as it is these people that continue to drive the market . They listen to their real estate agents and their neighbours, family and friends. They read what people say on facebook. I hope the stress test restricts home purchases to what they can afford. I hope that it slows the market. Dumb and dumber has been driving the market. But, even though logic defies, it has been dumb and dumber that have been the winners to date.
I feel sorry for the guy that has been booted out four times. He held out, hoping the market would drop. I would be frustrated to have to move so often. I am hoping for a “Happy housing crash” but so far, dumb and dumber are still the winners. It is time for logic to come ahead.

#17 45north on 10.09.17 at 7:04 pm

Andy: I feel stuck and need your help

Andy you need to hear what Hilliard MacBeth has to say:

starting at 8:00

He was talking with a US hedge fund manager who went through the real estate crash in the US 2008-2009. He and the hedge fund manager say that the crash happened because the lenders changed their view on how much they were willing to lend and to whom they would lend. Similar to the US, lenders in Canada have changed their view on how much they will lend and to whom.

Andy you should understand that the banks and the OSFI are closely intertwined:

Just listen to Dave McKay, who happens to be in charge of the Royal Bank: “We need some of this policy change, particularly the B-20 change, as we are in a highly stimulative monetary policy environment. We needed to layer on some type of policy change; now that the Bank of Canada feels more comfortable raising rates, that’s supposed to be the brake on the economy that we all like to see.”


In the words of Sun-tzu you need to understand yourself and your enemy. You little fish. They big fish.


finally Garth:

Andy your primary job is to save, ensuring your family is financially secure, can weather reversals and your kids have the pile of money they’ll need to get educated.

#18 FOUR FINGERS WATSON on 10.09.17 at 7:09 pm

Same old song, “this won’t end well”, “the end is near”, etc. etc…..how many years now ? There is always a “work around” for these govt. regulations.Canada is a housing superpower and the world will beat a path to our doors as long as interest rates are low and capital gains are tax free. And the govt. won’t change that cuz the economy would collapse if housing “corrected”.

#19 Herestoyou on 10.09.17 at 7:11 pm

This is for Andy – fact – a Mid Island realtor has said that none of the realtors in her office are allowed to talk to anyone about how the market has slowed right down and sales have dropped right off. This same realtor has sold and gone into a rental. I’ve heard that condos are selling in Victoria but detached home sales have slowed right down. If you’re old enough to look back as far as the early 1980’s there have been hot markets with high prices and lots of markets where it took a lot of time to sell a home for just an average price. I would guess that the ones who bought in at high prices wished that they hadn’t. If interest rates keep going up (which I think they will) that will take the speculators out of the market. I do believe that with so many people having bought a second property to rent or flip that this has driven the high demand for homes. Higher interest rates quite likely will force some of these people to sell off their rentals (which low low interest rates enabled them to buy) plus eliminate further purchasing by this portion of the population. Less demand – lower prices. Now if the government could somehow free up all the vacation rental homes on the island that would amount to a very significant increase in listings.

#20 dr. talc on 10.09.17 at 7:14 pm

The big markets will end up like Shanghai: limited trading and very expensive houses. Everything the governments have done has resulted in less trading. The HST from all real estate related activities is so bad that Jeremy Rudin’s Stress Test II will likely be cancelled. His empty rhetoric has already achieved his objective of whacking prices, anything more is just overkill.

#21 Herestoyou on 10.09.17 at 7:21 pm

# 13 Victoria Tea Party

You sound like everyone else in Victoria who says “This is Victoria and it’s different here – prices will never come down!”. It will be a sad day for all of you if you get the realty check that I’m convinced you’re in for.

#22 Scoops on 10.09.17 at 7:22 pm

Hey Screwed Canadian Millennial, take a lesson from some of your own who don’t blame everything in their lives on someone else:


#23 Dolce Vita on 10.09.17 at 7:26 pm

DP = $140K
3.5%, 25 years
Max house of $501,500 means you have to assume the following expenses = $861.50/mo:

Heating, Property Taxes, Maintenance or Condo Fees, Credit Cards, Vehicle loan/lease and Loans, lines of credit.

Recall, TDS and GDS include expenses, not just the payment.

Above = TDS of 32%, GDS < 40%

Stress Test @ 5.5%, same $861.50/mo expenses as Prop. Taxes and Heat, DP the same, 25 yrs, yields a Max house of:

$435,689.29, TDS = 32%, GDS < 40%
_ _ _ _ _ _ _ _ _

13% drop in purchasing power ($65,810.71).

Still, a lot.

#24 HoweStreet.com on 10.09.17 at 7:28 pm

Ross Kay on HoweStreet.com Radio:
Government “Puzzled” by Housing Market.
Can Calgary Taxpayers avoid risk, building new NHL rink?


#25 acdel on 10.09.17 at 7:35 pm

Regarding this article; why not rent outside of Vic? Even if one has to commute one hour a day the savings would be worth it. Never could understand the fascination with Vic; have been there a number of times over 40 plus yrs and just do not get it; over priced damp houses, fear mongering activist that have no problem dumping millions of gallons of raw sewage into the ocean and yet dare to preach to the rest of us on how things should be done; what a crazy country we live in!!! Biggest spoiled hypocrites I have ever encountered….

#26 pay your taxes on 10.09.17 at 7:35 pm

If Andy bought his house several years ago instead of remaining a filthy renter he would have spared his family a lot of stress and had equity to boot. He’s put his family through hell (when was the last time anyone here moved their family?) and his money is worth less than it was 7 years ago. The questions are these :are houses worth more than they were 25 years ago, and are rents higher or lower? Property owners aren’t chumps and won’t subsidize renters forever. The lag time between property price appreciation and rental rates is closing fast.

This is the tale of a dirty market timer who is trying to time the housing market instead of the stock market, and we all know what happens to those guys in the long haul. The comment section is littered with the carcasses of would be home owners who really are shut out forever. I can’t imagine the shame of their wives at dinner parties and social gatherings where the home owning women hump their legs and rub it in.

Interest rates will go back down to what they were and the government will blow more hot air into the existing asset bubbles. Good news for homeowners and stock/etf holders for the time being. Time for Andy to smarten up and provide some stability for his family while he still can.

#27 Smoking Man on 10.09.17 at 7:39 pm

Trying to understand the sign. Dogs and Dyslexia. My dogs love me. Took em on a savage road trip that they loved and will remember it their whole lives. I’m Dyslexic.

My dogs did bourbon street in New Orleans.

I’m such a good daddy.

#28 I thinks I know something on 10.09.17 at 7:47 pm

“Logic tells us that after B-20 takes effect, governing the rate at which every single borrower must qualify, credit will shrink in a hurry.” – Garth


What is amply clear is that when it comes to Canadian RE and prices, logic simply doesn’t apply. This Dude should buy ASAP. Ten short years from now, houses will cost more than they do today. And that is for sure. Of course if CHMC is dismantled and immigration is curtailed and money laundering is obliterated, etc. then houses may go down in prices. Or, if we have an economic collapse. Otherwise, prices are going up.

#29 Dolce Vita on 10.09.17 at 7:47 pm

Garth, I think the real impact of B20 to uninsured mortgages is not so much the loss of purchasing power; rather, it is the resulting drop in qualified buyers.

I have posted this before (link below), but when the 2% stress test came into being for insured mortgages in Oct. 2016, YVR new mortgages dropped by 32% in Vancouver (1st Qtr 2016 vs. 1st Qtr 2017, per TransUnion):

6,226 from 9,162

That’s 1/3 fewer qualified buyers, which a lot.

Purchasing power lessens by a lot only when someone applying for an uninsured mortgage has a lot of expenses in the form of Credit Cards, Vehicle loan/lease and Loans, lines of credit.


#30 I thinks I know something on 10.09.17 at 7:50 pm

“So the worst thing he can do is buy one today – at peak house – then suffer a loss big enough to nuke his equity.” – Garth


The fact is, people have been calling the “peak” for years. Has it happened yet?

#31 Smoking Man on 10.09.17 at 7:53 pm


#32 TurnerNation on 10.09.17 at 7:56 pm

1 million? In no other ho hum city in this world would you find junkers like these selling above 300k:


#33 bubu on 10.09.17 at 7:56 pm

$140k down payment and $100k income would qualify him for minimum $700k…. look around for options….

Insane. — Garth

#34 I thinks I know something on 10.09.17 at 8:00 pm

“Poor Andy might not only piddle away $140,000 in down payment and closing costs, but end up with a mortgage of $382,000 on a house worth $336,000. What a disaster.” – Garth


That could possibly happen, but I see it as very unlikely. Any measures the government brings in to negatively impact RE prices could easily be curtailed or other incentives could be introduced to keep house prices buoyant. The government doesn’t really want RE prices to crash.

‘The government’ is not behind B-20. It is the autonomous bank regulator. You should like a blowhard shill. — Garth

#35 -=jwk=- on 10.09.17 at 8:02 pm

Andy needs to get better at picking landlords before he starts picking houses. Professional landlord. Owns multiple properties dating back 15+ years. Ask for references. Call them. Simple really: rent from a flipper and you have to move…

#36 I thinks I know something on 10.09.17 at 8:05 pm


#37 Smoking Man on 10.09.17 at 8:07 pm

#31 Smoking Man on 10.09.17 at 7:53 pm

Really? I thought it’s was witty and provocative and was a true story. Wyatt don’t like people or noise, usally frightened out of his mind this little 12 lbs beast. And he just loved the autistic dude we meet at the gas station in mobile alabama. It blew me away.

Inspired the new book. What was wrong with post gartho?

#38 tccontrarian on 10.09.17 at 8:21 pm

My advice to Andy:

moving is a drag, I know! I’ve done it twice in 3 years but got me a 3 year lease this time, so I’m good for another 2.

Save your money, like Garth says, and wait it out. Now that the tide has turned you may be surprised how low ‘low’ can go.
Just keep reminding yourself that 3x-4x gross family income is the centuries-old affordability ratio for a home.
Also respect the fact that ALL markets are cyclical in nature and eventually return to the mean – it’s NOT different this time!

“Buy Low, Sell High” – in RE too!


#39 VICTORIA TEA PARTY on 10.09.17 at 8:28 pm

#21 Herestoyou

You got it wrong, what I wrote. How could you?

You took my comments as if I’m some kind of idiot shill for ever higher real estate property prices in a local industry soaked in greed, avarice and lack of knowledge of the financial dangers that lie ahead.


This market needs a proper reaming with lower prices and a lot of borrowers-regret especially by speculators who buy these brand new 300 square foot condos to later rent out as Air BNBs.

This only screws further into the ground the renting part of the residential market. It has gone to Hell.

Meanwhile the real estate market shows some cracks but not nearly enough. It needs chasms. Lots.

Back in 1980-81 the real estate market here dropped 50 per cent. High double digit interest rates ensured that outcome.

More of THAT please!

We’re no longer part of the house-owning madness. Bailed last year and now rent and watch and wait, and watch and wait…

What everyone here needs to know is that Mr. Market is ALWAYS in charge.

He moves when he does.

Next moves? Up or down?

We wait.

#40 Dolce Vita on 10.09.17 at 8:32 pm

By the time MSM or TransUnion tells us what has happened due to OSFI and/or higher rates, it is usually a done deal by then (i.e., no advance warning). I like Scott Terrio @CooperTrustee (bankruptcy trustee, consumer proposals etc.) on Twitter for some advance warning.

Some recent posts, articles from him:

What is happening to the Bank of Ma and Pa:

– – – – – – – – – – – – – – – –
Some clients of his:

“Had a real estate agent/broker in to file a Division 1 proposal. Owed $400k+ in tax. Got away with a 20% payout. No more interest/penalties.”

“Self-employed cab driver for 20 yrs, $115,000 in credit card debt, not made payments for 2 yrs, gets approved to roll a previous car loan 1/

into a new loan (big 5 bank). New car loan? $56,000 (very average car). Reported income: $2,100/mo net. 2/ -FIN #BankPrudence”

– – – – – – – – – – – – – – – –
From his recent Tweets these past few months, it is getting ugly out there (same as debtslavecreator has been Commenting), to quote him:

19% of our active files are homeowners. That figure drops to 9% for filings in the last 12 months. Why, you ask? B/c house prices in 1/

the GTA (where we operate) skyrocketed in that time, adding huge amounts of equity. & when you have equity, you can make your debt ‘work.’2/

Extend & pretend, delay & pray. So fewer homeowners w/ newfound equity are going to file vs. those previously w/ moderate or no equity. 3/

Thus the huge (& expected) drop in insolvency filings more recently by homeowners. Equity means access to funding, whether it’s a good 4/

idea or not long-term, that’s what happens. 5/ -FIN

– – – – – – – – – – – – – – – –

62,506 consumer proposals
63,372 personal bankruptcies
2016 Canada

Extend & pretend, delay & pray…says it all to me.

#41 Alex on 10.09.17 at 8:39 pm

With 30% for mortgage payment, 10k DP 3.5% and 2 years it gives 500k MORTGAGE, and 640k selling price.
B20 rules will drop mortgage to 410k.

Theoretically it’s possible to buy 500-600k on his income, but I do agree, getting 500k mortgage on 100k income would be VERY stretchy, with all savings gone and half of net income going to house-related payments.

I wish we have more company owned rentals where you could easily live as long if you like it and pay in time. There are so many of them in US – 1/2/3 apartments, townhomes…so it’s much easier to rent (move a house full of stuff each year sucks, agree…)

#42 Basement on 10.09.17 at 8:39 pm

What about renting basement? ADD rental income and you will be fine

#43 april on 10.09.17 at 8:40 pm

$28 – sure sounds like realtor spin.

#44 Canadian Moose on 10.09.17 at 8:48 pm

Andy, no one not even Garth can predict the future of real estate in this country. Do your due dilligence, study the local market. Talk to your bank, and find out what you can COMFORTABLY afford with your current financial situation. Build in buffers, price in the some variables and then make an informed decision. If it doesn’t make financial sense. Walk away for another day. If you take the house plunge then remember this. This is about putting a solid roof with bones over your head with your family. Forget about house appreciation. Keep investing and keep reading this website for Garths advice. Be frugal and take care of your family.

Thoughts from the Hinterland. Cheers!

#45 Dolce Vita on 10.09.17 at 8:52 pm

#30 I thinks I know something



Real Estate Association of Greater Vancouver figures show the median price of a detached home is down more than $500,000 since February, to $1.7 million.

That is -23% in 7 months.

Detached peak in rear view mirror, numbers say correction to me.

And that is w/o the effect of B20 to come in early 2018, may accelerate the correction.

Just keep reading Flop’s posts for more verification.

#46 Brandon on 10.09.17 at 8:57 pm

I have a very similar story, even in the same city. Was trying to buy in ’08. Put the down payment into starting a business instead. Business is worth $600k and have another $150k personally. Our rent is cheap and my wife doesn’t care either way. Anybody ignoring the effects of OSFI and our next inevitable recession is completely ignorant. We’ll be millionaires by 40…everyone else can enjoy their “Forever House” lol.

#47 jim on 10.09.17 at 8:58 pm


“Andy, get a grip and clear outta Dodge.”

Not bad advice, actually. At 100k, he is on the upper end of the salary spectrum in Victoria. That city offers mediocre jobs at best, concomitant with high living costs.

I resided there at one point. Although it is not a nice city, it offers nothing in the way of upward mobility when it comes to careers (barring those lucky or well connected enough to ingratiate themselves to the powerbrokers in the civil service).

Depending on his profession he would be well advised to look elsewhere. Perhaps he has family in the region and doesn’t wish to leave. He could probably make more money in the vast bulk of Canada’s cities.

I would certainly not buy into that market, not with his middling wealth, one income stream, and young children.

#48 Smoking Man on 10.09.17 at 9:00 pm


#49 Lost...but not leased on 10.09.17 at 9:06 pm

I see that CRA latest tax grab is deeming employee discounts as taxable benefit.

#50 Linda on 10.09.17 at 9:10 pm

When the going gets tough, the tough figure out new options. Andy, if you are determined to take that hill & purchase (to avoid moving every year) I’d advise you to think creatively. As in, are there any properties being auctioned off by the municipality due to unpaid taxes? Are there any vacant (but serviced) lots that no one has done anything with that you could maybe build ‘the forever home’ upon for a reasonable cost? There are quite a few companies that build modular homes so you may be able to escape ‘island time’ construction timelines if you do some research. The benefit to a new build is you are not inheriting someone else’s mistakes or hidden horrors of mold, non-code wiring or failing service connections that may be yours to repair at your cost once discovered. How about derelict properties where the value lies solely in the land? Demolish, clean up & replace with the shiny new abode. Of course, none of these options is a slam dunk & all of them may take some considerable time to implement – a property auctioned off for back taxes could be snatched back at the last minute by the original owner if they pay up & most municipalities give the original owner a full year & a day to do so, so even if your bid is successful you may not end up getting the property. There could be zoning issues that limit what you can build upon any vacant lot(s) you may find; vacant lots or derelict properties could have nasty surprises underground, so if you do try any of these routes make darn sure you do your due diligence before you sign the dotted line, because once you’ve bought that sucker the cleanup costs are yours.

#51 Smoking Man on 10.09.17 at 9:12 pm

We I became an entrupenur. It wasen’t a safe space it was a was war zone. Other real life gamers trying to kill you.
Especially the govt. Got two fast thumbs it’s everything


#52 Smoking Man on 10.09.17 at 9:21 pm

For the little goofs who like me and want to extend my life with suportave emails.
I’ve seen in my dying mom and dad’s eyes how shitty that thought is.

Not going to be me. Hell I won’t take anyone with me when I go find God.

Let them feel life. Cause in the end nothing else matters.

#53 Yuus bin Haad on 10.09.17 at 9:22 pm

What if Andy’s employer (whose paying him $100K for some reason) finds out about this?

#54 Smoking Man on 10.09.17 at 9:23 pm

CRA thrives.

#55 Linda on 10.09.17 at 9:25 pm

Further to my first comment I just checked online for tax sales of properties. For Victoria, Oak Bay & other municipalities on the island tax sales take place annually the last Monday in September. Google ‘Tax Sales – Victoria’ if you want to find out more.

#56 Lost...but not leased on 10.09.17 at 9:34 pm

(Oh…I finally got the joke re:photo in today’s post).

Andy should recall the title(and meaning) of this blog ie “Greater Fool”.

It’s easy to get seduced to buy in a rising market. Often these markets have built up momentum..but once that momentum stalls/stops…then what ? Temporary or permanent ?

Tough call, but read the tea leaves…

#57 Tony on 10.09.17 at 9:35 pm

Home sales are collapsing in America. Home renovations in Ontario, Canada have just about ended. Interest rates are on their way down in both countries especially in Canada. Home prices in the GTA will push back towards the April 20th 2017 highs. The stress test did nothing last time and this time the only thing it will do is lower interest rates even more in Canada. Once again the housing speculators will have a field day. As interest rates keep on falling in Canada and south of the border both countries will have the same problem as Switzerland.

#58 higher mathematics on 10.09.17 at 9:40 pm

#34 I thinks I know something on 10.09.17 at 8:00 pm
“Poor Andy might not only piddle away $140,000 in down payment and closing costs, but end up with a mortgage of $382,000 on a house worth $336,000. What a disaster.” – Garth


That could possibly happen, but I see it as very unlikely. Any measures the government brings in to negatively impact RE prices could easily be curtailed or other incentives could be introduced to keep house prices buoyant. The government doesn’t really want RE prices to crash.

‘The government’ is not behind B-20. It is the autonomous bank regulator. You should like a blowhard shill. — Garth

If ‘the government’ isn’t behind it, that leaves the banks,
there are no other choices.
osfi’s authority ostensibly comes from the government,
in reality government powers were long ago bequeathed to private central banks

prove me wrong

#59 Smoking Man on 10.09.17 at 9:42 pm

When people frightened of risk try and tell me what to do.

Eat this song https://youtu.be/9SKFwtgUJHs

#60 Smoking Man on 10.09.17 at 9:53 pm

Love this man


#61 OttawaMike on 10.09.17 at 9:55 pm

It took 15 years for prices to get where they are now.

You think the stress test is going to magically make houses affordable overnight?

This blog is more fun than Twitter.

#62 OttawaMike on 10.09.17 at 9:59 pm

I see the Wynites are backing off on banning dual agency seller agents.
See, lobbying always pays off. Good work OREA.
Keep protecting your turf. Ask the taxi guys how that turned out.

#63 Entrepreneur on 10.09.17 at 10:12 pm

You have that gut feeling that is telling you not to buy Andy and ride this thing out.

Moving is the pits but you would lose more if you buy a house on borrowed money from a bank. Then house prices decline and the bank wants the difference up front. Now you will be sick and sorry that you bought.

You know deep down not to buy. Only buy what you can afford which is basically nothing now and that is why it is called a bubble.

#64 Smoking Man on 10.09.17 at 10:25 pm

T2 and duck loving butts.

Yeah I’m on the shit list. Jack is my buddy


#65 Kay street on 10.09.17 at 10:35 pm

If readers want to really understand what is happening to Canadian real-estate and why it is happening then you need to listen to the Ross Kay interviews.

I use to think Ross Kay was a whining goof, but I eventually came to realize than man knows his stuff. Check him out. Quite interesting.

#66 Tulips on 10.09.17 at 10:47 pm

#7 Nic on 10.09.17 at 6:28 pm
Same boat here. Have put off buying for 4-5 years..regret it big time. Thought it was overpriced in the lower mainland then..it has DOUBLED. If we bought we would have massive equity in our home and unless prices drop by more than 50% we would be fine. So frusterating. This was the same advice 5 years ago and it has been so wrong..no one knew it could go parabolic like this but nonethe less homeowners that bought 4+years ago have done well. Still waiting and saving.
Sounds similar to our situation. We have above average income and could have supported buying our dream property a few years back, but held off to avoid buying into a market that was “clearly overpriced” and in the midst of “peak house”. The same properties are now twice the price, and we can no longer dream of affording that. For the past few years we have been minimizing our housing costs by renting a humble home and paying no maintenance, interest, or property taxes. But that only advanced our financial situation about a third of what we would have gained over the same period if we had just jumped in and bought a property. Now, if there’s a 40% decline in the lower mainland, then we’ll be back to where we started and we’d be ecstatic paying what we initially tried to avoid. But I get the sense that there are a lot of people waiting for declines, and if the market pulls back 20% people will jump back in and prop up these high prices for a very long time if not forever.

The problem with trying to avoid “peak house” is that it may be followed by a series of ever higher peaks.

One positive effect of this market doubling in a couple years is that I no longer have to worry about whether or not we should take the plunge and buy, as we how simply cannot afford to. The interesting thing that I keep considering is that if we continue renting, saving, and investing as we are, we’ll be on track for a retirement before age 65 with more money than we will need to maintain our current comfortable lifestyle. We’ll just never own our dream home. In the light of Garth’s post yesterday, that’s really not all that bad.

#67 Smoking Man on 10.09.17 at 10:52 pm

To my wife


#68 Happy Housing Crash Everyone! on 10.09.17 at 10:57 pm

I hate all you dirty lying evil SHYSTERS. Many of you are uneducated CONs with some even scraping by high school. All you see is SHYSTERS kicking and screaming about the stress test. Btw remember this house https://m.realtor.ca/PropertyDetails.aspx?PropertyId=18661715

It’s still for sale . It sold in April for $2118000.00 in just 5 days. Now it collects dust and unwanted for MONTHS you dirty POS SHYSTERS. Why cant you sell it for $1849000.00? I still remember SHYSTERS in August said it would sell for the first reduced price of $1950000.00. Wait til the stress test. Funny how you useless SHYSTERS can’t sell it . You are useless. You offer zero value.
You SHYSTERS will suffer with no sales for YEARS. No money for you.

Happy Housing Crash Everyone Everyone :-)

#69 REinYVR on 10.09.17 at 10:59 pm

How National Debt Affects Retirement

Good read.

The way Lieberals are spending inflation of 5.25% is in the realm of possibility


#70 MinInMission on 10.09.17 at 11:03 pm

Good grief! 100K for an income! That would be the income for three guys in the shop where I work! And the majority of us own our homes. Many of us without any mortgages. I do not understand why people will pay so much for so little. Houses are supposed to be homes. Not investments or speculation.

#71 april on 10.09.17 at 11:13 pm

#61- Garth did not and has not ever said home prices will become “affordable overnight”. If my memory serves me correctly he has always said a “slow melt” which is what’s happening with houses, condos any time now.
“chickens coming home to roost” according to Ross Kay.

#72 When the Whip Comes Down on 10.09.17 at 11:15 pm

So if andys family income is $100k per year (which is in fact higher than the avg – sorry Rexx rock don’t even try to suggest that it is more than this – if so post a link to the verifiable stats) and he can only qualify to buy a home for $501,500 before the coming stress test how can the benchmark detached home in Vic be $823,100? What accounts for this herr turner? Simply move up buyers with current good equity? I guess so.

#73 Lets make real estate market great again on 10.09.17 at 11:17 pm

I was in the similar situation with almost the same income and I passed on bidding wars for townhouses in ~400-450k range in GTA. Idea of buying 30-40 years old property with no inspection with my $100k single person income seemed to be too insane. I would never buy a used car for more than 3-5k without proper inspection and CarProof. But here was a 20-25 years commitment.

All of realtors we have spoken too were saying we are going to regret our decision and the price will never go down, the interest will stay low for long. Recently one of them contacted us and said that saving but not buying a home is the crime against the money. And offered to join her in some RE investment scheme. LOL

#74 Ponzius Pilatus on 10.09.17 at 11:20 pm

#49 Lost…but not leased on 10.09.17 at 9:06 pm
I see that CRA latest tax grab is deeming employee discounts as taxable benefit.
What’s wrong with that?

#75 I like cookies on 10.09.17 at 11:23 pm

More deals are falling through in Vancouver… how bad is it going to be when the new rules kick in? https://beta.theglobeandmail.com/real-estate/vancouver/vancouver-home-sellers-take-a-wild-ride/article36518216/

#76 Ronaldo on 10.09.17 at 11:25 pm

#1 Flop

It would appear that the buyer got the royal shaft by paying so much more than the assessed value. Hard lesson for the buyer.

The following should change things in the hot condo market. Methinks we are nearing a top.


#77 40 something family man on 10.09.17 at 11:27 pm

#26 Pay your taxes


Some renters rent out of necessity, others (myself included) by choice!

Bottom line is it costs too much to look ‘normal’. People who rent by choice, are making a concious decision to resist FOMO, Peak or near peak pricing, peer pressure, etc.

I’ve never been one to follow the herd. Those parties you talk of where wives gossip about other wives? Who gives a Sh*t? LOL

Most Canadians who own homes (especially recent ones) are cash & cash flow poor. By taking on massive debt, they expose themselves to far worse things than a few snyde remarks from friends (who really aren’t your friends), namely financial loss or complete ruin, stress and potential marriage failure!

Why jeopardize your family? What do I know, $1.5 Million liquid, wife 200k and working hard on her promo, and baby Marcus ready to take on the world – go for Harvard, but you gotta earn your grade

#78 45north on 10.09.17 at 11:37 pm

Linda: When the going gets tough, the tough figure out new options.

Are there any vacant lots that you could maybe build ‘the forever home’ upon for a reasonable cost?

maybe, maybe – if Andy were a tradesman, maybe he could but he’s not. What about doing the job he has now and advancing his career?

#79 Ronaldo on 10.09.17 at 11:38 pm

#7 Nic

Just goes to prove that nobody can predict the markets whether it’s the stock or housing or any other market for that matter. I personally have stopped handing out any advice on the housing market. I had recommended to a family member back in January of 2010 that the market was due for a serious correction when the house they purchased for $850,000 in summer of 2008 was then valued at 1.2 million. They argued that it would go much higher due to the Asian influence which was being debunked. They sold last November for 1.85 million and had done zero to it. Who do you think looks the fool now? This bubble has gone on much longer than anyone could believe. No idea how this will end.

#80 VanMan on 10.09.17 at 11:56 pm

It’ll end up as more of the same. Gov’t intervention will “control” the market so as not to ruin the VLT that real estate produces both provincially and nationally. Real Estate is the easy way out for those that think they are entrepreneurs and want to get rich quick.

It’s simple…buy as many condo units as you possibly can and list them on AirBnb. It has worked for dozens of people that I know and countless thousands that I don’t.

This method has turned them into cash flow kings (and queens). In places like Vancouver and the entire PNW of BC, it’s a genius idea. Tourist seasons are breaking records every year, the world continues to flock here and the USA is really beginning to scare people away. I see the huge declining numbers outside the USA consulate these days… people want to be here, in Canada, and in Canada, I really mean the lower mainland of BC or Toronto.

So wait all you want, but a year from now, you’ll all still be frustrated still waiting for the stars to fall. Life is short… make a decision and then own it.

#81 Long-Time Lurker on 10.10.17 at 12:14 am

Logic tells us…. (Garth)

Yes. That is logical.

Live long and prosper, Garth.

Hey, Spock. I’m stealing your lines.

I had a friend who was a Mr. Spock fan. It took a looong time but he eventually got married. I think he overdid the eyebrow arch.

Andy meet Anna.

#82 Leo on 10.10.17 at 12:24 am

> Victoria blog dogs should meet up sometime. Commiserate. Wail. Grump.

We did, back in April https://househuntvictoria.ca/2017/03/05/10-years-of-hhv-time-for-a-meetup/

#83 Joe2.0 on 10.10.17 at 12:31 am

Bank givith
Bank takith away
Rinse and repeat.

#84 Ronaldo on 10.10.17 at 12:44 am

#38 Tccontrarian

”Just keep reminding yourself that 3x-4x gross family income is the centuries-old affordability ratio for a home.”
Actually, it was not until around the late 70s or early 80’s that the banks considered the other spouses income for mortgage purposes. Prior to that, average homes were valued at 2.5 to 3 times that of the single wage earner (generally the husband). It was the realtors who were pressing for the other spouses income to be considered so as to make it possible for potential home buyers to qualify. This had the effect of raising prices since families could now qualify for a more expensive home.

#85 joe on 10.10.17 at 12:45 am

an amateur landlord will not sell at a perceived lower price if rent is covering the expenses even with manageable monthly loss.
Lot of these new landlords in Milton,ON haven’t got the memo yet and still believe they are sitting on a gold mine.

My advice is to buy if your monthly carrying cost is equal to or up to 25% higher than rent. Mental peace is more important than paper loss.

#86 Black on 10.10.17 at 12:51 am

Why nothing about Vancouver for a while now? Is the market here permanently screwed because of ten year visas, and money coming in from foreign sources.

I know that Garth said that foreign buyers are only 6 % but I have read foreign money is coming in and family/friends of the foreign purchases are under thier family members name. I find it hard to believe it’s only 6%.

And I think Vancouver is going to be high, permanently. And all this talk about other markets going down….I was always waiting for Vancouver to go down….now….I feel like for too long, too many years I’ve watched and it’s still unreal! Now I’m thinking to move and the outskirts like Kelowna, Pemberton, Squamish are just as expensive….seriously…is it gonna give or what?

#87 Ronaldo on 10.10.17 at 1:00 am

#66 Tulips on 10.09.17 at 10:47 pm

There are many other places in Canada that are very nice, affordable and where you can live, work, raise children and live a very comfortable life. Too many people hung up on living in Toronto and the lower mainland.

#88 SNAKE PLISSKIN on 10.10.17 at 1:01 am

Yield is hard to find in the stock markets, and you have to pay tax on it. And you could get hit hard, like the dot com bust, the income trust fiasco, the GFC 08/09, the oil bust, etc.etc…..tax free gains in the housing market folks, and easy financing at low interest rates. No brainer.

#89 @ Smoking man on 10.10.17 at 1:09 am

Dear Smoking Man, please stop with your music video links. You have a terrible taste in music and we shouldn’t have to suffer for it.

The Silent Majority

#90 Fortune500 on 10.10.17 at 1:32 am

While I agree that B-20 will likely not be a non-event, I think recency bias is a very strong factor here. We have seen change after change made to housing and lending from various governments over the last few years in an effort to take some wind out of the sails, and every one has failed to make a significant or long lasting indent on elevated house prices.

I think Andy is right to wait, but obviously it takes the most determined and Buffet-like among us to play the long game at this point. Bulls have a decade of ‘proof’ to convince you with at this stage.

One thing I do find interesting when I read the various realtor press releases, or peer into the Real Estate bull orgy that is RedFlagDeals, is the argument that this will impact first time buyers and that is unfair. They don’t seem to connect the dots in regards to the fact that this will force prices lower, therefore benefiting the first-time buyers. It just wont happen over a one month period.

#91 slippery cricket on 10.10.17 at 1:37 am

Yes Andy I feel your pain, common sense told you to wait and that backfired big time. Needing to move your family is no fun. Rents keep rising keeping up with prices that are unaffordable. I hear parents wanting to send their kids to post sec. school in Victoria and I advice them against it informing them of the current rental issue. At this point you either rent and wait,or start thinking of a more affordable city. It is hard to gauge how high prices can go, but they have gone a lot higher in other cities and people are still buying. Not sure why everyone thinks $600,000 is crazy when yvr and TO is double that. Good luck.

#92 bring_it_on on 10.10.17 at 2:05 am

You seem to have very little empathy for these families caught in a terrible affordability crisis in BC, but loads of sympathy and hand-ringing about the welfare of those poor well-off doctors who may now be required to pay their fair share of taxes. Did it ever occur to you that you have blinders on to certain segments of the population? Why was there no response to the individual a few days ago who highlighted the recent study of the influence of foreign buyers in the BC market:
https://www.sfu.ca/content/dam/sfu/mpp/pdfs/Vancouver's Housing Affordability Crisis Report 2016 Final Version.pd

Must be because it is a leftist, biased, article, written by a second-rate scholar? Try to understand that it is a *&*&(* of a time in the rental market in BC for the past few years, where vacancies are almost nil and the price is exploding, with people being renovicted and tossed out seemingly every year. I am a mid 55 late boomer who has “made it”, but do strongly believe it is much more difficult now for this younger age group to find their way…..

#93 FLHTK on 10.10.17 at 3:10 am

#14 Stone- I bet that’s a great feeling! Hope I can get there someday.

#94 Reality 1 on 10.10.17 at 3:20 am

to # 32 TurnerNation

And that’s 1 million AFTER TAX dollars, plus interest and all the associated costs for 25 years in an unknowable interest rate future.

Not to mention the OPPORTUNITY COST of alternate uses for the funds committed.

For a glorified storage shed – certainly not a “pride of ownership” proposition.

PS – You made some interesting posts yesterday – you clearly are a “thinker” and your comments are always worth reading.


#95 Michael on 10.10.17 at 3:28 am

“Andy’s primary job is to save, ensuring… his kids have the pile of money they’ll need to get educated.”

What is with the obsession of paying for offspring’s education? How about instilling a work ethic so they can pay for it themselves.

#96 Reality 1 on 10.10.17 at 3:37 am

Pretty clear to me that Canadians suck at math and risk assessment.

Assuming that the economic context / dynamic will be the same for the next 25 years is borderline stupid buying at 3 to 4 times income – at 10 times is simply moronic / cretinous.

#97 Bob Dog on 10.10.17 at 3:56 am

You clowns need to realize the gov of Canada cares about Canadians about as much as the gov of North Korea cares about North Koreans. If you can, get a nafta tn or h1 visa and get out. trump is a certified tool but at least his admin represents the people who live there.

You are all easily replaced and are being replaced at the rate of about 1% per year.

It was a great run but I believe the country is lost.

#98 nubbers on 10.10.17 at 4:01 am

The Forever House becomes a millstone when property prices crash and you can’t afford to move to take up a new job. Been there, done that.

#99 Stone on 10.10.17 at 7:00 am

#93 FLHTK on 10.10.17 at 3:10 am
#14 Stone- I bet that’s a great feeling! Hope I can get there someday.


You definitely can if it’s what you really want.

#100 Reality 1 on 10.10.17 at 7:13 am

to # 80 Vanman

Hello, the tax hungry provincial governments are already preparing (esp. Ontario) legislation to control the AirBnB phenomenon. Occupancy bylaws already prohibit this in some locales and increasing numbers of condo corps are implementing rules against precisely this.

And the cities definitely do not want to forgo the existing cash flow of the occupancy taxes collected from licencsed hoteliers.

Do you really think that this is not a soft target for the tax man.

You know “dozens” of people who have bought condos they intend to rent because you sold them to them with that sales pitch.

Obviously a RE shill / agent of some sort.

#101 the Jaguar on 10.10.17 at 8:07 am

Garth, will the new stress test be different than the current qualifying rate used for terms three years and under in that it will now apply to all terms?

#102 Gravy Train on 10.10.17 at 8:13 am

I was watching The Good Doctor last night, and a patient said to his doctor: “I’m a real-estate guy. There’s an old saying: ‘You can have it fast, you can have it good, you can have it cheap—pick two.'”

#103 crowdedelevatorfartz on 10.10.17 at 8:32 am


Russia’s foray into Syria not going quite as well as they planned? Their Syrian “allies” not fighting as well as expected?

The US routs ISIS in Iraq and guess where the cockroaches run……..to Syria……en mass.

Lets see how popular Putin is in another year as the Russian body bags start arriving home in the hundreds….then the thousands…….


#104 Wrk.dover on 10.10.17 at 8:54 am

It took until this point in his life to gather 140K, which probably includes the full purchase price of his furnishings and car -not actual distressed sale value- which he doesn’t claim to have actually saved (heir?), dollar by dollar…and another 500K is going to show up while he raises two children on 100K/yr (gross not net) by paying mortgage and maintenance, insurance and tax instead rent?

I doubt that.

#105 crowdedelevatorfartz on 10.10.17 at 9:38 am

And from the “Repairs and Maintenance dept.” files


Nothing like flying hundreds then thousands of sorties to wear out equipment and maintenance crews…….
Methinks the Rooski Bear may eventually declaw itself…….

#106 crowdedelevatorfartz on 10.10.17 at 9:44 am

@#100 Reality1

OR you have a whole new meaning to “airbnb” when your rental property is “ventilated” by bullets


and two days later…..The West Van police are still trying to find( and interview) the renters or owners.

The house is managed by a Richmond Property group and apparently owned by an offshore company. Two guesses as to whether the house was purchased with cash from casino “winnings”.

#107 Midnights on 10.10.17 at 10:20 am

And this is exactly what I’m seeing when it comes to rent and rentals…

#108 IHCTD9 on 10.10.17 at 10:43 am

Andy, here is an option you appear to have not considered:

Pull out your old resume, and your wife’s. Start updating and polishing both of them. Start casting lines into communities that are not filled with insane people, insane prices, and can offer decent employment close by for BOTH OF YOU.

Consider that my household income is a measly 120K gross, that’s two people working. Our house was paid for in my early 40’s with ease, plus we were able to build a nest egg worth 100’s of thousands at the same time as we were paying off the house. We maintained an emergency fund of 20-30+K at all times. Cars and toys are bought with cash. No debt. We could afford to send both our kids to private schooling since JK. There have been zero unexpected life situations that have caught us with our pants down financially – not a single one.

Sound good? The reason for our financial ease is that despite our pathetic incomes, our cost of living still paled in comparison. Mortgage payment was 1200.00/month at 6.4%, income was 10,000.00/month. Rates only went down from there, our payment sagged to less than 600.00 measly dollars per month by the end.

A low mortgage payment set us up for financial success. You can bet rushing in for an insanely high one will set you up the opposite. IMHO, you need to get busy accepting renting for life, or move.

#109 fancy_pants on 10.10.17 at 11:00 am

just reflecting on some of the comments today and this blog theme message the past ten years of imminent rate increases and RE softening, the steerage here that hung on every word waiting for housing to fall really did miss the boat. take the golden nuggets offered here on investing and not becoming house poor, but don’t blame anyone but yourself for not using your own noggin. in the end you are responsible for your choices or pay someone to make it theirs.

#110 Lee on 10.10.17 at 11:04 am

#107 Midnights,

Firstly, do not listen to mainstream media when it comes to real estate. They just take their walking orders from gov.

Secondly, buy Canadian Apartments Reit. Well managed and have distributed their debt over eons so increases in interest rates should not effect their bottom line much.

Finally, when old people begin to die in mass numbers their will be a residential unit glut. This won’t effect a Reit’s bottom line much though. They’ve always got really old buildings that have to be decommissioned and this inventory will be released to deal with the glut. Great long-term planners.

#111 Tony on 10.10.17 at 11:23 am

Re: #110 Lee on 10.10.17 at 11:04 am

Newsflash… The stock market has never been this overvalued in history. It takes money to continually hedge the market indexes.

Categorically wrong. P/E ratios are not at any historic high. — Garth

#112 the2ndcomingofjohngalt on 10.10.17 at 11:36 am

#86 Black on 10.10.17 at 12:51am.

Well, if you’ve live here for any considerable period of time you can see that the real estate market in the lower mainland has long ago decoupled from any metric of the local economy. Get used to it, and adapt because it’s not going back to some period of recent history(10-20years) ago. Granted, Vancouver’s position is unique considering the disparity between local incomes,and the cost of living compared to other major metropolitan areas of North America ,and the rest of the developed world. Just a few thoughts, maybe pay more attention to Garth’s previous post, it’s not all about the money, re;(life)

#113 Hamilton on 10.10.17 at 11:54 am

Hi Garth,

Is it just me or is his math way off?


#114 Howard on 10.10.17 at 12:03 pm

#110 Lee on 10.10.17 at 11:04 am

Finally, when old people begin to die in mass numbers their will be a residential unit glut.

That’s not going to happen for a looooong time.

The Baby Boomers are going to be the longest-lived generation in human history. In fact, I expect their life expectancy to represent the peak for our species. Gen Xer and Millennials, leading much more stress-filled lives and all the health consequences that flow from that, will probably die somewhat younger.

With the average Boomer in one’s 60s and with most of them heading for the century club, it’s going to be a long wait.

#115 TurnerNation on 10.10.17 at 12:03 pm

#94 Reality 1 almost said same to you yesterday – facinating take on overseas stuff.

#116 People watching people on 10.10.17 at 12:25 pm

I find it comical that there are so many people who see the Foreign tax, and Stress test v.1 as market stoppers. These are taps on the breaks affecting small segments of the market, much like the quarter point interest rate hikes. Taps on the breaks. B.20 is a harder stop, to me, marking the first realiazation that more needs to be done because the house horny are out of control, leading to a miss-allocation of capital that could lead to worse problems if there was a collapse. Think overconcentration of the economy into one product a la Venezuela and oil (50% GDP/95% of exports). Diversity isn’t just for your portfolio.

#117 ronh on 10.10.17 at 12:30 pm

Millennials as homeowners:


Grandson, go into the trades.

#118 Gulf Breeze on 10.10.17 at 12:56 pm

500 homeless per day using services in Kelowna this year, up over 300 from last year and you wonder why people are rushing to buy. Also the fabled downturn has yet to materialize. Unless you consider a potential 30% drop from say, $1,000,000. to 700,000.00 a true reversal to the mean.

And somebody righteously complaining about having to move every year with 2 infants isn’t ‘whining’. They have real existential concerns.

Waiting for a downturn that will make,housing affordable to the masses almost anywhere in B.C. has been a mistaken strategy.

When B.C ‘opened its doors to the world,’ they created a stampede of people looking to park money in a ‘safe place.’

We are living through the consequences of provincial liberal party corruption, greed and indifference to the middle and lower classes, disguised as a kind of internationalism. Any questioning of the wisdom of this sea change, tarred with ‘racism.’

Any doubts about this will be erased by reading the Vamcouver sun, Globe and Mail and other relatively reputable publications.

#119 Mike in Toronto on 10.10.17 at 1:03 pm

#3 Joey

Yeah, if you need a house, can afford what you need, will be staying in it for 10 years plus, just buy and don’t look back. That advice has always been good.

In the worst case you’re “underwater” in three years. CMHC guarantees your mortgage renewal. Big deal.

Personally? I would rent a townhouse from large, reputable rental company. Your only problem seems to be that you’re being shuffled around by penny ante landlords.

#120 Big Apple on 10.10.17 at 1:07 pm

Some RE porn: c$ 8224 per sq ft in Manhattan.


Those are some sweet digs.

#121 PastThePeak on 10.10.17 at 1:20 pm

#79 Ronaldo

I am with you on not giving advice w.r.t. calling the markets (RE or equities). The corrections do come – they always have – but sometimes it is much longer than is accepted. And they do bounce back too – but it can take awhile – different each time. Californians never thought their RE would drop – and it was that way for decades – but eventually it did (for a few years, and shot up later). Likely a bit like parts of BC.

IMO lower mainland BC is different from Toronto. In the former this is more of a “real” land limit, there is both closer proximity and greater historical Chinese influence, and many Canadians with means still want to retire/live there.

GTA is much larger, foreign money will have less influence, Statscan showed that housing stock increased more than family formation, the land restriction is regulatory, not fixed. Etc. A different beast, and one which I expect is more prone to correction. I can’t see GTA pricing surviving a recession (assuming it moves past the current elevated levels and OFSI rules).

#122 PastThePeak on 10.10.17 at 1:24 pm

#87 Renaldo
There are many other places in Canada that are very nice, affordable and where you can live, work, raise children and live a very comfortable life. Too many people hung up on living in Toronto and the lower mainland.

This is what I don’t get. This is a huge country, and if you want to own a home, there are many smaller cities and large towns where you can find employment, and the price of homes is much less.

The benchmark price of a single family home in Ottawa is still under $400K. Lots of good employment options (unemployment rate is around the national average), with high-tech being reasonably strong.

#123 PastThePeak on 10.10.17 at 1:28 pm

Categorically wrong. P/E ratios are not at any historic high. — Garth

Not at a historic high, no – but not far off the 2000 bubble either. Currently S&P 500 P/E is ~25, and when the equity markets rolled over in 2000 it was around 30.

#124 aa3 on 10.10.17 at 1:36 pm

There will be three or four generations of knife catchers on the way down.

Andy and his buddies are the first generation knife catchers. The guys who missed the entire run up, and are desperate to get in on the free money of house appreciation.

#125 Victor V on 10.10.17 at 2:08 pm

Sears Canada throws in the towel, seeks total liquidation


TORONTO — Sears Canada is closing up shop, announcing Tuesday that it is seeking court approval to close all of its stores across the country and lay off about 12,000 employees.

#126 jess on 10.10.17 at 2:19 pm

103 crowdedelevatorfartz on 10.10.17 at 8:32 am

Putin is one of the richest men in the world! have a Russian foreign ministry spokesperson vowed that “any anti-Russian actions by the Canadian authorities will not be left without an adequate response.”


Bill Browder tells the Sergei Magnitsky story to cbc


#127 rainclouds on 10.10.17 at 2:25 pm

CRA and courts makes Van developers roll over. Looks like every new build condo development in lower mainland is going under the microscope. NDP is going to help with owner disclosure. the table is turning for spekkers


#128 westcdn on 10.10.17 at 2:33 pm

If I was the fearless leader of Alberta, I would have entered negotiations to amalgamate with Montana. It is just I don’t think Alberta’s best interest is served under confederation – not going to happen because I am a type “B” introvert. I have a hard time with an “alpha”. They bring out the worst in me.

It is not because Albertans are greedy. We have given a lot to the confederation of Canada and my patience for being a partner is low. It would be an ugly divorce but there comes a time when you realize it is the best decision for the future that matters. There is no point being anchored to a position when you are not respected.

I don’t like it when I can see both sides of an issue and have to decide where to land – usually somewhere in the middle where I get shot at by both sides. The Energy East pipeline was debatable. In the end, it was TransCanada’s decision and I am not privy to their thinking but I know money/profit was involved. Whether Alberta’s tar sand production would get a better price is unknown but it would have certainly given Canada a better opportunity to compete against Venezuela and Mexican heavy crudes. Texas has by far the most refineries in the world to process heavy oil. We are all played – links provided on demanded but the ones I found are boring. The rest of the world doesn’t seem to realize there is far more heavy crude than light so the world market for heavy crude outside of Texas is low. There are problems with heavy crude production but they are less than coal plus Venezuela doesn’t seem to have problems with leaking pipelines and sinking tankers.

At the end of the day, I have to make decisions and I think Canada has shot itself in the foot. 100 ducks killed by tailing ponds matter more than those greater numbers killed by windmills – give me a break.

Interesting corporate news release on AI. https://www.tmxmoney.com/en/news/company_releases/index.html?rkey=20171010C8636&filter=8242

Canada can compete. Thoughts for the day.

#129 Reality 1 on 10.10.17 at 2:35 pm

to # 115 TurnerNation

Well, they say that “Great minds think alike, but fools seldom differ”.

My father told me that my existence would be a hard one because I bore the “burden of intelligence”.

I retorted that the load without it was even heavier.

He also said “Ve (we) get too soon ault (old) and too late schmart (smart).

About that, he was more correct than he knew. I had no retort for that one.

Cheers !

#130 Reality 1 on 10.10.17 at 2:41 pm

to # 116 People watching people

Aside from your spelling errors (brakes, not breaks) I agree with both your imagery and your assessment.

Takes a lot of resistance to stop a freight train, but enough small rocks on the tracks can in fact cause a derailment.

#131 SCD on 10.10.17 at 2:52 pm

When it comes to trying to purchase a house in Victoria, I think one often has to start out with a suite and or room mates, at least in the first few years. With many lenders, having the additional income from those renters can increase your qualification amounts.

Getting the boot from your landlord sucks, as does trying to find a reasonable new rental situation especially in Victoria. We have never done this to any of our tenants.

#132 AGuyInVancouver on 10.10.17 at 2:57 pm

#75 I like cookies on 10.09.17 at 11:23 pm
More deals are falling through in Vancouver… how bad is it going to be when the new rules kick in? https://beta.theglobeandmail.com/real-estate/vancouver/vancouver-home-sellers-take-a-wild-ride/article36518216/
_ _ _
Let’s tease some facts from that article as many won;t click on the link. It shows why prices in Vancouver and to a lesser degree Toronto will not correct to teh degree expected:
“…We got a notice on Friday saying they were having trouble getting their mortgage. They need a mortgage for $3-million, and they couldn’t get it – they could only get $1.5-million. So they came back and said we can get our money out of China, but not until March. So now my closing date is March. That’s high risk for us, but it offered me a two-year rent back.”

To her dismay, the buyers plan on tearing the house down, but that was the case with all the offers, she says. Ms. Scott had purchased the house in 2000 because it is a character house in excellent condition. There are five houses near her that are set to be demolished and she estimates that one-third of the homes on her tree-lined street are empty…”

As long as people deny these facts, they will be waiting for a housing correction that never comes.

#133 gary smith on 10.10.17 at 2:59 pm

#130 Reality 1 on 10.10.17 at 2:41 pm

Aside from your spelling errors (brakes, not breaks) I agree with both *your imagery and *your assessment.

#134 P/E on 10.10.17 at 3:01 pm

#111 Tony on 10.10.17 at 11:23 am

Categorically wrong. P/E ratios are not at any historic high. — Garth


This is CATEGORICALLY interesting, though…

“Of course, in this current market bubble, we doubt anyone would care much if at all about fundamentals, as the only games in town are i) excess liquidity, ii) momentum and iii) finding a greater fool to sell to before the bubble really bursts and things like P/E multiples and generally fundamentals are again relevant.”



#135 TurnerNation on 10.10.17 at 3:11 pm

Cheaper homes in Hamilton ON folks load up!
Then exhale.


A large burst of particulate pollution escaped from ArcelorMittal Dofasco Sunday, forming a brown plume over the steelmaker that drifted across some city neighbourhoods.

It’s the latest in a series of pollution releases over recent years.

#136 jess on 10.10.17 at 3:12 pm

Software Apocalypse


#137 Tazi Bnu on 10.10.17 at 3:18 pm

I want to hear people’s opinions on the federal Government’s plan to go after those dirty tax cheats who don’t pay their fair share? ie. employee discounts

A government employee doesn’t get any employee discounts, so it isn’t fair that private sector employees get a discount at their employers. I’m guessing the incessant Ford employee discount ad campaign alerted the CRA to this great injustice.

This government is all about fairness. It’s definitely not about raising taxes for a spendthrift government. That’s just fake news being spread from the extreme far-right organization known on the dark web, where those evil Trump supporting deplorables hang out, as the Conservative Party of Canada. /Sarcasm

#138 TnT on 10.10.17 at 3:31 pm

#126 jess on 10.10.17 at 2:19 pm

The Russian sympathizers here have no idea what Putin’s regime is all about.

Bill Browder hit a home run with this book and the creation of the Magnitsky Act.

Red Notice: https://www.goodreads.com/book/show/22609522-red-notice

Anyone who reads this true story and still supports Russia’s global influence is willfully ignorant and hell bent on hating America.

The clear fact that more Russians leave Russia for America than the other way around tells you all you need to know.

#139 jess on 10.10.17 at 3:33 pm

Russian Minister: Moscow to connect Kurdistan’s oil, gas pipelines to Black Sea — Black Sea via Turkey
Mewan Dolamari Mewan Dolamari |
October 08-2017 01:40 PM



#140 Failed Measures on 10.10.17 at 3:33 pm

Yes, Andy could wait for the highly anticipated measure to cool the market – or he could research the history of such measures, realize that they have done absolutely nothing to kill the market, and buy now or rent knowing that will be his lifestyle.

Remember, the Fall 2016 Stress Test was supposed to kill the market? It was a moister millennial killing test that would be the equivalent of spiking rates 2% and wiping out between 15-20% of buyers.

And how did that turn out? Right, prices in places like TO and Victoria, and all their surrounding communities, took off with double digit increases. Who cares if CMHC insured mortgages dropped 40% at the same time – the point is that credit or cash was still found.

Now add this to the pile of failed measures over 9 years – like the elimination of the 0 down 40 year amortization; changed loan ratios for HELOCs; increased down payment rules in 2016, etc – and all have failed.

If people don’t think that people will find a way around these tests, as they have done with every other ‘cooling’ measure over the past 9 years, then people really are naive.

Also, remember Andy, the government can rescind any ‘cooling’ measure they put in at any point. If things get bad, you honestly think that one level of government will not put in a demand measure to stimulate prices? Think of BC where a foreign buyers tax was put in and then a new down payment program was put in half a year later…which say condos and townhouse prices take off like a rocket.

I would love to believe that B20 will have an impact, BUT nine years of failed cooling measures tells me otherwise.

Every new change that pops up every 6 months is viewed as a market changer here – but nothing happens. All hold their breath that the ‘next one’ will be it…

The only time anything happened was when the Ontario provincial government intervened with a comprehensive strategy – rent controls and speculator taxes for domestic and foreign speculation. And those can be taken back at any time.

#141 Lee on 10.10.17 at 3:33 pm

#114 Howard,

I was actually thinking about all the 80-100 year old women who have lived well beyond anyone’s expectations, and thankfully so. When baby boomers die is far too long a time to plan for other than knowing real estate in Toronto will be completely unaffordable for anyone other than NFL players at that time.

#142 Lost...but not leased on 10.10.17 at 3:48 pm

# 74 Ponzius Pilatus

Re CRA Taxing staff discounts

You agree….Are you being facetious….?

Aren’t there bigger fish to fry ?

So..say Value Village employee gets 20% off…and buys some clothing with price tag of $10…CRA is going after that $2 ?

Nickel and diming sends a bad message.

#143 jess on 10.10.17 at 3:56 pm

Multinational companies are using this loophole to avoid millions in corporation tax
Prem Sikka

By overloading balance sheets with debt, companies claim tax relief on the interest payments and then shift profits offshore.

By overloading balance sheets with debt, companies claim tax relief on interest payments and effectively shift profit to low/no tax jurisdictions. The tax relief reduces their taxable profits and tax liability.

Consider the example of Arqiva, a telecommunications company which controls a network of over 1,000 radio and television transmission sites. It is owned by the Canadian Pension Plan and Macquarie Bank through a network of offshore companies.

It is heavily financed by shareholder loan notes bearing interest rate of 13-14 per cent even though the interest rates are at a record low…” read further at


This week Parliament begins consideration of the Finance Bill. It contains clauses to implement recommendations from the Organisation for Economic Co-operation and Development (OECD) which would limit the amount of tax relief on interest payments that companies can claim.


#144 Hamilton on 10.10.17 at 4:04 pm

RE: TurnerNation , this is a weekly occurrence if you down by Dofasco done normally on windy days so no one notices.

This all can be yours 380 BEACH RD, HAMILTON, Ontario L8H3K5 a 50 year old house.

for $389,000
MLS® Number: H3219298

Proof that fools are always searching for the greater fool.

#145 IHCTD9 on 10.10.17 at 4:04 pm

#133 gary smith on 10.10.17 at 2:59 pm
#130 Reality 1 on 10.10.17 at 2:41 pm

Aside from your spelling errors (brakes, not breaks) I agree with both *your imagery and *your assessment.



Good Grief…

#146 Reality 1 on 10.10.17 at 4:09 pm

to # 138 TnT

Why would you conflate someone presenting a factual viewpoint that differs from the MSM narrative with being a Russian “sympathizer” ? You seem to equate differing substantiated opinion on Russia’s activities with ‘hating America’.
Really ?

Your critical thinking apparatus might need some tweaking. Like many issues, geopolitics is not “black and white”. America has its’ CIA and Russia its’ KGB – both seeking advantage in their “black ops” ways.

I doubt that you would like to sit down for a beer with either groups’ operatives.

Or maybe YOU wouldn’t.

Btw – the posting at # 139 by Jess seems to give credence to the IDEA that Russia is using diplomacy, not war, to further trade and development in the Middle East.

Also, maybe Russians don’t want Americans in their country, but they did make an exception for the hero Edward Snowden.

#147 Entrepreneur on 10.10.17 at 4:13 pm

After reading the comment section the great leaders of all levels have forgotten to listen to the people that elected them.

Who really can afford those expensive homes besides debt on debt, mom & dad, money laundering, undeclared rentals which leaves most of us honest ones out.

And the leaders did not see this coming? Or could care less to keep the system running? And because of all this chaos in housing the consumer is dead in the water for the community.

#148 Reality 1 on 10.10.17 at 4:20 pm

to # 133 Gary

You’re joking, aren’t you ?

Please tell me that you are – I mean, really?

I mean, why not (erroneously) put a star (*) on the first ‘your’ in the captioned sentence as well and make it a trifecta of ignorance?


Canadian education I’m guessing.

#149 Reality 1 on 10.10.17 at 4:32 pm

Does anybody else wonder why all the people stating / repeating the mantra that “real estate only ever goes up” are only recently hot to buy some?

I mean, if this is such a universal truth, what took these latest adherents so long to come to that conclusion ?

And why would anyone sell then – I mean the market should be “no offer”, shouldn’t it ? The ‘spec / house flippers – why would they sell if it’s only worth more real soon.

Hard to believe that people can be that bereft of critical thinking – especially when it comes to a potentially lifestyle altering commitment.

Hmmm – memo to self – locate a bridge to sell.

Well, I guess somebody has to win and somebody has to lose – that’s what makes markets

#150 Lost...but not leased on 10.10.17 at 4:51 pm

Re pipelines etc.

These megaprojects are often concocted during boom times and compounded by overly optimistic projections.

When things tank, the business case folds, yet people enter some irrational twilight zone of false hope economics.

NEW Oil and gas from North America is its own worst enemy, as it gluts the global market and depreciated prices..according to economist Jeremy Rubin. The Saudis have historically fought to keep market share and can with the cheapest oil to produce.(aka can easily manipulate the market.)

The oils sands was simply an optimistic blip at a point in history, and likely never to recover, thus the collapse of present and future pipeline deals.

FYI: re some numbers/data

Approx. 1/2 of oilsands exports (1.2 million barrels) are raw unrefined bitumen.

In Feb 2016, Alberta projected bitumen @ $10 per cubic meter or $1.50 barrel.

In Feb. 2014, Alberta projected bitumen @ $421 per cubic meter.

However ,bitumen requires a price of $60-70 /barrel to be viable.

Koch brothers built a refinery in Minnesota in the 1980’s that handles approx 300,000 barrels of Oil Sand Bitumen /day..the largest single purchaser…bitumen allows them to make some of the best margins in refining world.

Even if Alberta refined the bitumen, it would not only be expensive, it would glut the world market.

Basically, tying ones economic future to a pipeline transferring bitumen is tantamount to cutting ones throat.

THE END of pipe dreams….

#151 Wheresthemath on 10.10.17 at 4:56 pm

#45 Dolce Vita on 10.09.17 at 8:52 pm
#30 I thinks I know something



Real Estate Association of Greater Vancouver figures show the median price of a detached home is down more than $500,000 since February, to $1.7 million.

That is -23% in 7 months.

Detached peak in rear view mirror, numbers say correction to me.

And that is w/o the effect of B20 to come in early 2018, may accelerate the correction.

Just keep reading Flop’s posts for more verification.

Just curious where you got these numbers. I looked at the REBGV stats:



Sept Median price: $1.61M
Feb Median price: $1.50M

Seems like an increase to me. I was really hoping you were right, but maybe you can show me that I’m wrong?

#152 Alistair McLaughlin on 10.10.17 at 5:17 pm

@ #150 Lost… but not Leased, have you ever seen a major pipeline project go bankrupt after it was built? Me neither. There goes your theory.

Also, the reason we ship unrefined bitumen is because the margins for upgrading and refining just aren’t that high. Massive up front investment is required to build upgrading and refining facilities and the ROI is very low. The highest ROI comes from extracting it from the ground and selling it. Everything after that is a lower margin activity.

In other words, the opposite of what most know-it-alls who prattle on about “value added production” will tell you. If you bothered to learn a bit more about energy economics before lecturing others on it, you wouldn’t make such basic errors in fact, and you wouldn’t be embarrassed by your own public displays of ignorance.

#153 tulips on 10.10.17 at 5:28 pm

#149 Reality 1 on 10.10.17 at 4:32 pm
Hard to believe that people can be that bereft of critical thinking – especially when it comes to a potentially lifestyle altering commitment.


Bereft of critical thinking indeed. I recently had an argument with a friend who insisted 10% yearly house price increases in the lower mainland are not only possible, but they are probable. I asked for how long, and he said indefinitely, and he really believed that! I walked him through the math – today incomes are $100K and houses $1M for a multiple of 10x. If he’s right, then in 10 years the multiple becomes 19x, and in 20 years that multiple becomes 37x. For fun, I tried 100 years, at which point a house would cost over 7000x an annual income if my friend is right. Clearly house price increases will stop outpacing inflation at some point. Question is, what will it take for people to start thinking about this critically? That’s when it ends.

#154 tccontrarian on 10.10.17 at 5:33 pm

#111 Tony on 10.10.17 at 11:23 am

Categorically wrong. P/E ratios are not at any historic high. — Garth

Only the peaks of 1929 and 2000 were the P/E’s higher than now, I think. Being ‘long’ this market (SP500, Dow, Naz), is like moving to a higher level in the Titanic – when the prudent thing to do is get the H*ll off!


Traditional P/E is 16. We’re at 19. Tech bubble was 30. Relax. — Garth

#155 45north on 10.10.17 at 5:54 pm

Reality 1: Aside from your spelling errors (brakes, not breaks) I agree with both your imagery and your assessment.

gary smith: you’re

no Reality 1 was correct.

possessive adjectives in English and French:

Tnt: The clear fact that more Russians leave Russia for America than the other way around tells you all you need to know.


Failed Measures: Yes, Andy could wait for the highly anticipated measure to cool the market – or he could research the history of such measures, realize that they have done absolutely nothing to kill the market

it’s the lenders that determine credit. Generally they don’t make announcements but Dave McKay did (he’s the head of the Royal Bank). Try to keep up.

#156 tccontrarian on 10.10.17 at 6:00 pm

Supporting my previous statement:

“… looking at the cyclically-adjusted price-to-earnings ratio (CAPE), currently sitting right at 30, we’re well into rare territory. The CAPE was equal to or higher than it is today in only 59 of the 1,640 months going back to 1881, or less than 3.6% of the time.”

To me a ‘rare’ occurence such as this, means only one thing:
it’s only temporary, and will adjust (ie. correct) to more ‘normal’ levels.

#157 TnT on 10.10.17 at 6:09 pm

#146 Reality 1 on 10.10.17 at 4:09 pm

Geopolitics is not a Black & White issue however the end game is.

There’s a huge difference in our lifestyle if Russian influences prevail vs. if American influence prevail.

#158 Manitoba Whale on 10.10.17 at 6:10 pm

…and make it a trifecta of ignorance?

Awesome word play dude.

#159 Manitoba Whale on 10.10.17 at 6:13 pm

NEW Oil and gas from North America is its own worst enemy, as it gluts the global market and depreciated prices..according to economist Jeremy Rubin….

Don’t know if I would join his bandwagon, he was touting $200 or more per barrel oil less than a decade ago.

#160 YVR Renter on 10.10.17 at 7:11 pm

Change is in the air for Vancouver single family dwellings. We received an email from a realtor today stating that the sales to listing ratio is 29%….almost a buyers market, are we ready to buy!? Wow, what a change from last year! Realtors calling us, and admitting its’ a buyer’s market. We went away for 3 wks, got back last night and all the same houses are STILL for sale….nothing is moving. We advised said realtor, no-we are watching on the sidelines for the prices to actually drop significantly. And with numbers like these, they should.

#161 Tony on 10.10.17 at 7:22 pm

Re: #156 tccontrarian on 10.10.17 at 6:00 pm

Factoring out dubious or creative accounting and stock buybacks puts the CAPE ratio around the 48 mark today.

#162 Tony on 10.10.17 at 7:45 pm


#163 dosouth on 10.10.17 at 8:02 pm

Kids and their “at whatever the cost” attitudes. Hope this dude takes your advice but probably not. Divorce is the next step after a few months or years of fighting over finances and each pointing the finger at the other saying….”You made me do this…”

#164 PastThePeak on 10.10.17 at 9:03 pm

Traditional P/E is 16. We’re at 19. Tech bubble was 30. Relax. — Garth

Garth, where are you getting your numbers? The S&P 500 PE ratio (using trailing 12 month of actuals) has October 1st 2017 being at 25.14, while the peak of the dot com bubble (August 2000) was at 28.

That S&P 500 PE ratio actually climbed a fair bit higher even as the market fell, do to lower corp earnings – the peaks were in winter 2002 toping out at around PE=46 after a short rally, before the market fell 29% in 6 months.

I don’t know if the market will have a strong correction or not, but PE ratio based on actuals (not forecast) is back in the late 90’s territory. Of course, back in the 90’s the ratio become elevated for a couple of years before the correction, so there is no doubt some ways to go.

#165 Lost...but not leased on 10.10.17 at 9:19 pm

#152 Alistair McLaughlin

Your rebuttal makes no sense whatsoever….please at least try to challenge the numbers quoted.

Tar sands “may” have been economical to mine when world oil prices were high…but when OPEC wishes to can flood the market with cheap oil…which guts the tar sands viability.

That’s not market certainty nor worth a gamble to build any new pipeline…which is why it is dead.

#159 Manitoba Whale

Rubin’s previous prediction is irrelevant..his contention is that refining Tar sands and products of Frakking glut the world market, depreciating the world prices….hence counterproductive.