Another big week for poor Bill. More on that in a minute.
First, the B20 bomber and the much-misunderstood stress test. Will this new level of federal intervention in the horny housing market really make a difference? Critics, doubters and scared realtors are bravely saying, no. People will just go to credit unions, they say. The banks will get a round it by extending amortizations. And meanwhile scads of moisters are rushing to get pre-approved at pre-stress rates so they can accelerate a buying decision while prices remain lofty but rates remain low.
It’s important to understand the banks want this. And they provide more than 90% of Canadian mortgage financing. Increasingly worried about risk, they’ve been encouraging beggarly and prickish appraisals, beating up on self-employed people and untrustworthy commissioned salesguys and adhering strictly to debt servicing ratios. But they want more. They seek a way to be shielded from buyers who got a Bank of Mom down payment to avoid CMHC insurance and the existing stress test (which they’d fail). So B20 is it.
Says BMO: “This will have a significant dampening effect” on the housing market. “It will dampen the housing market in 2018, probably more significantly than we saw (with) the earlier federal measures.” This is also what bankers desire. Mortgage growth can slow and they’ll make billions. If existing loan portfolios can be rendered safer over the years to come with a universal +2% threshold, that’s good for profit stability and shareholders.
Recall this, too: B20 means anyone with an existing mortgage who wants to switch lenders must go through the testing process, as well as meet LTV (loan-to-value) guidelines. So if you got laid off, have a spouse on mat leave, are going through a divorce or saw your real estate decline by 20%, it could be bad news. The bank regulator has just given a significant reason to never, ever, ever, ever change your lender. So is your bank going to make you a super offer upon renewal to keep you as a client? Dream on.
As for getting around B20 by taking a 30 or 35-year amortization so monthly payments are lower, and thus the income required, no real rescue there. Anyone with less than a 20% down payment is required by law to apply for and be granted CMHC mortgage insurance (which costs a bundle) and cannot have an am of more than 25 years. People opting for a longer period will obviously be red-flagged by lenders. More significantly, if OFSI (the bank cop) sees leakage thanks to a flood of longer amortizations, it will act. Meanwhile you’ll be left paying way more interest. Bad idea.
Credit unions? Seriously? They’re minor players in a world of lending behemoths, thinly capitalized and in no position to substitute for the Big 5. Besides, outfits like Meridian and Vancity already pose big real estate-related risk to Ontario and BC, and you’ll likely see those governments opt to streamline CU regs with those of the feds.
The biggest threat B20 poses is to reduce the amount of available credit by 10% (TD’s estimate) or 20% (the mortgage industry guess). As mentioned here last week, it could mean a family shopping for a $725,000 house today will have to reduce their target to $570,000 after the test (which will be in place at most banks within three weeks). So if you have a $725,000 house to sell, guess what? You may now have a $570,000 property if you want to find a buyer. The feds (and the banks) are trying to walk back real estate valuations in a measured and sustained fashion, to reduce speculation, restore affordability and prevent the inevitable hard landing if nothing serious transpires. Besides, while B20 may reduce the size of new mortgages by up to a fifth, it does nothing to diminish the banks’ existing portfolios. It only trims risk.
What to do?
Don’t believe the crap being circulated about B20 being gutless or flawed. There will be no escape from its effects. By the way, you can thank all of the people who cheated after the moister stress test was brought in for insured mortgages. By getting down payments from family or subprime lenders, just so they could avoid the test (CMHC-insured loans crashed by 40% as a result), they forced OSFI to hammer down on everyone. Thanks kids.
Don’t bother getting pre-approved, either. Mortgage commitments are good for 90 days and only a fool would rush out and buy between now and the end of January. If houses could lose 20% of their value over the next year or two as credit is reduced, why on earth would you do this? So you can have lower payments on a house that just ate your equity?
Of course most Mills don’t care about debt, only payments. So look for another pop in condo sales in the next ten weeks. Then next year they can flood on here and complain about how they’re shafted.
Wow. At the bottom already. We’ve leave poor Bill until tomorrow. Talk about being screwed…
190 comments ↓
Unfortunately the next ten weeks will up condo prices so the decline will have to be much bigger to make those awful boxy homes worth buying. No pity for the fools jumping in now.
Bill Morneau ……. What is the purpose of a blind trust account. Why have accounts not in your name, in different provinces ???
Wait a minute Morneau-Sheppel actual helps their clients to dodge taxes legally!?!?!
Bill Morneau…..pooched?
How about impeached?
Let’s feed this guy to the dogs!!!
Spotted a realtor sitting on the front porch of an open house this afternoon, one fist on his chin holding up his head, the other hand holding his cell phone. He looked pretty defeated.
If he didn’t look so pitiful I would’ve yelled out: “You can almost hear the crickets!”
The last paragraph of the post is decievingly vague.
If a buyer us looking in Nova Scotia or small town Ontario or even Montreal, the risks are relatively low. Toronto or Van? Different storey.
How much of a spinoff or collateral damage will B20 really have?
“Of course most Mills don’t care about debt, only payments. So look for another pop in condo sales in the next ten weeks. Then next year they can flood on here and complain about how they’re shafted.”
=======
And naturally they will blame boomers and banks…but never themselves.
Millennial thinking 101
I was walking down the street with my wife, ahead of us we’re 2 mothers. I overheard them speaking and I was shaking my head.
One woman was complaining at how much their mortgage payment was per month. The other woman was agreeing and said and I quote; “it would be amazing to be mortgage free, it’s a huge chunk every month, that money could be used for an investment property” hahaha
So you’re complaining about your mortgage payments but if miraculously it was paid off you would swallow more debt. Wow, just wow!
Garth should we hold off on saying there will be an impending negative impact on prices? Let’s wait to see what transpires in next 6 months then assess. We’re doing an injustice to those who want to buy. What if prices don’t decrease? Just saying let’s not call it before it actually happens. We’ve taken this approach for 15 years now and a boy can only cry wolf so many times before people stop listening completely.
CONFIRMED PINK SNOW
This is a luxury condo that was sold in late July.
Bdwy Skrtn helped me report this one in real time and now it is officially Pink Snow.
Let’s have a look as to what happened there.
The details…
Paid 3.13m Jan 2014
Sold 3m Sept 2017(as you can see by my notes the deal was done on July 25)
And so this is kind of one I normally let L.S in Arbutus or someone sharpen my numbers but if we look at known expenses and the added complication of opportunity costs my rough estimate would be about a 375k loss but if I am way out then someone on here will fix it for me.
They waited roughly 3.5 years to crystallize the loss is my main point.
Perhaps one final thing of note on this case is he has a few neighbors in the same boat that I have in my Pink Folder and they were all roughly chasing 4 million as their starting ask price and now this guy bailed first got a decent amount despite taking the loss and now the other cases are growing mould…
M43BC
501- 5131 Brighouse Way, Richmond Sold on July 25th 2017.
Dec 6:$3,990,000
Jun 10: $3,850,000
Change: – 140000.00 -4%
https://www.zolo.ca/richmond-real-estate/5131-brighouse-way/501
https://evaluebc.bcassessment.ca/Property.aspx?_oa=RDAwMDBLMkI4Vg==
#148 VanIsleStyle on 10.22.17 at 3:18 pm
#136 Stan Brooks you obviously don’t work in trades. No robot will ever compete with the work of technical trades, which includes plumbing. You’ve been watching too much Star Trek. Plumbers don’t receive any credit… they’re pretty much on par with janitors. Plumbing service work involves a constant barrage of headaches and problem solving that most other professions don’t even come close to comparing to. I know… I do some occasional plumbing work since I’m a commercial hvac tech which is also a profession that robots will never replace. What I do see in the future is a burgeoning field for working on automated equipment that will need constant maintenance and repairs. Any tech will tell you the more advanced and expensive the equipment it is, the more it breaks.
———————
EVERY human skill is automate-able and replay-able as all the human knowledge can ban abstracted and reproduced.
Including that of a brain surgeon.
There are already robots that allow to perform distant-surgeries.
Don’t you think fixing a pipe is much easier?
———————-
More(Tax) Now is done. Caput. Finished.
So basically the already incredible overweight of bank stocks on the TSX is going to increase?
What does it tell you about buying the TSX index?
IMPEACH the Finance Minister!!!!
CONFIRMED PINK SNOW.
O.K ,So here is one that is a bit more realistic for the average family,after all I forgot to mention for the luxury condo in my last post it was 30k a year in maintenance fees and taxes.
This one must of had a short close as the ink dried on the bc assessment the same day as my file indicated a sale on this property.
The details..
Paid 1.38 April 2016
Sold 1.35 August 2017
And so like a lot of my cases at this juncture in proceedings,they were able to split the known expenses with the buyer but despite that and even if we are conservative with opportunity costs it is not unreasonable to say that these guys were 80k lighter after their little journey…
M43BC
1540 Pinetree Way, Coquitlam 1.38 sold on August 26
May 8:$1,588,888
May 15: $1,498,888
Change: – 90000.00 -6%
https://www.zolo.ca/coquitlam-real-estate/1540-pinetree-way
https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzWTA1OQ==
Sounds like Canada’s big banks continue to win no matter what. Theirs is a perfect world. True market forces held at bay by friends in government. Must be nice.
#2 TRUMP on 10.22.17 at 3:35 pm
Bill Morneau ……. What is the purpose of a blind trust account. Why have accounts not in your name, in different provinces ???
Wait a minute Morneau-Sheppel actual helps their clients to dodge taxes legally!?!?!
—-
Liberal political leadership privilege.
“you’ll likely see those governments opt to streamline CU regs with those of the feds.”
Lol. Like that’ll happen. Just as much chance of that happening as, for instance, a common securities regulator. Or complete abolition of interprovincial trade barriers.
So basically the already incredible overweight of bank stocks on the TSX is going to increase?
What does it tell you about buying the TSX index?
XIU unit issuance is down dramatically over the past year. Canada’s largest mutual fund / ETF has shrunk by ~20%. So you’re not the only one who is a bit frightened with the overweight.
Bill Morneau’s Wikipedia introduction
William Francis “Bill” Morneau PC MP (born October 7, 1962) is a Canadian politician and businessman, who was elected in the 2015 Canadian federal election as member of parliament for Toronto Centre. Morneau was executive chair of Canada’s largest human resources firm, Morneau Shepell, and the former chair of the C. D. Howe Institute. He has also been chair of the board at St. Michael’s Hospital, and Covenant House. Morneau studied at the University of Western Ontario, INSEAD, and the London School of Economics (LSE).
He studied at the London School of Economics. He’s a commie.
They are talking almost daily now about all the RE money laundering in Greater Vancouver. Something denied on this blog repeatedly.
How is the stress test going to stop money laundering exactly?
Non-event. Enjoy worrying about stuff that actually does not impact overall real estate values. You guys are so easily diverted. — Garth
CONFIRMED PINK SNOW
This one is not that bad but their are some people on here that seem interested in condos and so I will present it despite really wanting the show the kids on here something like 6011-5511 Hollybridge Way in which they paid 806 and were asking 860 in a building known for multiple losses.
Anyway this one is a rung or two up the ladder but hopefully someone will get something out of it.
The details…
Paid 1..25 June 2017
Sold 1.3 September 2017
And so with the evidence presented it was a quick turnaround and even though they possibly could have lost up to 40k after known expenses they probably did fairly well to try and undo their mistake and got someone to pony up 1.3 million for a 13 year old condo, assessed for 220k less…
M43BC
2706 1077 W Cordova Street, Vancouver paid 1.25 sold on September 10 2017
https://www.zolo.ca/vancouver-real-estate/1077-w-cordova-street/2706
https://evaluebc.bcassessment.ca/Property.aspx?_oa=RDAwMDAwWlI5Rg==
For all of those “Vancouver will never collapse” believers; perhaps the residents are outdoing those “asian investors”. One guy = 10 houses. It’s a good thing nobody else in B.C. does something like this. lololol.
http://vancouversun.com/news/local-news/surrey-man-sentenced-fined-for-real-estate-income-tax-evasion
B.C. title documents show that Dhudwal currently owns 10 properties in Surrey, valued at $8.8 million in total. In various mortgage documents for these homes, Dhudwal lists his occupation as “self-employed” and also “janitorial,” as well as “sawmill worker.”
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It does make you wonder how much closer to the U.S.A. implosion we can get.
https://qz.com/1064061/house-flippers-triggered-the-us-housing-market-crash-not-poor-subprime-borrowers-a-new-study-shows/
“The latest comes in a new NBER working paper arguing that it was wealthy or middle-class house-flipping speculators who blew up the bubble to cataclysmic proportions, and then wrecked local housing markets when they defaulted en masse.”
Bill’s passion for public ‘service’ sure looks fishy.
Massive pay cut, public humiliation. Who brought up the conspiracy he’s so defensive about?
Remember Hank Paulson? Why would he take a pay cut after running Goldman Sachs? His deal was : 2 million in personal tax deferrals, all so he could transfer billions in public money to AIG ha ha
We will never know the truth about Bill Morneau’s ‘deal’, never
Hopefully B-20 will be the holy grail everyone has been looking for to bring real estate back down to reality. Fingers crossed and hoping hard that OSFI plugs every possible loophole.
I like the story of the two moms talking real estate. Sums up Canada and group think perfect!
I visit and of course in BC lower mainland walked outside and exactly the same thing. Two new moms pushing the stroller and talking RE like pros. It s actually quite fascinating and strange if you don’t live there and you know what a cool pathetic 680k gets you outside of Abbotsford BC or similarly GTA, I imagine.
Canadians are nuts but when u live in herd mentality, brainwashed 24/7, everyone only, and I mean only talks real estate, then it should be no surprise why it has turned into a religion.
Canada culture has become real estate . Lame. Oh and hockey. Wow. Everyone is a real estate guru and hockey expert.
CONFIRMED PINK DRAW.
This is another condo they just did enough to stay out of trouble.
The details…
Paid 900 November 2016
Sold 968(asking) October 2017-deal was done in early August.
And so the price crept up ,but no money was made but they are now free and if they are going to speculate again a 1988 built condo is probably not the best target.
Lesson learned perhaps…
M43BC
401 2189 W 42nd Avenue, Vancouver paid 900 ass 911 sold on Aug 4
May 17:$988,000
Aug 2: $968,000
Change: – 20000.00 -2%
https://www.zolo.ca/vancouver-real-estate/2189-w-42nd-avenue/401
https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMFM3VQ==
#9 Stan Brooks – You’ve been watching too many sci-fi shows. You havent done the work so you don’t know what’s involved in a tech doing service calls. I can guarantee you there isn’t a service trades person around who is fearing their job security. The type of robot required to do the work of a trades service person would be on par with Data from Star Trek. Will we be seeing that in our lifetime ??
Ans so it begins………………
https://globalnews.ca/news/3818347/14m-mansion-in-vancouvers-shaughnessy-neighbourhood-destroyed-by-fire/
“Wait a minute Morneau-Sheppel actual helps their clients to dodge taxes legally!?!?!”. Yup, they sure do, so who better in caucus to be MoF if you’re actually going to effectively persue the big money aggressive tax avoiders? Maybe the fox is in the hen house but if he identifies as a chicken rather than a fox then does it really matter?
Personally I think Bill was duty bound to resign as MoF because he didn’t establish the blind trust but since T2 didn’t demand the resignation I figure Morneau is exactly where T2 wants him along with his indepth knowledge of the avoidance industry.
I question his sincerity and his motivation but at least he didn’t lie about any of the scandal once it hit the fan…small justification I know but this is politics.
Well I just raised my tenant’s rent again. My god they squealed like stuck pigs! The sob stories I had to listen to. Little Jason won’t be able to go to hockey camp. Little Melissa won’t get her braces. I had to pretend I cared, but in the end the answer is: pay up or get out! You don’t get rich by falling for sob stories. PT Barnum once said “Never give a sucker an even break”. I say never give a loser renter an even break. Stick it to them every time!
Being a Millennial in Toronto is a living hell for me.
My peers fight for unpaid volunteer work.
My female peers think men like us are potential rapists and child molesters.
My Boomer and Gen X Professors teach divide and conquer topics intended to create a gender war
Millennial hipsters are likely to overpay for a dog house (quote from someone else on here) in Toronto, because it’s “trendy”.
#8 For those about to flop…
It’s still a $2 million condo, in Richmond for pete’s sake. Let’s all just call a spade a spade, as long as buyers can sneak money out under Xi Jinping’s nose, there will be no real estate crash in Metro Vancouver. Overheard at my credit union last month “…so you wouldn’t qualify to finance all of that, how much money do you say is still in China..”
If the BMO guy is correct, that this stress test will be more profound than the Oct. 2016 stress test, then yes, RE will correct and by 10% to 20% as you cite: TD and your estimate.
Still, those price drops will not roll back YVR and 416 prices much beyond 1, maybe 2 years ago.
No, I go back to your last post hinting at a job loss and recessionary economy…they always crash RE. And it takes nearly a decade to make up what was lost. May happen with NAFTA being torn up. If so, B20 just another coffin nail then.
Just today I watched for the first time the clip from a few days ago of T2 telling reporters “I’ll take ’em” when they asked to speak with Morneau.
Wow. Brutal. Humiliating.
When an intellectual flyweight like T2 thinks you’re not competent enough to answer some questions….
Sent an email out to my realtor yesterday about their thoughts on the upcoming stress test, what I got in return was a great laugh.
Apparently, the first stress test had no effect on the market, so they don’t expect people with more than 20% down to be affected at all by the new rule change.
Interesting logic… I’ll wait for that to play out.
For all the lenders out there.
How about “Stress Test Sprinkling?”
Junior won’t pass the stress test so Bank of Mom just takes out a much bigger HELOC against the long paid off family home and gets stress tested then “Gifts” it to Junior so he can apply for a much smaller mortgage.
Then they just arrange a behind the scenes little payment plan and Junior gets the massive mortgage he has always wanted.
Does that sound like it would work?
Figured out what is ‘Diversity’: the veracity of corporate pluralism.
Culture? Toronto spades buried it:
– A KFC set to open at Queen E/Greenwood in Lesliville.
– A bit west at Broadview the homespun burger shop was forced out, into a Pizza Nova.
– More westward on Queen the legendary Hideout music bar is almost ready for its Taco Bell chain.
– Even closer to the end of Queen: in the news a Parkdale Tibeten eatery had its rents doubled into a Pizza Hut plan.
– King West indy place Massaria pizza sporting now a Pizza Nova sign.
Most trendy burger joints are $18-20 + $8-9 for a beer. Add 13% tax and a tip and it’s near $35.
Or $50 pre-tax income…the burger and beer index. $15 min wage will hurt more here.
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As soon as you left your tenants probably started rolling on the floor laughing. Thanks landlord for subsidizing my rent. The fool thinks he is getting rich with a depreciating asset that yeilds 2%.
Canada culture has become real estate . Lame. Oh and hockey. Wow. Everyone is a real estate guru and hockey expert.
—
It could be different if Canada produced companies that made investors excited the same way as pop and mom investors in the US got excited enough to invest in other places beside real estate.
TSX is a total yawn. No story.
Even look at business investment.
That will add the coffee shops to real estate and hockey.
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“Credit unions? Seriously? They’re minor players in a world of lending behemoths, thinly capitalized and in no position to substitute for the Big 5.”
What about Desjardins?
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Neau mor Bill
@# 29 Overpaid Starbucks Burnt Dirt flavoured Coffee
I must commiserate with your unfortunate position.
As the song goes,
” Millenials to the left of me….Boomers to the right….Here I am….. stuck in the middle with you…..”
hell I say….absolute hell.
#28 Sam the Sham
—–
I would say you are a douchebag troll but Garth might ban me. Wait… ok, you are a douchebag troll.
Sadly, you are entitled to your opinion. Hope your tenants rat you out to CRA, actually never mind, they won’t do anything anyhow, it’s real estate…but if you actually had a portfolio…actually that doesn’ t matter either…are you a small business owner?, maybe they will get you that way. We can only hope.
He’s a troll. — Garth
If Bill actually had a pair he would step down – but no he shows his true character in his actions – people like this in power are a poison to the system
RATM
Garth, you forgot something. What about Moreno’s and T2s signature project – the infrastructure bank.
You know where we cozy up to sovereign wealth funds to invest in our “open for business country” while at the same time we cancel our own internal projects, give radical groups veto power and then enact legislation to tax professionals and entrepreneurs and stop them from investing in our equities market.
Seriously, you cant make this stuff up.
All this mortgage tightening mumbo jumbo really makes no difference to me. People from Toronto will still keep coming to hamilton. Hamilton dead beats can’t addord to live here and the city is improving. Never takes more than 2 weeks to fill a vacancy. Newest tenant has a credit score of 815.
Housing is not pooched.
Thanks renters, you’re doing a good thing by buying houses for me
Not much longer and we will be trading squirrel recipes again. Do you have a favourite Garth?
#37 BS
–The fool thinks he is getting rich with a depreciating asset that yeilds 2%. —
Are you serious? The property value is up 250% since I purchased it twelve years ago. The tenant pay the mortgage and all expenses plus some free cash flow to help me cover the expenses on my sailboat and my extensive wine collection. Life is good as a rentier!
#28 Sam the Sham on 10.22.17 at 5:50 pm
Well I just raised my tenant’s rent again
……………………………………………………………………
They should leave, never seen rent so cheap out there
Steven Swinford, Deputy Political Editor
22 October 2017 • 11:20am
The Government will borrow billions of pounds at record low-interest rates to invest in hundreds of thousands of new homes under plans being considered by ministers.
“The Daily Telegraph understands ministers are examining plans which would see the Government directly commission small and medium-sized developers.
It would effectively make the Government one of the nation’s most significant house builders and break the monopoly of the biggest developers.
http://www.telegraph.co.uk/news/2017/10/22/government-will-borrow-billions-build-new-homes-minister-hints/
Tenants moving out nov 14. New ones moving in nov 15.
I’m going to sweep the floor throw some comet in the sinks and tub, recaulk the tub and call it a day.
It could sure use a paint job but when you have such a demand, you really don’t have to do anything. I told them they can paint.
This couple has a net worth of 60k. Since I have to see everything because I am the owner of the roof over their head. East Hamilton is stepping it up! Still a jungle out there with all the welfare moms looking for a place but it doesn’t mean you have to play every hand you’re dealt.
#16 Keith
Hey, I went to LSE and I am not a commie!
…perhaps you’re thinking Oxford?
hehe
Whatever.
So if Bill gets fired do we have to pay him severance?
#22 Dan.t on 10.22.17 at 5:26 pm
I like the story of the two moms talking real estate. Sums up Canada and group think perfect!
I visit and of course in BC lower mainland walked outside and exactly the same thing. Two new moms pushing the stroller and talking RE like pros. It s actually quite fascinating and strange if you don’t live there and you know what a cool pathetic 680k gets you outside of Abbotsford BC or similarly GTA, I imagine.
Canadians are nuts but when u live in herd mentality, brainwashed 24/7, everyone only, and I mean only talks real estate, then it should be no surprise why it has turned into a religion.
Canada culture has become real estate . Lame. Oh and hockey. Wow. Everyone is a real estate guru and hockey expert.
—————————————————————–
Oh c’mon now … not quite everyone. There are plenty of us sitting back and laughing. Even out here in the lower mainland.
“So if you have a $725,000 house to sell, guess what? You may now have a $570,000 property if you want to find a buyer.”
I don’t think that will be the case… people will not sale…. as they do in Edmonton and Calgary…. there are properties on the market for 2-3 years and people don’t lower the price… they rent them f they can’t sale for the price they want….
open houses everywhere, week after week
same properties!
LSE, Oxford, or being a Rhodes Scholar = Commie / globalist.
Just because people can borrow 20% less doesnt set a floor of 20% lower prices. RE is emotional.
People who were looking at $725k wont want the house priced at their new max… prices will begin to drop and buyers will second guess purchasing as prices fall and the media reports a crash… and so they’ll wait…and prices decline a little more and so on…
20% drop is the start, not the end.
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Free speech threshold detection result. Too much pink.
Don’t cry over Moroneau Garth, worst case for him is he doesn’t run next election and goes to his villa in France for a couple of months to clear his head.
I don’t have a villa in France, just a small business. But if I did have a villa in France I’d sell it. France is a long ways away and I don’t see the point of owning real-estate I have to pay $2000 in air fair to visit. Plus who looks after the place most of the year? Somebody’s got to be paid to do that. Then there is taxes, insurance, utilities, maintenance, etc. all for a place that hardly knows you.
I dated a girl for a while that thought a condo in Greece should be part of our long term strategy. I’m certainly glad that fell through. I don’t even want a condo in Fernie and that’s only 3 hours away so I might actually go there on the weekends. But hotels are only $150-$200 a night so even if I bring the whole family and need 2 rooms that’s only $800 for a weekend. Or you can rent a whole condo. Lots of those condos on the hill that someone owns are in the rental pool most of the year.
How much do people who have vacation homes pay per night they actually sleep there? I’m betting it’s way more than $400 a night for 2 rooms, especially if you count the cost of the property which could have been invested in a Garth ™ balanced portfolio. $500,000, if Garth actually can squeeze 6% out of the market for you, should earn $30,000 a year you can spend on hotels where ever you want. Even if you pay Garth 1.5% or $7,500 per year to manage the portfolio you still have $22,500 left for hotels, which at $200/night would mean you could stay in a hotel 112 nights a year. I must have screwed up the math somewhere because nobody has 112 nights a year to stay in a hotel. People got to work! And of course I didn’t count taxes.
Vacation properties never made much sense to me, not even for rich people like Moroneau and Turdeau. If instead of dropping $500,000 or more for the cabin you topped up your RRSP’s, you’d never spend the extra investment income on hotels in a year and you can go wherever you want whenever you want. Plus you don’t have to pay airfare to get the family to France and back, or wherever your little villa is located. I’m not saying everyone here can afford a villa in France even if they wanted one. Just saying it’s not very bright to own one.
But I guess vacation properties are like boats. Nobody should own one, they should rent. It’s much cheaper over the long run. But most people (like me) only ever buy one boat and I only spent $15,000 to learn that lesson. I’ll never buy another one. If this one sinks in the lake I’ll become a non-boater. If someone steals it they can have it, good luck with the maintenance!
I also have a travel trailer, and in the end I don’t think that was a very good investment either. But it is a lot more reasonable to expect that I might recover the $30,000 I spent on that over it’s lifetime as camp sites are only $20/night and I can go wherever I want. Plus it has been used a number of times where the camping fees were zero. In fact I think the camper may have paid for itself in hotel dollars as we have slept in there way more than 112 nights since we bought it.
So anyway, my point is that many of the things we buy, we’d be better of renting. Vacation homes, RV’s, boats, skis and sporting equipment, etc. are just too expensive to own when you look at how often you actually use them. I have about $2000 wrapped up in just skis. They are getting old now. If I rented instead of buying, which runs about $20 a day for just skis (more if you need boots), correct my math but don’t I get 100 days of rental skis for that money? And the rentals are never more than 2 years old whereas mine are ancient at this point. Kids point at me in the lift lines and laugh; “ha ha his skies are only 101 mm wide at the hip! Geezer! Buy some real skis with twin tips!” It’s sad really but that’s what happens when you own.
Hey I just had a really good idea. One of the worst wastes of money out there of course is hockey equipment for kids. Why not rent it out like band instruments? Most hockey parents are paying $400-$500 a year upgrading equipment as their kids grow and hardly see any of that money back. Charge $200 a year to equip the kids and get all the equipment back every year! Probably have to be $300 with skates, but you could also have options to rent out high end skates for even more. Super high end skates can be $500 and the kids wear them for one year! But then I remember that Sportswap went broke in Calgary during the boom times. Even though it was one of the best ideas ever, Calgary got so prosperous for a while that nobody would put their kids on the ice in used equipment. A lot of beer and wine making stores went out of business at about the same time because nobody was interested in brewing their own anymore, they just paid the $10 for co-op brand.
Looking forward to more on Billy Boy tomorrow! Jagmeet is getting stronger by the day and wants to have a cage match with Justin. I bet Justin will probably try to ignore. Finally, someone more liberal than Trudeau but with charisma! Poor Andrew Scheer doesn’t have a chance unless he comes up the middle. Good luck to these three in 2019!
Guess were gonna have to see what the b20 really does by the end of 2018. We should have a beter idea of if this really worked.
I’m guess the effect will be minimal. But,I could be wrong.
Non-event. Enjoy worrying about stuff that actually does not impact overall real estate values. You guys are so easily diverted. — Garth
—————————————————————–
Love ya boss, but you’re out to lunch on this one. RCMP has barely scratched the surface of this. When its all said and done I bet its a few billion that has been laundered through our lovely country. Guess time will tell.
It’s official now. If you dislike T2 for any reason you are a nazi racist.
Ok then I’m a hard core racist then. What you going to you little fascists.
No job. Make a killing trading forex from Nictonite.
100 bucks or so in my Canadian Bank.
Let’s rock…
Garth gives us the goods on Billy Boy. Now we got to wait a whole day.
Re: Credit Unions
Intriguing….
Read recently that Credit Unions have quotas as per their exposure to real Estate…ie if the quota is used up early in the year…thats it
In the GVRD area, I’ve noticed a lot of the multi family projects have smaller banks ie Canadian Western Bank, as well as Credit Unions signs plastered in front of projects…much less so the bigger banks
What does one deduce…do the Big 6 banks lean towards SFH, and less so the Multi Family ???, whereas the reverse may apply for the more regional credit unions ?
Anybody got info with respect to the aforementioned ?
#52 Rental property math on 10.22.17 at 7:29 pm
Tenants moving out nov 14. New ones moving in nov 15.
I’m going to sweep the floor throw some comet in the sinks and tub, recaulk the tub and call it a day.
It could sure use a paint job but when you have such a demand, you really don’t have to do anything. I told them they can paint.
This couple has a net worth of 60k. Since I have to see everything because I am the owner of the roof over their head. East Hamilton is stepping it up! Still a jungle out there with all the welfare moms looking for a place but it doesn’t mean you have to play every hand you’re dealt.
——
I remember you from a few weeks past. You seem to have a lot of tenant turnover. I wonder why? Slumlord?
So, can we split the difference & say a 15% decrease overall for qualifying mortgages? Regardless, housing will have to come down to sell if the ‘buyer’ can’t get a mortgage for more. As for the banks, they are old hands at making one penny double to two – if you want freaked people, just suggest Big 5 bank stocks won’t a) pay a dividend & b) actually go down in value:)
#44 Dan.t
Let me guess…you’re a renter.
Garth…re: #17,
Great answer on your part. The hysteria in Vancouver re: “money laundering” and “foreign buyers” is really something to behold.
It is AMAZING how memes like these can spread like wildfire and grab everyone’s attention!
Folks who are bashing realtors here have no idea. It is brutal, they are starving, and many of them are taking retail jobs just to keep their spouses from leaving them . DO NOT GO INTO REAL ESTATE. THE PARTY IS OVER.
Bill Morneau will soon be Bill NoMore…
#24 VanIsleStyle
Thanks for replying to #9 Stan Brooks and his dreams about robot plumbers. Someone had to do it but I just couldn’t be bothered.
Lol have to love the fake rental stories from shysters who haven’t made a sale in a long time. Your stories are pathetic. No professional landlords treats their tenants like that. It makes me think you are either SHYSTERS telling stories or amateur landlords who have cash flow negative properties? Btw Hamilton (mostly)is a dump. Went to visit family at one of the hospitals and I swear it seemed like something in the movies. It was like a movie set that had crackheads, hookers and homeless people everywhere. Wife and I couldnt believe what we were seeing. Btw congrats to being the bigs shots of Halmilton. It’s great there.
Down in the Bay Area. Moisters, Millenials, BLM members, Antifa, Tech dudes, everywhere. Interesting combination, of humans. It’s a jungle at the supermarkets. I have no desire to live in San Francisco. Dry, arid, and densley populated, too many vehicles on the road. Give me the open prairies, mountains, rivers, creeks any day. Love the Cowboy.
PB43
My first delete and it contained no swearing,racist,sexist remarks!
Went out for a pedal today and three houses that have been for sale for the last couple of months now have reduced price signs,the last one was hand made.Going to be seeing way more of these in the coming months.
‘“Non-event. Enjoy worrying about stuff that actually does not impact overall real estate values. You guys are so easily diverted. — Garth”
Extraordinary levels of capital flight tied to chaos in the Middle Kingdom.
How China’s Politics Are Screwing with Canadian Real Estate Markets
https://thetyee.ca/Opinion/2016/08/08/Chinese-Politics-Canadian-Real-Estate/
Who do we believe? Garth or The Economist
https://www.economist.com/news/leaders/21723418-demand-safe-assets-emerging-markets-creates-headache-policymakers-lessons
Beats me. But I do know stats prove Canadian real estate values are set by delusional Canadians. So much angst over marginal influences you have no control over. What a waste of time. — Garth
#65 Smoking Man on 10.22.17 at 8:27 pm
It’s official now. If you dislike T2 for any reason you are a nazi racist.
—–
Old Stalinist “salami” tactic used in Eastern-Europe by the Communist parties after WWII. Google it.
Maybe T2 gets advice from someone with first hand experience there?
Lots of rich folks from around the world (not French citizens) do this in France (buy a villa or chateau) for estate planning purposes. France has special rules to pass on the estate to beneficiaries with minimal tax.
——————————————–
#61 Nonplused on 10.22.17 at 8:22 pm
#69 Sam the Sham
Let me guess, you are a douchebag troll. Done for today with this site.
@ #53 Triplenet
I googled LSE left wing and apparently it was left wing in the sixties and seventies. Now apparently it’s a recruiting ground for “the city.” Quelle horror. From commies to banksters in a single lifetime. I guess the eventual financial success of Mick Jagger was the turning point.
bubu: “I don’t think that will be the case… people will not sale…. as they do in Edmonton and Calgary…. there are properties on the market for 2-3 years and people don’t lower the price… they rent them f they can’t sale for the price they want….”
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
You're absolutely right bubu. Toronto and Vancouver will be just like Calgary. lolol.
http://www.cbc.ca/news/canada/calgary/foreclosures-alberta-calgary-rising-2017-1.4108646
"Foreclosures have been on the rise, growing by about 25 per cent annually over each of the past two years, according to new data from the provincial government."
Hey Sam,
I thought you lost your boat to Pennywise when it went into the gutter!
#71 Old Ron on 10.22.17 at 8:43 pm
Folks who are bashing realtors here have no idea. It is brutal, they are starving, and many of them are taking retail jobs just to keep their spouses from leaving them . DO NOT GO INTO REAL ESTATE. THE PARTY IS OVER.
==================
Sadly very true. A friend of mine is a realtor of modest success. He had proposed to his girlfriend a while back…she accepted. He gave her an expensive ring too. Recently I heard from him that she’s returned the ring and the called off the wedding. I know he’s been having financial problems and business has suffered, so my guess is that why his gal got cold feet.
Bill’s OK .. the Sunday scrum on CBC says he’s a man a high ethical standards and integrity. Apparently this Scheer guy is just a smiling Harper and this whole mess is his fault, or was it Harper’s, maybe Mulroney’s, not sure, but everything is fine with the Libs and they get a B-. Nice to live in a country where the media isn’t controlled by the government though.
Prices in Van and GTA might take a bit of a hit for 6 months or so (maybe), but it will rise again after that. The forces for RE price increases are unstoppable. Canada is the place to be – we have the most admired leader and the most diverse and inclusive society. Immigration is at 300K/year and increasing. They all have to live somewhere, and over half move to Van or GTA (maybe more now that Quebec has brought in their face cover ban). People from all over the country move to these two areas. Toronto is the cheapest world class city for RE. Lots of room to grow. Interest rates won’t go much higher, and debt servicing ratios are still quite low historically.
The safest bet you could ever make is to invest in Van or GTA RE. It will increase double digits for many years to come. It might seem daunting to purchase a $1M house, but think that it likely will be worth $1.5M in a few years. Making $500K in a few years, with high leverage? It is a dream come true.
So for all those Millennials still on the side lines – buy now!
That was amusing. — Garth
DELETED
@#29 Empty Mansion burning
It isnt the first and it wont be the last.
The house was renovated to pritine condition, purchased by offshore investors 6 years ago and according to the neighbors… left to rot.
And , as one neighbor at the fire stated on the 6pm news, “There are several houses on this block in the same state, Offshore owners and the houses are abandoned,”
The Fire dept stated the fire looks suspicious.
Good to know 14 million dollar renovated mansions are left to rot in a city with a zero rental vacancy rate and thousands of homeless…….
Yo Flopster! Perhaps you should also start a “Pink BBQ” count for all the houses that go up in flames in the next 12 months…..
http://www.google.ca/url?url=http://bc.ctvnews.ca/suspicious-fire-destroys-14m-shaughnessy-mansion-1.3643633&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwi13IPBy4XXAhUNwGMKHe2nAYEQqQIIHTAC&usg=AOvVaw3NJpWXj2WTPfmbuH41ffUj
#67 Stone on 10.22.17 at 8:30 pm
#52 Rental property math on 10.22.17 at 7:29 pm
Tenants moving out nov 14. New ones moving in nov 15.
I’m going to sweep the floor throw some comet in the sinks and tub, recaulk the tub and call it a day.
It could sure use a paint job but when you have such a demand, you really don’t have to do anything. I told them they can paint.
This couple has a net worth of 60k. Since I have to see everything because I am the owner of the roof over their head. East Hamilton is stepping it up! Still a jungle out there with all the welfare moms looking for a place but it doesn’t mean you have to play every hand you’re dealt.
——
I remember you from a few weeks past. You seem to have a lot of tenant turnover. I wonder why? Slumlord?
—————–.
Or maybe a few rentals? I have never had any turn over from slum. I’m actually pretty decent. I fix stuff. They get toilet paper, paper towels, a bunch of cleaners, laundry detergent, 6 beers and a bottle of wine when they move in if they are younger tenants.
Older ones get bottles at Christmas.
But yes I do less and less to make people feel cozy. As long as water isn’t coming in or leaking, I don’t really care about much else. My painting and caulking jobs are getting better though.
#74 Happy Housing Crash Everyone! on 10.22.17 at 8:46 pm
Lol have to love the fake rental stories from shysters who haven’t made a sale in a long time. Your stories are pathetic. No professional landlords treats their tenants like that. It makes me think you are either SHYSTERS telling stories or amateur landlords who have cash flow negative properties? Btw Hamilton (mostly)is a dump. Went to visit family at one of the hospitals and I swear it seemed like something in the movies. It was like a movie set that had crackheads, hookers and homeless people everywhere. Wife and I couldnt believe what we were seeing. Btw congrats to being the bigs shots of Halmilton. It’s great there.
——————-
Went from getting 1000+900 in 2013 to 1350+1450 now in a 2 unit duplex. Ain’t no negative cash flow here :)
yes the north end is ghetto, best place to plant some seeds and watch them grow. I’m in better areas but it would have not been a mistake to have picked up rentals in the north end years ago. House prices have doubled and rents are up by 50%.
Congrats on coming up with 1st and lasts.
#25 …Empty Mansions burning..etc. etc.
Plot thickens…
In general, vacant homes are not insureable.
In addition, my understanding is many homes/buildings are not demolished as to do so creates a vacant lot “technically” and triggers other taxes. ( This is why one sees many vacant homes boarded up )
Accidental fires or arson ? end result is the same…
The interesting ones are the NEWER projects that somehow catch fire….anarchists or developers insurance scams?
In New York City…in the 1970’s…fires were epidemic in various buroughs “coincidentally” as property values collapsed.
Regardless…..history has shown that when an increasing number of people become disenfranchised, revolution in its many forms and manifestations ensue.
Good job deleting comments yesterday. So will this blog shut down after the fear mongering of OSFI and nothing happens? Keep deleting.
You comment was too moronic to publish. Quite a feat. — Garth
DM TO SMOKEY
https://youtu.be/x7bIbVlIqEc
YOU BET WRONG
PastThePeak must be a RE agent…and I’m guessing so’s the Hamilton rent guy…trying in their own little way to get things going again [8-/
Garth, what would be wrong having 30 or 40 year mortgages? It would lower the monthly payments and give people a better chance getting into the housing market. Are we brain washed that a house has to be paid off in 25 years?
These type of mortgage terms are very common in Europe.
#89 Pete on 10.22.17 at 9:55 pm
PastThePeak must be a RE agent…and I’m guessing so’s the Hamilton rent guy…trying in their own little way to get things going again [8-/
———
no not a realtor. not hard to get your real estate license. it’s about a grade 10 level difficultly.
not easy making a living being a realtor though. it’s all a popularity contest. if you spend the most on advertising and have the biggest network you’ll succeed. otherwise don’t count on it.
amateur landlord with some doors in hamilton. you guys always take a crap on home owners and especially landlords so I like to poke it with a stick since my yields are actually pretty darn good. hard work, balls, luck, backbone.. not for everyone.
From yesterday:
Hey, Ace.
I read this morning that Tesla Motors got the go ahead to open a plant in Shanghai. (Source: Wall Street Journal, if I remember correctly.)
Maybe Musk can pull a rabbit out of a hat?
Whatever happens with Musk, I think he’ll be remembered as the first private space entrepreneur. Getting that rocket to re-land was a huge accomplishment that NASA and the Soviets never accomplished.
—
That crossing guard looks a lot like Alice Cooper.
(photo joke)
Well, Paddler, that IS why they’re called “mort”gages.
What’s wrong? What’s wrong with 99% of the payments for the first 15 years going to pay interest? It’s fiscally moronic to do it.
Old Ron: Folks who are bashing realtors here have no idea. It is brutal, they are starving
Victor V: talking about a man he knows: he’s been having financial problems and business has suffered, so my guess is that’s why his gal got cold feet.
that got my attention
We’ve leave poor Bill until tomorrow. Talk about being screwed…
poor Bill why did he ever decide to go into politics? He could have stayed at Morneau Shepell.
Hinterlaned: Milton desperation? Appears, you can there rent any new house for about 2000/mo.
https://www.kijiji.ca/b-house-rental/gta-greater-toronto-area/milton/k0c43l1700272
Of course borrowing say 500,000 @ 3% over 25 years is $2360/mo. Throw on another 300 for the property tax.
Says here that the N. American economy is lagging the recovery made after the Great Depression.
https://www.nytimes.com/2017/10/12/opinion/great-depression-recession.html
Interest rate increases? Interesting theory but we are not going to see any big ones.
Four Fed hikes in 12 months. – Garth
#88 crowdedelevatorfartz on 10.22.17 at 9:28 pm
@#29 Empty Mansion burning
Yo Flopster!Perhaps you should also start a “Pink BBQ” count for all the houses that go up in flames in the next 12 months…..
//////////////////////
Hey Crowdie, I’m gonna tell ya something.
When the original post went up and I saw the 3700 block of Angus Dr ,that rang a bell in my empty head and I went to my Pink Folder and I do have a case in that particular block but the valuation leaves me to believe it is not the same house.
I worked two doors down from a Pink Snow case all summer and the house was vacant and I didn’t see anyone there but the lawn was getting mowed.
Working in Point Grey at the moment and sussing out what is going on but it is hard to get negative information out of people when their jobs rely on keeping the illusion going…
M43BC
re: #86 PastThePeak
Prices in Van and GTA might take a bit of a hit for 6 months or so (maybe), but it will rise again after that. The forces for RE price increases are unstoppable. Canada is the place to be – we have the most admired leader and the most diverse and inclusive society. Immigration is at 300K/year and increasing. They all have to live somewhere, and over half move to Van or GTA (maybe more now that Quebec has brought in their face cover ban). People from all over the country move to these two areas. Toronto is the cheapest world class city for RE. Lots of room to grow. Interest rates won’t go much higher, and debt servicing ratios are still quite low historically.
The safest bet you could ever make is to invest in Van or GTA RE. It will increase double digits for many years to come. It might seem daunting to purchase a $1M house, but think that it likely will be worth $1.5M in a few years. Making $500K in a few years, with high leverage? It is a dream come true.
So for all those Millennials still on the side lines – buy now!
That was amusing. — Garth
—————————————————————–
Bahahahahahahahahahahahahahahaha !!!
Tell us another funny story Uncle Shyster !
Take the Audi back and remember to ask…
“Do you want fries with that ?”
TRY to be believable
Really ? They won’t sale if they don’t get their price ? Even if they are cash flow negative on the property
And mortgage renewal is around the corner ?
Wow , guess folks in Ontario enjoy losing money ?
Re: Turdeau and Moroneau et al
Keep in mind that Moroneau (born 1962) is technically a Boomer…whereas Turdeau (born ? hatched? ???incubiii??? spawned???..Frankensteined ???) was somehow given Canadian citizenship in 1971 via Rolling Stones groupie.
This approx 10 year chronological separation does not do justice to the obvious spiritually, politically, culturally etc. fact they are joined at the” ________”..aka if Moroneau goes down…Justin is OUT.
More succinctly..love of HATE em..old T1, while an arrogant @sshole/dictator… at least was decisive and would’ve made liabilities walk the plank…
Bill was really screwed:
https://www.youtube.com/watch?v=fWJqQC96T_I
#51 Jess
Yes, direct investment in real estate by the central government. British posters on this site have mentioned it before during the Cameron years. I expect to see it here pretty soon.
What fear mongering ? He is sharing an opinion . Obviously an opinion you don’t want to read . You don’t like it cause ….? :)
Canadians ,today , have highest household debt in country history . You cool with that ? You cool with real estate rising disproportionatly to household income, grossly so ? Not a problem in your world ? …..your livelihood dependent on real estate ?
#56 bubu on 10.22.17 at 7:48 pm
“So if you have a $725,000 house to sell, guess what? You may now have a $570,000 property if you want to find a buyer.”
I don’t think that will be the case… people will not sale…. as they do in Edmonton and Calgary…. there are properties on the market for 2-3 years and people don’t lower the price… they rent them f they can’t sale for the price they want….
____________________________________________
So let them sit on their precious RE asset and service their debt.
It may not hurt now, but all that equity stuck in RE, and all that interest paid, could be invested and making monthly gains. Talk about a huge opportunity lost, and its gonna bite HARD when the retirement years come. There’s a very real risk that RE is going to drop 20, 30, 40 percent or more. Nobody knows how big the drop is going to be at this point, but it is a near certainty that the increase in RE prices is kaput for the near-mid future.
There are two types of people , those that pay rent and those that collect rent .
The ones that pay rent make the ones that collect rent rich by buying a house for them.
Lots of money can be made in owning real estate and getting other people to pay for it .
There are two kinds of people. Renters and those who subsidize them. – Garth
#91 Lost..but not leased on 10.22.17 at 9:34 pm
#25 …Empty Mansions burning..etc. etc.
Plot thickens…
In general, vacant homes are not insureable.
————————————————-
Wrong! Owners of vacant homes just need to inform their insurer since it is a material change in the use of the object being insured.
It is an extra endorsement on the policy and is simply an increase to the property policy’s premium.
probably old joke, but new to me.
Woman:
Do you drink beer?
Man:
Yes
Woman:
How many beers a day?
Man:
Usually about 3
Woman:
How much do you pay per beer?
Man:
$5.00 which includes a tip
(This is where it gets scary !)
Woman:
And how long have you been drinking?
Man:
About 20 years, I suppose
Woman:
So a beer costs $5 and you have 3 beers a day which puts your
spending each month at $450. In one year, it would be approximately $5,400. correct?
Man:
Correct
Woman:
If in 1 year you spend $5400, not accounting for inflation, the past
20 years puts your spending at $108,000, correct?
Man:
Correct
Woman:
Do you know that if you didn’t drink so much beer, that money could have been put in a step-up interest savings account and after accounting for compound interest for the past 20 years, you could have now bought a Ferrari?
Man:
Do you drink beer?
Woman:
No
Man:
Where’s your Ferrari?
— Almost went to this rabbit hole my self-today…
Of course, if even condos don’t pop in the coming months, it’s a sure sign you shoulda picked up that survival cabin in the Ozarks circa 2011…..
Four Fed hikes in 12 months. – Garth
That’s it though.
Employment and inflation have become decoupled. The Serfs demanding more pay is no longer as directly correlated to inflation as it was during the high demand days of young Boomers.
BANNED
#44 Dan.t on 10.22.17 at 7:13 pm
#28 Sam the Sham
—–
I would say you are a douchebag troll but Garth might ban me. Wait… ok, you are a douchebag troll.
Sadly, you are entitled to your opinion. Hope your tenants rat you out to CRA, actually never mind, they won’t do anything anyhow, it’s real estate…but if you actually had a portfolio…actually that doesn’ t matter either…are you a small business owner?, maybe they will get you that way. We can only hope.
He’s a troll. — Garth
—————————————————————-
Total troll and posts under several different names. This blog is seriously infected by trolls. I long for the good old days when we had serious and interesting posts. Sad what has happened. We’ve lost a lot of great bloggers over last couple years. Likely got fed up with all the b.s. Oh well, it was great while it lasted. Don’t know why you put up with these guys.
You guys (gals) need to work on your sarcasm detector…
Not a realtor, actually work in high tech in Ottawa, house is long paid for but it hasn’t increased much in value in the last 7 years (some nice gains from 2000-2008), and no one I know ever talks about real estate. The only RE in my portfolio is REITs. My main concern is the elevated equities markets, and how a downturn in RE might affect near term investments.
Love the blog, and do find amusement with the GTA crowd and their housing market. Also quite enjoyed a Ottawa pounding the Leafs the other night…
Wait, the kids can’t force parents and family to fork over 10s of thousands as ‘gifts’. Only the parents can decide to do that.
Thanks boomers. Again.
#112 Hotdogs from heaven
Re: Vacant homes and insurance
Maybe let us know which insurers_____? you are aware that do provide coverage for vacant homes…as many agents have told me that NO insurance is available(SFH) for any long term vacancy,as the logic appears to be a rental or owner occupied is minimum security benchmark otherwise the home is too vulnerable to vandals, criminals etc.
In addition, while on topic of insurance.(…and as an ex landlord)….there is NO pet insurance for tenants..aka if a pet causes damage to property…the owner is SOL re: insurance coverage.
#9 Stan Brooks
A robot can perform basic and routine plumbing jobs, especially green field, and be remote controlled for other jobs. People vastly overestimate the job security and skills required of trades. Besides, a robot can get into places a fat plumber can only dream of, and no plumber’s crack as a bonus. Sure, such a robot would be expensive today, but costs and capabilities of technology, all technology not just smartphones, are constantly improving.
#79 Spock
I have to apologize I did not know that a French villa could be used as an estate planning tool. Perhaps in that case it makes sense for someone like Moroneau to have a French villa even if he seldom uses it.
However that only makes me even angrier now that he’s called me a tax cheat and come after my small business. To be fair, my small business is just consulting. I help businesses figure out what the numbers they are collecting mean. I’m no plumber or electrician. But I’ve always paid my taxes, in fact I need to accountants and a lawyer do to so because I do some business in the US and it’s too complicated to learn how to do it on a part time basis. But I’ve never cheated and I don’t have a French villa as a mechanism to save money for my kids and avoid taxes. Instead I pay the tax I owe, use the money left over to put my daughters through university and pay my son’s soccer fees, and Moroneau calls me the cheat.
It’s easy enough to see why people hate politicians.
This is why Trump came to be in the US. Sure he’s probably all the bad things people say about him (won’t recount that now or I’ll get deleted), but let’s face it the only way to get elected is to have a whole lot of money behind you and a lot of time on your hands. Trump was the politician they did not expect: someone with enough of his own money that he didn’t need the trust fund babies and enough time in front of the camera to know how to work it. There is a reason he figured out twitter first among the politicians, he figured out reality TV before that and therefore knew something about modern media. The fact that he is running the presidency like a reality show is more than a little concerning, but a tiger doesn’t change it’s stripes.
Anyway, my hope is that Turdeau and Moroneau will be like an 18 year old with a cheap bottle of whisky. Sure seemed like a good idea at the time, but come morning you wish you hadn’t, and you won’t talk to your friends for a long time because they keep bringing it up.
Oh, this is getting exciting.
First, interest rates rise along with fixed mortgage rates.
Second, B20 regs come into effect impacting every buyer.
All of the supposed ‘drivers’ of Vancouver and Metro Vancouver’s market are being tackled.
With mortgage pre approvals being extinguished by the the new year, that means that if low rates and cheap credit are really the drivers of Metro Vancouver’s extreme lack of affordability, then prices falls very very soon.
Perfect – now we will really see if its cheap rates and easy access or foreign capital that is the driver of Vancouver’s prices.
And in six months time, when prices have not headed south, then I suppose everyone will have to conclude that foreign capital plays a much bigger role and is the critical driver. I think the bears are going to be very disappointed with the lack of price declines…
No turning back now bears – you will soon have your answer as to the driver of the housing crisis!
The good thing about the stress test is
1) It forces people to prove their income
-also the people who are working under the table and
do not declare their income
– it will also be a nice list of people who bought these
mansion, but have very little declared income.
(this may be because the wife live in canada , scraping the benefits of the Canadian system while the husband working in taiwan, and pay very little taxes.
At the same time the wife and kids can rape and pillage our canadian social services without the family paying a single cent in canadian taxes.
2) 5 percent to 7% should be the normal borrowing rates.
3) the people working under the table will have to declare income otherwise they won’t be able to get a mortgage.
Interesting numbers I dug out of the archives re: the constituents of the TSX.
Peak of the Tech Boom
Aug 2000 Oct. 20/17
Energy 7.6 19.33
Materials 7.3 11.64
Industrials 8.1 9.56
Cons. Disc. 8.1 6.11
Health Care 2.3 .59
Financials 16.5 37.01
Info Tech 42.5 2.79
Tele 4.2 4.78
Utilities 2.2 3.90
Cons. Staples 1.4 3.57
Nortel made up most of the TSX at that time with Info Tech at 42.5%. Why would we not have thought that was a bubble? Current levels of Financials, energy and materials are pretty close to their normal levels but on the low side. Materials are the laggards and likely the next ones to run along with energy. Banks a bit toppy.
What a waste of time it is reading the comments on this pathetic blog. Approximately 1 in 20 posts are worth reading. How does Garth put up with having to proof all this inane nonsense. kudos sir
#115 OttawaMike
Amen. The decoupling of inflation and wages is to due fact that humanity has entered a behavioural sink since around the mid-2000s.
Description: https://youtu.be/0Z760XNy4VM
modifying local buyers ability to purchase is a boon for foreign nationals who see lower prices as a fire sale. Prices will continue to force locals out the market. Proof of billions laundered through local casinos into local real estate is all laid out in the preliminary release of information by RCMP.
#32 Howard on 10.22.17 at 6:16 pm
“Just today I watched for the first time the clip from a few days ago of T2 telling reporters “I’ll take ’em” when they asked to speak with Morneau.
Wow. Brutal. Humiliating.
When an intellectual flyweight like T2 thinks you’re not competent enough to answer some questions….”
A relevant quote from a potent notable, Walter Kerr, who successfully worked in the realm of drama/theatre:
“He is suffering from delusions of adequacy.”
@#121 devore
“A robot can perform basic and routine plumbing jobs.”
+++++
Links?
You seem to be quite enamored by robots……
A Fan of Westworld are we?
@#129 maxx
“He is suffering from delusions of adequacy.”
+++++
No, he’s just delusional
#22 Dan.t
“Canada culture has become real estate . Lame. Oh and hockey. Wow. Everyone is a real estate guru and hockey expert.”
——————————————————————–
Yah. And don’t forget Tim Horton’s addicts.
Commuting from Barrie (“where the dry wallers live”), to their soulless jobs, paying down their 35 year amortized mortgages (while their equity melts), listening to the blockheads Radio 590 drone on endlessly about Connor McDavid (“hey, how ’bout dem Leafs, eh?”), and getting into the mile long drive-through line with the rest of the ignorant cattle for their daily morning-dose of hot brown Timmy-swill with a side of stale, chemically preserved airline food.
Mmmmm…mmmmm…good! Life in Canada is GRAND!
Canadian households ‘nowhere near prepared’ for higher rates, survey finds
http://www.bnn.ca/canadian-households-nowhere-near-prepared-for-higher-rates-survey-finds-1.892780
Almost half of Canadian households don’t feel financially prepared for further interest rate increases, according to a survey released Monday.
Forty per cent of respondents to an Ipsos poll, conducted on behalf of MNP, said they fear ending up in financial trouble if rates go up much higher, with one-in-three already feeling the impact of higher rates.
“It’s clear that people are nowhere near prepared for a higher rate environment,” MNP President Grant Bazian said in a release. “The good news is that there seems to be at least the acknowledgement now that rates are going to climb which might make people reassess their spending habits – especially using credit.”
#84 Victor V on 10.22.17 at 9:19 pm sez:
Sadly very true. A friend of mine is a realtor of modest success. He had proposed to his girlfriend a while back…she accepted. He gave her an expensive ring too. Recently I heard from him that she’s returned the ring and the called off the wedding. I know he’s been having financial problems and business has suffered, so my guess is that why his gal got cold feet.
——————————————-
Surely women aren’t THIS mercenary? Well, at least she returned the ring.
#35 TurnerNation
It gets worse…in my zone (Toronto Centre, home of everyone’s favourite MP) they took Harlem Restaurant, which was a super cool place with jazz and Caribbean food, and turned it into a DOMINOS PIZZA.
Talk about a downgrade…gah.
https://www.youtube.com/watch?v=fWJqQC96T_I
The Honorable Minister of Finance is gone.
He is annoyed by distractions and want to serve Canadians. Canadians do not want him.
The faces of the liberal caucus and the absence of T2 spells his fate. He is gone.
No person can shield this s..t storm.
If he insists on staying, he will drag down the whole liberal party and backstage players/DC Howe, etc think tanks with him for years if not decades.
https://www.youtube.com/watch?v=fWJqQC96T_I
Barbados and Morneau Shepell, the French Villa, Bill C27.
Calling millions of small Business tax cheats and loopholeers…
T2 himself is going down the drain fast if he does not resolve this quickly.
I was amazed to see for sale signs in Barrie just sit for the past few months without any movement. Everyone on the blog was noting no movement and I thought this was surely a sign of things to come. Fast forward and the dozen or so for sale signs – 9 have recently had sold slapped on them. Only 1 house I notice took down their sign a few weeks back. Dead Cat bounce or maybe the push forward to buy is once again gaining steam. I am not preaching anything but this housing cycle has got me always guessing wrong. We own our home and have planned on a 2 year exit from Ontario to Nova Scotia so I watch with some anxiety that things could get ugly quickly but everything has defied logic for many years and do so going forward.
Great job Garth –
#64 ryguy
What I don’t understand is why everything in this country needs to be reactionary. Press goes “omg money laundering!!!” – where was the RCMP on this years ago? Press goes “omg tax evasion!” – was CRA out playing golf with the Plozzer? OSFI goes ‘omg subprime mortgages!!”…21 years into a bull market.
What the hell is going on? Are we ever going to have some actual proactive leadership?!
Finances Getting a little tight in BC
http://vancouversun.com/news/local-news/rising-interest-rates-put-many-in-b-c-on-edge-of-bankruptcy.
On a related note. Wife’s co-worker (originally from PRC) leaving for Ottawa. Finds people in Van “too angry”. Prediction. in Ottawa, she will find them too lazy :-)
#111 tbone
Garth , I like your humour and I kind of owe you for my sucessful in life by
Reading your columns several decades ago and started investing .
With some savings I invested in rental properties and never looked back.
My most recent sale left me with a 7 figure payday after paying capital gains and deducting the investment amount .
So not every landlord subsidizes the rent . Only the unfortunate ones and I am sure there are plenty of them out there.
My problem now… I have to put my excess cash in a gic .
Too much invested in the markets with stocks, etfs,and mutual funds.
Ya , I am balanced too.
So my advice still stands … invest in real estate and give it time .
Oh and for the other poster stating a robot can fix plumbing and hvac .
Let’s see a robot climb a ladder and trouble shoot an hvac unit on a roof in January . Won’t be anytime soon.
#139 Ian on 10.23.17 at 10:19 am
#64 ryguy
What I don’t understand is why everything in this country needs to be reactionary. Press goes “omg money laundering!!!” – where was the RCMP on this years ago? Press goes “omg tax evasion!” – was CRA out playing golf with the Plozzer? OSFI goes ‘omg subprime mortgages!!”…21 years into a bull market.
What the hell is going on? Are we ever going to have some actual proactive leadership?!
———————————
No.
This is how the country works.
Objective number 1 is maintenance of the status Que,
which means ensuring profits of the owners –
the various Oligopolies, at any cost.
Objective number 2 (optional) is to provide if possible cushion to government employees.
These are the only true objectives and foreign and internal policies swing to accommodate them.
All this talks about middle class is just jaw exercise.
The fight now is who will distribute the Infrastructure fund – 10s of billions in the years to come.
All the risk is of course outsourced to the tax payers.
#58 Harvey Burger on 10.21.17 at 7:48 pm
Whatever. Today Waze told me get off a congested highway, told me take the overpass to cross the highway, sent me back over that same overpass, and back to the highway at the same exit it told me to get off. As Garth would say, Suck and Blow.
And self-driving cars will never understand the innuendo of a nod, a head shake, a car pulled over on a narrow road to let you pass, or the myriad other complexities we rely on human intuition to make it through the day.
———-
Yeah, and what about road rage and drive by shootings.
Will they be automated, too?
Of course most Mills don’t care about debt, only payments. So look for another pop in condo sales in the next ten weeks.
————————————————————-
I still don’t get it. Have a look at page 4 of The Globe Report on Business today at an article titled: The problem of youth unemployment. In this day in age with fast changing technology the era of steady employment is becoming a thing of the past. you don’t believe me? just ask one of those thousands of former Sears employees, for example. Why anyone in their right mind would want to commit such a large amount of money, complete with mortgage payments, and be tied down to one location in this kind of environment today is beyond me.
IMHO housing will be propped up at any cost.
https://ca.finance.yahoo.com/news/buyers-regain-confidence-toronto-real-221215407.html
There is nothing else left in terms of real economy.
I would stay away from TSX.
Toronto house prices are crazy. Spending so much for a house is nuts. If you were to plop this example down in ho-hum Etobicoke it would be selling for $900k to $1.1M.
https://www.realtor.ca/Residential/Single-Family/18775491/11-Birchmount-Avenue-Welland-Ontario-L3C4A9
for those of you who have more expensive tastes this house is right accross the street
https://www.realtor.ca/Residential/Single-Family/18771866/14-BIRCHMOUNT-Avenue-Welland-Ontario-L3C4A9
So would you buy the one for 329 or the one for 749.
I know which one I would take.
Nice comment on the following link:
https://ca.finance.yahoo.com/news/buyers-regain-confidence-toronto-real-221215407.html
————————————————–
Housing is going to be the next big social shift – only the very wealthy and/or foreigners from countries where they get their wealth in unethical ways will be able to afford to own anything. No ‘regular folk’ family will own anything. Owning a home will be like the old landed gentry from the 19th century – they were the upper class, the special ones, everyone else was a servant of some kind. Renting will become the thing people aspire to – people will save up a ‘downpayment’ in order to secure a decent apartment or to pay a bribe to the property owner to let them rent. You’ll brag about the steal you got on your new rental, it’ll be like NYC in the Seinfeld era when snagging an apartment to rent was a bloodsport. For those who can’t cough up $3000-$4000 a month in rent, there’ll be communal housing where several families will be forced to share. And expect to see an increase in people willing to live three to four hours away from work just to be able to afford their own place to rent (but still not to buy). Adding another 8 hours to their workday in transit will be the only way they can manage it.
—————————————-
Now, why would one put up with such miserable life when the whole world is wide open and there are much cheaper places with much better weather is beyond me.
No matter how certifiable brainwashed and stupid we are, there are I believe some limits to that.
I bet on the opposite – the big North American cities actually becoming crime ridden ghettos. Like Detroit.
Who is right?
Time will tell, time will tell.
Condos In TO are really overpriced compared to detached houses that have gone down quite a bit since the insane top this spring. This is soon going to change, as it always does :).
#111 Tbone on 10.22.17 at 11:08 pm
There are two types of people , those that pay rent and those that collect rent .
The ones that pay rent make the ones that collect rent rich by buying a house for them.
Lots of money can be made in owning real estate and getting other people to pay for it .
There are two kinds of people. Renters and those who subsidize them. – Garth
———–
Garth,you’re on fire.
This one is for Floppy:
http://www.richmond-news.com/news/bandits-in-luxury-cars-stealing-pumpkins-in-richmond-1.23069403
If you tell a big enough lie and keep repeating it people will believe you.
posted yesterday cbc
The uncertainty sparked by the introduction of Ontario’s fair housing plan is starting to wane as formerly hesitant would-be buyers regain confidence that Toronto’s real estate market is stabilizing again, analysts and realtors said Sunday.
While some prospective buyers will be hit by new mortgage rules coming into effect on Jan. 1, the overall market will likely see little impact from the changes.
“Between April and July we saw a significant correction in home resale activity in the GTA and that followed the introduction of Ontario’s fair housing plan,” said Robert Hogue, senior economist at RBC.
“That plan really had an impact on the market,” he explained, adding the strategy was implemented when some areas were seeing 30 per cent year-over-year increase in home prices.
“Clearly the market was overheated … It had become quite vulnerable to any sort of shock,” he told Radio-Canada.
First revealed in April amid criticism that many people were being pushed out of the city by soaring house prices and the near absence of viable rental options, Ontario’s 16-point plan to reign in the market included a 15 per cent tax on foreign buyers, rent controls and a review of murky realtor practices.
According to Hogue, some areas in Toronto and the surrounding region saw subsequent drops in resale activity of up to 44 per cent, largely driven by uncertainty over how the changes would play out in the long-term.
Sylvia Santarelli, sales representative with Remax Hallmark Realty, said buyer behaviour was noticeably altered.
“They’re taking their time. Unless the house is super special, they might wait for the next one, which they weren’t in the spring,” she explained.
“We had such a lack of inventory in the spring that people were buying anything just to get their foot in the market because they were seeing increases on a month-to-month basis.”
That being said, there’s been little difference in especially trendy neighbourhoods like Riverdale, Leslieville, Roncesvalle Village and Bloor West, as well as some suburbs surrounding Toronto.
Similarly, areas that did see a drop in real estate activity are picking back up again, according to Hogue.
“We interpret this rebound as the market starting to adjust to the fair housing plan. Buyers are starting to come back into the market,” he said.
“Overall I think we’re pretty close to the bottom of this correction.”
Neil Riach, a realtor in Toronto, echoed Hogue’s analysis, telling CBC Toronto the “market is coming back quite nicely.
“Buyers are realizing that the market has not — the bottom has not fallen out of it — and they’re back in it,” he said.
There are still many wondering, though, how the new mortgage rules set to take effect on Jan. 1, 2018, will impact buyers. Earlier this month, Canada’s top banking regulator revealed that potential buyers with uninsured loans will have to undergo a stress test to see if they could withstand a hike in interest rates. Currently, about one in six, or 18 per cent, of mortgage loans in Canada are uninsured.
The revised test, coupled with the expectation that the short-term interest rate will hit two per cent by the end of 2018, could have a short-term “cooling effect” on buyers, Hogue said, though it won’t be a “large shock” on the GTA housing market.
Riach said there’s likely buyers rushing to get into a property “under the wire,” but that post-January the impact will be minimal.
“Long-term, I think that people will just adjust,” he told CBC Toronto.
“The reality is that it will affect a small number of people, but it’s not going to, in any way, damage the market.”
Huffpost post from today,
Its like a lit fuse burning to the mount of dynamite!
A significant minority of Canadians say they have already been affected by rising interest rates — despite the fact rates are still very low, and likely to head higher.
In a survey carried out by Ipsos for insolvency firm MNP, one-third of Canadians said rising interest rates had already affected their finances. The average respondent had $149 less in savings at the end of the month, after paying bills and debts, than was the case in a previous survey in June.
The survey highlights how sensitive Canadian households have become to changes in interest rates, thanks to growing debt loads. Canadians now carry the highest consumer debt of people in any G7 country, with the average household owing $1.67 in debt for every dollar of disposable income.
View photos
“It’s clear that people are nowhere near prepared for a higher rate environment,” said MNP President Grant Bazian in a statement.
“The good news is that there seems to be at least the acknowledgement now that rates are going to climb which might make people reassess their spending habits — especially using credit.”
Evidence is mounting that Canadians, to some extent, are already reassessing those spending habits.
In the wake of the Bank of Canada’s July rate hike, retail sales in Canada disappointed in August, Statistics Canada reported on Friday. Sales fell 0.3 per cent in August, while volumes fell 0.7 per cent, the largest one-month drop in several years.
The Bank of Canada raised rates twice this past summer, bringing its key lending rate to 1 per cent, from 0.5 per cent. All of Canada’s major mortgage lenders followed suit, raising mortgage rates.
The bank is scheduled to make another interest rate decision on Wednesday, but analysts say it’s likely to stay put this time around, given the slowdown in retail and exports in recent months. Nevertheless, they see further rate hikes either before the end of this year, or early next year.
Millennials appear to be struggling with higher interest rates more than others, the survey found, with four in 10 saying they have been affected so far.
Thirty-eight per cent of millennials said they fear rising interest rates could push them into bankruptcy, compared to 30 per cent of Gen-Xers and 18 per cent of Baby Boomers.
#139 Ian on 10.23.17 at 10:19 am
#142 Stan Brooks on 10.23.17 at 10:35 am
———————————————————–
The real problem is these “leaders” just don’t give a sh*t about anything except themselves. Its not about whats good for you, its whats good for the party and the cronies that come with it.
The money laundering (and other sources of funds, I cant say its just that, but its UNDENIABLE to anyone with eyes that an ENORMOUS amount of foreign money has come into this country)..IMO, it’s gone on for so long that if it stopped today the entire RE market would collapse. It would be a reset of epic proportions.
Just a personal anecdote; 3 years ago I was driving around Edmonton and looking at some new developments. At one site I looked at a couple spec houses and I remember them having really unique windows and rounded corners. I asked the sales guy on site about that, and he said something about the chinese and feng shui.
Same day different development & different builder, I noticed the houses weren’t numbered in the normal way. Rather than 2,4,6 etc, it was 8, 18, 28 etc etc. I asked the sales guy about it and said the chinese buyers are all about the 8’s in the address.
This was in Blue collar cold assed Edmonton! So I don’t know, something is & has been going on. I don’t want to be tin foil hat guy, but I don’t exactly believe the stats the govt & RE cartel say about it being 5%. The other country in an epic housing bubble Australia, read some of the comment sections about their RE, they bring up very similar points.
Who knows, just my opinion.
#139 Ian on 10.23.17 at 10:19 am
…What the hell is going on? Are we ever going to have some actual proactive leadership?!
_____________________________________
Probably not.
Proactive starts at home in 2017
151 Hamilton
I agree. Spring/summer was a good buying opportunitiy….like I posted.
Too many tail winds.
MF
You gotta get down on your knees, believe
Fold your hands and beg and plead
Gotta keep on praying
You gotta cry, rain tears of pain
Pound the floor and scream His name
‘Cause we’re still worth saving
Can’t go on like this and live like this
We can’t love like this
We gotta give this world back to God
#138 Kayaker23 on 10.23.17 at 9:59 am
I was amazed to see for sale signs in Barrie just sit for the past few months without any movement. Everyone on the blog was noting no movement and I thought this was surely a sign of things to come. Fast forward and the dozen or so for sale signs – 9 have recently had sold slapped on them. Only 1 house I notice took down their sign a few weeks back. Dead Cat bounce or maybe the push forward to buy is once again gaining steam. I am not preaching anything but this housing cycle has got me always guessing wrong. We own our home and have planned on a 2 year exit from Ontario to Nova Scotia so I watch with some anxiety that things could get ugly quickly but everything has defied logic for many years and do so going forward.
Great job Garth –
==================
Best to look at actual quants to supplement your anecdotal observations. Average prices, DOM and sales volume not looking good relative to Spring peak — momentum is clearly negative in Barrie.
https://barrie.listing.ca/detached-home-price-history.htm
#134 Bytor the Snow Dog on 10.23.17 at 9:19 am
Surely women aren’t THIS mercenary? Well, at least she returned the ring.
_______________________________________
Something’s up, although it may not be a mercenary thing:
https://www.livescience.com/14705-husbands-employment-threatens-marriage.html
“The possibility of losing your job is bad enough. But for men, unemployment status can also make it more likely their wives will divorce them, a new study finds.
Whether or not a woman had a job, however, had no effect on the likelihood that her husband would decide to leave the marriage, the researchers said.
The findings reveal that despite more women entering the workplace, the pressure on husbands to be breadwinners largely remains, according to researchers at Ohio State University.”
Generally speaking, I think Women feel better about a Man who works and brings home the bacon, and I think a Man feels more worthy of a Husband also if he brings home the bacon.
Almost seems like some caveman DNA still persists…
#111 Tbone
There are two types of people , those that pay rent and those that collect rent.
——————————————
There’s one type you forgot.
Those who rent their accommodation (thus avoiding a plethora of carrying costs) and yet hold the debt of others through investment (thus earning plenty to pay rent with lots left to enjoy life).
That’s the type you want to be.
These new rules will have a larger impact in Toronto and Vancouver…However the new 2% Stress test will also undoubtedly have some sort of an impact here in Ottawa….just not as much. Time will tell!
…So if you got laid off, have a spouse on mat leave, are going through …
Spoke to a well experienced broker / family friend at the big five out of curiosity.. .said as long as you have a letter stating the mat / pat leave spouse is returning to work at their original job / salary – they’ll go with the pre-mat/pat leave salary not the reduced one for mortgage approval. Changes very little I’d say.. but just FYI at least one of the big banks won’t punish family time…. course taking out that mortgage in Van or TO might be punishment enough
http://www.cbc.ca/news/business/mnp-interest-rates-survey-1.4367098
In the survey, 42 per cent of respondents said they are just $200 or less away from not being able to pay their bills and debts each month.
Among different generations, millennials — broadly defined as those born from 1981 to the mid-1990s — are the ones most likely to say they are feeling the effects of higher rates, with 40 per cent responding they can already feel the pinch.
They are also most concerned with their ability to repay their debts as interest rates rise, at 52 per cent, and 38 per cent of millennials said higher interest rates could move them towards bankruptcy. Only 30 per cent of generation Xers (born between the mid-1960s up to about 1980) and 18 per cent of baby boomers (born between World War II and the 1960s) also responded that way.
Not too many mentions of Vancouver lately. While I agree with Garth most of his opinions i disagree on one thing.. in Vancouver the HAM is real, there are NO stats, no controls, the RE industry corruption is elbow deep into municipal and prov politics, nobody is doing anything, money is flooding in and its not stopping anytime soon. HAM is WAY more than 5%, thats a BS number.
its. just. a. mess.
Spend some time you here in Vancouver/Richmond, youll see.
Nonplussed:
Another thing one should NEVER BUY: A TIMESHARE!
I hear daycare fees in Toronto already rising up to 20% in advance of first minimum wage hike.
Toronto School boad mulling removal of enrichment programs in the name of “inclusion”.
It’s clear we are to be kept dumber and stupider at the hands of our tax farm overlords.
Even failed lefty Bob Rae just got a plum appointment. Free everything I bet.
Etsy stock getting murdered today based on Amazon entering the craft-selling space.
Maybe Amazon will do real estate next? Seems to be no limit to their ambition.
Re: The MNP survey on interest rate sensitivity
Is anyone aware if Transunion has done an update since the two rate rises? They were the ones warning before the first rise in the summer. They really need to update their research and let us know what’s up.
Stone # 21,
“Hopefully B-20 will be the holy grail everyone has been looking for to bring real estate back down to reality. Fingers crossed and hoping hard that OSFI plugs every possible loophole.”
———————————–
Who here believes the system (politico’s) wants Real Estate prices in Canada to:
A) Stop rapidly rising.
B) Stagnate or flatten out.
C) Decline a modest amount, 10 – 20 %.
D) Decline a severe amount, 30 -50 %
————————————————–
Which one of these options (A,B,C,D) are career ending for politicos?
Remember, 70% + of the population in Canada, already owns RE.
A), B) and even C) are not a big problem.
This leaves only option “D”…..
Option D) is the cinereous, no politian wants.
Option D) brings mortgage defaults, hard recession and unemployment.
Option D) happens on your political watch and you are toast.
Justin Trudeau or John Horgan, it matters not, you are done.
Some events like the bond market moving rates or a GFC style event are beyond the systems (politicos) control, but any thing else will be blamed squarely on the current governing party.
Why leave the loopholes (Stone points out) in policy that Credit Unions / Long amortizations are ways to avoid B20 rules, when it would be, soooo easy to block the exits?
Politian’s don’t want to spend a lifetime building a career, only to throw it away over some policy gaff, once they achieve provincial or national success.
Law of Self Preservation.
https://en.wikipedia.org/wiki/Self-preservation
Think back to 2008/2009 when the Gov stopped, a very real RE correction, dead in its tracks. I sure as hell remember it as I had just sold my primary res.
Look at the dip on the linked chart for proof:
http://www.aboutinflation.com/archive/canada-real-estate-charts/canada-real-estate-charts-2011-december/canada-real-estate-30-year-trend-charts-december-2011
Any body notice the third biggest credit union in Canada, Coast Capitol Saving is expanding, nation wide?
I guess it’s just lucky timing : ]
Victor V………like so many things you read especially online, the devil really is in the details.
In this case you really have to dig and dig to find the study protocols and question parametres.
Specifically to this study, they asked a very broad question i.e. The responder’s “”feelings” about whether they could afford an increase in monthly expenses with no increase to their family income. It certainly sounds straight forward but it really is a misleading question/response paradigm.
Of couse, most people would find it difficult to absorb a n expense increase without a corresponding spending decrease but the question didn’t mention anything about a corresponding decrease in family spending. It was a simple question that didn’t actually address the reality.
I’m fairly confident that most folks can cut a few hundred bucks a month out of their mad money or discretionary spending with very little hardship. Hell, BNS have been pushing their “You’re Richer Than You Think” come on for ages now.
So, a sudden increase in fixed expenses isn’t fun but almost certainly manageable by most people up to a certain point with nothing more than a readjustment of spending priorities.
Scenario, not ‘cinereous’.
Victor V – hey snap judgment guy, did you even read what I wrote – I wasn’t basing any facts rather then what I was observing. Maybe, just maybe, my little enclave is rocking in sales while the entire surrounding area is dead stopped – I don’t know, I don’t care! Go harp up someone else’s behind – Such Moron’s on this site!! Victor V profession must be a proctologist by day – blogger by night??
#159 DamaFino
I agree , and some day I could very well be in that situation myself .
But to my point , we would still be buying the landlord his house.
Landlords don’t care where the rent money comes from.
There is a fourth type also . Those that own their house and don’t pay anybody .
And a fifth, those that pay the bank for the pleasure of living in their house.
Lots of choices for everybody !
Latest US City to declare bankruptcy?
Hartford,(population of approx. 120,000)..CAPITAL CITY of Connecticut(population approx 3.6 million) is near Bankruptcy .
High property taxes are scaring off large corporations…(AETN is leaving),combined with civil servant salaries and pensions”obligations”…are pushing it over the
edge.
IMHO,if this is happening in the US rest assured its coming to Canada…
T2 wears organic socks
https://www.youtube.com/watch?v=gi6ApjoZbwM
and avoids drinking tap water. Fluoridated water is for the serfs I guess.
@#170 Blacksheep
“Scenario, not ‘cinereous’.”
======
Geez and here I was impressed at your vocabulary and searching through Latin texts trying to find the meaning of the word!
I was thinking you were on a whole different, higher level of English vocabulary than the rest of us dawgs…….
Im crushed
Blacksheep: “Any body notice the third biggest credit union in Canada, Coast Capitol Saving is expanding, nation wide?
I guess it’s just lucky timing : ]”
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Blacksheep, I guess it depends on whose luck you're ascribing Coast Capital Savings growth.
Any Credit Union that goes national is covered by OSFI.
https://www.cujournal.com/articles/canadas-biggest-credit-union-looks-to-go-national
Coast Capital Savings is two weeks away from OSFI regulation.
http://www.fic.gov.bc.ca/pdf/fid/decisions/NOD-CU-20170814.pdf
http://www.osfi-bsif.gc.ca/Eng/osfi-if/Pages/hst.aspx
Federal credit unions
Over the past few years, significant consolidation occurred with the ten largest credit unions representing about 40 per cent of system assets. Until 2016, credit unions were regulated exclusively by the provinces.
To promote the continued growth and competitiveness of the sector and enhance financial stability, the federal government introduced amendments to the Bank Act and other federal acts to enable credit unions to incorporate and continue federally. The legislative model was based on the framework applicable to banks. The model wove in unique cooperative elements for federal credit unions and established transitional elements to facilitate the migration of credit unions to federal jurisdiction and subject to OSFI’s regulation.
Crowdy,
“Geez and here I was impressed at your vocabulary”
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Nope….Jist plane ingnant.
#169 LivinLarge on 10.23.17 at 3:21 pm
Victor V………like so many things you read especially online, the devil really is in the details.
In this case you really have to dig and dig to find the study protocols and question parametres.
Specifically to this study, they asked a very broad question i.e. The responder’s “”feelings” about whether they could afford an increase in monthly expenses with no increase to their family income. It certainly sounds straight forward but it really is a misleading question/response paradigm.
Of course, most people would find it difficult to absorb a n expense increase without a corresponding spending decrease but the question didn’t mention anything about a corresponding decrease in family spending. It was a simple question that didn’t actually address the reality.
I’m fairly confident that most folks can cut a few hundred bucks a month out of their mad money or discretionary spending with very little hardship. Hell, BNS have been pushing their “You’re Richer Than You Think” come on for ages now.
So, a sudden increase in fixed expenses isn’t fun but almost certainly manageable by most people up to a certain point with nothing more than a readjustment of spending priorities.
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Not the only study out there showing that pressure is increasing on the overly leveraged:
http://www.cbc.ca/news/business/transunion-debt-interest-rates-1.3759844
131 crowdedelevatorfartz on 10.23.17 at 8:23 am
Ethical Issues in Advanced Artificial Intelligence
Nick Bostrom
…”Since artificial intelligences are software, they can easily and quickly be copied, so long as there is hardware available to store them. The same holds for human uploads. Hardware aside, the marginal cost of creating an additional copy of an upload or an artificial intelligence after the first one has been built is near zero. Artificial minds could therefore quickly come to exist in great numbers, although it is possible that efficiency would favor concentrating computational resources in a single super-intellect….”
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oh the humanity!
https://www.wired.com/story/botnik-ai-comedy-app/
LOL bot
http://www.heraldsun.com.au/entertainment/comedy-festival/comedy-festival-2017-australian-techs-build-worldfirst-ai-comedian-to-perform-at-melbourne-comedy-festival/news-story/e4410d0e17f5fd4969cefc8865d389af
Oops # 176,
“Any Credit Union that goes national is covered by OSFI.”
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Well, you got me on that one…
It’s a good thing they are not the only option:
“Today, there are 623 credit unions and caisses populaires in Canada, with almost 3,000 branches. They hold combined assets of $350 billion and serve more than 10.1 million members.”
https://www.central1.com/about-us/credit-union-system
That’s roughly 1/3 of Canada’s population.
Lots of dough to go around for the small % of mortgagors that have issue with the big 5 banks.
That’s with out even getting into long ams.
Truck sized loopholes that will not all be closed. Just watch.
I keep saying it….Don’t fight the system.
the tech Millennials
https://www.sisterdistrict.com/
…” campaign vets launched Flippable, crunching data to identify the most winnable seats and crowdsourcing donations to finance them. Now it has nine full-time staff, has siphoned $550,000 and 3,000 volunteers into state-level campaigns across the country, and hopes to help up to 100 candidates next year.
The first real statewide test of these new organizations will arrive November 7 when Virginia voters go to the polls to elect members of the commonwealth’s House of Delegates election.
https://www.wired.com/story/the-army-of-silicon-valley-activists-trying-to-elect-dems/
#122 Nonplused on 10.23.17 at 12:53 am
Not many would know other than the very wealthy. I own a business also and will be in the 2 or 3% of the folks affected with the new changes to passive income.
The new rules for passive income are just punitive ($50K per year of dividends or passive income is not much) and hopefully the Cons can roll it back if and when they come in power. The devil will be in the details as they say.
From one of the publications:
CBC News reported that holding property through a private company is useful in avoiding inheritance taxes in France.
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#122 Nonplused on 10.23.17 at 12:53 am
Regarding Morneau holding villa in holding company
Someone just got Tboned. Garth will be docked 3 demerit points for this one. :-)
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#111 Tbone on 10.22.17 at 11:08 pm
There are two types of people , those that pay rent and those that collect rent .
The ones that pay rent make the ones that collect rent rich by buying a house for them.
Lots of money can be made in owning real estate and getting other people to pay for it .
There are two kinds of people. Renters and those who subsidize them. – Garth
#169 LivinLarge on 10.23.17 at 3:21 pm
… I’m fairly confident that most folks can cut a few hundred bucks a month out of their mad money or discretionary spending with very little hardship. Hell, BNS have been pushing their “You’re Richer Than You Think” come on for ages now.
So, a sudden increase in fixed expenses isn’t fun but almost certainly manageable by most people up to a certain point with nothing more than a readjustment of spending priorities.
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You assume people are spending on frivolous items – maybe increases in prices have something to do with it. Retail spending is down in Canada and the UK. Gas is still up, electricity is up, even fast food is up. I didn’t even mention real estate.
And if people are able to cut back will they…be able to in time – before it causes stress, financial hardship and divorces.
What about jobs losses – 12 former employees of Sears, etc. You assume that everyone is at the some place at the same time and will be able to simply cut back spending and everything will be fine. Yikes.
So look for another pop in condo sales in the next ten weeks. Then next year they can flood on here and complain about how they’re shafted.
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10 yr old broken record…
Sorry Don.
I said most people can find a couple of hundred buck to save. Sure there’s crap all over and Sears is just one of those shitstorms no one needs when raising a family ir even living alone.
I was simply pointing out the “sky is about to fall” claims of people using this study as proof is unfortunately incorrect.
I cut $30 per month from my hydro bill by nothing more than scheduling every hydro intense activity to after 7 PM or weekends and making sure every light in the house was turned offduring the day unless absolutely unavoidable and I’m retired and at home many days too.
So saving money is not impossible and most but certainly not all can save maybe $200 per month without any real hardship.
Garth had this tune in his head when he meat Dorothy
https://www.youtube.com/watch?v=_PLq0_7k1jk
Not much longer and we will be trading squirrel recipes again. Do you have a favourite Garth?
R fun
Keep in mind more people r trying to enter Canada than leave Canada .
Just got an email from my favourite realtor . He says – ‘now is the time to buy , before Jan’
Own 3 properties and looking for a 4th, student rental in Waterloo . Not buying now . We go Lower,imo. Certainly hope so for the betterment of country