Mush

Unless I have mush for brains, or enjoy recreational flogging, this will be the last blog for a while on why young people can’t afford to buy or rent houses in Van or T.O.

It’s not because armies of 1%ers scoop and hoard those places, keeping the condos dark and the houses vacant. No evidence of that. Besides, it doesn’t pass the smell test. Why would they? But it’s a convenient myth for the 99% to brandish on a stick as they march to the palace gates.

Foreign buyers? We’ve debated this one to death. In Toronto they’re an absolute non-event, according to every piece of data published, private or public. And yet the government brought in a 15% foreign buyer’s tax. It accomplished little, of course. The motivation was 100% political. It’s what politicians do.

In Van the evidence is that offshore money in concentrated areas has impacted some local prices. But the province’s own data shows most foreign buyers come to stay as residents and buy mid-priced houses. The Lambo set exists, of course, but seems not to be a market-maker. Overwhelmingly, housing markets are dominated (90% in the Lower Mainland and 95% in the GTA) by locals.

This brings us to the real reasons house prices are stupid.

Speculation. It’s rampant as real estate has become the one-asset strategy of the masses. Just read the comment section here for a week or two (then seek therapy) to ascertain that. We’ve become a nation of house-lusty automatons, drooling over listings and measuring each other in the crassest of ways – by the property acquired. The boasting over how much a house has inflated is endless, and the very notion of this blog – that greater fools buy from lesser fools – is trounced daily by the vast majority of Canadians. They’re horny for more.

If government wanted to end this, a speculation tax would be quick and efficient. Ample precedent exists. Tax short-term windfall gains as income, and stop diddling with stress tests, anti-foreigner bias, empty-house levies or mortgage regs.

Leverage. You can’t buy a $1 million investment portfolio with fifty grand, but you can buy a million-dollar house with $50,000. The ascendance of property values began in earnest when traditional 25% down payments become 10%, then finally 5% (and briefly, 0%). By trying to make real estate more accessible to people who can’t actually afford it, governments have contributed to price escalation. That would reverse if CMHC did the wise thing, and insured only those with 10% or more in their jeans.

Hoarding. Yeah, happens. But not as the tax-empty-houses crowd believes. These days an astonishing 15% of all families in the GTA, for example, own multiple properties. Overwhelmingly it’s a principal residence and an ‘investment’ condo, bought on spec. Key to this strategy is leasing the unit to try and carry it (good luck), which actually increases the pool of rental housing. It also inflates prices by creating more demand.

CMHC wipes away risk. No element of government has done more to create bubble prices and dis-entitle young buyers. By providing blanket mortgage insurance to cover every high-risk, high-ratio borrower, Canada Mortgage and Housing Agency has removed lender risk. Thus, a kid with little to put down is offered the same rate as a move-up family with a 70% down payment, even though the first-timer poses a far greater risk of default. In fact, CMHC-insured borrowers often get a better rate, since lenders know the feds are standing in the wings to bail them out. This distortion has translated into rising prices and dropping affordability. It’s time lenders shared the risk.

Unrealistic rates. An entire generation of house-horny moisters has matured knowing only the lowest money costs in history. What were ‘emergency’ rates in 2009 to save the economy from crisis became commonplace within a couple of years, then completely normal. As a consequence, we engorged on cheap money and now disbelieve interest charges might rise because, “nobody could afford it.” Household debt has surprised $2 trillion and two-thirds of that is mortgage borrowing – leveraged against house prices which have never been higher. What a massive risk. Ironically, low rates were sustained to encourage borrowing so people could afford houses. As rates fell, prices rose. Debt swelled to fill the gap. Genius move.

So, rents are high because prices are high. Duh. Not because Chinese dudes bought mansions that don’t live in much, but because house lust, speculation, cheap loans and pliant lenders made them so. By extending gobs of low-cost credit to people with scant means, governments have pimped real estate to this sad conclusion. As housing became more valuable, leasing costs have risen, too. Whacking people who own homes and keep them empty some or all of the time won’t bring prices or rents down. Believing otherwise is evidence of the real reason we have irate Mills at the gate…

Financial illiteracy. It is naïve and simplistic to believe first-time buyers should be able to afford real estate within bicycle distance of downtown gigs in cities like Toronto or Vancouver. Whether their parents could or not is irrelevant, given the pace of urban growth over a generation – plus all of the policy mistakes detailed above. It is toxic to put all of your net worth into a single asset, in one location, in one city. It’s dangerous to borrow a huge amount of money on terms that allow the lender to increase the cost every few years. It’s irresponsible to start a family and not have liquid assets to deal with reversals or educate your kids. And the last entity you should ever trust with your financial future or your long retirement is the government.

Tax others because they own things you want? If you buy that, you’ve lost your way.

171 comments ↓

#1 IVoteIndependent on 11.09.17 at 5:41 pm

It seems to me that the rent vs buy (with mortgage) argument boils down to what you prefer to rent.
You can rent a property from a landlord, or you can rent money from a bank. Either way you are renting, so which do you prefer to rent. Which is the better deal?

#2 Dave on 11.09.17 at 5:45 pm

Regulators are conceived to help the masses but 100% of them do the exact opposite ie CHMC, Lottery, etc. In the end, they all just promote to the max the very product they should regulate.

BC Lottery – use your game sense. What a joke

#3 HPVictoria on 11.09.17 at 5:46 pm

Couldn’t agree with you more, Garth. Great post.

#4 LOANS are treated as INCOME to welfare Ontario Works, etc. on 11.09.17 at 5:46 pm

Regardless of xenophobia or not, LOANS are considered taxable income in the eyes of Ontario works or any welfare office in Canada.
Loans reduce the welfare cheque of a welfare recipient.
BUT people who are flipping condos in Toronto and Vancouver do not pay taxes on their profits.

Why should a 45-year-old single parent lose her welfare cheque for taking a payday loan or credit card payment to pay for her groceries, but a 1%er can flip a condo, make over 100k, and none of that gets treated as income.

LOANS are treated as taxable income to welfare recipients, but condo sales profit are not treated as income in Canada.

#5 crowdedelevatorfartz on 11.09.17 at 5:49 pm

Garth you’re kicking the hornets nest!
Unleash the mush!

#6 Ok on 11.09.17 at 5:50 pm

Canada = Tax
Sad but true.

#7 LOANS are treated as INCOME to welfare Ontario Works, etc. on 11.09.17 at 5:51 pm

From the Globe and Mail on how penalizing a welfare recipient for taking on student loans causes genocide:

“Kimberly Rogers died a miserable, lonely death. We will know in the next few weeks whether she also died in vain.

Ms. Rogers was 40 years old and eight months pregnant when her body was found in her second-floor walkup in Sudbury during a record-setting heat wave in August, 2001.

Three months earlier, she had pleaded guilty to welfare fraud for continuing to collect benefits while receiving student loans.

As part of her sentence, she had been forbidden to leave what one supporter called her “hovel” except for a three-hour period each week, and she had been cut off the welfare rolls.

In death, Ms. Rogers was portrayed as a victim of the Mike Harris government, which had expertly exploited the feeling among many voters that welfare recipients had it soft.

The government’s critics said she had been treated little better than a caged animal.”

Because she took student loans which had to be paid back, Mike Harris Ontario government morons and buffoons treated her worse than a white collar criminal accused of Enron-like fraud or embezzlement.

Canadian welfare treats a Liability (Loans) as an Asset (Income) because they are delusional and anti-poor.

HOWEVER when someone flips a condo for 100,000+ profit, it’s treated as not income.

#8 Mr Reality on 11.09.17 at 6:01 pm

Sheeple. It’s becoming multi-generational.

Mr R

#9 broader mind on 11.09.17 at 6:02 pm

So, rents are high because prices are high. Duh. Rents are more closely tied to mortgage costs. When landlords renew in a few years at higher rates the rental cost explosion will be epic.

#10 Penny Henny on 11.09.17 at 6:02 pm

Anyone see Jimmy?

#11 TurnerNation on 11.09.17 at 6:05 pm

The hunter or the hunted.

Re. yesterday’s character. For our elite leader’s pictures I hold my thumb sideways on the screen, just under the nose. Gives a view of eyes/mind above.

Dogs, try it!

https://www.globeseries.com/forum2016/media/mayorgregorrobertson8x10.jpg

and

http://mtltimes.ca/wp-content/uploads/2017/07/Vale%CC%81rie-Plante-1-web-493×300.jpg

#12 FOUR FINGERS WATSON on 11.09.17 at 6:10 pm

If government wanted to end this, a speculation tax would be quick and efficient.
……………………………..

Bingo. Government knowingly created the bubble. They pay lip service to ending the bubble but they don’t really want to because it would cause too much suffering and a drop in government revenues.

#13 Eyes wide shut on 11.09.17 at 6:11 pm

While most of your reasons for the frothy property market make sense, I am not sure why you refuse to accept any role of foreign buyers. Until the FB-tax was instituted earlier this year, every interest group claimed lack of any meaningful data. And any data that were published were suspect and not entirely credible. While there are a combination of reasons that helped take some air out of the bubble since the 15% tax was announced, there is no denying that it played a part in accomplishing what it was supposed to. Moreover, speculation, a hope that a greater fool would always be available at any price, was a factor in both – local and foreign buying. And no, I don’t think it is racist to rightfully pin a portion of the blame on foreign money.

#14 allovertheplace on 11.09.17 at 6:13 pm

It’s amazing how many people feel entitled to live in a “world class” city, yet can’t even manage to earn the paltry national income average. It’d be one thing if this were relegated to a single misguided generation, but all I see is entitlement being doubled down on as you get younger.

At the end of the day, Canadians will get what they deserve. This is a country of risk averse, consumer/employees with a fatally false dichotomy between “workers” and “management”. People need to realize their manager is just another Canadian but with a slightly higher income. All that means here is that they’re more leveraged than you.

So, we’ll huff and puff about things we don’t like, but there’s no chance anyone is actually going to change their behaviour. This is a national past time. Like bitching about high gas prices while driving a pickup or SUV, complaining about hydro costs while forgoing renewables like solar in favour of that new granite counter top and kitchen reno, the list goes on.

#15 pay your taxes on 11.09.17 at 6:13 pm

Vancouver is much different than the rest of Canada. The number of foreign exchange students and temporary visa holders who rent here is what is driving the insane rental prices. There’s big money in Vancouver now Garth. You can be forgiven for not understanding how things work here as you’re an Easterner.

People who didn’t buy a few years back are twice the fools: first they’ve missed out on massive tax free gains and now they get the massive rent increases that go along with bloated house prices and the nosebleed level of demand for rental accommodation. The ones who bought are leaving the city with their windfall gains, the rest are leaving with their tails between their legs and bank accounts drained.

Cheap and easy credit drove the peasant’s end of the market but now the peasant accommodation is being torn down and replaced with expensive high rises. I agree that attacking people with more than one abode is a political move, probably made to mask the many policy failures that led to this mess.

#16 Smartalox on 11.09.17 at 6:17 pm

Love the ad. I saw another one today from the same institution asking ‘Are You Ready for the Mortgage Stress Test?’

Not as good as my all time favourite from the Big Blue bank in Richmond, BC: ‘Thinking of Selling Your Home? Talk to one of our Mortgage Specialists, and rent it instead!’

#17 Guy in Calgary on 11.09.17 at 6:18 pm

The only thing I do not understand with the rampant local speculation argument is what “middle class” families are making enough combined income to debt service these huge mortgages (along with other debt). I do not understand how a middle class income say $200k household, services a $800k mortgage then allegedly, another middle class family comes along and purchases the property for more. It just seems like there is a missing piece to the puzzle.

#18 The ryguy on 11.09.17 at 6:26 pm

oh boy the comments on this one should be good!

I live in Edmonton, couple years ago I went to 2 different developments by 2 different builders and looked at show homes. Both had unique features I asked about, and both salespeople said it was cause that’s what the Chinese wanted. Maybe a coincidence, but I doubt it.

Regarding the government stats..they don’t take into account students, #d companies, or halfie relatives. It’s real, i live here, I work here, I’m not making it up.

Specers are part of the problem too, but to dismiss what so many people claim as “statistically insignificant”, is wrong. If me and smoking man just started ranting about the Swedes buying stuff up, we would be laughed at, and rightfully so, because NO ONE would have seen it.

Govt is lying, or are skewing the stats, or cherry picking them. My eyes ain’t lying to me.

#19 MSM-Free Zone on 11.09.17 at 6:29 pm

This blog reminds me of a lot of AM talk-radio shows, where 80% of the callers (minus the bump-stock, banjo-picking Ford/Trump nation whackos, of course) offer 90% valid and sensible opinions, of which 100% are soundly rejected by over-lobbied politicians of every stripe.

Con/Lib/NDP, it doesn’t matter, as I’ve resided in a broad selection of politically-tilted provinces. In general, we Canadians live, not in a democracy, but a lobbyocracy, where repeatedly, the benefits to the well-connected few continually outweigh the benefits to society in general. It’s been around since Sir John A. and is not about to change anytime soon.

The best thing one can do is become a well-informed, broad spectrum (not just MSM) news-junkie, intelligently sift the wheat from the chaff, and continually adapt to the change in the swamp every four years.

#20 pay your taxes on 11.09.17 at 6:29 pm

It is toxic to put all of your net worth into a single asset, in one location, in one city. It’s dangerous to borrow a huge amount of money on terms that allow the lender to increase the cost every few years. It’s irresponsible to start a family and not have liquid assets to deal with reversals or educate your kids. And the last entity you should ever trust with your financial future or your long retirement is the government.”

The best passage I’ve read on this blog and well worth the price of admission. I mostly disagree with the causes of the current state of things, but fully agree with the message of balance , and the meaning of life being more than owning a house.

#21 AB Boxster on 11.09.17 at 6:33 pm

Mostly it’s just a good lesson on how pathetically useless government is at making effective policy or reacting to the economy.
Government thinks that it can control the economy and the behavior of people.

Mostly they just screw things up.

Millennials looking for government to solve their problems are going to be hugely disappointed.

#22 millmech on 11.09.17 at 6:38 pm

#9
Your wrong, since most homeowners have at least one if not two suites just to pay the mortgage they can not afford to lose a months rent as they live payday to payday. Rents will come down as more and more homeowners convert housing to tenanted suites to fund the ever escalating costs of home ownership.
Do the math, on my area there is competition for renters as homeowners are getting squeezed for cash flow, there are three, two bedroom suites for rent for $800.00 on my cul de sac alone. With every new house with a new suite or two to capture the 30% of non homeowners who rent and all the investor condo landlords, renters will have a lot to choose from.

#23 X on 11.09.17 at 6:38 pm

‘That would reverse if CMHC did the wise thing, and insured only those with 10% or more in their jeans.’ Garth

I have said this a few times as well. Seems like the reasonable thing to do to protect the Canadian taxpayer, and to push a little more burden onto the banks.

#24 allovertheplace on 11.09.17 at 6:45 pm

@ #15 Pay Your Taxes

You’re right that Vancouver and the LM is different. There’s a massive contingent of born-and-raised that can’t reconcile the fact that things change. They’re grasping at the dream of living in a world class city while carrying out the lifestyle decisions of every other suburbanite in the country. The math simply doesn’t work, but these people won’t hear it. Van may have the highest concentration of greater fools in the country, that’s why you think it’s different. Get out of your echo chamber and get some perspective that has relevance in a global free market system.

Do Canadians dislike capitalism, or just fundamentally not understand it?

#25 Sam the Sham on 11.09.17 at 6:47 pm

#4 LOANS are treated as INCOME to welfare Ontario Works, etc.

“LOANS are treated as taxable income to welfare recipients, but condo sales profit are not treated as income in Canada.”

If you get caught not reporting profits from a condo sale that isn’t your principle residence, you are facing serious problem with CRA, maybe jail time!!

#26 Alan Dee on 11.09.17 at 6:47 pm

Canada has the highest population growths in the G7 over the last 5 years. And one of the highest urban concentrations. And Canada’s ownership rate is high as its ever been. At the same time interest rates have been low. And a weak currency makes our market cheap to foreigners. And an aging generation has supported politicians that implement policies that rob from younger generations to take care of their elders (like 20%+ of all health care goes people in their last years of life.) All these things contribute to higher prices.

A balanced portfolio is a great idea. But no one knows if interest rates will go up or down, or if the stock market will go up or down or if jobs will go up or down.

Your interpretation of the B20 is wrong. The B20 was not instituted as a stress test to protect against a future bubble (tho that is how its been sold). The B20 was introduced to solve a simple problem. Interest rates are low to keep the currency down and to encourage business investment – but that creates serious mis-allocation into real estate. So how does the government keep interest rates low for business but high for real-estate? – Easy – the B20. It effectively raises rates for real-estate without actually raising the rates. If/when rates do rise, there may be no reason to keep the B20 and it might very well disappear.

#27 SusanM on 11.09.17 at 6:48 pm

Another outstanding analysis. It is astonishing how many borrowers are financial illiterates: more thought goes into researching their car purchase, than in making probably their most expensive purchase ever.

It is disappointing that the fiscal policy in this country countenanced banks pimping huge mortgages. However, it is incredibly naive for people to agree on an unstable mortgage debt that can so readily overwhelm their after-tax earnings.

As for that comment in #1, listen up, cupcake, Vancouver is *not* different to the rest of the country in terms of the precarious nature of real estate or ‘big money’.

Designating the blog’s author an Easterner is irrelevant. You think he operates in a vacuum? The fiscal analysis holds true for any locality that has inflated pricing based on low-cost money and relies on no changes to that cost.

#28 Jimmy on 11.09.17 at 6:50 pm

#10
Hello. Jimmy is still here. Fighting for number one.

#29 Kilt on 11.09.17 at 6:56 pm

I don’t think you can ignore 10% of purchases by Foreign buyers as being irrelevant, and then say speculators are driving the market.
Leverage, sure I’ll buy that.
Hoarding – I have several friends who make a very good living off being landlords. They either go the ‘buy and hold’ route, adding a new property every few years. They’ve been doing this for several decades, so the mortgages on the early purchases are easily paid with today’s rent. And they are renewing at much lower rates. Others tend to focus on zoning and try to purchases homes that ‘may’ be re-zoned as townhome or multi-family. These people have no day jobs and one even has hired a person to collect rents. It is actually something I am considering getting into if we see a collapse in prices.
I also think ‘Recency Effect’ has a much stronger influence on prices. When homes are trading hands for $1 Million for a few years, buyers tend to forget that five years ago those same homes were selling for $600K. So when a seller drops his price to $920K the buyers jump at it because they think they are getting a good deal.
Kilt

#30 Crazy millennial on 11.09.17 at 7:03 pm

Well Garth, you saved the best post on this topic for last. Totally agree with everything you said. All those reason are why our real estate is stupid expensive. Looking forward to tomorrow’s topic.

#31 rainclouds on 11.09.17 at 7:03 pm

Nobody in any level of government wants the hot potato.None of them have the leadership or political courage to call this mess for what it is.
The right thing to do is knock the stuffing out of the RE market in overheated areas. NOT. GOING.TO.HAPPEN.

Carry on.

#32 not 1st on 11.09.17 at 7:07 pm

Garth, please just talk Trump for a while. Its the only subject that matters.

#33 For Flop on 11.09.17 at 7:14 pm

#121 For those about to flop… on 11.08.17 at 10:41 pm
Possible Pink Snow.
Here is a case that someone calling themselves ” For flop” helped me with not that long ago.
They paid 1.94
Were asking 1.78
Sold 13 days ago.

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

Bugged a friend for the sold price

3443 E 51St Ave, Vancouver paid 1.945 June 2016 asking 1.78 ass 1.862

sold $168.8

#34 Dobermanduke on 11.09.17 at 7:14 pm

Garth

Today’s post was bang on! I agree with you 100%.

For those who choose to believe something else, so be it. You have done your part, I wouldn’t waste any more breath.

#35 Vanecdotal on 11.09.17 at 7:15 pm

10 cc’s of suggested reading, stat: “Sacred Commerce”.

Conscious Capitalism is real. Threadless, Saje, just 2 successful co.’s off the top of my head that employ this concept top-down, there’s many more. This divisive us-vs-them rhetoric really needs to stop, there are better ways forward.

Now extrapolate to the bigger picture, fiscal, economic, housing, health, education, and social policy. Perhaps a better alternative to “let them eat cake”?

#36 Don't get it on 11.09.17 at 7:19 pm

DELETED

#37 Dave on 11.09.17 at 7:20 pm

COme on Garth, with most homes costing well over a million dollars in Vancouver and the median salary about 70K, there is no way prices are supported by locals.

Most people trade up over time, obviously, using a combination of equity and debt. Such a vacuous argument. – Garth

#38 MSM-Free Zone on 11.09.17 at 7:21 pm

#7 LOANS are treated as INCOME to welfare Ontario Works, etc. on 11.09.17 at 5:51 pm
“…..Because she took student loans which had to be paid back, Mike Harris Ontario government morons and buffoons treated her worse than a white collar criminal accused of Enron-like fraud or embezzlement….”
_________________________________

In early 1981, I left a frozen Ontario for balmy, chinook-cloaked Calgary, boarded a CP Air B747 , affectionately known as the ‘eastern lunch-box special’ along with hundreds of other early-20’s singles making our fortunes going west, only to be greeted as ‘Eastern Creeps and Bums’ by then King Ralph.

A decade later, during another resource-dependent, self-induced economic downturn, the ever folksy, aw-shucks, Klein drunkenly stumbled into the Herb Jamieson Centre for the homeless, calling them ‘bums, tossing cash at their feet, and ranted at them to ‘get a job’.

Some things never change.

#39 akashic record on 11.09.17 at 7:25 pm

#165 Herb on 11.09.17 at 8:54 am

#96 akashic record

Where were you during history lessons?
Communists did this social engineering before.

Considering that the western part the Soviet Union was destroyed in a little war with Germany, what solution would a libertarian genius have offered?

Pick your historical precedents carefully.

—-

Carpet bombing destroyed way more buildings all over Europe, with higher population density than in the “western part of the Soviet Union”.

Only countries with Communist totalitarian governments following WW2 were stupid enough for this social engineering.

The ideologically, politically normal part of Europe started accelerated re-building as a solution.

#40 akashic record on 11.09.17 at 7:30 pm

#26 Alan Dee

That was pretty good.

#41 -=jwk=- on 11.09.17 at 7:34 pm

@ #73 feldar from yesterday

sorry jwk # 31. there’s nothing “quick” about losing
your property .in the states for non-payment of residential or farm property. Like Ontario, its a slowprocess, lots of appeals, “work-outs” with small payments, arbitration, and so forth . Your argument, in the context of what Garth is arguing, is poorly chosen. Down there property rights exist meaningfully, unlike here, where they are rather looked down on.

——————–

I lol’d. Explain how millions of homes were repossessed during the crash – some with no mortgage on them? Care to look up the appropriation laws in your state? I they want your land to build a road, they build a road. period. They can take whatever they want, and it’s even easier than up here. Again, try missing your taxes. In Miam-dade your property will be on the court house steps in 90 days. In toronto it takes *years* for the city to take over,and you can pay $1 and restart the whole process…

I own more property in the US (FL, SC, CA) than I do on Canada. I do that becasue the rental laws are massively in favor of the landlord ( 3 day evictions in FL!) You should know what you rights are, because you are living in la-la land if you think being a ‘property owner’ in the US makes you special. You aren’t special. Look it up.

#42 Boombust on 11.09.17 at 7:35 pm

#29 Kilt

The problem with 10% of foreign buyers is only if the other 90% of stupid locals try th match them dollar for dollar and that is certainly what has happened in Metro Vancouver. However, it was historically low interest rates that enabled them to even try to “compete” in the first place.

That is now over with though, locals are maxed out, are faced with burdensome debt, bloated mortgages and they will end up being The Greater Fools for literally “buying into” this nonsense. After all, no one held a gun to their heads.

#43 Nonplused on 11.09.17 at 7:36 pm

Hard to add much to your post today, Garth, because you covered just about everything.

But I did find one thing to add:

“Tax others because they own things you want? If you buy that, you’ve lost your way.”

For those that need help pushing the buggy up the hill, one day it will be your turn to be taxed. Oh I will be even more redundant, every single tax you propose somebody else should suffer, you will suffer too in your time if things go your way.

Democracy seems to be entirely about voting for someone who promises you a free lunch. Now, I have commented on the impossibility of free lunch for everyone but nobody working in the kitchen before but it’s been a while.

Governments do not create wealth, they “redistribute it” (after taking a bunch for themselves). So, social warriors, keep in mind all the new taxes you would like your doctor or plumber to pay are really only a good idea if you never find the capacity yourself to become a plumber. And even then it doesn’t work, because as I have had to explain before the plumber bakes his taxes into what he charges you to fix your toilet in the middle of the night because you flushed a sock down there for some reason or a tree grew a root through your sewer pipe. I don’t know about you, but the last time I had a plumber out it was $140/hr. I know he wasn’t taking home more than $30, but there is a lot of overhead and much of it is the umpteen levels of taxes between him and the government.

Let’s look at our poor plumber’s (well millennials and SJW’s think he’s rich) trip to my house to replace a faucet:

Let’s say he starts at 7-11 and grabs a coffee (GST, property tax, the taxes the franchisee pays, both federal and provincial, business license.)

Then he needs gas (all of the above plus carbon and fuel taxes and don’t forget royalites).

He’s bought a van and tools (so more GST and income taxes and property taxes for everyone that built those things.)

He had to get himself a journeyman’s license (so student debt, banks charging interest and paying taxes on the gains.)

He’s got a business license so more fees.

Insurance and licensing on his van which all amounts to more taxes.

The people that financed all of this including the banks and their shareholders are also paying income taxes.

He needs a cell phone now which means even more GST, even on the monthly connection, and all of those people that provide the service are paying taxes. All of them, even the guy at the store front, but especially the company that installed the tower.

And then he has a house, and he has to pay property taxes on that as well as carbon taxes and all the taxes in-bedded in anything he needs done.
And there is more, but I’m growing tired of it.

Do you think our poor plumber has the money? No, he doesn’t. Which is why you pay $140 an hour, not $30. There are a lot of things to be paid up the chain including the income tax the receptionist at his employer has to pay, and you need to pay for all of this.

That, folks, is why a quarter pounder meal is now pretty much $10. The guy flipping the burger is taxed, the guy that owns the franchise is taxed, McDonald’s is taxed, the farmer who grew the wheat for the bun is taxed, the rancher who raised the cow is taxed, Coke is taxed, the trucker that drove the stuff to the store is taxed, the truck is taxed, the company that built the truck is taxed, all the fuel used is taxed, the lights are taxed, the waste is taxed, everything is taxed and it’s taxed at each point 3-4 times, federal, provincial, civic, and HST, and land taxes and royalties.

Whatever you buy, up to 50% of the cost is taxes. This is after you already paid taxes.

Oh and then don’t forget if you have a small business you need a lawyer and an accountant to get you through all this and then they have to pay taxes too. But they don’t. As I have said time and time again the end user pays all taxes. If there weren’t so many taxes, we wouldn’t need a minimum wage. $5/hour would seem pretty good if McD’s could sell a lunch for $3 like they used to. Or if a new car cost $4,000 like they used to. McD’s has fared better on a percentage basis but they don’t have the government helping them design their burgers.

And amazingly, it’s still not enough money to balance the budget.

#44 raisemyrent on 11.09.17 at 7:40 pm

I read daily, but never read the comments anymore, because who does? but to Garth: cheers for 3+ great posts in a row. You’re on fire these days.

#45 SoggyShorts on 11.09.17 at 7:40 pm

#18 The ryguy on 11.09.17 at 6:26 pm

Straight from wikipedia:
“Asian Canadians refers to Canadians who can trace their ancestry back to the continent of Asia or Asian people. Canadians of Asian ancestry comprise the largest visible minority group in Canada, at roughly 15% of the Canadian population, and is the fastest growing. ”

If you were a developer would you add a few features to your homes that might interest the fastest growing demographic?
Asian ancestry =/= Foreigner

If canadians of Finnish decent were 15% of our population and the fastest growing part I would expect new homes to come with saunas installed. I would also not jump to the conclusion that the Finns are laundering money through Edmonton realestate and driving the prices.

#46 Bill T. on 11.09.17 at 7:46 pm

In the last ten years it was a genius idea to leverage up and put everything you own into anything real estate related in Vancouver. Fortunes were made for everyone foolish enough to do so. Every year I think it will change but it’s still rolling strong. What will next year bring….

#47 The real Kip on 11.09.17 at 7:48 pm

And after all the houseaggeddon blathering, I am still being offered 5-year $$$ at 3% or less. Houses in my area are selling again albeit at approximately a 25% reduction from the spring which means they’re still up year over year! Love this country!

#48 People still buying on 11.09.17 at 7:48 pm

I can’t believe it, but people still seem to be buying in the GTA, sure not as many, but still things are moving for ridiculous prices. I just don’t get it anymore. I don’t know how people are covering these insane mortgages and all of the other normal bills of life! I mean I realize most of its debt, but people just don’t seem to be bothered by debt anymore. Sad, not sure if this market will ever return to normal levels, where sound economic fundamentals are aligned with the cost of housing. Maybe it IS different this time and please don’t attack, I am not a real estate pumper, I don’t even own a house, but it seems like prices are no where near “normal.”

#49 Ace Goodheart on 11.09.17 at 7:48 pm

RE: “The motivation was 100% political. It’s what politicians do.”

The motivation behind any action, or inaction, taken by a politician, is to get re-elected.

Any benefit to the general public that might result from that action, or inaction, is just a co-incidence.

#50 The real Kip on 11.09.17 at 7:51 pm

The basement dwellers here would do well to buy now on the slight dip while there is still some selection. Prices have likely bottomed out as sales pick up again.

#51 Pete from St. Cesaire on 11.09.17 at 7:58 pm

A question about the empty-house tax in B.C.: What are the rules? If someone was happy with leaving the house empty, would they be permitted to rent it out for $50/month or would that be deemed ‘invalid’? You could rent it to your nephew who never stays there. What business is it of yours how much your tenants use the place? That begs the next question.
What happens if your tenants leave the house empty most of the time?
Being Canada I’m sure that the ‘authorities’ have the small-print written so as to penalize you for any of the above occurrences.

#52 crowdedelevatorfartz on 11.09.17 at 8:01 pm

@#44 raisemyrent
“I read daily, but never read the comments anymore,”
++++++
Come on. Admit it. You peek at the comments every ONCE in a while.

Did you know that the number 4 ( Four) sounds like “Death” in Chinese?

Hence YOUR comment( that you never read) number 44 sounds like “Double Death”

Is that cool or what!

#53 For those about to flop... on 11.09.17 at 8:01 pm

Recent Sale Report.

This one is so fresh the heart is still pumping.

3380 w 28th ave Vancouver.

Ask 2.59

Sold 2.58

Tax assessment 2.8

On the market 17 days and pretty much got ask…

M43BC

#54 Mark on 11.09.17 at 8:03 pm

“The problem with 10% of foreign buyers is only if the other 90% of stupid locals try th match them dollar for dollar and that is certainly what has happened in Metro Vancouver. However, it was historically low interest rates that enabled them to even try to “compete” in the first place.”

And how do you know its not the 10% foreigners (that number actually sounds pretty high, I believe the number is much closer to 5%) competing with the 90% of the locals who drove up the prices?

Evidence is scant of significant foreign participation in Toronto/Vancouver’s RE markets. However, there are lots of racist attitudes out there towards people who our former Prime Minister once described as not being “old stock Canadians”.

#55 MF on 11.09.17 at 8:06 pm

#17 Guy in Calgary on 11.09.17 at 6:18 pm

“I do not understand how a middle class income say $200k household, services a $800k mortgage then allegedly, another middle class family comes along and purchases the property for more. It just seems like there is a missing piece to the puzzle.”

-Tons of equity was created with this housing bubble. That buyer you are talking about most likely bought a place in the 90’s (with zero mortgage) or in the mid 2000’s and has seen the value sky rocket. Some buyers have doubled their equity in less than 5 years and are on their third or fourth home since the bubble began.

It seems like anyone who has made money in RE (almost everyone) believes they are a financial genius and cannot help themselves but buy more. A lot of these same folks will put all their equity into a new property. This one asset strategy is supposed to be “risky” but it has given everyone massive positive leverage.

#15 pay your taxes on 11.09.17 at 6:13 pm

“People who didn’t buy a few years back are twice the fools: first they’ve missed out on massive tax free gains and now they get the massive rent increases that go along with bloated house prices and the nosebleed level of demand for rental accommodation.”

-Happening in the GTA too. I know, because I am one of those fools lol.

#1 IVoteIndependent on 11.09.17 at 5:41 pm

-Umm, because renting for 25 years leaves you without an asset. This is unless you are smart enough to invest your savings, and find a place where rent is not eating all your income. With rental rates at extreme levels in our cities (and getting worse), people would rather have an asset that most likely appreciated in value at the end rather than nothing.

MF

#56 crowdedelevatorfartz on 11.09.17 at 8:06 pm

@#39 Akashik Record
“The ideologically, politically normal part of Europe started accelerated re-building as a solution.”
+++++
I believe after WWII th reconstruction of Europe was called The Marshall Plan since the US didnt want to fight Germany again 20 years later…..like the second time

#57 Happening now on 11.09.17 at 8:14 pm

Too funny Garth!!!…..prices have gone way, way past “stupid” to the point where average incomes can’t possibly come close to affording these prices regardless of the amount of leverage used and yet you continue to minimise the effect of Ham….theres a awesome piece of investigative journalism on knowledge network …
Watch it if you dare

https://www.knowledge.ca/program/vancouver-no-fixed-address

#58 AGuyInVancouver on 11.09.17 at 8:15 pm

#24 allovertheplace on 11.09.17 at 6:45 pm
@ #15 Pay Your Taxes

You’re right that Vancouver and the LM is different. There’s a massive contingent of born-and-raised that can’t reconcile the fact that things change. They’re grasping at the dream of living in a world class city while carrying out the lifestyle decisions of every other suburbanite in the country. The math simply doesn’t work, but these people won’t hear it. Van may have the highest concentration of greater fools in the country, that’s why you think it’s different. Get out of your echo chamber and get some perspective that has relevance in a global free market system.

Do Canadians dislike capitalism, or just fundamentally not understand it?
_ _ _
LOL, Vancouver, world class? Certainly not world class wages or job opportunities. Definitely not world class arts & culture or sports teams. World class money laundering maybe.

#59 MF on 11.09.17 at 8:17 pm

#14 allovertheplace on 11.09.17 at 6:13 pm

“So, we’ll huff and puff about things we don’t like, but there’s no chance anyone is actually going to change their behaviour. This is a national past time. Like bitching about high gas prices while driving a pickup or SUV, complaining about hydro costs while forgoing renewables like solar in favour of that new granite counter top and kitchen reno, the list goes on.”

-I see this as a positive. Worrying about first world problems sure beats worrying about the next meal, typhoon, or civil war.

And if you think Canadians are the only ones who complain, go read an American forum and see how much they hate each other and complain. They have us beat.

MF

#60 dakkie on 11.09.17 at 8:19 pm

Housing Bubble Confirmed,It’s The Same Cities As The Last Housing Bubble

http://investmentwatchblog.com/housing-bubble-confirmedits-the-same-cities-as-the-last-housing-bubble/

#61 For those about to flop... on 11.09.17 at 8:23 pm

For flop.

7:14 pm
#121 For those about to flop… on 11.08.17 at 10:41 pm
Possible Pink Snow.
Here is a case that someone calling themselves ” For flop” helped me with not that long ago.
They paid 1.94
Were asking 1.78
Sold 13 days ago.

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

Bugged a friend for the sold price

3443 E 51St Ave, Vancouver paid 1.945 June 2016 asking 1.78 ass 1.862

sold $168.8

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

I see I got some mail.

There are people better on here at breaking this down but a few of them seem to be taking a break and so I will embarrass myself yet again by taking a stab at the result.

I’m guessing that the sold number that you are trying to pass on is 1.68 and so the percentage difference between buy and sell is roughly 13%.

Then if we factor in 5% for closing and are generous with opportunity costs and just add two percent because they just got the poop kicked out of them ,that lands us at a nice even 20%

20% of the buy price gave me a loss of 388k but they just bought a 12k Lazy Boy ,so lets say a 400k loss.

If the numbers hold 20% is roughly tied for biggest loss percentage at the moment.

Dollar losses on condos are obviously less ,with the exception of the people talking it in the ear in Richmond with their 3 million dollar condos.

I will present it as CONFIRMED PINK SNOW probably not until February 2018 ,which is why I try and network and show real time results because if you slept through what happened late last year in Vancouver and this summer in the GTA ,a lot can happen in four months.

M43BC

#62 MF on 11.09.17 at 8:24 pm

#43 Nonplused on 11.09.17 at 7:36 pm

“Governments do not create wealth, they “redistribute it” (after taking a bunch for themselves). So, social warriors, keep in mind all the new taxes you would like your doctor or plumber to pay are really only a good idea if you never find the capacity yourself to become a plumber.”

-First off, no government worker is going to work for free. If they did, goodbye services and accountability. Hello corruption and chaos.

Next, I think we can put away the idea that the country hates its small businesses (except, like you said, some younger, naive/lazy T2 supporters). The country did not fall for that pathetic move and the idiot Liberals were forced to change their approach.

MF

#63 Wrk.dover on 11.09.17 at 8:31 pm

Purchase AND earning power of currency doing what while RE soars???

You can sleep in your car at the Halifax Delta parkade for $25.30/night AKA $750.00/month, with a room in the hotel being an optional extra for considerably a whole lot more.

A maxed TSFA GIC income is not good enough for an hour a night in that parkade.

#64 Ponzius Pilatus on 11.09.17 at 8:31 pm

DELETED

#65 Wrk.dover on 11.09.17 at 8:40 pm

#43 Nonplused on 11.09.17 at 7:36 pm
———————————————

I am liking your posts more and more, everyday.

You get it, and I hope your head doesn’t explode from what you are getting.

#66 Jman on 11.09.17 at 8:40 pm

“If canadians of Finnish decent were 15% of our population and the fastest growing part I would expect new homes to come with saunas installed. I would also not jump to the conclusion that the Finns are laundering money through Edmonton realestate and driving the prices.”

No but if their is clear proof that foreigners (of any race) are laundering money and using shady tactics such as shell companies to offshore money and buy RE far in excess of what the official numbers tell us…then yes I will conclude they are likely affecting local RE with large cash injections. Garth has continually buried his head in that sand on this because it doesn’t fit his narrative. And he stifles any discuss with claims of xenophobia. Stating facts in no way is xenophobia. The funny part is. If he actually took the time to talk to Asians in Vancouver he would find they are the first to talk about what is happening. Also, have a look at the rapid demographic change over a short period of time in Van and it totally runs counter to the 10% claims This is not a racism issue its a basic fact issue. It simply happens that one visible race is involved at the present time because of certain economic and political and environmental conditions. (environmental = see https://www.thestar.com/news/immigration/2016/03/11/environmental-migrants-breathing-easier-in-canada.html). Identifying a trend is not racism. I personally have nothing against any nationality or race. I haven’t said a word about foreign ownership being wrong or immigration being wrong. Simply observing that it is most definitely having a meaningful affect on the market beyond what is being officially documented.

Keep in mind G also cries against ageism. Whilst in the following 20 articles makes negative blanket statements about millennials. Convenient way to stifle certain discussions…you be the judge.

I make fun of everyone. Especially people who see scary Asians under the bed. — Garth

#67 Long-Time Lurker on 11.09.17 at 8:47 pm

I liked your analysis and commentary, Garth. Thank you for continuing your blog.

Hey, Smokey.

If you want a marketing play for your book, try sending a copy to Charlie Sheen. If he likes it he’ll talk about it and his fan base will start buying it. (Celebrity endorsement)

Put in a good sales copy with the book. It probably has to go through his personal assistant first, too.

#68 For those about to flop... on 11.09.17 at 8:47 pm

What ever happened to ” I see debt people”…

M43BC

” Mapping StatesWith Enormous Debt Problems. Where Does Your State Rank?

With all the recent discussion around tax reform and how it will impact the federal deficit, it’s important to take a step back and look at another looming fiscal crisis: debt held by the state governments. You might be surprised to find out that overall debt at the state level is now well over $1.75 trillion. What does that look like mapped across the country?”

Top 10 States with the Most Debt
We’ve included the total debt load and assets (in $ billions), and ordered the list according to the debt-to-asset ratio.

1. New Jersey – $176.51 debt and $56.2 assets at 314.1%

2. Illinois – $188.93 debt and $62.2 assets at 303.7%

3. Massachusetts – $89.2 debt and $36.29 assets at 245.8%

4. Connecticut – $67.61 debt and $29.75 assets at 227.2%

5. Kentucky – $49.63 debt and $35.04 assets at 141.6%

6. California – $279.75 debt and $249.44 assets at 112.2%

7. Maryland – $50.92 debt and $48.5 assets at 105%

8. Rhode Island – $7.37 debt and $7.078 assets at 104.2%

9. Hawaii – $19.87 debt and $21.24 assets at 93.6%

10. Louisiana – $25.1 debt and $31.16 assets at 80.6″

https://howmuch.net/articles/the-united-states-of-debt

#69 Cathy Groom on 11.09.17 at 8:51 pm

Good insight about the here and now of Canadians and their current real estate dilemma. Have enjoyed reading your blog daily for the past few months, it’s a challenge to find articles and opinion based on bottom up analysis. Looking forward to more!

#70 Dave on 11.09.17 at 8:55 pm

You forgot immigration. 150k people come to the GTA a year they need a place to live.

#71 the ryguy on 11.09.17 at 9:02 pm

#45 SoggyShorts on 11.09.17 at 7:40 pm

I would also not jump to the conclusion that the Finns are laundering money through Edmonton realestate and driving the prices.

__________________________________________

I haven’t jumped to any conclusions. Ive read a ton about how they are doing the same things in Australia & London. Its not negligible was all I was saying. I say its something, you say its zero, who do you think is closer to the truth?

#72 A123 on 11.09.17 at 9:03 pm

Re #1
It seems to me that the rent vs buy (with mortgage) argument boils down to what you prefer to rent.
You can rent a property from a landlord, or you can rent money from a bank. Either way you are renting, so which do you prefer to rent. Which is the better deal?
———————-
When you rent, you can leave any time within your lease terms or sublet. There are little more financial obligations than your monthly payments.

When you buy (or as you call it, rent from the bank) and it is the GTA or Vancouver area, you owe big money. If the selling price drops , and you sell, the “rent” can be big money.
So there is a big difference.
Better to rent than buy when it is a bubble market.
—————
Hey Garth
Just read the comment section here for a week or two (then seek therapy) to ascertain that.
———
Since you read all the comments, should we set up a fund for you for therapy?

I am now beyond help. – Garth

#73 Dr. on 11.09.17 at 9:11 pm

#17 Guy in Calgary
” I do not understand how a middle class income say $200k household, services a $800k mortgage…”
——————————-
I do not understand either, specially since median family income in Canada is about $75k. Families with 200k, you are talking about, are not middle class. They are in top few percents.

#74 n1tro on 11.09.17 at 9:24 pm

#4 LOANS are treated as INCOME to welfare Ontario Works, etc. on 11.09.17 at 5:46 pm

Regardless of xenophobia or not, LOANS are considered taxable income in the eyes of Ontario works or any welfare office in Canada.
Loans reduce the welfare cheque of a welfare recipient.
BUT people who are flipping condos in Toronto and Vancouver do not pay taxes on their profits.

Why should a 45-year-old single parent lose her welfare cheque for taking a payday loan or credit card payment to pay for her groceries, but a 1%er can flip a condo, make over 100k, and none of that gets treated as income.

LOANS are treated as taxable income to welfare recipients, but condo sales profit are not treated as income in Canada.
–—–++++++++++++—+-+-
The “rules” favour the rich. Like your hero Justin Trudeau. How hard is that to comprehend?! All the bitching won’t change this.

“Get rich or die trying” – Rapper 50 Cent

#75 Stone on 11.09.17 at 9:24 pm

#66 Jman on 11.09.17 at 8:40 pm
“If canadians of Finnish decent were 15% of our population and the fastest growing part I would expect new homes to come with saunas installed. I would also not jump to the conclusion that the Finns are laundering money through Edmonton realestate and driving the prices.”

No but if their is clear proof that foreigners (of any race) are laundering money and using shady tactics such as shell companies to offshore money and buy RE far in excess of what the official numbers tell us…then yes I will conclude they are likely affecting local RE with large cash injections. Garth has continually buried his head in that sand on this because it doesn’t fit his narrative. And he stifles any discuss with claims of xenophobia. Stating facts in no way is xenophobia. The funny part is. If he actually took the time to talk to Asians in Vancouver he would find they are the first to talk about what is happening. Also, have a look at the rapid demographic change over a short period of time in Van and it totally runs counter to the 10% claims This is not a racism issue its a basic fact issue. It simply happens that one visible race is involved at the present time because of certain economic and political and environmental conditions. (environmental = see https://www.thestar.com/news/immigration/2016/03/11/environmental-migrants-breathing-easier-in-canada.html). Identifying a trend is not racism. I personally have nothing against any nationality or race. I haven’t said a word about foreign ownership being wrong or immigration being wrong. Simply observing that it is most definitely having a meaningful affect on the market beyond what is being officially documented.

Keep in mind G also cries against ageism. Whilst in the following 20 articles makes negative blanket statements about millennials. Convenient way to stifle certain discussions…you be the judge.

I make fun of everyone. Especially people who see scary Asians under the bed. — Garth

——

Not a day goes by that I don’t laugh so hard I nearly pee myself when I read the comments section of this blog. Thanks to our poet biker for all the great insights as well as the non-stop comic relief when responding to some of the commentators. Scary Asians under the bed. How do you come up with all of this? LOL

I think rather than an apple a day keeps the doctor away, it should instead be, a laugh (or multiple thereof) a day will keep the doctor away.

Glad I found this blog.

#76 Newcomer on 11.09.17 at 9:25 pm

Garth, I am guessing that we would be on the same page if I were to say that, for things like rent where, unlike RE purchases, there is no leverage and no moral hazard, prices are set by supply and demand. The only way that high purchase prices can impact this by reducing supply because it encourages people to hold homes empty because they see them purely as investments. If people were not allowed to do that high purchase prices would not impact rental costs. In short, the solution to the problem you write about today is none other than the legislation you trashed yesterday.

Rentable properties are on the market already. That tens of thousands of tenant-ready places are ‘held back’ in Van is a myth. – Garth

#77 Danny on 11.09.17 at 9:27 pm

Garth
Yes we don’t know the true extent of foreign home buyers in Canada….that is what Mayor Tory said many months ago.
Did you see the advertisement on the weather network for a planned high rise condominium in Toronto last week……it was all written in Chinese…..not one word in English.
I am not sure but if I was Chinese and owned a company in China….doing business in Canada…..why would I not want to own property in Canada? ….basically a more safe Country than most places in the world to keep money.

I don’t blame them…..in case of trouble….Canada is a welcoming place for immigrants….and relatively safe place to invest.
I support strongly multiculturalism and diversity. …but speculation in housing has had an impact on pricing.

Maybe one day…..somehow Revenue Canada will be able to truly know the extent of foreign owners of property in Canada.

Almost 8 million Canadaians speak primarily in a language other than English or French, with Cantonese and Mandarin being the main ones. Makes sense to advertise that way. – Garth

#78 Smoking Man on 11.09.17 at 9:29 pm

Garth how can you expect the kids to have financial litaracy when they are void of common logic and obsessed with getting like on facebook. That’s all that matters to them.

They don’t realize they are schooled social constructs of truly mental educators.

Kids, Ive been downtown for the last few weeks interacting with the newly schooled. And I guarantee anyone born after 1993 showing a degree to a prospective employer that cares about the bottom line, in a few years will be a huge disadvantage.

Go for a govt gig. Its your only chance.

How said is that?

Dr Smoking Man
PhD Herdonomics

#79 jim on 11.09.17 at 9:44 pm

#15

“There’s big money in Vancouver now Garth. You can be forgiven for not understanding how things work here as you’re an Easterner.”

How interesting. Unlike Garth, it is my hometown. Not to mention I was there last week, visiting from Seattle.

Please tell me about this ‘big money’.

Certainly you don’t mean salaries. Salaries in Vancouver are pathetic. An equivalent position to mine (assuming you could find one) would pay half, not even taking into account the currency difference.

Add to that taxes, consumer goods, housing costs, etc etc….

I’d love to see some stats on this ‘big money’. Hint: Chinese millionaires are outliers, they don’t make up 30% of the citizenry.

#80 jim on 11.09.17 at 9:49 pm

#24

“You’re right that Vancouver and the LM is different. There’s a massive contingent of born-and-raised that can’t reconcile the fact that things change.”

What a dumb claim. Cancer is a ‘change’. Doesn’t mean that you have to be happy about it.

“They’re grasping at the dream of living in a world class city while carrying out the lifestyle decisions of every other suburbanite in the country.”

World class city… keep telling yourself that. I was in Moscow, Kiev, Hong Kong, Singapore, LA, London, Zurich, NYC and Chicago this year. Please point me to all the high paying jobs, corporate headquarters and art galleries/museums in Vancouver. World class my #$#$.

“Get out of your echo chamber and get some perspective that has relevance in a global free market system…. Do Canadians dislike capitalism, or just fundamentally not understand it?”

Wow, you know nothing about free markets OR capitalism. Embarrassing. Education these days.

The CMHC is the OPPOSITE of capitalism. It is market intervention at its finest. Apparently YOU don’t understand capitalism.

In a free market there are no CMHCs, government subsidies to banks, government purchases of bank-held mortgage securities, RRSP withdrawal incentive programs, etc etc.

How embarrassing that you don’t even understand the basics, yet you point a finger at other people.

#81 Canadian Moose on 11.09.17 at 9:51 pm

It’s about money, always has been and always will be whether its you, me, business or govt.

“The point is ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind”

Gordon Gekko

#82 Smoking Man on 11.09.17 at 9:57 pm

I’m feeling it. Economic Nationalism coming to Canada real soon. Identity politics so yesterday.

To bad I’ll be somewhere else to totally enjoy the shit show watching the liberals totally lose there collective damaged minds.

Flip flops year round.

#83 Jman on 11.09.17 at 10:00 pm

Scary Asians under the bed. How do you come up with all of this?

Yeah that’s a brilliant comeback. Might wanna pull your head out of someone’s butt there bud.

Just another BS deflect of many deflects cause the facts counter the claims. Point out anywhere I mentioned fear of Asians or anything that could be construed as remotely close? LOL Stating reality has nothing to do with fear. Claiming fear and xenophobia however allows one to censor reasonable comments that counters one’s claims. hmmmm Some are dead set against facts when it upsets the narrative and will do anything to cover rather than admit they were wrong. Ego yo.

#84 crowdedelevatorfartz on 11.09.17 at 10:01 pm

@#38 MSM Free
“In early 1981, I left a frozen Ontario for balmy, chinook-cloaked Calgary, boarded a CP Air B747 …”
++++++

Well I’ll be roped, branded and hogtied.

I left the East Coast and drove out to Cowtown in early 1980 to seek fame and fortune.

My car broke down in Airdrie just short of Cowtown and I woke up the next morning to the Emergency Broadcast system announcing the eruption of Mt St Helen’s…..Everything smelled of sulphur….I was in heaven…..It was like the entire world had ripped a big one.
Alas it was all downhill from there……the economy was as gaseous as a Trudeau promise…..

I went further west to be closer to the “eruption” location.

#85 OttawaGuyRenting on 11.09.17 at 10:14 pm

#7 LOANS are treated as INCOME to welfare Ontario Works, etc. on 11.09.17 at 5:51 pm
——————-

Who are you? Where can I read more of your insight?

You smart

#86 Lost...but not leased on 11.09.17 at 10:14 pm

From last post #243 LivinLarge

Your comment (?!?)obfuscates the point that the wealthy in Canada pursue tax avoidance schemes….or conversely in the 1999 case, KPMG themselves devised a vehicle to do so.

This is even more germaine and pertinent as elitist club members T2 and Moroneau invoked fire and brimstone fingerpointing at the middle class as tax cheats…these “tax cheats” were equally pursuing tax “structuring ” BUT within the context of Canadian laws,and not some foreign tax haven which seem to be a private club for likes of Moroneau and Trudeau.

The documentary laid out the cases…Canadians negotiated amnesty with CRA..aka they could have been charged= what they did may have been ILLEGAL ..but seems these elites are above the law……so your points are rather WTF?

These cases are not unique, but seem to surface all the time. These elites are not going to go broke paying the taxes..this seems to be some sort of psychosis of the need to win as well as the attitude that only the lower classes should pay taxes, its an insult to the 1%.

#87 Pimps R Us on 11.09.17 at 10:23 pm

As you say, “governments have pimped real estate to this sad conclusion”. And therein lies the problem: since this abundantly clear to many, they also have little reason government would do an about face; indeed, with all the measures taken in the past, it is natural to believe govt will keep the party going at almost all cost. The rub here lies in “almost”. Some of us, including myself and presumably you, believe that factors have been building up that make pimping now completely unsustainable as a government policy. But that is largely based on things that are or may unfold in the US, china, and the middle east, among others. So, nobody has a good grip on how long our pimping politicians can keep going, and what new pimping tricks they might pull out of their hats. In that sense, it is hard to blame the house horny: what is certain is that the pimpin’ policy will be stretched to the max.

#88 Deplorable Space Dust on 11.09.17 at 10:25 pm

#82 Smoking Man on 11.09.17 at 9:57 pm

I’m feeling it. Economic Nationalism coming to Canada real soon. Identity politics so yesterday.

To bad I’ll be somewhere else to totally enjoy the shit show watching the liberals totally lose there collective damaged minds.

Flip flops year round.
..

Jeez dude you’ve been saying that for years… could you hurry up and get off the pot already… or else we’ll think you are a total BSer

#89 Smoking Man on 11.09.17 at 10:33 pm

The entire reason energy east pipe line died was because all those rounded up Saudis under incarsirated at the moment would give a shit load of loot to mental case liberal causes to make sure they maintained market share and keeped our oil sands in the ground.

T2 and duck loving butts not so Nobel. A bit of self interest and the thrill of trying to make pick up trucks go extinct. Sorry my girls. Not going to happen.

Real men are like big dogs. They sleep a lot. They don’t give a shit if you take a milk bone out of there mouth. But if you take away the meat. And they get hungry. There going to bite you back hard.

It’s all coming out soon.

#90 Vanecdotal on 11.09.17 at 10:43 pm

Hmmm, a lot of vacant properties not in the rental stream in a city where >51% of people rent. Andy Yan disagrees with even the upwardly revised officially vacant City of Van dwelling count. Air B&B another toxic layer to housing crisis.

https://beta.theglobeandmail.com/news/british-columbia/vancouver-has-the-highest-ratio-of-empty-underused-homes-in-35-years/article33961876/?ref=http://www.theglobeandmail.com&

“Last year, 66,719 empty or underutilized units were recorded in and around Vancouver, which represents the highest proportion in the past 35 years, said Andy Yan, director of Simon Fraser University’s City Program… “I didn’t expect it to go up [in 2016], I had actually thought it would remain stable or the same or even possibly go down,” Mr. Yan said. “It really shows the challenges in trying to house the region.”

His estimates of empty and underutilized units in Vancouver are more than double the 10,800 found by a city-commissioned study, which was published last year before council proposed its own vacancy tax.

That analysis examined BC Hydro electricity data for the city’s 225,000 homes over a decade and found that by 2014, just under 5 per cent were empty for a year or more.

The two studies use very different methodologies, “vastly different data sets and vastly different standards” as to what constitutes an empty home, Mr. Yan said.

Mr. Yan said the increasing popularity of short-term rental platforms like Airbnb likely played a role in the increase of 8,500 more empty or underused units in the region over the past five years.

“These would take units off the rental market – that’s the difference between 2011 and 2016,” he said. “[That’s when] short-term rentals became really in vogue in terms of residential real estate holdings.”

Note: In the course of the past year the City of Van doubled their official unoccupied dwelling estimate.

#91 Millmech on 11.09.17 at 10:49 pm

#55 MF
You should buy as soon as possible,me I’ll continue to rent and hit my early fifties with a seven figure portfolio thanks to renting(banking 36k/yr).What is the point of working when I will be pulling in 70k-80k in income every year for the rest of my life with no portfolio depletion.I could buy a nice house in Van with that cash and be the belle of the ball on social media attracting all those likes for my smart move, but then I would have to work forever to maintain that financial albatross around my neck.Not!

#92 Pete from St. Cesaire on 11.09.17 at 10:56 pm

Smokey: You’re missing one thing about university degrees: They’re really just certificates of conformity; reassuring your potential employers that you aren’t a free thinker, or a S4!T disturber, or non-PC, or averse to feminism, nor do you have any aspirations of individuality.
Employers already know that the degrees are worthless in terms of education, knowledge or intelligence.

#93 Lost...but not leased on 11.09.17 at 11:06 pm

Vancouver..world class city ?
Let’s recap…

BC had elected a NDP Gov’t in 1972..
It took quite a hit from all the goofy socialist legislation..
The NDP were turfed in 1975 by Social Credit Gov’t.

Trudeau Liberals , aka Federal Gov’t economic disaster, oversaw the carnage of early 1980’s(aka recall 20% interest rates). BC was in recession mode.

BC Gov’t brought Expo 86….which then evolved into a landing spot for scared Hong Kong $$$. Since then, pimping RE is the mainstay of BC economy.

World Class?..seems to be a generic definition applied to Cities that have actually been hollowed out via displacement of middles and lower classes, and in their place are expensive shops, restaurants, hotels, theatres operas, etc. but nothing of substance.

Perhaps World Class can also be synonymous with “conquered”, “spoils of war”…”defeat”?

#94 Big Daddy on 11.09.17 at 11:36 pm

I’m hearing from whiny Millenials that rents are skyrocketing because the majority of shaky owners are going Air B&B in droves to try and make the mortgage. Of course few ‘landlords’ have thought it through…first you lose your capital gain exemption because its no longer a principal residence….then you have to get a business license….pay taxes….and risk two crackwhores throwing an all you can poke and smoke party resulting in the total fragging of your suite and the loss of everything you once held dear. Greed is not always good. Gordon Gekko was a fictional character not a role model. Housing is no longer an investment….it’s become a casino.

#95 Cici on 11.09.17 at 11:40 pm

Amen. Garth is a good man. Listen to him!

#96 Lost...but not leased on 11.10.17 at 12:05 am

#89 Vanecdotal

The “official”reported numbers of empty or vacant condos are pure BS…junk science methodology meets fake news.

I was at Richmond Center mall this evening. A scan of the hi -rises and via observing dark condos(ie ZERO lights on) are that as a conservative estimate approx.90% of the condos are vacant.

This is not an anomaly…this has been observed for years in other parts of Richmond, from SFH to townhomes to hi rise condos.

#97 Tony on 11.10.17 at 12:06 am

Re: #28 Jimmy on 11.09.17 at 6:50 pm

I saw a second and a third not too long ago.

#98 morrey on 11.10.17 at 12:08 am

Just read the comment section here for a week or two (then seek therapy)


and read Prof Josh Gordon from SFU.
https://torontolife.com/real-estate/qa-joshua-gordon-researcher-blames-buyers-rising-home-prices-toronto/

#99 AGuyInVancouver on 11.10.17 at 12:29 am

#54 Mark
In a long litany of dumb comments, that’s one of your dumbest.

#100 TheDood on 11.10.17 at 1:06 am

#15 pay your taxes on 11.09.17 at 6:13 pm

Vancouver is much different than the rest of Canada……
_____________________________________

I agree, it is much different. People in Vancouver are in ALOT more debt than people from other parts of the country. There is (as you say) big money here, but only in a few pockets. The masses – 99.99999% – don’t have a pot to piss in. They sure are proud to be property owners though (broke property owners!)

#101 Russ on 11.10.17 at 1:45 am

Lost…but not leased on 11.09.17 at 11:06 pm

Vancouver..world class city ?
Let’s recap…

BC had elected a NDP Gov’t in 1972..
It took quite a hit from all the goofy socialist legislation..
The NDP were turfed in 1975 by Social Credit Gov’t.

Trudeau Liberals , aka Federal Gov’t economic disaster, oversaw the carnage of early 1980’s(aka recall 20% interest rates). BC was in recession mode.

BC Gov’t brought Expo 86….which then evolved into a landing spot for scared Hong Kong $$$. Since then, pimping RE is the mainstay of BC economy.

World Class?..seems to be a generic definition applied to Cities that have actually been hollowed out via displacement of middles and lower classes, and in their place are expensive shops, restaurants, hotels, theatres operas, etc. but nothing of substance.
==================================

What about the 2010 Winter Olympics?

Doesn’t that re-qualify us as world class?

Heck. Even Wayne and Janet showed up for that party.

Pretty world classy if ya ask me.

#102 Dave on 11.10.17 at 2:05 am

Foreign investors have way more influence on the market than 5-10%… through compound influence!

Say there are 100 homes in a neighborhood. Foreigners with bags of cash from who knows where buy 5 houses for 20% above market value. Now the 5 locals who sold need a place to live, so they take their new piles of cash and get in bidding competitions to buy replacement homes. Then those home sellers have more cash than they expected and go on and get in bidding competitions to buy replacement homes and so on. So the trickle down effect on the market of the initial 5% foreign investment is HUGE….

And to make things more tight, government restrictions on development and endless fake news promoting fear of missing out have there effects….

And finally, removing mandatory retirement years ago must have an effect on housing as people will live in there homes longer rather than downsizing and moving to popular retirement towns, and they will work 5-10 more years than in the past at the top of their salary while mortgage free, so many will be enticed to invest in more real estate with there excess cash.

Millennials are screwed every which way I must say!

#103 Stan Brooks on 11.10.17 at 2:15 am

The government does not want to end speculation.

It is the only thing left in the house of cards that our economy is.

Why do you think are we importing 1 million immigrants in the next 3 years?
For them to take over the debt slavery as the current debt slaves up to their eyeballs in debt for the stupid cardboard particle house or glass condo can not take on debt any more, nor afford kids (their purpose in life is to pay the mortgage).

There was a lot of spitting on Trump here but the guy was received as royalty in China, made deals for 250 billions accompanied by 2 dozen top American CEOs and is about to unleash major tax break budget.

In contrast our lightweight trust fund tax cheating ‘leaders’ are increasing taxes in the worst possible time, hide their fortunes in foreign companies and offshore heavens and will never ever demand any attention on the world scene except for their socks and corruption.

#104 Howard on 11.10.17 at 4:38 am

Vancouver :
– No economy beyond house flipping, yoga studios, and Lululemon.
– No nightlife beyond pot smoking in Stanley Park.
– No cuisine if you don’t feel like having sushi every night.
– Awful, insufferable people. Really.
– Mediocre transit (though better than that other “world class” city Toronto).
– Laughable wages, even by Canadian standards.
– Discharging of untreated sewage directly into the ocean.
– Laughable arts and music scene (again, no nightlife).

Oh yeah, move over Manhattan!

#105 Where's The Money Guido? on 11.10.17 at 4:40 am

Re; #92 Lost…but not leased on 11.09.17 at 11:06 pm
BC Gov’t brought Expo 86….which then evolved into a landing spot for scared Hong Kong $$$. Since then, pimping RE is the mainstay of BC economy.
—————-
Totally agree.
But let’s not forget the triad connection to the Expo land sellout.

http://www.primetimecrime.com/Articles/RobertRead/Sidewinder%20page%201.htm

Significant portions of some large Canadian urban centres are also owned by Chinese entrepreneurs. For example, it is estimated that Li Ka-Shing owns with his son at least one sixth to one third of downtown Vancouver. (S)
Stanley Ho https://www.wsj.com/articles/SB10001424052748704207504575129102781344536

Ho was also named by the Canadian Government, citing the Manila Standard newspaper, as having a link to the Kung Lok Triad (Chinese mafia) …
One of Macao’s richest with a superstar singer daughter
https://en.wikipedia.org/wiki/Stanley_Ho
https://en.wikipedia.org/wiki/Pansy_Ho

Yup, no influence there, cough, cough

#106 Dolce Vita on 11.10.17 at 4:52 am

B20 will slow things down a bit next year, but, it will not slow down Assignment/Flipping in the new condo market – currently the tax cheat Forex esp. in YVR according to CRA.

The only thing that I can think of, to unwind this crazy single asset Canadian passtime, is a good old fashioned job sucking recession to strike fear in the RE obsessed and over leveraged heart – and to put a decade long financial dent in it as well [the other thing was 21.46% in the early 80s, but tell Poloz that].

Every 10 years or so we get a good old fashioned job sucking recession and they are Biblical, thief in the night speed.

We are due for another.

The rest is minutiae until a good old fashioned job sucking recession happens.

#107 Stone on 11.10.17 at 5:04 am

#83 Jman on 11.09.17 at 10:00 pm
Scary Asians under the bed. How do you come up with all of this?

Yeah that’s a brilliant comeback. Might wanna pull your head out of someone’s butt there bud.

Just another BS deflect of many deflects cause the facts counter the claims. Point out anywhere I mentioned fear of Asians or anything that could be construed as remotely close? LOL Stating reality has nothing to do with fear. Claiming fear and xenophobia however allows one to censor reasonable comments that counters one’s claims. hmmmm Some are dead set against facts when it upsets the narrative and will do anything to cover rather than admit they were wrong. Ego yo.

——-

Lighten up there bud. Life is short. I enjoy the humour and banter of this blog, that’s all. It’s his blog and he can do as he wishes. He spends the money and time and you want to dictate how he should run it. That’s rich. We’re all just visitors here. If you don’t like it, don’t know why you bother adding a comment or reading the blog. You’re more than welcome to set up your own and then you can set the rules or read another that suits your mindset and doesn’t offend your sensibilities. Outside of that, you can remove the stick that’s up your ass and enjoy life more. Like I said, life is short. Just lower the sensitivity meter a bit.

Your welcome.

#108 Where's The Money Guido? on 11.10.17 at 5:29 am

Re: #220 Josh in Calgary on 11.09.17 at 3:09 pm

If someone has two cars, and you have none, do you deserve one? — Garth
A few people have taken issue with the statement above. It’s really the main difference between Capitalism and Communism.

A little history on communism:

http://ukreloaded.com/cultural-destruction-and-the-khazarian-mafia/

#109 IHCTD9 on 11.10.17 at 6:59 am

“It is naïve and simplistic to believe first-time buyers should be able to afford real estate within bicycle distance of downtown gigs in cities like Toronto or Vancouver.”
__________________________

Read the above twice kids. Also you may extend that statement to include every SFD in either of those two cities. You can thank your peers for going insane attempting to pay these prices and thus supporting them.

In my little story from yesterday, the vehicles represented the cost of RE, and Dealership represented the City. If you go to the biggest dealership in town, all you’re going to see is expensive cars.

If you go to Bill’s fine used autos, you might be able to get into a car you can actually afford. It might not be an F350 King Ranch, but it’ll still get you to work just fine.

But, we already know all this right kids?

#110 Dharma Bum on 11.10.17 at 6:59 am

#17 Guy in Galgary

I do not understand how a middle class income say $200k household, services a $800k mortgage then allegedly, another middle class family comes along and purchases the property for more.
——————————————————————–

“There is . . . no greater tragedy than discontentment; the worst of faults is wanting more – always!” – Lao Tzu

#111 IHCTD9 on 11.10.17 at 7:17 am

#14 allovertheplace on 11.09.17 at 6:13 pm

So, we’ll huff and puff about things we don’t like, but there’s no chance anyone is actually going to change their behaviour. This is a national past time. Like bitching about high gas prices while driving a pickup or SUV, complaining about hydro costs while forgoing renewables like solar in favour of that new granite counter top and kitchen reno, the list goes on.
___________________________________

Yes Sir, like complaining about rent costs — right after paying them.

Some options are just not on the table for the kiddies these days, so they’ll pay and suffer until they see the light. Some never will.

Most of the kiddies I know are doing great, and are home owners too. Nice truck in the driveway, nice quad in the garage, nice chunk of equity carved into the property after a few years.

Of course, I don’t live in the GTA/YVR…

#112 crowdedelevatorfartz on 11.10.17 at 7:40 am

@#104 where’s the money

Ahhhh yes expo 86 and Li Ka Shing.

Quite a sweet heart deal for Mr Shing.

The BC Govt loaned him the money INTEREST FREE to buy what was it? 26 ACRES of water front property in the downtown core of Vancouver on False Creek?
And the loan didnt have to even start being paid off for up to 20 years……where do I find deals like that?
But it gets better.
Then. When toxic levels of pollution were found in the all the soil of False Creek ( due to the fact False creek was used for 100 years for Shipyards, Train yards, Lumber yards, paint factories, Sweeneries,etc. Pollution ? Who knew?).
The Province ( as the seller) had to remediate all the soil for costs close to the original sale price.

As one political wag opined,
” It was the greatest land give away in North America since Manhattan was traded for glass beads”.

#113 N on 11.10.17 at 7:55 am

Thanks for sharing this Morrey…..

#97 morrey on 11.10.17 at 12:08 am
Just read the comment section here for a week or two (then seek therapy)


and read Prof Josh Gordon from SFU.
https://torontolife.com/real-estate/qa-joshua-gordon-researcher-blames-buyers-rising-home-prices-toronto/

#114 worthy of a repeat on 11.10.17 at 8:11 am

It’s about money, always has been and always will be whether its you, me, business or govt.

“The point is ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind”

Gordon Gekko

…………….applauds

#115 worthy of a repeat on 11.10.17 at 8:11 am

It’s about money, always has been and always will be whether its you, me, business or govt.

“The point is ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind”

Gordon Gekko

………..applauds

#116 Pot calling the kettle Black on 11.10.17 at 8:14 am

Like I said, life is short. Just lower the sensitivity meter a bit.

……….

hilarious

#117 Stone on 11.10.17 at 8:25 am

#90 Millmech on 11.09.17 at 10:49 pm
#55 MF
You should buy as soon as possible,me I’ll continue to rent and hit my early fifties with a seven figure portfolio thanks to renting(banking 36k/yr).What is the point of working when I will be pulling in 70k-80k in income every year for the rest of my life with no portfolio depletion.I could buy a nice house in Van with that cash and be the belle of the ball on social media attracting all those likes for my smart move, but then I would have to work forever to maintain that financial albatross around my neck.Not!

——

I totally agree. You call it the financial albatross around your neck, I call it the shackles that bind and weigh you down. I’ve never felt freer than since selling my house. If prices drop in the $300,000 range, I might reconsider as then it will only make up a small amount of my total net worth. Otherwise, I feel free like a bird renting.

Also , good on you for banking the $36k/yr. Hope you get to the seven figure portfolio sooner than you think.

#118 LivinLarge on 11.10.17 at 8:35 am

Dolce, “Every 10 years or so we get a good old fashioned job sucking recession and they are Biblical, thief in the night speed.

We are due for another.” …Nope, another myth of the great unwashed masses. This is no more true than if you toss a coin 20 times and it comes up heads each time. On the 21st toss you aren’t “due” for a “tails” any more than you were due for a “tails” on the second toss.

Using just two metrics of broad general growth in the global economy (capital growth of CDN bank shares and spot price of gold) the global economy has grown by a compound annual rate of approx. 7.85% since 2000. This includes the 08-12 shit storm.

I’m not advocating buying bank shares or gold, just that they both broadly mirror the global and domestic sentiments of economic growth.

So, we aren’t “due” for any recession any more than we are “due” for another world war.

#119 IHCTD9 on 11.10.17 at 9:06 am

#43 Nonplused on 11.09.17 at 7:36 pm

And amazingly, it’s still not enough money to balance the budget.
________________________________________

That last part is all you need to know. Taxes up and down the supply chain out the whazoo by three layers of government – and we’re still swilling an 11 figure deficit and a 13 figure debt total.

Now consider the fact that just about no one in the country cares about this, and we’re going to get more Trudeau style goofballs until the financial pain starts to rival having your arm cut off with a pre WW1 power hack saw.

#120 IHCTD9 on 11.10.17 at 9:21 am

#102 Stan Brooks on 11.10.17 at 2:15 am

Why do you think are we importing 1 million immigrants in the next 3 years? For them to take over the debt slavery…
_____________________

Yep, diversity is our strength ie – tax mules from abroad are welcomed with open arms. 300K/yr won’t be enough. We’re going to need every last one of the 500,000/yr as was recommended, and all of them will need to become gainfully employed (and pay taxes) asap.

Those are the big questions: Will the immigrants find work, will they create jobs, and will they spend what they earn in large part increasing revenues and GDP.

I’m going to be right on this one: It won’t be enough, and it’s too late to try and catch up.

That’s why our governments are going to stay broke, and why they are spending 90%+ of their time in power trying to figure out new ways to tax us.

#121 Penny Henny on 11.10.17 at 9:56 am

Hmmmm, that’s strange. A certain commenter here forgot to post his daily broadcast of what his portfolio did yesterday. Now why would that be?

#122 Denise#1 on 11.10.17 at 9:59 am

Regarding the Paradise Papers: Perhaps if the ultra-rich didn’t hide their income in offshore tax havens, the governments wouldn’t be so strapped for cash. Then these said governments could properly & efficiently end this real estate debacle because they’d be collecting the appropriate taxes due – from EVERYBODY.

Having international accounts does not mean corporations or individuals did not pay their required share of income prior to moving the remaining dollars. Naive comment. — Garth

#123 Herb on 11.10.17 at 10:23 am

#39 akashic record,

forget anthroposophy etc. and study a little history. My cruel streak suggests reminding you that carpet bombing destroyed inhabitants as well as buildings, but let’s not go there.

You might check how the accommodation problem was solved in Germany during and after the war, and how Germany got the funds for reconstruction while Russia did not. (Hints: Bretton Woods, Marshall Plan, Cold War.)

Communist ideology had nothing to do with it, except in subsequent propaganda, of course. Practicing the art of the possible did.

#124 Dissident on 11.10.17 at 10:26 am

#1 IVoteIndependent on 11.09.17 at 5:41 pm

You can rent a property from a landlord, or you can rent money from a bank. Either way you are renting, so which do you prefer to rent. Which is the better deal?

– – – – – – – – – – – – – – –

Oh snap..! True tho.

Bottom line, don’t bite off more than you can chew. Either way, you need to have money to save and invest for future use, regardless on how much you squander on rent or on homeownership. Which scenario allows you to do that – depends on the market, your income and the type of crib you want to get. I feel like this is more of a lifestyle/budgeting issue than a rent vs own issue.

#125 LivinLarge on 11.10.17 at 10:27 am

BTW, in case my underlying point in my last post was too subtle…why do you think the often mentioned 7% return for a balanced 60/40 ETF portfolio is so important?

Since about 2000 when ETFs started to multiply, that 60/40 mix with regular rebalancing has delivered such efficacy in mirroring the global economy. Why? Because that is precisely what ETFs are designed to do.

So, do you want to throw the dice every day thinking you’re wiser than the global economy or do you want to sit back and let a properly compensated professional advisor keep your personal financial health in line with the global financial health?

#126 Mike in Toronto on 11.10.17 at 10:29 am

The only person getting $36k from me for the next few years will be my nanny. Almost entirely after-tax money too, as the deductions are capped and applied to my wife’s salary.

The nanny of course will pay more taxes on the money after I pay her (and the accountants to make sure her ei, epp, wsib, t4, roe etc are ok)

All cheaper than daycare because we’re ‘too rich’.

#127 Not A Victim on 11.10.17 at 10:42 am

Apparently I’m a crazy millennial for trusting my math over the supreme wisdom of the mob.

My retirement plan includes never owning a house and never needing my wife to work. At 25, with no debt, expecting 5% yoy return average, I should be sitting on a mill and a half by the time I retire.

I think this is a better plan than trying to squeeze myself into a precarious RE market. I’ll have more fun managing my own investments anyway.

My plans will change and maybe I’ll step into real estate when the market is in a valley, but for now it just looks stupid to me.

Maybe I’m just a naive young man though.

#128 Boombust on 11.10.17 at 10:54 am

#116 Livin’ Large

HOWEVER, the “balance of probability” suggests a recession and a severe housing correction. So there.

#129 Boombust on 11.10.17 at 11:08 am

#112 N,

Prof. Josh Gordon’s studies are full of holes. This bubble has been going on long before foreign buyers showed up on the scene.

At only 34, he’s still wet behind the ears; he has yet to see the full effects of a severe housing correction for a
bubble caused by Canadians themselves; not “foreigners”

#130 Herb on 11.10.17 at 11:31 am

Garth, re your reply to #120 Denise#1,

it’s not the parking of tax-paid accounts overseas that’s the problem. It’s not paying taxes on income or gain on those accounts that’s the problem.

Why are individuals expected to declare and pay Canadian taxes (offset by foreign tax paid) on global income, while corporate and private accounts parked in tax havens avoid or evade that requirement? Surely that’s the whole point of moving to a “tax haven”, or would that be “naive” too?

Yes, it’s naive. — Garth

#131 Bob on 11.10.17 at 11:39 am

it’s crazy that all this madness never ends. I am 30 years old, hopefully I will live long enough to see some sort of correction

#132 AGuyInVancouver on 11.10.17 at 12:03 pm

#102 Stan Brooks on 11.10.17 at 2:15 am
…There was a lot of spitting on Trump here but the guy was received as royalty in China, made deals for 250 billions accompanied by 2 dozen top American CEOs and is about to unleash major tax break budget….
_ _ _
LOL, Trump was received in China like the self centred, egotistical blowhard that he is. Remember when candidate Trump railed about how China was raping the USA in trade. All that outraged dissolved when little Donny got a military guard and excited happy dancers on his route into Beijing. Xi played him like a fiddle. Steve Bannon must be rolling in his grave (oops wishful thinking).

#133 Herb on 11.10.17 at 12:08 pm

Further to #128 –

Excellent, Garth. Then please explain why anyone would go through the machinations of using a tax haven, besides protecting money or hiding income form money from taxation. And why publication of the “Panama Papers” and “Paradise Papers” would raise concern, even consternation, in Revenue services, the taxation industry, political classes, and those named, as well as the naive public.

Everyone, including you, avoids taxes they need not pay. No news here. — Garth

#134 LivinLarge on 11.10.17 at 12:13 pm

Boom, “HOWEVER, the “balance of probability” suggests a recession and a severe housing correction. So there.” well you can account for anything when you use terms like “balance of probability” and “suggests”.

Historically we do have recessions but historically the vast majority of the prognosticators have always proven to be incapable of predicting them except in hindsight.

Severe housing corrections are another kettle of fish IMO because their timing is dependant upon some factors extremely difficult to quantify. Things like human nature and a willingness to hold debt compounded by unrelated factors like extraneous global economic fluctuations. This blog alone has been correctly identifying a coming correction for what, 10 years? So, sure, periodically any given local domestic housing market can and likely will go for a prolonged corrective crap but historically the process has always started up again.

Predicting housing bubbles is like predicting sunrise and sunset. Sure they have come with regularity but nothing like the regularity of sunsets and sunrises.

#135 IHCTD9 on 11.10.17 at 12:20 pm

#125 Not A Victim on 11.10.17 at 10:42 am
Apparently I’m a crazy millennial for trusting my math over the supreme wisdom of the mob.

My retirement plan includes never owning a house and never needing my wife to work. At 25, with no debt, expecting 5% yoy return average, I should be sitting on a mill and a half by the time I retire.

I think this is a better plan than trying to squeeze myself into a precarious RE market. I’ll have more fun managing my own investments anyway.

My plans will change and maybe I’ll step into real estate when the market is in a valley, but for now it just looks stupid to me.

Maybe I’m just a naive young man though.
______________________________________

That’s wisdom beyond your years right there IMHO.

Congrats!

#136 IHCTD9 on 11.10.17 at 12:26 pm

#122 Dissident on 11.10.17 at 10:26 am

Bottom line, don’t bite off more than you can chew. Either way, you need to have money to save and invest for future use, regardless on how much you squander on rent or on homeownership.
______________________________________

That’s it in a nutshell right there. If buddy can afford a 1.5 Mil shack and still build up a 7 figure portfolio over a lifetime of work, there is no issue. If you lose your head and start buying spec properties, or if you buy the most expensive house you can swing and end up with the proverbial “one asset strategy” – you’ve made a potentially fatal mistake. This is what Garth preaches time and time again.

#137 Hongcouver on 11.10.17 at 12:26 pm

I wouldn’t discount the effect of Chinese money in Vancouver, Garth.

Neighbourhoods that were once bustling with children during Halloween now turn out less than a dozen and that number continues to decline year over year.

The locals that grew up have moved outwards past Burnaby into Poqo, Port Moody, and Maple Ridge. What’s left is empty houses with luxury cars.

I feel for the kids that have to grow up anywhere west of Burnaby, they will miss out on this quintessential North American experience.

#138 Lost...but not leased on 11.10.17 at 12:36 pm

# 104 Where’s The Money Guido ?

Thanks for the links ..great stuff!

Wayy back…I would read strange anomalies in the news..like Billionaire Armand Hammer had landing rights in Communist Russia? Huh? Aren’t uber rich capitalists and communist mortal enemies

Like J.D. Rockefeller stated ….Competition is a SIN. aka monopolies, one world gov’ts etc.

I think people are starting to finally sense the noose tightening around their necks…..one end of the rope is being held by the militaristic communists, the other end is being actively pulled by their allies, the financial communists.

Li Kai Shing is the perfect example of how the two “communists” work as a joint venture.

If people don’t see tanks and soldiers in the street…all is well, while under their noses their sovereignty is increasingly undermined by less than subtle economic means.

In the end..does it matter if a foreign army invaded? The end result is the same.

Ironically, we don’t see a city in ruins like carpet bombing, yet in hindsight, as another $2 Million 60 year old house is demolished (aka first economic attack wave was perhaps to “conquer ” the land from competition..like planting a flag)..then the next spoils of war was to build an ostentatious”exclusive” mansion as the final insult to the conquered people ? For all intents and purposes that property is no longer a part of the existing community. Now multiply that by thousands of similar examples since 1986 and even the densest person starts to connect the dots.

“Military Communist” work faster bada BOOM BOOM BOOM…yet their allies, the “Economic Communists” work more slowly, in stealth fashion (aka like the frog in the pot analogy)in their ultimate goal of global governance.

Like one old Commie said…and I paraphrase:

” OUR Gov’ts have literally and figuratively sold (given?) them the rope they will use to hang their own citizens”.

#139 ForeignInfluence on 11.10.17 at 12:43 pm

I hate the arguing back and forth regarding foreign ownership (and the more complicated issue of foreign money driving local ownership). Garth has an educated opinion, but the fact is there is no institution in Canada that collects this information. We simply do not know. What we do know is that in Vancouver, declared income taxes and assessed home values are largely inversely correlated. This could be because wealthy neighborhoods have a lot of retirees or are Canadians parking money overseas, etc. But the fact is there is something very wrong that can’t be explained purely by speculation. And a lot of people are playing the race card to prevent people from simply investigating further to understand the problem which has nothing to do with race. Port Moody has the highest taxable income in the GVR…does that make sense to anyone?

#140 Real estate in Toronto and vcr on 11.10.17 at 12:44 pm

Are people delusional enough to think house prices will drop to $300,000?

Wow

#141 Lost...but not leased on 11.10.17 at 1:07 pm

Paradise papers expose major Canadian ticket scalpers.

CBC reported Julien Lavallee runs Ticketaria, and apparently has a side deal with StubHub that allows he and is cronies first dibs on concerts etc, then resell aka scalp at big profits.

#142 Where's The Money Guido? on 11.10.17 at 1:14 pm

Ooops, my bad, you’re still moderating. You can nix that last post as I missed #103 being moderated. It just showed up as #93 when I posted it. I guess there’s a lot of stuff to go through there, but you can see my point Garth, can’t you?
You have a wonderful site that has many people who have great minds and am sure will want to use these faculties to get to the bottom of it.
We need the Blog Dog Papers! With Turner’s Burners…..burning the myths that infest every mis-information article put out by the people who gain the most from this mania. We have to try to make them accountable, which most people on your blog want.

You and others are obsessed with scary foreigners buying Canadian real estate, about which you and I can do nothing. This blog will not descend into the xenophobic and racist morass that envelopes so many sites today. The anti-Chinese sentiment in Canada is gut-turning and debases everyone. Keep this conversation focused on what we can all do to improve our lives without wailing about the unfairness of a life in which many others have more money, and always will. — Garth

#143 Ponzius Pilatus on 11.10.17 at 1:17 pm

#137
Port Moody has the highest taxable income in the GVR…does that make sense to anyone?
————————
makes lots of sense.
And Richmond has the lowest.
Lots of sense, my friend.

#144 Lisa on 11.10.17 at 1:19 pm

#24 allovertheplace:

I agree with your comment. I used to live in Chilliwack and the people who moved to Vancouver developed such an air of importance about them it was sickening. The locals themselves were snobby and unapproachable and once they found out that I was from Hamilton, look out! My 13 year old self was personally responsible for all the evils of the Bill Vander Zalm government.
You’re right: things change! What used to be attainable has now become unattainable due to entitled attitudes and self importance. I mean, just look at those mountains! :p
I’m a Hamilton girl by birth so I never grew up with that kind of attitude-it would have been unthinkable!
“World Class” to me just means that everything is 10X more expensive than it needs to be. Hamilton is far from “world class” but I enjoy seeing it change and grow. I’m glad I’m home! :)

———————-

On a different note, how many of these Millennial’s kids are going to hate THEM once they grow up if the popular meme of continuously rising RE proves to be true and they are priced out forever?!? Well, “They should have bought a few years ago.”
I don’t think certain people who comment actually read what Garth writes about timing the market, etc. This site should come with a reading comprehension test at the beginning.

#145 Ponzius Pilatus on 11.10.17 at 1:24 pm

Amazon is recruiting people to deliver their parcels.
I thought they would use robots and drones and self driving cars.

#146 Eyestrain on 11.10.17 at 2:14 pm

Dear Garth,
When my early morning dispatch did not make it to the front, I wasn’t sure if there was trouble on the wire or a snafu at HQ. I didn’t think the offensive had nearly enough strength to crater into the DELETE folder, but I just read your general directive on xenophobia. I guess the fella I quoted could be just a racist with a PhD.

It may not be my “A” materiel, but I don’t have a lot to work with here. “Re.” is babbling incoherently from shell-shock, and the rest of the troops are dug-in, mining for Bitcoins. Looking forward to a day of silence. I think you deserve some R&R. And a medal.

#147 Re., eyestrain on 11.10.17 at 2:32 pm

Not surprisingly a tardy entry -Kindly do NOT flush your medications down the toilet . Selfish . Follow the FDA guidelines of proper disposal. Or better yet , take them . Warm regards .

#148 LivinLarge on 11.10.17 at 2:39 pm

“On a different note, how many of these Millennial’s kids are going to hate THEM once they grow up if the popular meme of continuously rising RE proves to be true and they are priced out forever?!” but the meme is true on a long enough time horizon just not on a daily, weekly, monthly or yearly basis.

It was true in the ’70s, it was true in the ’90s and it is true today and almost certainly tomorrow too.

To paraphrase H. L. Menken, “no one ever went broke underestimating the intelligence of people”.

I bought a Power of Sale property near the bottom of the ’90s correction and it’s appreciated over 300% by 2011.

#149 Blacksheep on 11.10.17 at 2:49 pm

Leaving for work on the morning of Nov/8/17, I saw a RE listing sign being installed on my neighbours front lawn.

Leaving for work the morning of Nov/10/17 I saw a sold sticker, on said sign.

I talked to a realtor I know. The place was listed below market and sold in less that 48 hours for well over asking, in a bidding war.

Multiple lots on my street have become sub dividable from 1/4 down to 1/8 acre in size due to the cities new “Infill Policy.” This is Agenda 21’s “Densification” plan in action.

I cant speak for Van, but the market is moving just fine in the Valley.

#150 Boombust on 11.10.17 at 2:54 pm

#132 LivinLarge,

Are you kidding? Garth has never been WRONG, per se. He has merely been blindsided ( like MOST other people) by the EXTENT to which the Feds, the CMHC and the BoC, etc. have gone to in order to keep this party going.

Besides, it better to be wrong, wrong, wrong and THEN right instead of the other way around.

You’ll see.

#151 LivinLarge on 11.10.17 at 3:01 pm

And surprisingly or not, my little house has appreciated about 360% since 1999 which is almost totally identical to the growth of the global economy metrics I mentioned earlier.

Could be coincidental but I am getting very suspicious that it isn’t. When 4 totally unrelated metrics show a 7.85 annualized compound growth rate over nearly 20 years I am starting to cinsider there being a fundamental connection happening. That 7.85% compound growth rate works out to a simple 355-360%.

#152 Herb on 11.10.17 at 3:06 pm

Everyone, including you, avoids taxes they need not pay. No news here. — Garth

Of course I do, which is why I use a tax-efficient financial adviser and report all income.

Assure me that those using tax havens are merely applying the Duke of Westminster Principle “to order … [their] affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be“ and not hiding income.

I’d be happy to stop being “naive”, but I try to avoid being gullible.

#153 Eyestrain on 11.10.17 at 3:09 pm

Sorry to tie-up the wireless lads, but I need to respond to some of my fan mail.

#234 Penny Henny (yesterday)
@Eyestrain Might you be the long lost Nosty?

Not a clue, but I like his nom de guerre. I am fresh off the boat, and by that I mean recently enlisted.

Re: Re.
The gentle ribbing you receive is in lieu of the shit-kicking you missed out on in grade school. My DB plan tells me that kids prefer to engage with their walkie-talkies rather than beat up the snotty rich kids. And look at what happens.

#154 Overheardyou on 11.10.17 at 3:18 pm

Another straight to the point transparent post, now if only I could convince my millennial friends to stop being house horny. Just learned today one purchased a detached in Brampton 3 bedrooms for $750K. I asked them about the B-20 changes, they didn’t even know it existed, sad times it is.

#155 Overheardyou on 11.10.17 at 3:44 pm

#43 Nonplused on 11.09.17 at 7:36 pm

Correct me if I’m wrong but he can write off a lot of the taxes he pays as expenses. It’s what my accountant told me when you’re self employed.

#156 Overheardyou on 11.10.17 at 3:52 pm

#48 People still buying on 11.09.17 at 7:48 pm
I can’t believe it, but people still seem to be buying in the GTA, sure not as many, but still things are moving for ridiculous prices. I just don’t get it anymore. I don’t know how people are covering these insane mortgages and all of the other normal bills of life! I mean I realize most of its debt, but people just don’t seem to be bothered by debt anymore. Sad, not sure if this market will ever return to normal levels, where sound economic fundamentals are aligned with the cost of housing. Maybe it IS different this time and please don’t attack, I am not a real estate pumper, I don’t even own a house, but it seems like prices are no where near “normal.”

—–

There are a lot of houses for sale still and it’s almost winter. Houses are not selling and if they are they are selling for under asking, some significantly under too. I’ve been looking around the suburbs for a place and there are properties that are listed for months now that haven’t sold. The listing disappears from MLS but the for sale sign is still on the front lawn. The sold over asking signs have also vanished mysteriously. Just wait and see, some of the comments earlier have mentioned that the B-20 will boost sales for a bit until it’s enforced.

#157 RL on 11.10.17 at 3:56 pm

Hopefully you have shared this wisdom with Bill M? :) I think he could use some help these days.

#158 TheDood on 11.10.17 at 4:06 pm

#138 Real estate in Toronto and vcr on 11.10.17 at 12:44 pm

Are people delusional enough to think house prices will drop to $300,000?

Wow
_________________________________________

Nobody knows for sure what is GOING to happen. House prices COULD drop to $300k, or even less! The point is no one knows for sure one way or the other.

Canada’s obsession with carrying huge household debt is insane! It makes a big RE crash a very good possibility.

I wouldn’t bet against it happening – since when is a house in Canada worth 4 or 5 times more than the exact same house in the U.S.? Just because Canadian Realtors says so?

#159 LivinLarge on 11.10.17 at 4:07 pm

“Sad, not sure if this market will ever return to normal levels, where sound economic fundamentals are aligned with the cost of housing.”…those are two totally unrelated concepts.

Yes, house prices will once again creep upward sometime in the future. The ridiculous appreciations 2016 v. 1st 1/2 2017 were just anomalies that broke the camel’s back for a while.

Home ownership has been an emotional decision since about 1955-60 so expecting sound economic principles to reenter the process is like reading “Waiting for Godot” for the first time wondering “so where is Godot?”

#160 Stan Brooks on 11.10.17 at 4:20 pm

#130 AGuyInVancouver on 11.10.17 at 12:03 pm
#102 Stan Brooks on 11.10.17 at 2:15 am
…There was a lot of spitting on Trump here but the guy was received as royalty in China, made deals for 250 billions accompanied by 2 dozen top American CEOs and is about to unleash major tax break budget….
_ _ _
LOL, Trump was received in China like the self centred, egotistical blowhard that he is. Remember when candidate Trump railed about how China was raping the USA in trade. All that outraged dissolved when little Donny got a military guard and excited happy dancers on his route into Beijing. Xi played him like a fiddle. Steve Bannon must be rolling in his grave (oops wishful thinking).
===============================

And the deals that the selfie trust fund boy made with China are?…..

Exactly zero.

#161 TurnerNation on 11.10.17 at 4:36 pm

I told the BTC BSD nimrods few days ago to short BTC. It went kaput.

#162 Herb on 11.10.17 at 4:44 pm

The CRA’s “skinny” on tax havens –

https://www.cchwebsites.com/content/pdf/tax_forms/ca/en/rc4507.pdf

#163 Eyestrain on 11.10.17 at 5:13 pm

Re: Tardy

If I am not on-time there is usually a good reason. How about we make the world a better place, as Garth suggests, and call a ceasefire? It will give you some time to enrich your vocabulary. When you come back, I’ll be there. Wherever there’s an ahole beatin’ on a guy, I’ll be there. (T. Joad)

#164 LivinLarge on 11.10.17 at 6:22 pm

Lost, “Your comment (?!?)obfuscates the point that the wealthy in Canada pursue tax avoidance schemes….or conversely in the 1999 case, KPMG themselves devised a vehicle to do so.” … well geeze Louise, I wasn’t intending to obfuscate anything. Tax avoidance schemes aren’t inherently wrong…just illegal under very specific circumstances. That any individual or entity got an amnesty deal from the CRA tells me they didn’t so much get preferential treatment but instead their 30+ lawyers were able to convince the 2 CRA litigation lawyers that enough of the components of a legitimate tax avoidance proceedure were present that the Tax Court would likely have ruled that no criminal intent could be proven. Otherwise, if the the CRA counsel were certain there was a guilty mind then they would have gone to trial. Now they have likely scared the Rolexes off the defendants and they are the subject of 7 years of more intense scrutiny by CRA.

#165 Tenugi0 on 11.10.17 at 6:46 pm

#43 Nonplused on 11.09.17 at 7:36 pm

Nonplused is fast becoming one of my favorite commentors here. Very pragmatic and logical. Keep it up good sir!

#166 Overheardyou on 11.10.17 at 7:14 pm

#135 Hongcouver on 11.10.17 at 12:26 pm
I wouldn’t discount the effect of Chinese money in Vancouver, Garth.

Neighbourhoods that were once bustling with children during Halloween now turn out less than a dozen and that number continues to decline year over year.

The locals that grew up have moved outwards past Burnaby into Poqo, Port Moody, and Maple Ridge. What’s left is empty houses with luxury cars.

I feel for the kids that have to grow up anywhere west of Burnaby, they will miss out on this quintessential North American experience.

—–

Unfortunately the problem you state is not limited to Vancouver. It’s happening where I live as well, in Toronto. There is no Chinese money where I live, it’s very diverse and the house prices are still affordable and I’m talking SFH are affordable. I think, diversity is changing our society (for better or worse) and what was tradition 20 years ago is no longer the case.

#167 AGuyInVancouver on 11.10.17 at 8:43 pm

You and others are obsessed with scary foreigners buying Canadian real estate, about which you and I can do nothing. This blog will not descend into the xenophobic and racist morass that envelopes so many sites today. The anti-Chinese sentiment in Canada is gut-turning and debases everyone. Keep this conversation focused on what we can all do to improve our lives without wailing about the unfairness of a life in which many others have more money, and always will. — Garth
_ _ _
So our government can do nothing to control capital inflows? That’s kind of scary.

As someone partnered to a wonderful Canadian of Chinese descent I understand full well the dangers of pandering to people’s basest instincts on this issue. But one also has to realize we have citizens of Chinese descent who aren’t wealthy who are being hurt by the dramatic increase in prices as much as anyone else.

As affordability activist Justin Fung said: “As one of the resident Chinese-Canadians on the HALT team, I was particularly frustrated to see this misleading headline on the front page of the Vancouver Sun “Is Racism Part of the Issue? Of course it is.”

Every time we make progress on trying to address housing affordability, we end up getting sidetracked and pulled back to square one with cries of racism. We’ve already seen Gregor Robertson and Bob Rennie do it once, calling out academically peer-reviewed research done by Andy Yan as being “racist”. Now it is Pete McMartin of the Vancouver Sun and Charlie Smith of the Georgia Straight just days after Mike De Jong’s foreign ownership “data” got debunked as being completely irrelevant…”
https://www.straight.com/news/734326/justin-fung-open-letter-those-who-play-race-card-vancouver-housing-affordability-debate

#168 jimbo on 11.10.17 at 9:06 pm

My father s oldest brother was a sapper in WW1(engineer corp.demolitions).Paid the ultimate price for my freedom in the battlefields of France.august of 1918 just 2 short month of wars end.These brave men and women deserve our eternal graditude.

#169 DON on 11.11.17 at 12:22 am

Huff post – according to gov numbers Alberta is less Dependant on oil, mining, gas 17 % than BC is on resale estate 18.4%.

Local govs are doing airbnb and empty tax regulations. Speculator tax may also weigh in – nobody Dependant on revenues wants to be the PRICK that ends the party. Lots of people have skin in this game. You can cut the tension with a knife. It has been proven that real estate doesn’t increase endlessly and interest rates can rise.

One more thing – saw a recent chart of interest rates in western and eastern countries. Eastern higher on average ranged from 3-8% and western 0 to 1.5% hmm

Another thing – Trump talking up war with NK and follows up with big military deals in South Korea and Japan. All about sales.

One last thing – ordered a delicate car part online – it came in a box with bubble wrap taped to the outside the box and nothing to stop the part from knocking around and denting the gasket’ which was also flying around in the box – FFS! The pendulum has swung two far in one direction.

#170 Avoid the Herd on 11.11.17 at 10:11 am

Garth, if this was your last blog (for a while) on the topic of housing affordability for young people, you certainly went out on a high note. Excellent summary of the past decade. Unfortunately, for the late party arrivals, the next ten years won’t be a continuation of the boom. I suspect Ludwig von Mises would have characterized the Toronto and Vancouver housing markets as a “crack-up boom” since those markets were surely fueled by massive credit expansion.

Young people (and the rest of us) will soon experience the downside of the crack-up boom, and it won’t be pretty.

#171 I like cookies on 11.12.17 at 3:37 am

“It’s not because armies of 1%ers scoop and hoard those places, keeping the condos dark and the houses vacant. No evidence of that. Besides, it doesn’t pass the smell test. Why would they?”

I’m not enough of an economist to tell how much of this is bovine poop, but this article weaved an interesting explanation: https://betterdwelling.com/urban-land-banking-101-supervillains-guide-ruining-local-real-estate-markets/