The bite

She bought the property, firm, plunking down a $50,000 deposit for 46 Raleigh Crescent, in the troubled GTA exurb of Markham. Then, a change of heart. In the midst of a declining market the buyer decided the deal wasn’t right. Her lawyer sent notice it was being repudiated – a legal term indicating the contract was unenforceable since one party was walking away.

But, of course, you can never walk. There are always consequences, the very least of which is surrendering your deposit.

So she did something clever, employing an arcane tactic that’s been gaining currency at a time of disintegrating deals. Her lawyer registered a ‘caution’ against the title of the Raleigh house, attempting a sort of blackmail against the owner. Unless the deposit is returned, her lawyer said, the caution will remain, rendering the property unsaleable. (A caution is a legal warning that someone other than the owner has an interest in the property. With one in place, you can’t sell or finance.)

Enter Albert Frank. He’s a hardened litigation lawyer with three decades of experience in smacking around his clients’ enemies. Hired by the owners, he went to battle in a case that intrigued him.

“I’d never seen this before,” he told me on Thursday. “I searched case law back for the last hundred years and did not come across any instance where someone used a caution over the issue of a deposit. It was just bizarre. Here’s a buyer who repudiated the deal, who‘s not claiming any interest in the property, and yet filed an instrument against the title. Obviously it was designed only to hold the property to ransom.”

So Al went to court to get the thing quashed. “I was startled when I was there and talking to other lawyers that at least two of them were facing the same thing. I guess it’s the current new thing to leverage the return of a deposit.”

So what happened in the Ontario Superior Court of Justice?

“The judge was very unimpressed.” You bet. Not only did he rule that the caution had to be removed, but gave the homeowners costs of $10,000 to cover the cost of hiring a sharp dude like Albert to get the job done. Meanwhile Century 21 Leading Edge Realty was ordered to fork over the fifty grand in their trust account (they would not do so without a mutual releases signed by buyer and seller) to the jilted seller. Now they can close the deal with a new buyer, and still go after the old one for damages.

At least that’s the theory.

You might recall the blog dog who sold his suburban house for $2.25 million in early April, only to have the buyers walk days later as the GTA real estate market started to fall apart. He sued, they ignored it. He eventually sold for $400,000 less than the original amount, and filed for damages. They ignored it. His lawyer secured a court date. They said they were busy. And now the whole thing is slated to go to trial – maybe – in May or June. Meanwhile the owners have racked up a sizeable legal bill and feel the justice system is a sham. To make matters worse, the deadbeat buyers are suing the owners, alleging they took too long to get their place back on the market.

Isn’t real estate fun?

If you’re selling a house – with more market declines ahead thanks to the new stress test – make damn sure the deal is solid. No long close. A mother of a deposit (ask for 10%). No buyer visits prior to closing. Deposit held in your lawyer’s trust account, not that of the listing broker. No condition on the buyer finding ‘satisfactory’ financing. And a clause giving you a day or two for legal approval of the offer.

Also do something radical – find out who the buyer is before you enter into a contract with them. Job? Circumstances? Background? Can they afford it? After all, you’d never rent your cheapo condo to someone without a credit application, references, credit check and income/employment verification. Why sell a $1.5 million house to a stranger and make huge life changes based on a closing months away that may never happen?

Say, did you hear household indebtedness just hit a new all-time high? And that people are borrowing money on their HELOCs at 3.7% to lend out as down payments to desperate moisters trying to beat the stress test, at 10.5%?

If you like disaster movies, you’ll probably love 2018.

149 comments ↓

#1 Mike on 12.14.17 at 6:33 pm

.
Nothing is going to happen to RE in Canada. Its up and up on year by year basis. No Interest rate hike, no B-20 can cause it to soft land let alone hard crash.

Prices will never be back to 2014 levels. Those who thought and waited have missed the bus. Keep renting.

#2 young & foolish on 12.14.17 at 6:35 pm

Hahaha … buyers and sellers are getting spooked. Opportunities will surely begin to present themselves. In the meantime, I suggest renting.

#3 Debtslavecreator on 12.14.17 at 6:38 pm

The ingredients are there for a debacle and for many recent buyers and refi -ers of the last 3-4 years it will end badly but the damage might not be as bad as many fear
Nasty yes but catastrophic no. If the market corrects steeply by Q3 Mr Poloz will drop the overnight rate down to 0 and start QE by late 2018/early 2019

And they can always reverse B20. Election year soon and Evan did fall is on record as saying any house crash will be bailed out by governments

So enjoy your 2m detached in Toronto in 2021 but you’ll be borrowing to pay for surging property taxes, weekly basic groceries of 500 , and eventually rates will rise sometime after due to the loss of confidence in governments

So hopefully we have one more sharp drop in RE into late Q3 in nominal terms but if it gets bad enough the loonie will do what loons do -dive hard

Better to have a modest home with land value and a manageable mortgage then a lot of money in GICS or cash

#4 Looney Baloney on 12.14.17 at 6:39 pm

Say, did you hear household indebtedness just hit a new all-time high? And that people are borrowing money on their HELOCs at 3.7% to lend out as down payments to desperate moisters trying to beat the stress test, at 10.5%?

10.5%? I have a substantial low interest rate line of credit that is sitting untapped and would like to know more about this. Are there reputable third parties out there who can intermediate, lend it out and deal with collections, etc on your behalf for a fee? I’d appreciate it if anyone could shed some light on this. Smokey, this sounds like it could be more money than your forex gig.

As for the greedy sellers who want to triple their money, tax free, for doing nothing, and the pathetic losers writing cheques with their mouth their body can’t cash, wgaf? Zuck ’em, both.

#5 Guy in Calgary on 12.14.17 at 6:39 pm

Very interesting post. $60k to walk away from the deal doesn’t seem worth it but then I street viewed the address…

#6 Linda on 12.14.17 at 6:44 pm

To buy or not to buy, that is the question. However, if you do make an offer, put your big boy/girl panties on & stand by your offer. The behavior described in this post is so lacking in any kind of character as to defy description, though I’m sure some will give it a try. All I can say is, good thing names are mentioned here, because if I for sure would want to keep my distance from the buyer on every level but business especially.

#7 Edward Bear on 12.14.17 at 6:45 pm

Century 21 Bleeding Edge Realty perhaps? An old boss turning down work from a sketchy junior oil once said, “One can always seek out a better class of clientele.”

#8 Linda on 12.14.17 at 6:45 pm

Meant to say, names are NOT mentioned in the blog.

#9 the Jaguar on 12.14.17 at 6:48 pm

I can see a ‘caveat’ registration (usually related to a financial interest and further evidenced by something like a promissory note and undertaking on the property or a ‘lis pendens’ warning of a matrimonial interest, but the above scenario is a stretch. If backed up only by the purchase contract then shut your cakehole until you fork over the balance of the purchase contract. It’s the whole amount referenced, not just some measly deposit. I like tough judges who don’t just get mad, they get even for the innocent party who acted in good faith..

#10 SmarterSquirrel on 12.14.17 at 6:54 pm

Garth,
I’m curious… of all the people you advise, for whom financially you believe the right course of action is for them to liquidate their primary residence asset and invest in a balanced portfolio, what % would you say actually follow that advice?

Just curious…

None, since it’s not my advice. – Garth

#11 Sue on 12.14.17 at 6:54 pm

Finally a yorkie! So much personality in such a tiny package

#12 Research the Game on 12.14.17 at 6:54 pm

Researching your buyer is wise – it is equally wise for the buyer to research the seller.

In BC, I can pay $10 dollars for a basic title search for a property. I can see if there are liens, a mortgage, the bank of alternative lender (very very common now), original purchase price, full names of the owners, etc. I cross reference this with a basic internet search and you can paint a pretty accurate picture of that person’s life.

This information on title is key in negotiating. Are you dealing with someone that bought their house a few years ago and cannot afford to budge on price – or one that bought decades ago, has record windfall, and can afford to come down in price?

I can research the owners to see anything – their jobs, if they are moving or bought a place (everyone tells everything on social media), if their company went under, if they are sell employed, if they have building permits in place for another new houses, etc.

As a renter now, I pay my $10 bucks at Land Titles and research all prospective landlords. I turned one rental down because the owner had liens for child support payment – I knew that they would keep wanting rent increases every year. I turned another one down because the owner was giving testimonials on a mortgage broker site about using the broker 3 times in 3 years – meaning he was a speculator and would have sold once I rented the place (which was listed for sale without the sign in front. I verified owners a few times when the landlord was ‘renting it out for their friend.’

The key is – both buyers and sellers, and renters and landlords can get a lot of info cheaply.

#13 Research the Game on 12.14.17 at 6:56 pm

And you can also go old school and ask the owner’s neighours for information and even the local post person. You would be surprised how much info people will share about the neighbourhood…and then the owner…..

#14 Stein & Assoc. on 12.14.17 at 6:58 pm

DELETED

#15 M on 12.14.17 at 7:00 pm

Gartho baby…the entire economy resides on debt. Corporate, soverain, consumer.
This edifice is about to collapse.
Ratio of put to calls is about 0.7
3 to 5 weeks baby.
Between now and end of January a 5% correction in the market. Not the canadian one. The real one.
If is indeed true that most of the trading is done by unsupervised machines, this correction WILL trigger an avalanche of sells once the sell-limits are reached..then fun begins.
Elemetary Watson…elementary…

#16 Happy Housing Crash Everyone! on 12.14.17 at 7:05 pm

You dirty scum of the world SHYSTERS should be locked up and jailed for your financial crimes. You POGarbage ruin lives with your lies. RE is CRASHING and will continue CRASHING. NO interest rates won’t go down and NO they won’t reverse B20. You SHYSTERS are FINISHED. People are trying to RUNAWAY from housing.

Happy Housing Crash Everyone! :-)

P.S. I HATE SHYSTERS.

#17 Correction on 12.14.17 at 7:05 pm

at #3 Debtslavecreator
> If the market corrects steeply by Q3 Mr Poloz will drop the overnight rate down to 0 and start QE by late 2018/early 2019

There is only so much QE that can happen before math becomes a thing and it spirals in hyper inflation or deflation. So no, wont happen this time as we are near the limit.

And besides, you are basing financial decisions on *hope*, which is always a bad idea.

#18 Dolce Vita on 12.14.17 at 7:06 pm

#1 Mike

Not in YVR (ya, that’s -6% y/y):

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

and, a near tie for 416 Avg. Sell Price, well, up by a market crushing $1,000:

https://toronto.listing.ca/detached-home-price-history.htm

…it’s over.

#19 SimplyPut7 on 12.14.17 at 7:09 pm

A mother of a deposit (ask for 10%). No buyer visits prior to closing.

——————————–

The market is softening in the GTA, most sellers/agents are happy anyone came to visit. I don’t think those buyers who need the down payment (second or third) mortgage at 10.5% have a lot of extra money hanging around to give to a lawyer to keep in a trust. And even the buyers with good credit would still want to make sure all of the appliances and other items the seller agreed to leave behind are still there before moving in.

#20 Dolce Vita on 12.14.17 at 7:11 pm

“borrowing money on their HELOCs at 3.7% to lend out as down payments to desperate moisters trying to beat the stress test, at 10.5%?”

…and queue Alberta’s early 80s Dial Mortgage fiasco coming to a private lender near you.

Ask the 65,000 people that lost their shirts if they had a good day doing what the new and improved HELOC people are doing?

Then again, it’s different this time.

#21 Rifles on 12.14.17 at 7:13 pm

A similar recent deposit squabble in the aftermath of the FBT in BC:

https://globalnews.ca/news/3881548/would-be-foreign-buyer-forced-to-give-up-north-vancouver-home-deposit/

#22 will on 12.14.17 at 7:14 pm

Oh man this is just the kind of shite I hate about real estate. I’m gonna stick with stocks and renting.

#23 FOUR FINGERS WATSON on 12.14.17 at 7:15 pm

What the HELOC has also been able to do is help spur the private lending space which has ultimately supported rising house prices. Seth Daniels of JKD Capital, one of the most astute Canada-Watchers, says there’s a growing trend where “a homeowner acts as a sub-prime lender by drawing a HELOC at 3% interest only, and lends it to a subprime borrower at 8-12% for one year (interest only).”

This is something I’ve been hearing on an ongoing basis from mortgage brokers and lawyers who help facilitate these deals. Especially since mortgage lending conditions tightened, starting with OSFI’s first mortgage stress test back in November, 2016. The financial regulator required “high-ratio” borrowers (those with less than 20% down payment) to qualify for a mortgage at the borrowing rate plus 2%. So basically you’re getting qualified on what you can borrow at 5% even though you’re borrowing at 3%.

Rising interest rates pose special risks in Canada because most mortgages come with adjustable rates. Many of them adjust very quickly to rate increases. Others have a five-year fixed portion and then adjust. Meaning a rising interest rate environment is much more impactful. Hence the new stress tests, and new ways to get around them, including using private lenders that source their funds from taking out HELOCs.

This strategy has been bulletproof, because, well, prices can only go up. The lender makes a juicy return, and the borrower gets his house. The borrower then transitions into a traditional mortgage once his home equity rises after the one year expires.

#24 AisA on 12.14.17 at 7:18 pm

Hot dang this is gettin’ juicy. Anybody else sharpening their forks to stick into this pig of a market and watch the juices fly?

#25 Ray Skunk on 12.14.17 at 7:22 pm

Random musings and observations from Raymond Skunk:

Friend of Mrs Skunk decided she wants a different condo. Pretty much the same as the one she has now, only bigger. Not sure why – no compelling event, no kids – heck, not even a FWB on the scene. But what the hell, eh – let’s do it anyway. She deserves it (for reasons unknown).

So now she’s on the cusp of holding two condos. Nay bother – she can sell the other one in the bustling Toronto condo market, can’t she? Well, actually no – she can’t.
Takes possession of the new one in a week, can’t sell the old one. Zero interest. Tried canvassing friends and family to take it on as an investment. No thanks, we’re not that dense.

However, there is light! Last week she got an offer and accepted it. Phew. Got a text today. Buyer has pulled out on failing financing. Ruh-roh.

* * * *

I’m looking at a new gig in the new year, with these events I weigh my options up from time to time – one of which is to go back to a certain city on the far-flung reaches of the GTA. Quick perusal of MLS this morning threw up an intriguing nugget… a detached which looked familiar from my nesting-instinct winter browsing of around this time last year. Although fundamentally a crock of shit, it was in a nice ‘hood and the price was right (last year).

I email my Realtor(tm) pal (he’s not a bad person really) for the inside scoop and yup, it’s the same one. Sold last fall for 390 large. Up now for 530.

Same house alright, albeit with the crappiest HGTV amateur hour flip-job of all time. None of the fundamentals addressed, just a lick of paint and a nice kitchen which is sure to be mentioned throughout the listing. Baby paraphernalia staged all over the place to get the hormones racing. Also in the listing are the open house dates, which have been and gone. Weeks and weeks ago. And it’s still there, sad, unsold and massively overpriced as we head into the white dung months.

Oh. Dear.

* * * *

Did a bit of portfolio consolidation last night. Net worth YTD up by more than the hoped-for flip delta on that dumpy detached. Liquid and free of the Realtors(tm) grubby mitts. The market, clearly, continues to slide.

This loser, scumbag renter may just have the last laugh yet.

Cheerio!

#26 Bob Dog on 12.14.17 at 7:23 pm

Canadians deserve each other.

Its 19c and sunny in San Jose today.

#27 Doug t on 12.14.17 at 7:24 pm

People are pathetic – the world has become a less compassionate, less gracious place to live and more greedy and disconnected place.

RATM

#28 45north on 12.14.17 at 7:28 pm

Debtslavecreator:

If the market corrects steeply by Q3, Poloz will drop the overnight rate down to 0 and start QE by late 2018/early 2019

that’s not how I see him. Basically he takes orders from the US Fed. He can choose how fast or how slow, but follow he will.

And they can always reverse B20.

no they cannot

Let me explain: B20 reflects the banks’ decision to withdraw credit. A collective decision that reflects the fundamental interest of each bank. There is no reversal.

#29 Sebee on 12.14.17 at 7:28 pm

13 Reasons Why

The Real Estate Edition. Coming Spring of 2018 to Nestflix.

#30 Nonplused on 12.14.17 at 7:31 pm

People are very interesting indeed. How does someone come up with $50,000 without understanding a deposit is forfeit if the deal doesn’t close unless specific conditions allow it (like a home inspection, for example). But even a home inspection clause can often allow the seller the option to rectify the situation. For example if the roof’s no good the seller can counter offer to have it replaced (at the seller’s expense).

When I bought this shack my realtor suggested a “1%” home inspection clause, which meant the total corrections had to be more than 1% of the purchase price to allow me to back out. He said this was to assure the seller I would not cancel the deal over minor issues since we knew the seller was motivated and we were bringing what the seller considered a low-ball offer.

It turns out I should have backed out because there is PBE plumbing in the house which I understand is considered to be replaced ideally, it has a higher failure rate than other types of plumbing. But the home inspector did not make that adequately clear. I only found out when the insurance company I had at the time would not insure for water damage unless I have the plumbing replaced. Anyway the way the basement is finished most of the plumbing is accessible by ceiling tiles so the job would not be as bad as it can be. Since the house is a bungalow very little of the plumbing is in the walls. I think just 2 showers and 1 outside tap would have to be opened up and they are all accessible through drywall from the back. But I digress.

Anyway I side with the seller in this case. The purpose of a deposit is to compensate the seller for any costs or lost opportunities the seller may experience if the buyer doesn’t close. It’s the same idea as putting money down when you lease or buy a car. It’s to put skin in the game so you have an incentive to make those payments. Sure, sometimes you can get a zero down car, but even when that’s advertised you have to have immaculate credit to get it. For everyone else the down payment is really just prepaying for the repo-man. You won’t get a penny of it back once the dealer takes the car and sells it, they calculate it pretty precisely.

Anyway, it continues to amaze me what people will try. I think title theft is a great one, who in the heck would do that? But it happens. Then there is all the other thefts, cons and scams. Why do cars need locks and alarms? Human nature. If it ain’t nailed down, someone will steal it. We all like to think of ourselves as moral and just, and maybe you and I are, but everyone else is a thief. That’s why every door on your house has a lock. Even the door on your RV has a lock and you have to lock the hitch when it’s not hooked up. Your boat needs a key, your motorcycle needs a key, heck you can’t even leave your ax out in your campsite or it goes missing. Stores cannot operate without significant anti-theft measures or the shelves would be bare. This is the true state of human morality.

I will retell the story of the time I tried to buy a gold coin on ebay. Turns out the guy was selling coins he didn’t have, waiting for the price to retreat, and then buying the coins lower for delivery. This time the prices didn’t come down again so he just didn’t deliver. Thankfully Paypal got my money back. But I didn’t get my gold coin which was worth more now then when I bought it either. He could have run the same business using his own money to buy low and sell high but then he ran the risk of loosing money if prices fell, so he chose non-delivery as a risk management strategy.

People suck. Even your own relatives are going to try and screw you when they can.

#31 crowdedelevatorfartz on 12.14.17 at 7:33 pm

@#16 Happy Housing Crash Everyone
“P.S. I HATE SHYSTERS’
+++++++

Thank you for clarifying that.
I wasnt sure how you felt about Realtors

#32 Suede on 12.14.17 at 7:36 pm

I wonder if Ryan and Doug own any cryptos.

They must.

Ryan for sure.

#33 AGuyInVancouver on 12.14.17 at 7:37 pm

Who can one trust these days. I’m sure Garth can vouch that the case below is every politicians’ worst nightmare:

“A prominent B.C. Liberal donor and fundraiser, Paul Oei, defrauded investors of about $5 million in an immigration scheme, a B.C. Securities Commission panel has ruled.

Postmedia News has reported extensively on the case of Oei, including testimony from Chinese investors that alleged Oei promoted his connections with top Canadian politicians, including then B.C. premier Christy Clark and Prime Minister Justin Trudeau.

In the case, Oei was accused of bilking investors of $6.9 million in an immigration-investment scam surrounding Cascade, a proposed Port Coquitlam recycling plant. Of $13.3 million raised for the project, almost half went into Oei’s personal bank accounts, his immigration business Canadian Manu, and for renting luxury cars, including a Bentley. The panel heard that Oei impressed investors by “rubbing elbows” with politicians, and that Clark and her B.C. Liberals received $37,888 in political donations that came directly from investor funds for Cascade…”
http://vancouversun.com/business/local-business/b-c-liberal-donor-committed-fraud-in-immigration-scheme-panel-finds

#34 down_boy on 12.14.17 at 7:39 pm

#4 Looney Baloney on 12.14.17 at 6:39 pm

“10.5%? I have a substantial low interest rate line of credit that is sitting untapped and would like to know more about this. Are there reputable third parties out there who can intermediate”

Kind of a reverse rehypothecation, eh? Let us know how it goes.
Mi crédito et su crédito.

Thanks for the post, Garth. It’s a heads up to have snacks and popcorn ready.

I think CAD went up as stock traders took profit. Alas, my mini bet at 2am went the other way, but I’ll hold with the cards I’ve got.

#35 In support of Toronto separatism from Canada on 12.14.17 at 7:42 pm

https://www.ig.com/uk/investments/news/isa/2017/03/02/how-inflation-is-killing-your-cash-savings-27866

The Bank of Canada sees no inflation, hears no inflation, and speaks no inflation throughout the year, while my grocery bill increases by over 15% for the past 5 years, and I lost 18lbs.

We, the nation of Canada, should secede from downtown Toronto, and let downtown Toronto, from Harborfront to Lakeshore, to Bloor St at north, to Leslieville at East, become its own sovereign nation with overpriced real estate, low interest rates, and very cold & not too warm gender relations.

#36 TurnerNation on 12.14.17 at 7:44 pm

MF keep layin down the good lines here – you sound like one red-pilled, based brah.

2 bedroom condos…rent. A rule: condo fees always hit $1/square foot. This means 800-1000 a month on what.

10-15 years in the kando will require major underground garage and elevator and rooftop and hallway rehab.

Did the amateur condo board members budget for it? If not special assessment.

Kandos are for renting. Plus they always block your view with a new building eventually.

#37 tulips on 12.14.17 at 7:53 pm

>> “If you like disaster movies, you’ll probably love 2018.”

—————————————————————

Please clarify. Is the disaster movie about a correction, or about a further increase in prices fueled by this ever increasing debt? I’m hoping it’s the former, but increasingly anxious that it’s the latter.

We expect to buy in 2018 either way, as we’re going to be losing our long term rental and we have no appetite to pay current lower mainland rental rates. We always expected we would be climbing the property ladder when we bought again, not sliding down it. But now we find ourselves facing the reality that we will end up buying something very similar to the outdated box we sold in 2012 when we decided to become prudent renters. We sold our place to rent a nicer place for lower monthlies with expectations of a pending correction. That seemed so wise at the time.

We sold our old place for $400K and we had a $200K mortgage. Today, with an extra $150K in investment gains and additional savings our down payment is a healthy $350K, but our old place has rocketed up to $950K so it would take a $600K mortgage to get it back. We can afford that, but when we do it will be pretty clear that our previous move to rent was a financial failure.

If 2018 brings the appreciation that Remax and Royal Lepage are predicting, even with more rate increases and rule changes, then that’s a clear sign to me that the bulls were right and still are.

#38 westcdn on 12.14.17 at 7:58 pm

Quotes that spark me – there are tons more but I don’t exist to bore.

“Some British markets are selling seedless avocados. Scientists, food researchers, and retailers have come together to keep you from getting drunk and cutting your hand off.” – it is a wonder I am still alive.

“Worth, wind, and fire” – my mantra for cryptocurrencies

“Dear Mr Karma, you seemed to have missed a few people” – Karma is created by free will, not to me when you have to answer

As to Bitcoin, I missed the boat mainly because I am steeped in tradition. I bought a gold coin just out of spite.

#39 Andrew Woburn on 12.14.17 at 8:00 pm

We all like to think of ourselves as moral and just, and maybe you and I are, but everyone else is a thief. That’s why every door on your house has a lock. Even the door on your RV has a lock and you have to lock the hitch when it’s not hooked up. Your boat needs a key, your motorcycle needs a key, heck you can’t even leave your ax out in your campsite or it goes missing. Stores cannot operate without significant anti-theft measures or the shelves would be bare. This is the true state of human morality.
==========================

You probably won’t believe this but in the 50’s, people did not lock their front doors, they left their keys in the ignition when they went shopping and we didn’t know what a bicycle lock was. A small time bank robbery was front page news.

Not in rural Saskatchewan – in downtown Hamilton, Ontario.

Yes, we have thankfully left behind those bigoted, patriarchal times but we also seem to have left behind something else. I think we used to call it “self-respect”.

#40 tccontrarian on 12.14.17 at 8:01 pm

“If you like disaster movies, you’ll probably love 2018.” – GT
———————————————————-

2018 the Prelude;
2019 the Main Act;
2020-21 – the Finale!

Like waiting for the Olympics, only better!

TCC

#41 My Wife Loves Garth on 12.14.17 at 8:03 pm

I’ve been doing private 2nd mortages for years 80% LTV. 12% return annually paid monthly. Great while it lasted. However, pulled all my funds this summer because a dip in values can wipe you out.

#42 For those about to flop... on 12.14.17 at 8:04 pm

I arrived in Vancouver in late January 2002 ,traveling the world and picking up work visas.

In June of that year I met a nice girl but knew I wasn’t gonna be in Canada much longer and didn’t see the relationship going that far due to distance as I was due to go back to Europe but was hoping to stay in touch.

I went on a trip to see some old buddies in Nova Scotia that I shared an apartment with in London and then checked out New York.

In the meantime that girl was visiting a friend in Chicago and we decided to meet up in Ottawa after I visited Montreal.

A strange think happened in Ottawa,we were walking hand in hand down the street( I think it was at the market) and we started to talk about getting married as we had decided we wanted to be together.

After arriving back in Vancouver we contacted the Canadian Government to see what could be done visa wise and they recommended that since I already had status and if we were serious about getting married then go ahead with their blessing.

I guess what I’m trying to say is that we took a risk but today,December 14th is our 15th wedding anniversary and so far everything has worked out o.k.

Never had kids,lots of travel and memories and all the freedom that comes with no children and no house to maintain.

Most importantly my wife is my best friend and companion ,although I suspect she thinks I have the hots for this blog…

M43BC

#43 Newcomer on 12.14.17 at 8:06 pm

#4 Looney Baloney on 12.14.17 at 6:39 pm

………
10.5%? I have a substantial low interest rate line of credit that is sitting untapped and would like to know more about this.
———-

You’d borrow money to lend to someone with such bad finances that they cannot get a conventional mortgage in the land of stupidly-lax mortgage financing, all for 10.5% (minus the cut that the leg-breaker charges). Everyone got 10% this year from plain old ETFs and mutual funds. I’d want a hell of a lot more than that to lend to a speculator/loser.

#44 april on 12.14.17 at 8:19 pm

# 37 – Its the correction.

#45 Newcomer on 12.14.17 at 8:23 pm

#12 Research the Game

——

Great advice!

#46 Andrew Woburn on 12.14.17 at 8:26 pm

I realize this kind of thing could never happen in this country where politicians always prudently manage our electric utilities for the benefit of ordinary taxpayers.

Not like Belgium where they leave all the streetlights on all night.

“The official explanation is that it helps road safety and provides security. But critics doubt this and say the phenomenon sheds light not only on Belgium’s roads but also on a mutually profitable relationship among its politicians, electricity distributors and main energy supplier, Electrabel.

Belgium’s system rewards local politicians for keeping the bulbs blazing, said Peter Reekmans, speaking from his experience as the mayor of the town of Glabbeek.

Streetlight consumption translates into profits for electricity producers, distributors and the state, he said. The profits of electricity distribution companies are paid out “in dividends to the local municipalities that own shares in them, and in salaries and stipends to the local politicians who sit on their oversight boards,” he explained.

The system has “built-in conflicts of interest” for local politicians deciding on energy policy, including about streetlights, he said. “It also makes politics in Belgium quite a profitable profession.” ”

We Canadians, of course, are far too smart to let venal politicians milk public utilities.

https://www.nytimes.com/2017/12/12/world/europe/belgium-electricity.html

#47 I’m stupid on 12.14.17 at 8:42 pm

This one is for Flop

Look at 22 fenelon drive in Toronto

Sold March 1 2017 for 1.608

Now it’s for sale after 2 price reductions at
$1.375

That’s a hefty hair cut in 9 months

#48 Lost...but not leased on 12.14.17 at 8:44 pm

Re EXPERTS:

Question: When you hire a given expert/professional… what are you really getting ( or as a priority should make sure they have above all else ?)

Answer: Someone with “errors and omissions” insurance.

#49 oncebittwiceshy on 12.14.17 at 8:47 pm

Tulip: “….. but our old place has rocketed up to $950K so it would take a $600K mortgage to get it back.”

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

That must have been one sweet "old box" Tulip, because right now there are over 230 houses listed under $750,000 between New Westminster and Abbotsford.

Maybe try myrealtycheck where you can watch the price drops every day. Take Langley for example:

Average Change: -1.64% Up:6 Down:22
Overall $ Change: -1192240.00 Average Change Amount:-42580.00

Wow, if people are going to make this stuff up, at least go on the MLS site and see if your story holds up.

Then again maybe you checked on the value of your old house several months ago. Now you can see how much it has dropped. That has got to give you hope for 2018.

#50 dr. talc on 12.14.17 at 8:50 pm

Any tax experts here? here is the quote, followed by the source

“What we’ve done… is we’ve put some things in place that are impacting the price increase,” Morneau said.

They included a requirement that people report the sales of their principal residences, and that they had to live in them every year they own them, in order to avoid paying a tax — this, he said, “reduced the amount of flipping and speculation.”

https://globalnews.ca/news/3912790/bill-morneau-vancouver-housing-prices/

—-

I was under the impression that the principal residence was in fact a designation made by the tax payer. For example you could live in your cottage most of the time and designate some other house at your discretion, and in fact leave it empty

#51 SimplyPut7 on 12.14.17 at 8:52 pm

#4 Looney Baloney on 12.14.17 at 6:39 pm

10.5%? I have a substantial low interest rate line of credit that is sitting untapped and would like to know more about this. Are there reputable third parties out there who can intermediate, lend it out and deal with collections, etc on your behalf for a fee?

—————-
Yes, I do know someone who is doing this, before rates went up they were very happy (and bragging) about their returns. One of the borrowers they gave money to defaulted on their loan and the bank got involved. They are pretty sure they won’t get any of their investment back.

In most scenarios, you are not the primary lender, so when the person falls behind on their payments, you will get your money back, after the bank has collected their money first.

Also, remember these “investments” are very risky, no one would take out a loan/mortgage for 10.5% when the going rate is around 3% for a 5 year fixed mortgage. The high interest rate is your compensation for knowingly giving money to people who have a higher probability of not paying back their loan, than the people receiving the loan at 3%.

If you are still interested, go to an open house in the GTA, one where there is a mortgage broker on-site. I am sure they have had more than enough interested buyers walk through who can’t get enough money to buy the home they are trying to sell, and would happily turn a blind eye to where the down payment came from while B-20 is not in effect, and have an investor help finance their client’s homeownership dreams.

#52 bigtowne on 12.14.17 at 9:00 pm

As of late it seemed Garth was planning on retiring but tonite’s read rocks…this is very good. Evil low life; excellent lawyers able to see their prey and judges not tolerating “hissy fits” from the new folks in town.

I tell ya next to John Grisham.

#53 Sam the Sham on 12.14.17 at 9:05 pm

#37 Tulips

“…it will be pretty clear that our previous move to rent was a financial failure.”

Thirty years ago an older lady the was a real estate agent and a very decent person
told me: “Never sell your last house.” True then and truer now!

#54 John on 12.14.17 at 9:09 pm

We’ll see

#55 For those about to flop... on 12.14.17 at 9:14 pm

Pink Pumpkins being carved in Burnaby.

This house is as good as any to represent as an example of how slow and painful the correction here in Vancouver is.

Stupid just showed me the Wham,Bam ,Thank you ma’am goings on in Toronto,here it is a little more definitely next to no media coverage.

I have called it The Stealth Correction,as it appears to be sneaking up on people without much fanfare.

Try and get Spring 2016 prices ,plus 10% if you dare…

M43BC

5656 Carson Street, Burnaby paid 1.51

May 25:$1,649,000
May 30: $1,599,000
Change: – 50000.00 -3%

5656 Carson Street, Burnaby

May 25:$1,649,000
Aug 18: $1,549,000
Change: – 100000.00 -6%

5656 Carson Street, Burnaby

May 25:$1,649,000
Dec 13: $1,499,000
Change: – 150000.00 -9%

://www.zolo.ca/index.php?sarea=5656%20Carson%20Street,%20Burnaby&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzV0ZCRA==

#56 TheSecretCode on 12.14.17 at 9:16 pm

Did anyone catch the public service announcement by Poloz today?

If you missed it I will give you the executive summary in a few words:

If you have any CAD…run for your life..get rid of it…like yesterday.

Everything Garth is speaking about is going to cost you, the taxpayer. JT has the bank bailouts ready.

#57 Deplorable Dude on 12.14.17 at 9:18 pm

Well it looks like the Uniparty in the US has chosen Rubio to be the bad guy to scupper the Tax vote. Trillions at stake for the Globalists.

Expect the tax vote to fail, and the markets to tank big time.

And on top of that I’m calling it now…..

..the Sh1t is gonna hit the fan big time next week….the released FBI texts of some members on Meuller’s team basically prove Sedition, possibly Treason, or as they called it ‘insurance against Trump winning’….in this case a falsely gained FiSA warrent to spy on an incoming President.

Storm Forecast:

*Earlier today Trump honored Secret Service.

*Tomorrow POTUS goes to Quantico to visit with the FBI peeps and give them attaboys.

*Tomorrow night, POTUS heads to Camp David for the weekend amid heightened security.

*Something’s coming.

You and SecretCode should get a room. – Garth

#58 Mattl on 12.14.17 at 9:24 pm

Love how you are a “numbers guy” when it comes to foreign buyers but deal mostly in anecdotes and emotion when it suits you.

Yes, RE can get ugly. Any contract that involves lots of zero’s can. But “the numbers” show RE has returned insane amounts of wealth to Canadians. For every one deal that goes squirrelly there are likely 1000 that close
with no issue. In an uncertain market that may be 1 in 300 – we’d need a numbers guy to lay this out for us – but these litigated deals are the outliers.

So cool story bro but how many deals are hitting the courts?

Most never do, of course. They are settled in arbitration with no public record. – Garth

#59 IHCTD9 on 12.14.17 at 9:38 pm

#37 tulips on 12.14.17 at 7:53 pm

We sold our old place for $400K and we had a $200K mortgage. Today, with an extra $150K in investment gains and additional savings our down payment is a healthy $350K, but our old place has rocketed up to $950K so it would take a $600K mortgage to get it back. We can afford that, but when we do it will be pretty clear that our previous move to rent was a financial failure.

————

I’d love to know what your household income is.

The biggest financial failure you could do, is to dump your life savings plus another 600k for a Mortgage, plus another 400k in interest on a mediocre house if your going to struggle even a tiny bit to do so. 1.35 Million dollars, and the house is an “outdated box”.

100’s of thousands of folks move to Canada every year looking for a better life. Many are from third world countries who don’t know our language, our culture, our business models, they may as well be shipping off to the Moon for all they know of what they’re getting themselves into.

You got it easy, you just need to move to a more affordable city in the same country you already live in – even the same Province would do! Did you know you’re living inside the single worst RE market in Canada, and possibly the world (cough)?

If you’re not making 500K household income, you’re going to be stretched thin. Your delima ends when you find a job doing whatever pays the bills, wherever you can afford to pay them.

Just think about your predicament if you bought and your house value starts to slide over the length of your mortgage. You may be looking back fondly to your former wisdom at selling your house for 400k and renting with 350K liquid in the bank…

#60 TheSecretCode on 12.14.17 at 9:39 pm

Don’t put any money in a deposit / trust when buying a place (obviously a challenge when talking about Van/TO up in Canada…don’t deal with a real estate agent and most certainly don’t sign a mutual release statement drafted by an RE agent via the associated board who owns them.

RE agents are only working for sellers. And even then you don’t own your data. You sign your data over the RE cartel when dealing with them. RE agents are all about pumping the price as high as possible. They get clients by promising mo money than ever imagined.

I can’t wait until the one trick hoarding of data (giving RE boards all of the power) is released through laws that actually work for the citizens. Canada deserves better.

The only RE agent I would ever consider dealing with (say if I had too) would be Steve Saretsky in Vancouver, BC – supposedly straight outta Richmond, BC – having street credibility along with being anti establishment makes him the peoples champion in RE. I am also convinced that he is somehow a relative of Garth.

Anyways, in the very least all you need is a lawyer and an accountant who works for you with RE and any other ventures you do.

#61 TheSecretCode on 12.14.17 at 9:56 pm

Caught some upbeat news today about Canada:

As a reminder: Kelowna, BC is leading the pace in pulling second mortgages for all of Canada. Way to go Kelowna. We are about to find out if this is due to the oil downturn a few years back or if it is a speculation play on flipping properties that only go up in price when rich Vancouverites show up. Also, note – an SFD is cheaper in Calgary right now (by like 250k on average) versus what it will cost you in Kelowna. Please enlighten me if anyone knows about a time in history when this has ever happened?

Without further ado: “Mortgages are being combined with HELOCs, to the point where about 40% of all housing-backed loans are blended with a HELOC component” – Stephen Poloz

Did someone say Loonie?

#62 DON on 12.14.17 at 9:56 pm

Debtslavecreator:

If the market corrects steeply by Q3, Poloz will drop the overnight rate down to 0 and start QE by late 2018/early 2019

adding to what others have said. If the market corrects steeply – human nature will take hold and housing will be so last…year. Changing sentiment will take hold fast and people will rush to get out. The US couldn’t stop the housing downturn, no country has…

Still waiting for the stories of people using heloc to buy bitcoins. Human nature is a rerun.

#63 D Apostrophe on 12.14.17 at 10:02 pm

So many fools in the 6ix. Gonna make LA’s crash look like a picnic.

#64 Still employed in AB on 12.14.17 at 10:05 pm

Just a friendly reminder that the Bank of Canada has one target…. INFLATION. It does not have a dual mandate like the fed to target employment and inflation. A weak CAD will cause inflation leading to higher rates. So while we may lag the US rates will rise :)

#65 ovidet on 12.14.17 at 10:06 pm

Listed for $849,000 (Sold $870,000)
List:2017-09-22 End:2017-09-27 N3935210
Listed for $998,000 (Sold)
List:2017-06-03 End:2017-06-07 N3828447
Listed for $798,000 (Terminated)
List:2017-05-25 End:2017-06-03 N3815202

If the data above is correct this is a very shady property. I think there is more to this story. Who terminates a listing only to immediately list 200k higher in a falling market?

Lots did that. They priced ‘low’ to get multiples and over-asking. When that failed they listed for what they actually wanted. – Garth

#66 DON on 12.14.17 at 10:06 pm

#42 For those about to flop.

Good story Flop – thanks for sharing.

I left Van in May of 2002. Just as the nutiness started to take hold. An old blue collar Dunbar area house was going for 400K and people thought that was expensive. Condos and townhouses on 4th/MacDonald for 168K. Credit wasn’t flowing easy back in the early 2000s. Where the hell did that time go.

#67 ovidet on 12.14.17 at 10:08 pm

Prices in my previous post are for 46 Raleigh Crescent.

#68 Lost...but not leased on 12.14.17 at 10:11 pm

#55 Flop…..

Are assemblies coming up on your radar screen ?
In Richmond, they are popping up like weeds.

Drove down Steveston Highway the other day..major multi -property assembly….literally a whole block.

…..local realtors next quantum leap is packaging properties for potential multi -family developments even when there is no change to the OCP..yet…

#69 april on 12.14.17 at 10:12 pm

#60 -Maybe your Steve Saretsky?

#70 april on 12.14.17 at 10:17 pm

#47 – we think alot of people raised their asking price to such a high level that they can afford to drop hundreds of thousands and still laugh all the way to the bank.

#71 D Apostrophe on 12.14.17 at 10:18 pm

1st time posting twice.. WTF??!?!?!? Hosers?!??! 1.71:1 https://www.thestar.com/business/economy/2017/12/14/canadas-debt-to-household-income-ratio-rises-to-171-per-cent-statcan-says.html

#72 Lost...but not leased on 12.14.17 at 10:21 pm

#50 dr. talc

Re: capital gains and principal residence designations…

Intriguing IF the Feds are going to scrutinize this more closely. My understanding was that one actually designated any dwelling (ie even cottage etc.) as principal residence at one’s discretion.

All sorts of scenarios come to mind…a person may own a cottage…yet rent a condo in the city for work for most of the year…..then what?

Anybody got answers ?????

#73 DON on 12.14.17 at 10:29 pm

#39 Andrew Woburn on 12.14.17 at 8:00 pm

We all like to think of ourselves as moral and just, and maybe you and I are, but everyone else is a thief. That’s why every door on your house has a lock. Even the door on your RV has a lock and you have to lock the hitch when it’s not hooked up. Your boat needs a key, your motorcycle needs a key, heck you can’t even leave your ax out in your campsite or it goes missing. Stores cannot operate without significant anti-theft measures or the shelves would be bare. This is the true state of human morality.
==========================

You probably won’t believe this but in the 50’s, people did not lock their front doors, they left their keys in the ignition when they went shopping and we didn’t know what a bicycle lock was. A small time bank robbery was front page news.

Not in rural Saskatchewan – in downtown Hamilton, Ontario.

Yes, we have thankfully left behind those bigoted, patriarchal times but we also seem to have left behind something else. I think we used to call it “self-respect”.

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

When I started driving in the late 80’s on Vancouver Island – people used to leave their cars running with the doors unlocked while they ran into the convenience store.

#74 TheSecretCode on 12.14.17 at 10:32 pm

Anyone else noticing the pump n’dump between BTC and ETH? Like the oil play of the last few years on steroids. Happening a dozen times a day now.

So, here is what is happening…as soon as BTC goes green, start buying it by selling ETH…then when BTC goes red, start selling it and buying ETH.

Ripple +90% on the day.

Bloomberg has added Ethereum, Litecoin and Ripple to its terminal.

And if anyone needed anymore evidence as to what everyone is doing right now: Coinbase is #1 app in apple’s app store right now.

#75 Jon on 12.14.17 at 10:33 pm

Wow this why we love dogs and hate people, it really bothers me just to know that the person who flakes out then basically tried to screw the owner they just tried to screw.

Ps anybody watching the crypto mania that traded through dot com has seen the story before. I bought xrp crypto on a lark and watched it shoot from 23 cents to almost a dolllar in four days. I sold well before top after making what I would consider a good annual return. Around 40 cents. It rocketed people piled in almost 300 percent in three days the exchanges were stopping trading. Yes that is correct you couldn’t sell. Within 12 hours it hit sixty cents now 80 it is just total gambling madness . Funny to watch if your a trader. Now someone will come on and say this one is the one the new amazon. Does anyone remember how many companies active in dot com bubble I worked for one that raised 53 million on fairy dust and burnt it just as fast. There will be a company that succeeds out of this mania but your chances of picking it are the same as picking amazon when it sold books online

#76 TurnerNation on 12.14.17 at 10:35 pm

Was this posted, merry xmas…

“Cenovus Energy eyes 500 to 700 staff cuts as it adopts lower 2018 spending plan
CTV News · 14 hours ago”

Day before Fed I found myself looking at Barrick (ABX.US) chart and wondering. Fed lifted it off, ABX back to life.

Also:

https://www.investopedia.com/terms/n/non-possessory-lien.asp

“The legal claim against an asset in order to secure payment of the debtor’s obligation. In a non-possessory lien the lienor does not hold physical possession of the asset in question, only a legal right. For example, a creditor can place a non-possessory lien against a debtor’s piece of real estate in order to recoup his/her loan amount once the property is sold.”

#77 TheSecretCode on 12.14.17 at 10:39 pm

Re: #62

The regulators have already confirmed what you are saying about crypto.

Poloz reiterated it indirectly today when warning about Bitcoin. He is seeing the data live.

People are taking out mortgages / second mortgages to buy bitcoin, says securities regulator is the US.

https://www.cnbc.com/2017/12/11/people-are-taking-out-mortgages-to-buy-bitcoin-says-joseph-borg.html

And what does all of it mean? Game on…for now.

#78 TheSecretCode on 12.14.17 at 10:46 pm

As of this moment it is official that bitcoin is now the biggest bubble in history, having surpassed the Tulip Mania of 1634-1637.

Bitcoin
Market cap: $275.1 billion
Year-to-date rise: 1,590.5 percent

Ethereum
Market cap: $71.1 billion
Year-to-date rise: 8,812.6 percent

Bitcoin cash
Market cap: $33 billion
Rise since it was created in July 2017: 229.6 percent

Ripple
Market cap: $21.8 billion
Year-to-date rise: 8,479.8 percent

Litecoin
Market cap: $16.5 billion
Year-to-date rise: 6,859.6 percent

#79 Lost...but not leased on 12.14.17 at 10:56 pm

From Financial Post article on shadow lending

QUOTE: ” Roughly 90 % of new mortgages in Toronto and Vancouver this year are UNinsured”

also:
—-49% of all outstanding mortgages are UNinsured.

—-Credit Unions hold 17% of UNinsured mortgages.

—– gov’t insurance is forbidden on homes over $1 million.

#80 Lost...but not leased on 12.14.17 at 11:04 pm

Re Bitcon…err Bitcoin

See the transaction fees have gone up dramatically from literally zero in January to $26 last Friday….transactions have slowed to 4 per second.

So….the die is cast…everybody gets scared via being trapped..pay the ran$om suckers…

#81 For those about to flop... on 12.14.17 at 11:07 pm

#68 Lost…but not leased on 12.14.17 at 10:11 pm
#55 Flop…..

Are assemblies coming up on your radar screen ?
In Richmond, they are popping up like weeds.

Drove down Steveston Highway the other day..major multi -property assembly….literally a whole block.

…..local realtors next quantum leap is packaging properties for potential multi -family developments even when there is no change to the OCP..yet…

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

Hey Lost,Assemblies in my hood have been the golden ticket so far this year.

Previously bought houses that were slightly cheaper than the rest of the neighborhood and were shunned due to noise and pollution have paid out amazingly if they went anywhere near ask.

The previously more cherished speculative targets,nicer houses on nicer streets have struggled to get their money back.

Three whole blocks of Fraser st have sold recently and there is still a lot more up for sale.

There are a lot people hoping to cash in on zolo but none more than this guy…

M43BC

https://www.zolo.ca/vancouver-real-estate/3833-fraser-street

#82 Johno on 12.14.17 at 11:07 pm

My wife loves me – good call on pulling back on your 80% 2nds… I did the same and re-adjusted the portfolio to 50% LTV 1sts at 7%.

#83 For those about to flop... on 12.14.17 at 11:14 pm

Pink Pumpkins being carved in Richmond.

Ahhh Richmond,you sweet hunting ground you.

This house was purchased like so many represented in my study in The Spring a Fling of 2016

10111 Lawson Dr ,Richmond.

Paid 1.36

Asking 1.29

And so yet another relatively affordable option languishing on the market.

Not real sure what the problem is.

Unless,unless,the unthinkable is happening and prices are actually going down in some segments because things got to hot for the majority.

20% a year not sustainable.

Imagine that…

M43BC

https://www.zolo.ca/richmond-real-estate/10111-lawson-drive

#84 For those about to flop... on 12.14.17 at 11:16 pm

Pink Pumpkins being carved in West Vancouver.

This property was picked up for 4.1m in April 2016

1802 Rosebery Ave, West Vancouver.

Paid 4.1

Asking 3.98

This bracket has collapsed in a lot of the city.

Surprise,surprise they are having trouble getting their money back…

M43BC

https://www.zolo.ca/west-vancouver-real-estate/1802-rosebery-avenue

#85 Terry on 12.14.17 at 11:22 pm

“Say, did you hear household indebtedness just hit a new all-time high? And that people are borrowing money on their HELOCs at 3.7% to lend out as down payments to desperate moisters trying to beat the stress test, at 10.5%?”

How do highly indebted Canadians go bankrupt? ………. slowly at first …………… then all of a sudden!

#86 NoName on 12.14.17 at 11:24 pm

interesting read

IOTA’s system can address this in two ways, he says. First, it can assure the integrity of this data by securing it in a tamper-proof decentralized ledger. Second, it enables fee-less transactions between the owners of the data and anyone who wants to buy it—and there are plenty of companies that want to get their hands on data.

https://www.technologyreview.com/s/609771/a-cryptocurrency-without-a-blockchain-has-been-built-to-outperform-bitcoin/

#87 slick on 12.14.17 at 11:34 pm

#13 Research the Game
your local post person isn’t supposed to say a thing about clients.
I have done some contract postal work, and one day the police stopped the carrier to ask for some info on a guy.
The carrier said sorry, nothing doing.
The cop was pissed, but too bad.

#88 TKW on 12.15.17 at 12:20 am

You think thats a story watch how TD stock is about to fall…big time …T. F.

#89 Tony on 12.15.17 at 12:25 am

The first time in ages I haven’t seen a sold out sign on billboards for new townhouses at McCowan and 16th Avenue in Markham.

This development:
https://condonow.com/for-sale/ON/Markham/McCowan-Rd-and-16th-Ave

#90 For those about to flop... on 12.15.17 at 12:30 am

Recent Sale Report.

This ” cute starter home in the heart of Dunbar” just got a new owner.

3406 w 23rd ave,Vancouver.

Asking 2.38

Just sold for 2.38

Tax assessment 2.82

And so I guess the tale for this one is that it went for 15% less than the local bibles recommended retail price…

M43BC

https://www.zolo.ca/vancouver-real-estate/3406-w-23rd-avenue

#91 Last of the Boomers on 12.15.17 at 12:37 am

Yes, assemblies are the next big thing. Happening near the hospital in north van and realtors canvassing neighbors in GlenEagles west Van. I rent in west Van where every 10th house is for sale. Nothing moving. Same houses, just rotating realtor for sale signs; some trying to rent at astronomical prices; occasional success on the rental front, but many just sitting empty. Asking too much for local incomes. My friend in GlenEagles dropped the price of their house by $100,000. Report is of few showings, no bites, and those with any interest are move up buyers that have been unsuccessful in selling their primary residence first. Unreported change is upon us. Can’t staff the hospitals. Nobody can afford to live here anymore. We really need this change.

#92 paulo on 12.15.17 at 12:57 am

#72
You generally get one kick at the cat on this one, so choose the claimed primary residence wisely.
You could attempt to perform a split claim,but it would be subject to the sole determination of the CRA as to what they might accept. i am thinking this is one for the no fly zone file.

#93 Perfect Ending on 12.15.17 at 12:58 am

In a declining market the sellers will not have the leverage to obtain all those stipulation you listed.

No pity on the sellers or buyers. In this day and age where sellers only look at the highest offer price and where agents do not want the buyer and seller at the same table during offer presentations, then this is a perfect ending to the perfect story.

Much can be gleaned by meeting someone face-to-face, but for the sake of expediting deals, most agents don’t want this during offer presentations. Then just want to close and move to the next fool.

#94 Smoking Man on 12.15.17 at 1:09 am

Globalism. Thats Power bitches. They got the schools they got the big multi nstional corps. They got the banks They got T2.

They got me now. I wasn’t a cheap date. They paid good.
But I could not resist this. Sorry Soros.no refunds on keys me.

Roy Moore received 953 votes, Doug Jones 5,327 in a town of 2,256 residents with only 1,867 registered voters.

#95 im a fool on 12.15.17 at 1:14 am

#42 For those about to flop… on 12.14.17 at 8:04 pm
I arrived in Vancouver in late January 2002 ,traveling the world and picking up work visas.

In June of that year I met a nice girl but knew I wasn’t gonna be in Canada much longer and didn’t see the relationship going that far due to distance as I was due to go back to Europe but was hoping to stay in touch.

I went on a trip to see some old buddies in Nova Scotia that I shared an apartment with in London and then checked out New York.

In the meantime that girl was visiting a friend in Chicago and we decided to meet up in Ottawa after I visited Montreal.

A strange think happened in Ottawa,we were walking hand in hand down the street( I think it was at the market) and we started to talk about getting married as we had decided we wanted to be together.

After arriving back in Vancouver we contacted the Canadian Government to see what could be done visa wise and they recommended that since I already had status and if we were serious about getting married then go ahead with their blessing.

I guess what I’m trying to say is that we took a risk but today,December 14th is our 15th wedding anniversary and so far everything has worked out o.k.

Never had kids,lots of travel and memories and all the freedom that comes with no children and no house to maintain.

Most importantly my wife is my best friend and companion ,although I suspect she thinks I have the hots for this blog…

M43BC

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

Hey flop i like you.
Where are you from?

#96 Nonplused on 12.15.17 at 1:58 am

#39 Andrew Woburn

I sort of remember those times. Not really though. When I was a kid I could leave my bike in the bike rack without a lock but not after I got a nice one.

40 years ago my dad said to me “if it isn’t nailed down it has legs”. He was right.

If human nature was pure, they wouldn’t make bike locks.

#97 GUN TOTTER on 12.15.17 at 2:12 am

So why do so many of you thing it’s right that you should have the right to steal my stuff but I should not have the right to shoot you when you are on my property committing crimes? Leave my wife, my daughter, and my canned food alone or I will shoot!

#98 tulips on 12.15.17 at 2:49 am

>> #49 oncebittwiceshy on 12.14.17 at 8:47 pm
>> Maybe try myrealtycheck where you can watch the price drops every day.

It looks like myrealtycheck shows changes in ask prices, not sale prices. I’m not sure if this constitutes a correction, as I would think that people generally need to lower ask prices more regularly than they raise ask prices for a particular listing. Even in a flat market an initial ask price set too high will result in a slow listing with price adjustments downward, while an appropriate initial asking price will result in a sale with no listing changes.

>> #49 oncebittwiceshy on 12.14.17 at 8:47 pm
>> Wow, if people are going to make this stuff up, at least go on the MLS site and see if your story holds up.

Nothing to make up here. We’re in Langley, where the average single family house went from $500K to over $1M between 2012 and now. I have been watching MLS over the past couple years. We have seen several places near our old home that are similar sized mid-70’s BC box houses. Many listed this year in the 900K+ range and sold within a couple weeks which makes me think they sold for at or near ask prices. Everyone I talk to here thinks it’s justified because of all the Vancouver residents fleeing east to find affordable housing. I do see that listings are hanging around a lot longer recently, but it’s also December so I’m going to wait until this spring to make up my mind on whether the brakes are really being applied.

>> #59 IHCTD9 on 12.14.17 at 9:38 pm
>> I’d love to know what your household income is. The biggest financial failure you could do, is to dump your life savings plus another 600k for a Mortgage

We can afford the $600K mortgage. Our household income is $230K. The $350K we would put down is not all of our life savings as we also have over $450K combined in RRSPs and RESPs. That’s not the point. The point is whether prices can somehow avoid falling, or if it would be a regrettable move to buy here in 2018. Moving elsewhere would be appealing, but we are tied to this area for now by family and careers.

#99 jane24 on 12.15.17 at 2:59 am

I spent 15 years as a RE agent in my misspent youth. We always held the deposit in the broker’s account although there is no legal reason for this. If anyone questioned it we just said we were the neutral honest broker in the transaction. People very seldom questioned it actually.

The real reason though was to ensure that we got paid, that deposit becomes the commission and since we are holding it, we get paid first. The general public are so gullible.

#100 Dan.t on 12.15.17 at 3:40 am

Say, did you hear household indebtedness just hit a new all-time high? And that people are borrowing money on their HELOCs at 3.7% to lend out as down payments to desperate moisters trying to beat the stress test, at 10.5%?
——————————————

What? Is that for real? Oh, right, forgot, Canadian real estate is all that matters and I mean, seriously, it’s only debt. So who cares if you need to pay 10.5% to get a down payment. Add in Bank of Mom, maybe a 3rd party lender and credit card, as long as you get real estate! And even if you are swimming in debt, and after 24 months can’t afford it, just sell for a 100% tax free gain- because real estate usually just doubled in price every 2 couple years… it’s Canadian law I think..

That’s sarcasm but nothing is going to change when people covet insane unaffordable, crap construction condos, townhouse , actually any real estate at all costs. what is wrong with people and house lust in Canada?

#101 Dan.t on 12.15.17 at 4:09 am

#66 DON on 12.14.17 at 10:06 pm

I left Van in May of 2002. Just as the nutiness started to take hold. An old blue collar Dunbar area house was going for 400K and people thought that was expensive. Condos and townhouses on 4th/MacDonald for 168K. Credit wasn’t flowing easy back in the early 2000s. Where the hell did that time go.

—————————————————————

Where did that time go? You already said it. Because credit wasn’t flowing people had to buy what they could afford. We have had massive amount of free money given to anyone who wanted it – it was encouraged and advertised 24/7 until people understood- debt is good, plus QE1-2-3-4-5….14 and on and on… probably the biggest devaluation of currency ever , and people wonder about the rise of crypto… I have no doubt the government will try to wreck that too .

But don’t worry things are much better now in Vancouver, just ask people that live there if you can find them – most really like the massive speculation and selling out out of real estate there to foreign buys and the insane costs to live there…. it’s part of Van charm.

#102 under the radar on 12.15.17 at 4:50 am

Good advice, but what you also must do, is to include a clause in the agreement which says, In the event the buyer does not complete this transaction on the date set for completion , through no fault of the seller, the buyer hereby irrevocably authorizes and directs the listing broker to pay the deposit to the seller as damages .
Just because the lawyer holds the deposit does not change the necessity of going to court and getting a judgment for the deposit, the above clause does –

#103 IHCTD9 on 12.15.17 at 6:33 am

#58 Mattl on 12.14.17 at 9:24 pm

But “the numbers” show RE has returned insane amounts of wealth to Canadians.
_________________________________

Yes for all of two markets in the entire country. Only for those who bought in 15+ years ago. Only for those who actually sold. Only for those who then moved somewhere else to preserve the difference.

I’d bet my @ss there are many more Canadians being steamrolled by massive mortgages than there are those who can point to a Million+ liquid in their bank accounts thanks to RE.

I’d also bet that in the long run, these same two RE markets will strip massive amounts of wealth off of Canadians, it looks like it is already starting…

#104 No raise!! on 12.15.17 at 6:35 am

I told everyone here that Poloz will never raise again. Now it’s obvious he can’t and won’t raise rates. It will destroy Kanada.
Go be a good Kanadian and buy a bunch of crap you don’t need for Xmas to keep this bs debt fuelled fire burning!

#105 IHCTD9 on 12.15.17 at 7:10 am

Any dogs have extended family who have been brainwashed by foreign governments? Looks like your Trudeau bucks payday has arrived in Ottawa, give your lawyer a call.

http://www.cbc.ca/news/politics/cia-brainwashing-allanmemorial-mentalhealth-1.4373590

#106 Steven Rowlandson on 12.15.17 at 7:22 am

I don’t think Canadians can afford the luxury of living in Canada. We are not made of money.

#107 dr. talc on 12.15.17 at 7:41 am

#72 Lost…but not leased on 12.14.17 at 10:21 pm
#50 dr. talc

Re: capital gains and principal residence designations…

Intriguing IF the Feds are going to scrutinize this more closely. My understanding was that one actually designated any dwelling (ie even cottage etc.) as principal residence at one’s discretion.

All sorts of scenarios come to mind…a person may own a cottage…yet rent a condo in the city for work for most of the year…..then what?

Anybody got answers ?????

global text says-

They included a requirement that people report the sales of their principal residences, and that they had to live in them every year they own them, in order to avoid paying a tax — this, he said, “reduced the amount of flipping and speculation.”

global news written quote is at odds with what Bill Morneu actually says the @ 9:20 point:

https://globalnews.ca/news/3912790/bill-morneau-vancouver-housing-prices/

Bill says ‘get capital gains if they were actually in the house’

global written version adds ‘every year they own them’

neither can be found on the cra site

no clarity, it’s tax code on the fly

in some European countries :
5 years ownership=no capital gains tax

#108 Ruby Clayton J.D. on 12.15.17 at 7:50 am

It is unfortunate that the legislated “cooling-off” period that protects the buyer of an overpriced vacuum cleaner does not apply to real estate. It is ironic that only the cream can afford to “lawyer up”, but criminal scum can often obtain free counsel to ensure their right to a fair trial. This safeguard is necessary as occasionally the cops do frame the wrong scum. It is crazy that these activities, like some Financial Services and most Governmental Services are added to GDP instead of subtracted. But I digress.

A stroke of the mighty pen could revise the legislation and bring sanity to the market, but lawyers desperately need the work. Alternatively, making paper fluttering accessible to every Canadian using a public insurance scheme similar to private dental insurance would enrichen yet another profession. But that would lead to a shortage of trophy spouses, as global demand already exceeds supply (see Melania).

Furthermore, successful lawyers are less likely to enter politics which, prima facie, is a good thing; but failed realtors are more likely to throw their hat in the ring. It is foolhardy to pre-judge; their matchbook diplomas might be sufficient preparation for the House of Commons. Could they possibly do any worse?

#109 Lama on 12.15.17 at 8:24 am

Garth, how many times do you feel like self-medicating when people think you’re “anti-house” rather than “pro-balance”?

Also, @#104 Steven Rowlandson, sure we can afford living in Canada, simply rent. And dump the difference in weed stocks and crypto. Retire rich. Probably.

#110 IHCTD9 on 12.15.17 at 8:24 am

#96 tulips on 12.15.17 at 2:49 am

We can afford the $600K mortgage. Our household income is $230K. The $350K we would put down is not all of our life savings as we also have over $450K combined in RRSPs and RESPs. That’s not the point. The point is whether prices can somehow avoid falling, or if it would be a regrettable move to buy here in 2018. Moving elsewhere would be appealing, but we are tied to this area for now by family and careers.
______________________________________

You want to know in advance if prices can somehow avoid falling? No one knows – end of discussion. You will spin the wheel and take your chances just like you did last time.

Looks like you can comfortably cover the costs though, so you really just need to get buying and accept the fallout whatever it may be if you are unwilling to move.

I was in a similar but way less consequential position a month ago looking for a good used truck for under 5K. Anything worth looking at was sold in hours. It became quickly apparent that I was not going to get a good deal on anything under 10 grand. There was no value in that price range – everything was bid to the max the market would allow and then some. The typical 10 year old rusted up beater with 300K on the clock was between 6-8K.

My solution was to start looking for value regardless of price. Bang for the buck. I ended up with a low mileage truck that is MINT, only 123K on it, for 10K. More than I wanted to spend, but triple the bang for the buck compared to the cheaper end of the market. If I look after it when the time comes to sell, it will sell easy – and for top dollar.

If I were in your shoes I’d do the same kind of shopping. I’d also try to buy 1 years time via short term rental to see if the RE market is stalling or not.

I myself would be very loathe to sacrifice that 350K on the altar of a falling market if there is any possible way to avoid doing so.

#111 Sweetcity gamechange on 12.15.17 at 9:09 am

Re #59 comment on ‘Tulips’ totally agree! Why struggle to swim upstream with all the other Toronto salmon? Moving to Hamilton, yes Hamilton – has been a game changer for us, more galleries & gourmet restos than we can keep up with, fantastic waterfront, gorgeous housing in the core (Parkdale type homes & cabbagetown style Victorian brick houses as far as the eye can see) with your downpayment you could buy a sweet spot for yourselves and an income property or a huge duplex as your own house. Our tenants have been amazing ( we do our homework) and moving here has allowed us to jump up to a previously unattainable lifestyle on our salaries.(4 homes purchased in 7 years- sold 2 at a profit, building new, & keeping 2) Funny how once you leave the constant comparison game of living in Toronto you can lift your head, look around and realize just how sweet life can be. Any town that gives you less overhead & a better quality of life will make realize that TO really isn’t where ya gotta’ be.

#112 For those about to flop... on 12.15.17 at 9:54 am

am
#42 For those about to flop… on 12.14.17 at 8:04 pm
I arrived in Vancouver in late January 2002 ,traveling the world and picking up work visas.

In June of that year I met a nice girl but knew I wasn’t gonna be in Canada much longer and didn’t see the relationship going that far due to distance as I was due to go back to Europe but was hoping to stay in touch.

I went on a trip to see some old buddies in Nova Scotia that I shared an apartment with in London and then checked out New York.

In the meantime that girl was visiting a friend in Chicago and we decided to meet up in Ottawa after I visited Montreal.

A strange think happened in Ottawa,we were walking hand in hand down the street( I think it was at the market) and we started to talk about getting married as we had decided we wanted to be together.

After arriving back in Vancouver we contacted the Canadian Government to see what could be done visa wise and they recommended that since I already had status and if we were serious about getting married then go ahead with their blessing.

I guess what I’m trying to say is that we took a risk but today,December 14th is our 15th wedding anniversary and so far everything has worked out o.k.

Never had kids,lots of travel and memories and all the freedom that comes with no children and no house to maintain.

Most importantly my wife is my best friend and companion ,although I suspect she thinks I have the hots for this blog…

M43BC

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

Hey flop i like you.
Where are you from?

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

Me?

I spent the first 24 years of my life in Tasmania.

Sold my house and all my possessions and got a 2 year working /holiday visa in the U.K.

Got addicted to travel and never got home sick and so I have never been back.

Looking back I think that the reason I blew my old life up pretty good, to try and make it harder to go back and fall into the same old traps.

I thought one day of returning to Australia and living in Perth,using it a base to spend some time in Asia.

Never happened, and I had to settle for the western outpost that is Vancouver.

Never know what’s gonna happen…

M43BC

#113 Victor V on 12.15.17 at 10:41 am

Slumping home sales to cost economy $1 billion and almost 12,000 jobs next year, CREA warns: The impact of tighter mortgage rules that come into effect New Year’s Day is expected to take a toll on housing sector

http://business.financialpost.com/news/economy/crea-says-lower-sales-forecast-will-cost-economy-1b-in-lost-economic-activity

#114 Mattl on 12.15.17 at 10:42 am

IHCTD9 – yes sure, only 2 markets. That represent 30 percent of the population. And no you didn’t have to get in 15 years ago, but if you did wow you killed it. Most GTA and YVR markets are up 40-80% over the past 5 years.

Agreed some people are going to get killed but you can’t ignore that RE has been the biggest wealth opportunity most middle class Canadians will ever see. If they took out HELOCs to buy toys, or more property, or moved up to houses they can’t afford then they are at serious risk. But the folks that bought within their means, lived in and paid down their homes are sitting pretty.

And the specs and builders that sold during the boom made absolute fortunes. I have 4 builder friends spending a week on a yacht in San Diego, combined they made more than 10mm the past few years building SFH in the Lower Mainland.

Yes people are going to smoked but that correction or crash won’t wipe at all of the billions of dollars that were made on the run up. A large chunk of that wealth made its way into portfolios like the ones Garth manages. And the smart money, that likes to play in RE, will have cash set aside to gobble up discounted RE when that day comes. I for one am looking forward to a correction, if houses in my area tank I will buy the neighbours house.

#115 Stan Brooks on 12.15.17 at 11:00 am

The dogie looks like the little Putz – no bite, just bark.

BTW if I knew his view on bitcoin (up 5 % today):

Bitcoin more akin to gambling than investing, says BoC governor Poloz

https://ca.finance.yahoo.com/news/rates-likely-higher-bank-canada-173712676.html

I would have goon all in much earlier.

#116 MediOgre on 12.15.17 at 11:00 am

Canadian household debt might be at the highest its ever been, but it’s parked in rental units or investments that are generating cash or that can be sold to pay the balance…big deal. Why do we only focus on debt to income and not debt to assets ~ or a thousand other ratios? We would never doing that when considering the financial health of a company.

If you want a big deal you have to have a large evaporation of jobs, a spike in interest rates (or oil) or a major false flag event (several in the works to choose from)…

#117 IHCTD9 on 12.15.17 at 11:40 am

Kids get your pencils out and start taking notes.

Smaller Ontario town cost of living.

I know a SS teacher couple who live down the road in a nice 300K house. 1500.00 mortgage payment, 10,400.00 after tax monthly income.

Another young couple in a starter home. 600.00 mortgage payment, 5700.00 after tax monthly income.

IHCTD9 Compound, last term before the house was paid off ~550.00 mortgage payment, ~8200.00 after tax monthly income.

BIL bought an old 100 acre farm, severed and built a couple times; mortgage free at 32 years old, probably made near a half mil in the process over 15 years too.

Right now there is a sweet 150+ year old brick building right on the main drag for 230K. It’s a real cool place for several reasons. Mortgage payment would be 1200.00/month. How much does a couple need to make to comfortably buy this place? Minimum wage will do. Are there lot’s of these kinds of jobs out there? Hundreds.

Let’s take the teacher house example above: in Toronto, that house would probably run 2 Million. That’s a 10,520.00 monthly mortgage payment.

Remember kiddies, after a couple decades, a house is just a house, and a job is just a job. By 45 you’ll already be starting to think about retirement. If you arrive at 40 with zero savings and still slaving away at a mortgage, you’re screwed. DONE LIKE DINNER. Better pray for another bubble so you can get 2 Mil for the house.

40 comes quick. If you’ve married and raised a couple rug rats, the sprint from 30-40 might be the shortest decade of your life. By the time you feel like things are under control and you can take a breather, your 30’s are history. Get on it – you can’t waste time or burn money if you’re playing to win.

#118 oncebittwiceshy on 12.15.17 at 11:54 am

Tulips: “I do see that listings are hanging around a lot longer recently, but it’s also December so I’m going to wait until this spring to make up my mind on whether the brakes are really being applied.”
<<<<<<<<<<<<<<<<<<<<<<<<<<

So, what you're seeing is homes hanging around a lot longer despite the fact that everyone with a pulse rate and some kind of down payment is racing to get into the market in December before the new OSFI legislation comes in January 01/2018

Maybe reviewing this article will help you a little bit.
https://thinkpol.ca/2017/12/11/many-metro-vancouver-homes-selling-for-a-loss/

“The fact that these people are willing to take an almost 25% hit means that they expect the correction to be even greater,” they added. “As smart money cuts their losses and run, many others will gladly line up to catch falling knives.”

Perhaps the CREA can help you out a bit with a forecast when they're predicting 12000 job losses due to this legislation.

You seem intelligent enough. If the most vested organization in the country sees the problem you need to look outside your box. Perhaps you could take a little time to review this article.

http://www.moneygeek.ca/weblog/2017/10/16/canadian-housing-market-bubble-interview-seth-daniels-jkd-capital/

#119 LivinLarge on 12.15.17 at 12:20 pm

OK, this is a tad off topic but I can’t see it ever being on topic so here goes.

I was just thinking about how glad I am that Canada 150 is over in a few days and realized that the ETF was invented in Canada just short of 18 years ago (March 2000) so I think we should start planning some sort of celebration year for the Canadian invention that changed the investment world so much.

#120 Tony on 12.15.17 at 12:27 pm

Re: #113 Stan Brooks on 12.15.17 at 11:00 am

Poloz’s comment must be good news for holders and buyers of Bitcoin and other crypto currencies. I was very pleased to see his comment in the Globe and Mail online newspaper. I’m loaded to the hilt on Litecoin.

#121 Lee on 12.15.17 at 12:29 pm

Funny how workers (I think they are largely trade contractors) claim they are owed $1.1 BILLION for work on the new subway station near York. Do the project managers infuse the TTC know how to count? How can you miss the mark by $1.1BILLION. Either the project managers got duped on bids, or someone any add. Projects budgets shouldn’t go over by 50%, especially when the numbers are this big. And remember folks, I don’t think these costs are included in any public deficits. I guess the money is supposed to come out of mid-air.

#122 anc0dia on 12.15.17 at 12:46 pm

#114 MediOgre on 12.15.17 at 11:00 am
Canadian household debt might be at the highest its ever been, but it’s parked in rental units or investments that are generating cash or that can be sold to pay the balance…big deal. Why do we only focus on debt to income and not debt to assets ~ or a thousand other ratios?

Because it’s leveraged debt. Nobody would let you buy 1 million dollars worth of stock with 5% down but that’s the type of leverage people are doing with housing.

#123 PupPatrol on 12.15.17 at 12:47 pm

So our beloved RateSpy guy just put out an article “B-20 Backfire” in which he suggests that those wanting to buy a home in 2018 or those renewing will most likely find ways around the restrictions (ie. 30yr amortizations, credit unions) and “prices will surge to new records” next year after an initial lull.
If i choose to believe this, then, I guess the dream of being a prudent investor up til now, renting and waiting for the b20 effects have been for nothing, as the indebted will keep the party going and prices high and out of reach for our young family.
I wonder if he wrote that to pump a rush to buy this month? Or if he truly believes this is the beginning of a new wave of price increases to come.
Not sure if I can trust anyone in the mortgage or real estate industry.

#124 Lost...but not leased on 12.15.17 at 12:47 pm

#105 dr talc.

Re: Principal residence, capital gains, Morneau claim……I couldn’t find anything either on CRA sites.

This does not mean it won’t be enforced as Morneau stated. CRA appears to have a lot of latitude that is not set in stone..ie stock market players…whereby one may claim profits as capital gain..but CRA may state ones degree of involvement may be interpreted as a “full time job” and thus taxed at a higher rate.

The capital gains exemption on primary residences has been SERIOUSLY abused since the housing markets became juiced in the 1980’s. Here in BC, vacant homes, and VACANT FOR MONTHS…pre – demolition would have stacks of mail from utilities, etc. ..classic tactics to claim principal residence status. (Suffice it to say I knew many of the players).

I knew several parties that would build a home, live in it, obviously claim principal residence, then literally buy the house next door and build a second home and repeat the process.

I am not sure what CRA ‘s rule is on this…I’ve heard that one has to live in the home for ” one year ” ?. If true, that likely implies the practice was so rampant CRA waived the white flag, or was told to in such a hot market…don’t upset the golden goose.

( CRA gets its pound of flesh from other aspects of a hot RE market, ie the various taxes from tradesmen wages, supplies, but when it seeks more it uses the aforementioned broader and wider latitude.)

However, if CRA moves the goalposts to say 2 or 3 years of principal residence occupancy..IMHO that would certainly rein in the abuse.

ANYBODY WITH ANY INFO ON THIS ?

#125 AGuyInVancouver on 12.15.17 at 12:50 pm

#89 For those about to flop… on 12.15.17 at 12:30 am
Recent Sale Report.

This ” cute starter home in the heart of Dunbar” just got a new owner.

3406 w 23rd ave,Vancouver.

Asking 2.38

Just sold for 2.38

Tax assessment 2.82

And so I guess the tale for this one is that it went for 15% less than the local bibles recommended retail price…

M43BC

https://www.zolo.ca/vancouver-real-estate/3406-w-23rd-avenue
_ _ _
Ludicrous. I remember looking a similar size house in that neighbourhood at the start of 2000 for @ $310k. I didn’t buy it because it didn’t have a basement suite for a mortgage helper. Doh!

#126 Ronaldo on 12.15.17 at 1:27 pm

#78 TheSecretCode on 12.14.17 at 10:46 pm

As of this moment it is official that bitcoin is now the biggest bubble in history, having surpassed the Tulip Mania of 1634-1637.
—————————————————————–
And its going to get even better before it self destructs. With futures trading now being allowed, there will be no shortage of bitcoins as they will paper trade this thing in oblivion as they do with the pm’s. Wall Street couldn’t wait to get in on the action. The biggest pump and dump the world will ever see in our lifetime. 2018 will be an interesting year when the worldwide bubbles start to pop. Have you mortgaged your house yet?

#127 tulips on 12.15.17 at 1:33 pm

>> #108 IHCTD9 on 12.15.17 at 8:24 am
>> I’d also try to buy 1 years time via short term rental.

Thanks for your comments, I appreciate everyone’s discussions here. We expect our current rental will take us to the summer of 2018 before we have to move out. Hopefully that’s enough time to see if we smell a correction in the wind. Of course a correction’s coming soon, but we’ve been saying that for years! So this is our last waiting. If correction doesn’t come now, we’ll buy a basic $1M box. If correction starts to show, we’ll probably buy a little more time with a short term rental and try spend similar dough on more upscale digs a bit later.

#128 Ronaldo on 12.15.17 at 1:34 pm

#80 Lost…but not leased on 12.14.17 at 11:04 pm

Re Bitcon…err Bitcoin

See the transaction fees have gone up dramatically from literally zero in January to $26 last Friday….transactions have slowed to 4 per second.

So….the die is cast…everybody gets scared via being trapped..pay the ran$om suckers…
————————————————————-
Even Roger Ver, the guy that first bought into it has recently stated that it is not for him and he is moving out of it and into Bitcoin.cash, the latest fork. There will be a massive move out of this thing into the other better crypto’s like Ethereum and then watch this thing dive.

#129 Alistair McLaughlin on 12.15.17 at 1:35 pm

MediOgre, we focus on debt as a percentage of income because income is the only reliable – if still very imperfect – measure of one’s ability to service debt from one month to the next. That’s why. Debt is serviced by cashflow, not asset value.

You and Mattl should start your own blog. Your first blog post would be entitled: “WHY YOU SHOULD BUY A HOUSE TEN YEARS AGO, AND DO IT NOW!” You both seem blissfully unaware of systemic risks, and you both appear to struggle mightily with the concept of non-linearity.

#130 Still not a Trump Supporter on 12.15.17 at 2:10 pm

#92 Smoking Man on 12.15.17 at 1:09 am
Globalism. Thats Power bitches. They got the schools they got the big multi nstional corps. They got the banks They got T2.
They got me now. I wasn’t a cheap date. They paid good.
But I could not resist this. Sorry Soros.no refunds on keys me.
Roy Moore received 953 votes, Doug Jones 5,327 in a town of 2,256 residents with only 1,867 registered voters.
………………………………………………………………….
Trying to justify the loss? Your just a sad case of trailer trash to even consider supporting a low life like Roy Moore. Your voting list is a lie and vile with undertones of racism from the likes of Steve Bannon and his motley crew. I don’t care who you are but if you support the likes of Trump and Moore well then that tells me quite a lot about your position on woman and harassment. Come on now all of these woman got together from completely different areas of the country to accuse Moore and Trump? I don’t think so, give your head a shake. This is not the good old boys time anymore you old sack of horse turd. You disgust me!

#131 Lost...but not leased on 12.15.17 at 2:37 pm

#127 Ronaldo

As Garth noted a while back… human nature pretty much stays the same.

One should try to be in the drivers seat as an “outlier ” and not be caught up in the euphoria…the devil is always in the details.

I asked a relative with a PhD (who bought BitCoin early) to explain it to me.

I’ve searched the web, seen a lot of YouTubes videos.
One major BitCoin flogger is Andreas Antonopolous.

Apparently he has not bought BitCoin….but has had approx. $1.5 million in Bitcoin donated to him by his “followers”.

Lots of talk about competing crypto currencies..the next gold rush. That’s the key….so Bitcoin will have to play out quickly before it fades to black….err red !

#132 IM in C on 12.15.17 at 2:48 pm

I recall an episode of The Sopranos, where Tony Soprano put $200,000. down on a house and then wanted to back out. The seller very aggressively said that no way was Tony getting the deposit back. Tony then resorted to extra -legal, but non violent means to get the seller to release the deposit.
The point, people have been backing out of deals, and wanting their deposit back since , well , forever !!

#133 Lost...but not leased on 12.15.17 at 2:48 pm

Re: MediOgre and Mattl

Errors of Omission…
What does the future hold for potential buyers?

Have we literally absorbed in real time what would otherwise be 20-30 years of growth previously planned for the future ?

Boomers are at or near retirement…..who is going to buy their RE ? Yes..many BOOMERS bought way back and can afford a price haircut..it becomes relative…but the Gen X and millenials etc. may not be interested in a SFH…or Condo X…they are either so far in debt or the inventory becomes so high that prices crash.

Point is..who does one envision will be the future buyers ?

#134 #Three Things Keeping Me Awake at Night on 12.15.17 at 3:35 pm

Three Things Keeping Me Awake at Night:
1. A 50 cent Loonie.
2. $10 Cauliflower
3. Overcrowded Toronto that basements cost $3,000 a month.

#Three Things Keeping Me Awake at Night

#135 Blacksheep on 12.15.17 at 4:02 pm

MediOgre #114,

“Canadian household debt might be at the highest its ever been, but it’s parked in rental units or investments that are generating cash or that can be sold to pay the balance…big deal.”
————————————————-
ancodia #121,

“Because it’s leveraged debt. Nobody would let you buy 1 million dollars worth of stock with 5% down but that’s the type of leverage people are doing with housing.”
—————————————————
A Sovereign in control never has to worry about ‘paying off’ it’s national debt.

Garth has confirmed this fact multiple times. We also know central banks typically run, 2% inflation targets. Money creation (new loans/mortgages) are required to expand the economy, (along with exporting of goods) to achieve said 2% inflation and help drive positive, GDP growth. That’s assuming the Demand VS Supply equation is flat, which of course, it’s not.

Whether intentional or not, many highly indebted RE holders are behaving like Sovereigns, making the conscious decision to only ‘service their RE debts’ and are not really concerned with ever ‘clearing the mortgage’ given to the bank.

Low interest rates, long amortizations and secondary sources of income (rental suites / Air B&B / grow opps) all support this, loading up on debt plan. The more leverage these parties can use, the larger the piece of RE pie they can take on, the larger the $ gain based on standard inflation policies. Mean while they get to live in their high $ RE rather than dealing with the unpleasantness of renting.

Many Dogs here are stuck in past, expecting the return to: Three time earnings price structures when they are just not coming back.

They don’t see what’s really taking place and are left on the curb complaining about to much debt, when we know new debt is required to expand the economy.

#136 tulips on 12.15.17 at 4:31 pm

>> #117 oncebittwiceshy on 12.15.17 at 11:54 am
>> Perhaps the CREA can help you out a bit with a forecast when they’re predicting 12000 job losses due to this legislation.

I hope that you’re right, and your points all seems logical and reasonable. But following reasonable arguments about market over inflation has had inferior results to just following the crowd for a very long time. I hope we see that end soon. But I’ll make up my mind soon if people find new ways to keep buying and pumping up prices despite B-20. I agree that the market is overinflated, but if it takes another 10 years to get to a point of turn-around, then I won’t be waiting fully on the sidelines for that long.

>> #122 PupPatrol on 12.15.17 at 12:47 pm
>> So our beloved RateSpy guy just put out an article “B-20 Backfire” in which he suggests that those wanting to buy a home in 2018 or those renewing will most likely find ways around the restrictions (ie. 30yr amortizations, credit unions) and “prices will surge to new records” next year after an initial lull. … Not sure if I can trust anyone in the mortgage or real estate industry.

It’s not about you or I as individuals or who we trust or believe, but it’s about everyone else. If the masses think that B-20 will have no effect, then it won’t. They will keep buying and taking extra burdensome measures to help their kids buy, and continue scoffing at those who don’t buy. If enough of the crowd cautions against buying and people openly acknowledge the market doom with B-20, then it will bring some real change. If the spring market shows strength despite B-20, then we know the mentality of the crowd.

#137 BillyBob on 12.15.17 at 4:42 pm

#129 Still not a Trump Supporter on 12.15.17 at 2:10 pm
#92 Smoking Man on 12.15.17 at 1:09 am
Globalism. Thats Power bitches. They got the schools they got the big multi nstional corps. They got the banks They got T2.
They got me now. I wasn’t a cheap date. They paid good.
But I could not resist this. Sorry Soros.no refunds on keys me.
Roy Moore received 953 votes, Doug Jones 5,327 in a town of 2,256 residents with only 1,867 registered voters.
………………………………………………………………….
Trying to justify the loss? Your just a sad case of trailer trash to even consider supporting a low life like Roy Moore. Your voting list is a lie and vile with undertones of racism from the likes of Steve Bannon and his motley crew. I don’t care who you are but if you support the likes of Trump and Moore well then that tells me quite a lot about your position on woman and harassment. Come on now all of these woman got together from completely different areas of the country to accuse Moore and Trump? I don’t think so, give your head a shake. This is not the good old boys time anymore you old sack of horse turd. You disgust me!

===================================

Sexual assault and electoral fraud are both serious crimes. One does not justify the other. Your lack of intellectual ability disgusts me.

#138 MediOgre on 12.15.17 at 4:57 pm

Alistair McLaughlin ~ I agree with “still very imperfect” measure. Should we use only one “very imperfect measure” to project the status of the whole? I don’t see anyone sweating. Even on this blog…nobody sweating. Mostly wealthy from what I can tell. A couple of tales of failed deals this year ~ ouch, but not epic.

LBNL – I’ve read and appreciated your comments many times. I thought the recent run up was amazing…but I forgot one thing. People can buy two homes. or three. We will have land lords and we will have renters and everyone needs a place to live…buy dirt. They’re not making more of it.

#139 akashic record on 12.15.17 at 5:10 pm

#129 Still not a Trump Supporter

I am quite certain Smoking Man was writing about potential voter fraud. You must be a high ranking FBI employee investigating facts.

#140 Mattl on 12.15.17 at 5:11 pm

#128 Allistair – settle down pal, I am very well aware of systemic risk. Have always bought well below my means and just sold a house in the LM to further reduce risk. Current mortgage is at 2:1 income to debt. We own one home and live in it.

You RE doomers will eventually be right, and people are going to get smoked. But you don’t get to rewrite history and pretend that homes in East Van weren’t 500k 10-15 years ago. So go ahead and declare victory when you can buy a house in 2020 for 2014 prices at twice the interest rate.

#141 Alistair McLaughlin on 12.15.17 at 5:22 pm

@ #134 Blacksheep, individuals and firms are not sovereigns. We can’t print more of our own money. And an economy growing only due to the expansion of debt is doomed. Just like those participating in the debt orgy. Household debt alone is now 101% of GDP in Canada. The highest in the world. So yah, count me as one of those on the curb complaining about too much debt. It’s absurd, and there will be a price to pay.

Ralph Crampdown used to come here and make the same arguments – that we could in fact print/inflate our way out of all of our current problems. He was wrong, and so are you. There is no free lunch; no get out of debt free card. A reckoning is certain.

The alternative scenario – one you seem to be promoting – is that we’ve entered new territory, and there is no longer any such thing as a credit cycle. That for the first time in history, a credit bubble will indeed continue forever.

#142 Newcomer on 12.15.17 at 6:16 pm

#135 tulips on 12.15.17 at 4:31 pm
….

If the masses think that B-20 will have no effect, then it won’t.
———-

This is kind of true. Psychology drives the market. But it is also true that, if you go back an looked at RE crashes, the masses are always most confident during the early stages of the crash. So you can, and do, have situations in which mass psychology supports the market but it is already falling (the suckers just haven’t noticed yet). This being the case, psychology is clearly not the only market driver.

#143 MediOgre on 12.15.17 at 6:19 pm

#121 anc0dia, how leveraged?..I’m semi retired grey hair (if I remember right we have a massive boomer gen) If I have $1 mill in tax free capital gains sitting in my TFSA or RRSP…a personal residence that is 100% paid for..AND a second house mortgaged and earning rental income…how’m I doin? What does my income to debt ratio mean to you?

#144 Ronaldo on 12.15.17 at 6:42 pm

#133 #Three Things Keeping Me Awake at Night on 12.15.17 at 3:35 pm

Three Things Keeping Me Awake at Night:
1. A 50 cent Loonie.
2. $10 Cauliflower
3. Overcrowded Toronto that basements cost $3,000 a month.

#Three Things Keeping Me Awake at Night
——————————————————————If you’re losing that much sleep you probably should consider relocating. Sleep deprivation is not healthy.

#145 slippery cricket on 12.15.17 at 7:52 pm

#42 flop…… I like hearing a good love story, its brings us back to the things that make us happy. We get enough of “overpriced realestate”, bitcoin,investments. Make every day count, in the end thats will matter.

#146 Bottoms_Up on 12.15.17 at 11:07 pm

#132 Lost…but not leased on 12.15.17 at 2:48 pm
—————————-
My view is that the majority of boomers will live in their homes as long as they can. They have to live somewhere right? And they can take HELOCs against the value of their home (rather than selling, paying closing/moving costs, and moving somewhere foreign). Best of both worlds…live in your home, and access cash that is desperately needed.

And then you run out, with a giant debt to pay. – Garth

#147 Bottoms_Up on 12.15.17 at 11:14 pm

#130 Lost…but not leased on 12.15.17 at 2:37 pm
————————-
Here’s a pretty good read:

https://www.linkedin.com/pulse/gold-guys-view-bitcoin-blockchain-cryptocurrency-alex-stanczyk

Not sure how bitcoin can function as a store or wealth when it is traded like a commodity, and where computing power can earn it for you (like owning your own printing press). Also not sure how it can function as money, could one be lent bitcoin to make a house purchase? And in that sense it would have to be taxable. So why do away with money as a medium of exchange…we end up in the same place anyway (or in a massive depression.

#148 Chimingin on 12.16.17 at 6:29 am

Flop-Happy Anniversary!

My husband is from Perth. Once the kids are older and out we hope to spend more time there. Australia rocks.

#149 Albert S. Frank on 12.18.17 at 11:09 am

A Small Correction – the deposit money has been moved from Century 21 but it does not yet go to the sellers. The reason I call this a SMALL correction is that I am confident that in the end, if necessary after a trial, the sellers will be getting that money.