Common sense

Days ago, this pathetic blog asked what the landing of B20 – now scheduled for two weeks away – would mean to the real estate market. A few sketchy opinions were offered, ranging from a serious blow to prices and sales to an onslaught of renewed horniness. In short, nobody knows. But it’s coming, and once landed it’ll not be unmoved.

Herewith, then, the Official GreatFool Synopsis. The envelope, please….

*The market will be pooched.*

And following are the reasons why B20 will be the last straw breaking the back of residential real estate in most hoods in most markets. In the bubble cities it will help create and sustain a long, slow, resolute slide in values. In the normal cities it will spank speculators, punish amateur landlords and cure people of thinking they can buy a house, live in it for two years, then sell for more than they spent. It’s already happening, which you know if you live in Halifax, Edmonton or Ottawa.

Actions have consequences. Bringing in a universal stress test every single buyer must pass is the strongest single action ever seen in the Canadian housing market. Already there are signs of weakness, stagnation, ennui and je-ne-sais-quoi in Calgary, the GTA and the Lower Mainland. Alberta home prices are down by 8%, inventory in Toronto has exploded higher, the burbs are dying and sellers of detacheds in Vancouver are feeling lonely and unloved. These are not healthy markets, even before B20 has touched down.

In fact, mortgage dudes, realtors and economists think a significant amount of demand was pulled forward from 2018 into November by newbie buyers terrified they’d fail the test in January. These are sales which won’t be taking place later, and have helped mask the deteriorating conditions now taking hold.

For example, consider Richmond Hill in the GTA – less than a year ago one of the frothiest places on earth where every listing was swarmed and sellers sold in days, or hours, for huge premiums over ridiculous asking prices.

“You may find it interesting that Richmond Hill detached median sold price has dropped a whopping $122k, down to $1,100,000, or a full 35% down from the peak in April,” says Toronto real estate broker Alex Prikhodco in his monthly report to us. “In January-February sellers are going to get crucified. Expect a further drop of 10-15% before March 2018.”

And, yikes, look at this. The average sale price of almost $1.7 million nine months ago is now $1.1 million. If Alex is correct, these houses are on their way to the $900,000 range, for a plunge of about 45%. Pity all those buyers who were desperate to secure a particleboard-&-glue McMansion last March “before being priced out forever.”

Feeling not so rich in Richmond Hill

Source: Listing.ca

Meanwhile, let’s use some common sense. Canadian household debt just shot past a new milepost, with 65% of the $2.2 trillion we owe being in mortgages. Debt is rising faster than incomes and during the past nine years of cheap money nobody, apparently, used low rates to pay down their loans. They just borrowed more.

So, here come the consequences. Trump, his tax cuts, US expansion and renewed global growth are bringing back a little inflation and fatter interest rates. The cost of money is going up in 2018 in both Canada and the States, just as B20 affects the credit market. Less credit means cheaper houses. Look out Richmond Hill.

At the same time, lower American corporate taxes have propelled stock markets skyward, with more to come, it seems. A boring balanced portfolio in 2017 delivered 9.5% at the same time Toronto real estate was negative 2%. As more people understand where risk truly lies today and run screaming from insanely inflated house prices, expect the divergence to widen. Be safe. Be liquid.

Finally, a reminder of how fast sizzling real estate markets can turn frosty. In April the Ontario government unveiled a mishmash of policies called the ‘Fair Housing Plan’ (politicians love the F word). Here’s what happened to sales: over $14.5 billion was erased in a seven-month period.

Toronto real estate just took a $14-billion hit

Source: Toronto Real Estate Charts

This time the policy change is much more impactful and immediate. When buyers qualify to borrow 15% or 20% less, sellers have two choices: no sale, or drop the price an equal amount. Seems simple enough. Pooched.

175 comments ↓

#1 Doug t on 12.18.17 at 6:07 pm

Dear Santa – please get this correction on with already – I’ve been a good boy, saved for a rainy day, contribute to my TFSA and sold my house in Sept and bought smaller house and paid off mortgage – Santa please make sure the bad people in mortgage industry get a lump of coal and send the Grinch to the realtors houses.

RATM

#2 April B. on 12.18.17 at 6:10 pm

As an investor of several high-end condos and penthouses across Toronto, I refuse to allow welfare recipients from lowering the values of my properties.

Please send a letter advocating for cutting welfare rates in Toronto by 50% or more at this website:
http://www.ontario.ca/incomesecurity

Please tell your local MP and Ontario Minister of Social Security that welfare rates need to be LOWERED, and not increased because welfare will affect our Government’s budget to provide police services and prison services to keep society stable.

#3 Nick on 12.18.17 at 6:12 pm

Looks like we’re expecting puppies in 6 months, because this pooch just got screwed.

#4 Doug t on 12.18.17 at 6:16 pm

#2 April B

You sound completely pathetic and out of touch – sad really

RATM

#5 BlorgDorg on 12.18.17 at 6:26 pm

OK, so, assuming the market top was (pretty clearly) around April 2017, the only question left now is: how far, and how long, until the bottom?

Let’s see if the combined Garth-O-Meter© and Wisdom of the Dogs™ can come close to predicting this one.

#6 Bill Grable on 12.18.17 at 6:28 pm

“Meanwhile, back at the ranch……” They are slamming up condos all over the Greater Vancouver area. Traffic, is a disaster – but, still it continues.

To give you an idea what’s happening in Vancouver….Mr. Turner wrote about the ‘coming housing disaster”, starting what, 5, 6 years ago?

We sold our two bedroom Condo – for $319,000. It’s listed today, with 50K worth of upgrades for $782,000.

Crickets.

#7 Kbean on 12.18.17 at 6:28 pm

When buyers qualify to borrow 15% or 20% less, sellers have two choices: no sale, or drop the price an equal amount. Seems simple enough. Pooched.

Does this not assume that everyone is a first time buyer or had been using max credit to purchase?

#8 Happy Housing Crash Everyone! on 12.18.17 at 6:33 pm

What more is there to say?

Happy Housing Crash Everyone! :-)Ho Ho Ho.

#9 Happy Housing Crash Everyone! on 12.18.17 at 6:36 pm

BTW That house that sold for $2.118million and put back up for sale in July is still UNSOLD and the prices has dropped and dropped to $1.725 million. BaHaHahahaha. Stupid SHYSTERS in the summer said it would sell for $1.95million. Like useless SHYSTERS they know nothing and only can make up stories.

#10 JSquared on 12.18.17 at 6:39 pm

How will the price melt affect condo & townhouse prices?

#11 TRUMP on 12.18.17 at 6:39 pm

So Bill MORNEAU and your PM TRUDEAU raised taxes on everyone but themselves….. What crooks they are.

And you PATHETIC CANADIANS just suck it up and let it happen…

What a disgrace to humanity… Go play hockey and drink beer while they take your future and your kid’s futurw from right under your nose!!!

#12 Madcat on 12.18.17 at 6:40 pm

Good. I hope B20 smacks the living crap out of this gas bag… Horgan’s looking like he’s about to wimp out (I guess we’ll see what Selena does in February)…

Maybe I’ll add a Jeremy Rudin tattoo on my ass next to my Garth tattoo…

#13 Lost...but not leased on 12.18.17 at 6:41 pm

IMHO…..the biggest indicator for RE collapse will be the condo market especially in BC.

The Gov’ts have massaged their policies to funnel and herd buyers into this stratafied….err stratafried?market. This rather dumb -meets- desperate move doomed this facet of the market.

How many condos were bid up over $1 million, as past this point there is no Gov’t mortgage insurance.

Look for signs of distress..when member/s of the developer cabal break ranks and commence with fire sales.

#14 Ray Skunk on 12.18.17 at 6:41 pm

Which steerage character is on the wind-up as “April B” tonight?

#15 Nick B on 12.18.17 at 6:42 pm

Be safe? Not sure a balanced portfolio is a safe place either, we are long overdue for a recession and markets are expensive based on a lot of measures. Central banks have had our backs for the past 6/7 years but even that appears to be ending. Should be interesting in 2018 on both the Real Estate and Equity Market fronts.

#16 Penny Henny on 12.18.17 at 6:45 pm

“You may find it interesting that Richmond Hill detached median sold price has dropped a whopping $122k, down to $1,100,000, or a full 35% down from the peak in April,” says Toronto real estate broker Alex Prikhodco in his monthly report to us.-gt

How is $122k equal to 35% drop to $1,100,000?

#17 gfd on 12.18.17 at 6:47 pm

#3 Nick on 12.18.17 at 6:12 pm
Nick dog pregnancy lasts only 60 days unless, of course, it’s different this time. :)

#18 Ryan E on 12.18.17 at 6:49 pm

“When buyers qualify to borrow 15% or 20% less, sellers have two choices: no sale, or drop the price an equal amount. Seems simple enough. Pooched.”

This will be a long, painful lesson for many sellers who have become accustomed to years of “over asking!” stories. Denial is strong. Prices will be sticky for much of 2018.

#19 Tbone on 12.18.17 at 6:50 pm

#4 doug t
Welfare should not be a multi generational lifestyle.
When my new immigrant father came to this country in the 50’s
If he didn’t get a job he didn’t get to eat .
His sponsor had to get him settled.
A little motivation goes a long way.

#20 bubu on 12.18.17 at 6:52 pm

Owners will not sale…. look at this house build in 2015 in Edmonton.. https://www.realtor.ca/Residential/Single-Family/18062379/20-SYLVANCROFT-NW-Edmonton-Alberta-T5N0R1-Westmount

I have a lot of examples where the houses were listed 3-4 years ago and if they don’t get the price they don’t sell… Unless there is an interest rate hike big enough ( 0.5% doesn’t count) the market will stay at this level until income will catch up….

#21 Nobody on 12.18.17 at 6:54 pm

I love being a nobody. I paid off my mortgage. Debt free now.

#22 Royal City Dweller on 12.18.17 at 6:54 pm

Shysters(R) are getting nervous.

The operator of a website that began publishing homes sold information says it has received a cease-and-desist letter from the board, TREB(R)

https://globalnews.ca/news/3923277/toronto-real-estate-board-sales-data/

#23 Cottingham a bargain on 12.18.17 at 6:57 pm

I own and live in Richmond Hill and I can tell you that the window to buy at reduced prices is closing fast as sales have picked up and prices firmed.

Open houses are garnering viewings and if priced fairly , selling.

It is but a short period of time before demand from specific ethnic groups simply swamps what little supply is out there along west side of Yonge Street to gamble road.

Anything south of major Mack to Hwy7 is a screaming buy right now .

#24 homeless in BC on 12.18.17 at 7:00 pm

My collector plated 1988 BMW r100rt (boxer/airhead) has increased in value approx. 10% per year and I get to ride it. Some investments are more fun than others. Happy Holidays to all.

#25 Your Neighbourhood Dog Walker on 12.18.17 at 7:02 pm

#2 April B. on 12.18.17 at 6:10 pm

You ought to know that refusing to rent your condos and penthouses to welfare recipients (OW, ODSP and GAINS) is considered illegal under the Ontario Human Rights Code? Do you?

I do know that Landlords subtly cheat this legislation by asking all applicants that their credit scores and tax forms will be assessed for consideration, so technically, that method will be very difficult to prove discrimination under the Human Rights Code, but it’s new to me that you directly post online that you will refuse to rent or sell to welfare recipients in Ontario.

#26 I’m stupid on 12.18.17 at 7:02 pm

Bell, Telus, Rogers’s

They all have a promo if anyone is interested. $60 per month unlimited everything and 10gigs of data. Bring your own device.

#27 Shawn on 12.18.17 at 7:11 pm

Dramatic change of sentiment in Niagara – particularly in the high end market ($650K-$1M+). What sold in 1-2 weeks is sitting for months. Relists and reductions are common (especially in the $800K+ range). It’s just beginning.

The story down here was “everyone is moving down market from the GTA”. Now not so much.

#28 Hairhead on 12.18.17 at 7:13 pm

April @#2 – Um, April, what do you think those people who get their welfare cut 50% will do? Will they just lie down and die, quietly and politely?

No, they won’t.

They will whatever is necessary to fill their bellies and cover their bodies.

Whatever. Is. Necessary.

#29 Tedfiftyfour on 12.18.17 at 7:16 pm

# 1 Doug
Me thinks you are the grinch. You didn’t say no to that poor buyer who’s money you took in September with a promise to return any difference should the prices decline. You naughty boy, Santa

#30 Biddy on 12.18.17 at 7:17 pm

“When buyers qualify to borrow 15% or 20% less, sellers have two choices: no sale, or drop the price an equal amount. Seems simple enough.”

Really, those are the only possible choices? So all of a sudden no one is going to be able to borrow a bit o’ change from granny et al?

No parents will be able to lend a little more from their overpriced Mcmansions to junior to cover it?

No one’s going to get a second job, or maybe a tenant, to help with the higher payments?

Garth, to ignore the laws of supply and demand is beneath you. More people are coming, more are being born, this country is still basically empty.

It’s only going to fill up with more deplorable and Asiatic dudes and dudettes for, well, the rest of time.

I think there’s a myopic view, entrenched, here.

Ups downs and corrections yup. Sky falling, though? Nah.

We all enjoy this blog Garth, and love the wit and snark, but it is truly absolutely the broken clock. Brokenclock.com, maybe?

#31 For those about to flop... on 12.18.17 at 7:19 pm

Due to the correction happening in some parts of Vancouver ,a lot of people couldn’t get their number and have taken their property off the market and will likely have another crack at the title during Spring Fling 2018.

So many in the last couple of months that I had to create a new folder that in a moment of genius decided to call “Old Sold”

If you click on the links I supplied as examples, zolo simply states the date of the old sale and indicates the house is no longer on the market.

Not that important ,but I thought a few people might be interested…

M43BC

Old sold

1041 Prospect Ave,Vancouver.

Paid 2.8 April 2016

Asking 2.79

https://www.zolo.ca/north-vancouver-real-estate/1041-prospect-avenue

Old sold

484 Montgomery St,Coquitlam.

Paid 2.44 January 2017

Asking 2.39

https://www.zolo.ca/coquitlam-real-estate/484-montgomery-street

Old sold

1411 Grover Ave,Coquitlam.

paid 1.32 February 2016

Asking 1.29

https://www.zolo.ca/coquitlam-real-estate/1411-grover-avenue

#32 acdel on 12.18.17 at 7:20 pm

My brother and I were driving around Calgary yesterday looking at what is happening in the neighborhoods classified the inner region.

We were both gobsmacked as to how old homes were being torn down and replaced by new expensive homes with real estate signs already erected. What surprised us is how many are sold without the new building being finished.

With office occupancy running at 30%; personally knowing many professionals with many years experience cannot find a job or are only getting six month contracts; where the heck is this money coming from??

It absolutely makes no sense!!

#33 Richmond Hill Overpriced on 12.18.17 at 7:26 pm

Buddy from Richmond Hill has had his house on the market since March 2017 refusing to drop his price from peak March 2017 values (66 Richmond street) which was values at $1.6 Million. I rent down the street and have seen no interest in this HOME. buddy moved out months ago and it’s now sitting empty. HE’S GOING TO BE RIDING THE CURVE ALL THE WAY DOWN TO $900000 in the next few months. Must be painful!

#34 oncebittwiceshy on 12.18.17 at 7:29 pm

Doug T.

#2 April B

You sound completely pathetic and out of touch – sad really

RATM

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

Incredibly Doug, she is not out of touch, she's just another realtor that drank her own Kool-aid.

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

"In the bubble cities it will help create and sustain a long, slow, resolute slide in values."

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

Garth, you omitted the 35% – 45% drop in prices during the first year that occurs prior to the further long, slow, resolute slide in values.

Of course this will lead to thousands of "FIRE" industry job losses. Job losses, by the way, that will entail thousands of their speculative homes being listed.

The downward pressure on properties will be exacerbated by the competition from all of the "HELOC" home/condo investors.

Perhaps, some advice would help here. When you go to sell, make sure that your realtor doesn't have his own properties for sale, as well. You know the scam, your place is listed for x amount of dollars so they take a customer to your place and then they take that same customer to their comparable "newly priced" investment property. Ooops.

Finally, all of the "extend and pretend" homeowners who are blithely unaware of the OSFI legislation and try to re-finance their mortgages next year are going to be faced with the "stress test".

Once they are faced with the dilemma of dropping home prices and an inability to re-finance their "extend and pretend" loans, the chickens will come home to roost and even more inventory will come on the market.

The government, of course, will react by dropping interest rates again …. lol. It will have the same affect here as it did in the States when their housing market blew up.

The only result will be an even lower Canadian dollar as Canada slides into a very long protracted recession.

Oh well, at least we were so much smarter than those yankees for 8 – 10 years.

#35 Screwed Canadian Millenial on 12.18.17 at 7:34 pm

Why don’t Republicans know what revenues are?

$21 TRILLION national debt, Trump is running a $700 BILLION annual budget deficit that is set to explode and these morons think it’s time to cut taxes for Goldman Sachs and George Soros?

Conservatives really should not be trusted with handling money.

https://imgur.com/4dDZtRz

https://imgur.com/RbIurMC

America is going to collapse under the weight of Trump’s budget deficits.

Our Maple Money will be back to par within 2 years. Only our housing bubble might get in the way of that. Under Bush and a GOP Congress, we went from 63 cents to pay in 6 years.

The problem is it’s all going to come crashing down even worse than the Great Republican Recession of 2008.

And no sweeties, tax cuts for the rich don’t pay for themselves with trickle down magic.

#36 conan on 12.18.17 at 7:36 pm

Maybe the TO real estate market is fueled by Bit Coin vapors? Nobody light a match. I told people to sell it at 8K, Doh!

Met someone from Hong Kong the other day and they said, ” Vancouver will be like Hong Kong.” The flow of crazy money will not stop, its going to accelerate, and a big money investment today, will be worth much more 10 years from now.”

That’s what the peeps think from Hong Kong……

#37 Hope on 12.18.17 at 7:40 pm

April B. As an investor of several high-end condos and penthouses across Toronto, I refuse to allow welfare recipients from lowering the values of my properties.
——————————————————————–
You don’t need welfare recipients to lower the value for your high-end condo’s and penthouses. Economics 101 will take care of that. Maybe you could put up some unfortunate welfare recipients in your high-end properties. I’m sure they’d appreciate it.

#38 Steve on 12.18.17 at 7:40 pm

Garth,

I like dogs,

Everyone is talking about the possibility of a decline in house prices next year but, is there a possibility of a stagnation of prices, similar to what happened in Japan in the 90’s? I’m just wondering if there are any similarities between today and the Japanese economy in the 90’s

#39 Mattl on 12.18.17 at 7:43 pm

I think Alex is likely misunderstanding how averages work. If the top end of the market falls out and homes are not selling while condo are in fire average home number will fall. I’d be very surprised if like for like homes that were selling for close to 2mm are now selling for closer to a mil. The market is correcting, no need to play with the numbers to make a point. If there is a true 45 percent retreat by march then expect significant amounts of defaults and foreclosures.

#40 Oakville Sucks on 12.18.17 at 7:45 pm

…and a recession in the next 12 to 24 months will bring house prices down another 20%….The GTA is really pooched!!!

#41 Smartalox on 12.18.17 at 7:46 pm

Sounds like April B is hoping for a return to the failed Mike Harris ‘Common Senses’ revolution.

didn’t some poor, pregnant former welfare recipient die while under house arrest as a result of that failed collection of Neo-Con tripe?

way to go April, way to go.

#42 TheSecretCode on 12.18.17 at 7:47 pm

RE investors in Vancouver are high tailing it out. It must be nice to have the connections to obtain leaked information.

Peter German is cleaning up and word on the street and the talk in town is that the NDP government is going to introduce a speculation tax and close the loopholes in the pre-sale market in next year’s budget…out in a month or so…

About time NDP.

#43 Danny on 12.18.17 at 7:48 pm

You make another convincing forecast.
Sometimes………some people have to learn the hard way.
Real Estate fictitious “sale values “……were based on emotion and fear……as Garth has highlighted many times.

Hopefully the” learning curve ” that some people who are deficient about “brick and mortar values “and real estate speculation will happen faster and sooner rather than later……to hopefully reduce the imminent financial sufferance.

Garth those individuals who drove the already insane real estate values last winter/spring to unimaginable level will see their error.
Garth referred to them as “fools “….I prefer the description “pathetic” and “selfish ”

Something like Pathetic Donald Trump…….who lacks any sense of integrity to say publicly ” that the middle class will benefit more than the upper class ” from lower taxes…in the proposed tax bill.
Donald the general public are smart enough to do the math……get real …….”you can’t fool all of the people all of the Time ”
Although the Toronto Real Estate Cartel………..like you Trump surely try hard to do that. ……..”pathetic with no scruples “

#44 Fuzzy Camel on 12.18.17 at 7:54 pm

When the DOW is skyrocketing up 1000 points a day in 2018, rates will be going up, and going up fast. Canada is going to tag along, if the new universal stress test doesn’t knock out Canadian real estate, Trumps DOW 50,000 and rocketing interest rates will.

#45 n1tro on 12.18.17 at 8:00 pm

#28 Hairhead on 12.18.17 at 7:13 pm
April @#2 – Um, April, what do you think those people who get their welfare cut 50% will do? Will they just lie down and die, quietly and politely?

No, they won’t.

They will whatever is necessary to fill their bellies and cover their bodies.

Whatever. Is. Necessary.
——————————–
Does one of those things include getting a job and contributing to society?

Or is your dire warning a veil threat that unless the rest of society doesn’t pay for free loaders, that they will resort to crime which affects us all?

#46 So a rise then? on 12.18.17 at 8:04 pm

Sitting here hoping for the big Kelowna price correction and then this article goes up

https://okanaganedge.net/2017/12/18/real-estate-predictions-aggravate/

Uh… fake news?

#47 Alex P on 12.18.17 at 8:06 pm

@ #16 Penny Henny

“How is $122k equal to 35% drop to $1,100,000?”

$122k Since NOVEMBER! $580k down since April… time to wake up, sweetheart :)

#48 Screwed Canadian Boomer living in a gated community in Costa Rica! on 12.18.17 at 8:06 pm

April B. = April Brockman?

Are you steaming mad because your pwetty real estate investments are part of a larger wave of flooding inventory in Toronto?
https://betterdwelling.com/toronto-real-estate-leads-the-country-in-inventory-growth-again/

Awww April Brockman….Do you need some cheese with that wine?

You’re also oblivious that cutting welfare for welfare recipients will create an inverse effect of “maintaining order in society”, because police will not care a hoot when thousands of hungry and angry welfare recipients will be calling for change on the streets (who you stigmatize as being property destroyers= racist?)

#49 Bobs ur uncle on 12.18.17 at 8:06 pm

#35 Screwed Canadian Millenial

Here’s a slightly different perspective on US debt from Vox:

“Democrats need to get a grip about the budget deficit
The tax bill is bad, the debt is fine.“

https://www.vox.com/policy-and-politics/2017/12/5/16730978/deficits-tax-bill-democrats-reagan

#50 TheSecretCode on 12.18.17 at 8:06 pm

Seeing the first sign of down cycling printed by OSFI this month isn’t helping.

And REBGV is threatening anyone who releases real data or is talking about the brutal numbers regarding losses.

The data confirms with what Flop has been screaming.

Six figure losses if you have bought an SFD in Vancouver in the past few years.

This article is worth a read:

https://thinkpol.ca/2017/12/13/whistleblower-questions-reliability-of-statistics-published-by-vancouver-real-estate-board/

#51 Burnaby Bear on 12.18.17 at 8:09 pm

“Seems simple enough. Pooched.”

I have been waiting patiently for 10 years – I hope this time it happens.

#52 Screwed Canadian Boomer living in a gated community in Costa Rica! on 12.18.17 at 8:11 pm

@ #41….Mike Harris Common Sense Revolution made no sense.
Ontario was losing jobs during the 90s recession, and Mike Harris thought that cutting taxes for the corporations will create a type of “trickle-down effect” for jobs.
I was forced to apply for welfare in 1998, and I still have contempt for that social worker who suggested that I stand at the intersection of any major thoroughfare to panhandle and perform “squeegee” duties like cleaning car windows at stoplights.

#53 Screwed Canadian Millenial on 12.18.17 at 8:21 pm

#48 Screwed Canadian Boomer living in a gated community in Costa Rica! on 12.18.17 at 8:06 pm

Part-time Premier Brian Pallister of Costa Rica is that you?

NDP raffling off a vacation to Costa Rica to ‘live like part-time Premier’
https://globalnews.ca/news/3772860/ndp-raffling-off-a-vacation-to-costa-rica-to-live-like-part-time-premier/

#54 Screwed Canadian Millenial on 12.18.17 at 8:22 pm

Oops I meant to type ‘of Manitoba’

#55 Nonplused on 12.18.17 at 8:22 pm

I don’t believe the “economic growth” story. Here is an interesting chart for you:

https://inflationdata.com/articles/charts/inflation-adjusted-oil-prices-chart/

I like the inflation adjusted line. What it shows is that other than the oil embargo in the 70’s, oil prices have been very volatile and trending higher since about 2000.

Here is an article from 1998 that perfectly forecast what was to come and appeared in both National Geographic and Scientific American at about that time:

https://nature.berkeley.edu/er100/readings/Campbell_1998.pdf

They didn’t forecast the “shale oil revolution”, which would change all their supply forecasts. But whatever the oil companies say, shale oil is not “cheap”, how ever plentiful it may be, so the basic premise holds. It’s already pretty expensive, even in the “sweet spots”, and the shale oil companies are burning through cash. They keep declaring profits but cash flow is always negative. They are in essence, throwing good money after bad.

Oil consumption is economic activity. Simple as that. GDP as we currently measure it can’t grow unless energy consumption grows. (Sure I know it can come from other sources but other than natural gas, coal, and nuclear, where is the heavy lifting? It ain’t renewables at least not for some many, many years.)

This recent price collapse, down to the historical average on an inflation adjusted basis, is a welcome relief but it will be short lived if the economy ever truly recovers. Demand will increase. Prices will follow back above the $63.41 line on the chart in the first link, probably permanently this time.

Can the world afford to run the economy on $63.41 shale oil? Probably, because the infrastructure is already in place. People have already bought and somewhat paid for their cars so they will keep driving them until the wheels fall off. They say the average time from factory to junk yard has increase to 15 years. So it’ll be 15 years before most of the diesel 3500’s rolling out of the factories will be replaced by whatever pickup Tesla comes up with. But even in that event we must remember that at this point Tesla has batteries but no way to charge them without oil, gas, coal and nuclear. Electricity is not an energy source, it is an energy medium. It’s how they get the energy in the coal to your laptop and light bulb. It isn’t in and of itself energy because it need something else to drive it.

Therefore the question that faces the world, and it is the question, the biggest question there is, far greater than global warming, is “where are we going to get our energy from in 20 years?” Well that and how to avoid nuclear annihilation.

Global warming in a non-issue because the price of carbon based fuels is set to continue to rise due to scarcity. If $60 dollars becomes the new low, which it has to if shale is to be viable, the economy will contract and demand will fall. No need to worry about those emissions forecasts it’s going to go down on it’s own because of economics and scarcity. There is nothing on this planet that isn’t scarce. Even good farmland is scarce, so dirt is scarce. Oil just didn’t seem scarce because we started out with so much more of it than we were using. Well, the glass is half empty now and we are drinking it faster than ever.

Chris Martenson does a good job of explaining the problem here:

https://www.peakprosperity.com/video/85828/playlist/92161/crash-course-chapter-3-exponential-growth

An important thing to remember about exponential growth is that for whatever the growth rate, there is a “doubling period” or time it takes to double. But each time it doubles, the new period will use as much of the resource as all previous periods combined. From where we are now, if we try and double oil consumption in the next 30 years, we will use it all. That won’t be possible. It won’t come out of the ground that fast.

#56 Paul on 12.18.17 at 8:28 pm

#7 Kbean on 12.18.17 at 6:28 pm
When buyers qualify to borrow 15% or 20% less, sellers have two choices: no sale, or drop the price an equal amount. Seems simple enough. Pooched.

Does this not assume that everyone is a first time buyer or had been using max credit to purchase?
_____________________________________________
This assumes, First time buyer’s don’t buy there are no move up buyers.

#57 acdel on 12.18.17 at 8:28 pm

#2 April B.

You are a moron, tell that to all those men who were seriously injured building these projects over the years so that an investor like you can make a few bucks off of it.

I can say so much more but due to this climate where males can be crucified for saying hello to a woman and are not being recognized for all the positives accomplished in society; minus the power hungry war monger’s; what is the point?

Hopefully it will all even out one day; the sooner the better for societies sake! If not, enjoy ladies :)

Ever work in an office full of women; I have, never will again.. 20% are excellent, love them, love their way of thinking, incredibly hard workers and fun, the rest; what can I say without being crucified??

#58 Lost...but not leased on 12.18.17 at 8:31 pm

RE Exit strategy

Self cannibalization..

If the market is tanking…be ahead of the curve..”chase- the -market -down strategy”

Example: If the RE market is say at haircuts of 10%….haircut your own RE at say 15 %…cut yer losses before SHTF.

#59 Kelsey on 12.18.17 at 8:34 pm

# 49 Bobs ur uncle

“Obama’s deficits were way too small”. Did Vox steal that article from The Onion?

#60 Happy Housing Crash Everyone! on 12.18.17 at 8:36 pm

And the shysters will soon see that normal people like me dont need mcmansions!!!!!!!I have plenty of space in my 550 sq ft basement apt for me and the six cats. Dad lets me use the car and the shysters can starve. I have enough left over from my benefits to by whiskas, Star Trek convention tickets, and I even saved up for the next Tony Robbins superstar retreat in Vegas!!!

#61 Ronaldo on 12.18.17 at 8:40 pm

#13 Lost…but not leased on 12.18.17 at 6:41 pm

”Look for signs of distress..when member/s of the developer cabal break ranks and commence with fire sales.”
—————————————————————
Just as happened in the Okanagan in mid nineties. Just so they could get out from under all the excess inventory. Half completed developments boarded up and it took years for the excess to be absorbed. Not different this time.

#62 mathman on 12.18.17 at 8:42 pm

B20 will have a material impact, no question. House prices are a function of two things, access to and cost of capital. The big 5 have already turned off the taps on anything that is not prime + borrowers. This resurgence in responsible lending plus the stress test shaves 20-25% off prices and more in the peripheral GTA.

The Milton’s/Richmond Hill and Whitby’s of the world are toast. Prices will be more sticky in the core areas, but will see a drop. After the initial leg down driven by policy, emotions start to kick in an sentiment will turn very nasty. Once sentiment turns, no way to predict how far the pendulum can swing.

Wages have not changed in real terms, last I check money trees do not grow in this country.

Canaries to watch for

– Lease Busters
– Credit card deliquencies
– Fire sales of high end toys
– The condo market/Cottage market

Math

#63 oncebittwiceshy on 12.18.17 at 8:43 pm

Meanwhile, out in the Vancouver suburbs, apparently, things aren’t going that well at all, if this home is any indicator. Beautiful 3900 sq.ft. home on a 10,000 sq.ft. lot in prestigious Westwood Plateau. It would appear that this home finally sold.

http://kwelite.ca/officelistings.html/details-16631762
1541 EAGLE MOUNTAIN Drive
Westwood Plateau Coquitlam V3E 2Z3
$795,000
Residential Detached beds: 6 baths: 4.0 3,957 sq. ft. built: 1995

The only problem …. last year it was assessed for just about double the price:

Total Value
Assessed as of July 1st, 2016 $1,456,000

https://www.bcassessment.ca/Property/Info/QTAwMDAzWFpENw==

How did that happen?
1541 Eagle Mountain Drive, Coquitlam, BC V3E 2Z3
$1,498,000 2017-10-19
$1,550,000 2017-10-23
$888,888 2017-11-29
Overall Change= -$ 609,112.00
Percent: -40.66

Yes, despite dialing up all of those “chinese investors” with a list price of $888,888 this house went unloved.

#64 Paul on 12.18.17 at 8:43 pm

#25 Your Neighbourhood Dog Walker on 12.18.17 at 7:02 pm
#2 April B. on 12.18.17 at 6:10 pm

You ought to know that refusing to rent your condos and penthouses to welfare recipients (OW, ODSP and GAINS) is considered illegal under the Ontario Human Rights Code? Do you?

I do know that Landlords subtly cheat this legislation by asking all applicants that their credit scores and tax forms will be assessed for consideration, so technically, that method will be very difficult to prove discrimination under the Human Rights Code, but it’s new to me that you directly post online that you will refuse to rent or sell to welfare recipients in Ontario.
——===================================
Sell to welfare recipients are you for real?
Plus this landlord ‘says’ upper end and penthouses apartment the discrimination is the pricing !

#65 FOUR FINGERS WATSON on 12.18.17 at 8:44 pm

I don’t see demand falling off all that much in the bubble cities.

New census data shows the population of the metropolitan area of Vancouver outpaced the national growth rate over the last five years.

Statistics Canada released the first batch of numbers from the 2016 census on Wednesday and the population of what the government agency refers to as the census metropolitan area of Vancouver increased by 6.5 per cent since the last census in 2011.
…………..
Canada’s population increased to 35,151,728 last year largely driven by growth in the West, according to 2016 census data released Wednesday by Statistics Canada.

The country’s population has grown five per cent since the last census in 2011, when it was at 33.5 million, the highest rate of growth among G7 countries. However, the growth rate declined from the 5.9 per cent increase recorded in 2011.
………………………..

#66 Ronaldo on 12.18.17 at 8:47 pm

#20 bubu on 12.18.17 at 6:52 pm

Owners will not sale…. look at this house build in 2015 in Edmonton.. https://www.realtor.ca/Residential/Single-Family/18062379/20-SYLVANCROFT-NW-Edmonton-Alberta-T5N0R1-Westmount

I have a lot of examples where the houses were listed 3-4 years ago and if they don’t get the price they don’t sell… Unless there is an interest rate hike big enough ( 0.5% doesn’t count) the market will stay at this level until income will catch up….
—————————————————————-
$800,000 for a half duplex. They’ll be waiting a long time for wages to catch up to this sucker. Overpriced by $400,000. (at least)

#67 For those about to flop... on 12.18.17 at 8:47 pm

#50 TheSecretCode on 12.18.17 at 8:06 pm
Seeing the first sign of down cycling printed by OSFI this month isn’t helping.

And REBGV is threatening anyone who releases real data or is talking about the brutal numbers regarding losses.

The data confirms with what Flop has been screaming.

Six figure losses if you have bought an SFD in Vancouver in the past few years.

This article is worth a read:

https://thinkpol.ca/2017/12/13/whistleblower-questions-reliability-of-statistics-published-by-vancouver-real-estate-board/

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

I checked out the article and while I was there I checked out this other article that they had posted.

All 3 house in that article I have featured on this blog multiple times.

Two of them have sold and I am waiting to present them as CONFIRMED PINK SNOW as soon as they are updated.

One of them sold way back in August and last time I looked still wasn’t updated.

This is not timely enough anytime but especially with the dollar amounts involved nowadays.

Sure there will be some happy vultures but hopefully something good comes from all this pain that a lot of people are starting to endure.

I think that a lot of people on here questioned my credibility because I was honest and said I was a construction worker that works on high end residential properties and call myself a blue collar bum.

If I pretended to be a Mortgage Broker or someone else with insider knowledge then some more people might have listened to me earlier but that’s not how I roll.

I have not talked about work as much as in previous years because I had a late start to the year and have only worked on two houses and the current one is a recurring nightmare and I prefer not to think about it in my spare time.

I get taunted about wasting a year of my life doing a study but for me this is just the beginning of a multi-year project.

I just showed some examples of houses that have gone into hibernation for the winter and will perhaps come back on with a changed outlook of what will be an acceptable result.

I have the addresses.

I have the spare time due to a need to take it easy after work as am still not walking properly and definitely not pain free.

I have the ticker to show the real estate board where they can stick ‘er…

M43BC

https://thinkpol.ca/2017/09/05/investors-dumping-metro-vancouver-real-estate-at-cost-as-prices-plummet/

#68 young & foolish on 12.18.17 at 8:51 pm

Time for a little bit of early forecasting of my own: 2018

Real Estate: Flat at best, slight declines downtown, bigger ones in the burbs. As Granpa says “RE is a long term game”. His RE portfolio will continue to throw out huge monthly cash flows, until the developers come along and buy him out.

Stocks & Bonds: 4-6% And prey we don’t slide into recession.

Crypros: Well, all I can say is ” … to the moon”!

#69 Fiendish Thingy on 12.18.17 at 8:55 pm

I expect the hundreds of townhomes in various stages of construction/sales along 240th in Maple Ridge BC will be one of the “ground zeroes” for this soon-to-be-pooched market.

Can’t happen soon enough.

Wheeee!

#70 IHCTD9 on 12.18.17 at 9:07 pm

#48 Screwed Canadian Boomer living in a gated community in Costa Rica! on 12.18.17 at 8:06 pm

https://betterdwelling.com/toronto-real-estate-leads-the-country-in-inventory-growth-again/

—————————

Ouch! That’s bad news for the GTA. Especially bad for Richmond Hill, where homeowners are just going to get slaughtered.

#71 froggy on 12.18.17 at 9:10 pm

prices will not be sticky in 2018 especially for the mere fact that b20 will kill spec builds and as far as i’m concerned sellers will hit the jackpot even when prices go down 15- 20 % in 2018 providing they bought 15-35 years ago the blood bath will hit 2019-2022 that’s when to start looking to and low balling to another 20-30%

#72 Cottingham a bargain on 12.18.17 at 9:27 pm

-All you Doomers make me laugh. Same story over and over , year after year . If you had only bought instead of waiting for the sky to fall.

#62 mathman – Richmond Hill lumped in with Milton and Whitby? Really?? Just lost your credibility. I guess you think Pluto is about as far away as Kepler 90 right ???

#70 ihct90- wow ‘ slaughtered’ in Richmond Hill LMAO.
Only thing getting slaughtered in RH are roads as people run over each other to get in along the yonge corridor.
——-

My prediction- continuing soft prices below peak in April for about 6 months , then soaking up of current inventory followed by stampede and higher prices.

#73 acdel on 12.18.17 at 9:37 pm

Just an add on to the previous post #57; now this young lady deserves a round of applause; I followed her story throughout the past; she has gone through hell and back for no wrong doing, just expressing her legal views in a legal way to her students.

Today she was vindicated; those anti free- speech university quack pots advocates boo hoo, I will gladly send you one Kleenex if you cannot find a way to provide one for yourself!

http://nationalpost.com/opinion/christie-blatchford-investigators-report-into-wilfrid-laurier-universit-vindicates-lindsay-shepherd

#74 JR on 12.18.17 at 9:41 pm

Sorry – but where is all this inventory people keep mentioning? If you’re looking for a home in Central Toronto, within a 45 minute TTC commute of downtown, there’s nothing for sale.

“Toronto” is a huge area. Just like individual stocks will outperform the stock market, certain neighbourhoods across the city will outperform others. There will be leaders and laggard neighbourhoods in the 2018 market.

What’s going on in Richmond Hill has no impact on what’s happening at Yonge and St Clair. What’s going on in Scarborough has no impact on what’s happening in Riverdale. What’s happening in Mimico has no impact on what’s happening in Roncesvalles. Etc, etc.

Buyers who focused on emphasizing LOCATION, LOCATION, LOCATION over the past 18 months are going to be totally fine. My guess is their houses will appreciate nicely in value in 2018. The people who paid huge premiums to live in the suburbs are in a different boat.

Also, the new rules are largely overstated. No one I know who bought a house with 20% down over the past year walked into their bank and asked for the MAXIMUM mortgage they could get and then went out and spent it. Most who buy $1 mil homes could spend up to $1.3-$1.5 mil. Most who buy $2 mil homes can afford $2.5-$3 mil, ie this buyer class spends now what they’re going to be able to spend as of Jan 1.

#75 OttawaMike on 12.18.17 at 9:42 pm

B20 caused a 7% avg price rise in Ottawa:

http://ottawacitizen.com/news/local-news/tighter-mortgage-rules-in-new-year-may-be-driving-ottawa-house-price-hikes

#76 Willy on 12.18.17 at 10:01 pm

And, yikes, look at this. The average sale price of almost $1.7 million nine months ago is now $1.1 million. If Alex is correct, these houses are on their way to the $900,000 range, for a plunge of about 45%. Pity all those buyers who were desperate to secure a particleboard-&-glue McMansion last March “before being priced out forever.”
___ ___ ___ ___
Richmond Hill is ground zero for B20 – this should be no surprise. 1980’s and 1990’s McMansions piled on top of each other surrounded by 4-lane gridlock, ubiquitous strip-malls, and parks appearing slightly larger than postage stamps on google maps. In short – suburban hell. This soulless, sterile urban sprawl spreads as far north as Newmarket-Bradford. Innisfil offers up a patch of green before a sprawling gridlocked Barrie and her chinless wonders appear on the horizon.

#77 chopstix on 12.18.17 at 10:05 pm

Lost…but not leased on 12.18.17 at 6:41 pm
IMHO…..the biggest indicator for RE collapse will be the condo market especially in BC.

The Gov’ts have massaged their policies to funnel and herd buyers into this stratafied….err stratafried?market. This rather dumb -meets- desperate move doomed this facet of the market.

How many condos were bid up over $1 million, as past this point there is no Gov’t mortgage insurance.

Look for signs of distress..when member/s of the developer cabal break ranks and commence with fire sales.
——————————–
i’m not so sure…the head of greasy New Coast Realty was quoted in a piece by Kathy Tomlinson that is ‘was in the condo market that the real gold lies’.
maybe he’s right: people are priced out of single dwelling homes/townhomes etc…they have to settle for enlarged birdcages (and their stupid prices)…many people have to rent because they can’t buy in…so rent from condo owners.
my buddy lives in Telus Gardens on Seymour/Georgia…a 1 bdrm 550sq condo now goes for $800k plus….just insane….totally insane…but condos are a hugely strong market right now in Vancouver.
this whole city is fked….many employers having issues hiring staff (esp during xmas)…if workers can’t afford to live in the city due to insane rents/purchase prices, or thus have to commute in from the burbs, then it’s only fair that they require a higher salary…but the many retail owners can’t afford to give them a higher salary due to crazy lease rates…a sad assed and dire situation all around.

#78 Joe Schmoe on 12.18.17 at 10:09 pm

I think it might start to sink a bit, but people are dumb. They will fool themselves into thinking “alternate” lending companies are fine.

The bottom could still be 3-4 years away.

#79 BC_Doc on 12.18.17 at 10:13 pm

Non sequitir post here Garth.

I was chatting by telephone with my son who is off at university recently. He told me he had a small amount of bitcoin left over from a purchase he made a couple of years ago. What was worth $2 a couple of years ago was now valued at $45 Canadian with value fluctuating wildly by the hour. I counselled him to do the smart thing— sell, and use the money for some meals (he’s in Montreal). We caught up a few days later after he’d sold— very difficult to sell the bitcoin and get back into Canadian dollars. Transactional cost of about $20 leaving him about $25. Buy-sell spread of about 8%. Lots of good lessons for him, one of the biggest being the house always wins. The best person to be is the middleman or banker— they always take a cut of the action. Again, this wasn’t an “investment” or speculation on his part, just some loose change from a couple of years ago.

#80 NoName on 12.18.17 at 10:26 pm

didnt i say this in fewer words, few days ago…

bloom.bg/2kGk1vU

https://www.bloomberg.com/news/articles/2017-12-18/china-s-aging-population-bad-for-innovation-says-ctrip-s-liang

#81 Happy Housing Crash Everyone! on 12.18.17 at 10:31 pm

#60 Happy Housing Crash Everyone!

You dirty copy cat SHYSTER. The housing crash is unfolding before your eyes. Your lies have been exposed. No recovery and prices still crashing hard before B20. It’s going to be a Happy HAPPY Housing Crash Everyone! :-)

#82 Happy Housing Crash Everyone! on 12.18.17 at 10:33 pm

BTW I think we bottom when people start saying sell now or sell never.

#83 oncebittwiceshy on 12.18.17 at 10:37 pm

JR: “Also, the new rules are largely overstated. No one I know who bought a house with 20% down over the past year walked into their bank and asked for the MAXIMUM mortgage they could get and then went out and spent it. Most who buy $1 mil homes could spend up to $1.3-$1.5 mil. Most who buy $2 mil homes can afford $2.5-$3 mil, ie this buyer class spends now what they’re going to be able to spend as of Jan 1.”

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

Lololol, do you even believe what you write? The highest mortgage debt levels are in Vancouver and Toronto.

Perhaps you're naive, but more likely disingenuous as your real estate office tries to prop up a market heading into free fall.

#84 millmech on 12.18.17 at 10:38 pm

#61 Ronaldo
Ah the memories, had a friend buy into a $400,000 condo in Penticton, developer got distressed, unable to sell the other units. Two years later at auction a bigger and nicer unit than hers went for $180,000, I doubt she is in positive equity yet.
As for people stating that if real estate goes south the government will lower rates, that’s possible but fixed mortgages are set in the bond market. If the USA goes on a fast interest rate hike, Canadian mortgage holders might find that the banks could qualifying them at the fixed rate and with the B20 rules you could be having to qualify at maybe 8%. Going from 2.79% to 8% on $500,000, would cost you $1700/mth more and to qualify for that you have to now increase your income by around $5100/mth. This could get painful!

#85 As Bitcoin and the CAD crash on 12.18.17 at 10:38 pm

It is now a foregone contusion that the CAD is about to drop in a major way as our most talented vamoose to the USA and 20% taxes. Also Bitcoin is no longer anything that 99% of citizens can afford so it is not a currency but a collectible and a novelty. If my history is right look to gold bullion to protect the value of your liquid assets simply by hedging against our currency which is about to get hammered. Real estate is no longer the hedge that it was in the preceding months so voila, GOLD ID BACK for Canadians at least. Gold will rise from 1,620.00 CAD where it is now to over 2,000.00
The Americans have the rising stock indexes but we don’t. Canadians who invest in US stocks are obligated to pay capital gains tax to the US up to a certain amount and then both countries for the remainder, the threshold is not established yet. So, either buy US denominated securities or for those who are not gamblers…..888 GOLD 888

#86 Happy Housing Crash Everyone! on 12.18.17 at 10:43 pm

You poor delusional soon to be making no sales for years to come SHYSTERS will have to face reality. It’s going to be a brutal housing crash that can’t be covered up. Even SHYSTER AL on frozen properties on CP was babbling that for beginning of next year you can’t compare the month of last year to the month of 2018 because (I couldn’t understand his babble). Prices will be dowm 30-40% or more. They must be working on ways to confuse people for next year’s RE bloodbath. They are SHYSTERS and I hate them.

#87 yorkville renter on 12.18.17 at 10:43 pm

Prices will NOT stampede north after a small dip next year — you forget that interest rates are rising.

$700K mortgage at current low of 2.99% = $3,309.13
$700K mortgage at B20 rate on Jan 1st of 4.99% = $4,067.25

Difference of $758.13 a MONTH…which is a LOT of discretionary spending in a month. The alternative is to buy for $130K LESS ($570K mortgage) to get the same payment.

People who think prices will rocket higher are only fooling themselves…

This example doesn’t include any ACTUAL increases in rates.

#88 Screwed Canadian Millenial on 12.18.17 at 10:55 pm

#52 Screwed Canadian Boomer living in a gated community in Costa Rica! on 12.18.17 at 8:11 pm
@ #41….Mike Harris Common Sense Revolution made no sense.
Ontario was losing jobs during the 90s recession, and Mike Harris thought that cutting taxes for the corporations will create a type of “trickle-down effect” for jobs.
I was forced to apply for welfare in 1998, and I still have contempt for that social worker who suggested that I stand at the intersection of any major thoroughfare to panhandle and perform “squeegee” duties like cleaning car windows at stoplights.

—————————–

Can’t believe I agree with a boomer. You’re damn right about Mike Harris. The guy was a total disaster. There’s nothing common sense about giving away a publicly owned highway (407 ETR) to foreign conglomerates for 100 years. Worst deal in Ontario history. Nothing comes close.

Patrick Brown and his merry band of right wing lunatic bible thumpers will finish the job and privatize the rest of Ontario’s highways.

#89 Capt. Serious on 12.18.17 at 11:02 pm

#82 Happy Housing Crash Everyone! on 12.18.17 at 10:33 pm
BTW I think we bottom when people start saying sell now or sell never.

No. That’s still too hopeful. Bottom happens when everyone knows that you can’t possibly sell your house anymore. When people are revolted at the thought of owning real estate. When they’re bulldozing new subdivisions because there is no hope to sell the houses. When you see a forrest of For Sale signs. That’s what bottom looks like.

#90 Screwed Canadian Millenial on 12.18.17 at 11:05 pm

#2 April B. on 12.18.17 at 6:10 pm

I volunteer at a food bank you sick parasite April Brockman and can tell you that poor people don’t have a chance in this province. People on Ontario Works get like $700 a month which is not even enough to cover rent, yet alone any other expenses.

#91 Smoking Man on 12.18.17 at 11:17 pm

I’m so detached from Canada right now. Best move I ever made. Sold Shlong Branch at peek market. Living the Dream in California.

Looking to join the writers union and hang out with the most deranged human beings that God ever created.

This is home sweet home for now.

#92 NEVER GIVE UP on 12.18.17 at 11:18 pm

#11 TRUMP on 12.18.17 at 6:39 pm

And you PATHETIC CANADIANS just suck it up and let it happen…

=======================================================================
I see you have reached the level of disgust I have over the years at the incredible level of weakness our Canadian voting brethren have demonstrated.

Canadians are weak, well fed, and feeble brained citizens.

Give it to them in the **s.

#93 Cindy on 12.18.17 at 11:23 pm

My prediction is that this will all end very badly.

Those who wanted to bypass B20 did so by purchasing in November. That was silly.

Okay, more like downright dumb, but I was trying to be nice.

Those who weren’t phased by B20 but still want to purchase a home will kick back and relax in January and February to see how B20 will affect the market. They won’t make a move.

Overextended, overindebted, hanging on by a thread homeowners and speculators will see rising inventory and barely any movement, and start to panic. They will flood the market with inventory in the hopes of not completely losing their shirts. The fear will be contagious, and prices will start falling out of desperation. Everyone will want to get out while they still can.

So yes, I’m willing to take a guess that people will do what they always do when a market starts to turn. Panic. They already sniff fear, and that fear is only going to get worse.

Owners and specs will cause the market to crash themselves. History is a pretty good indicator.

#94 Smartalox on 12.18.17 at 11:26 pm

@Paul:

that assumes that first time buyers stop buying and that there are no move-up buyers.

Ummmm… if the first time buyers aren’t buying, who do you think the move-up buyers are going to sell THEIR houses to? If the first time buyers falter, the move-up buyers are going to have to stay put.

#95 Rates vs Capital on 12.18.17 at 11:26 pm

Tick tock…..only 13 more days until B20 kicks in.

If cheap rates and domestic speculation are really driving the market rather than foreign capital, then January 2018 data should reflect that 18% cut in credit through price and sale drops. If things remain the same in GTA and YVR, I guess foreign capital will have to be acknowledged as the driver.

Something tells me blog dogs are going to be disappointed…again.

#96 Bobs ur uncle on 12.18.17 at 11:27 pm

#59 Kelsey

Haha – yglesias is definitely a leftie, but he’s no dummy either. I don’t know if I buy all he’s selling, but one thing the article did raise – the GOP is leaving themselves wide open for similar deficit spending talk when the Dems get back in. I mean – can anyone take them seriously on that now? They clearly don’t care about debts/deficits with this bill.

#97 Chelsea on 12.19.17 at 12:09 am

Just because you own your home, mortgage paid, and debt free, sad to say the government still owns you. One day they will come along, make an offer on your home, build condos etc. or build a highway through your land. You basically lease the land and home from the government to the end of your demise. So no boasting about what you own … we are just pawns and puppets to the government.

#98 Ponzius Pilatus on 12.19.17 at 12:24 am

When you combine Teflon Man with the Energizer Bunny, what do you get?
Trump

#99 My Wife Loves Garth on 12.19.17 at 12:57 am

I happily rent in Richmond Hill. I saw the writing on the wall and sold the 3 bedroom 2 years ago at a big gain and moved down the street to rent a 3500 Sq ft 4 bedroom.

Best move Ive EVER made.

People up here are sitting on dead equity and think they are rich.

#100 Ponzius Pilatus on 12.19.17 at 1:09 am

Let’s recap Trumps folies for the last two days:
Drastically reduce income taxes.
Increase spending for the military by 800 billion.
Put 1 Trillion into infrastructure (the Amtrak accident is very convenient)
This budget won’t balance itself.
To quote the blog master: This will not end well.
China is salivating.

#101 Tccontrarian on 12.19.17 at 1:10 am

So much for the ‘slow melt’ initially predicted. The ‘c’ word is written all over this (hint: rhymes with ‘ash’).
TCC

#102 Nonplused on 12.19.17 at 1:16 am

PS nobody has commented on my post at #55 yet (or at least they haven’t been moderated yet), but I read the Scientific American article (which was published before National Geographic carried it). It had a profound influence on my thinking. I happened to be working at an oil and gas producer and in those days they use to hand out stock options as a long term incentive as they called it. Most of my coworkers would cash their options as soon as they were vested and “in the money”, “you can’t eat options” as one of my friends used to say. But I decided to hold them all until they were within 1 year of expiry. They paid for my house, maxed out my RRSP, put a bunch of money in a cash account, and filled 2 CMHC backed bank accounts to the max, after taxes and child support (my ex made out like a bandit too). You only need to look at the graph to see why.

So these guys got it right. I got lucky happening to be a fan of Scientific American before every second word in any article became “climate change”. Of course the article never forecast the shale oil revolution and that has made many more years of supply available, but it won’t be “cheap”, so the thesis of the article holds. The cheap oil is mostly half gone and pretty much all of it has been found.

The economy, 50 years from now, will not run primarily on carbon based fuels. But what will it run on? We are wasting a lot of money on solar and wind but they aren’t much cheaper than shale, although improving. But even if we put solar everywhere it makes sense to do so, land is not unlimited and we’d have to start covering up farms. That isn’t going to work. And in Canada, it’ll never work because the sun doesn’t shine when we need it most. Anyone who has ever experimented with solar knows you can’t heat your house on a cold day in Canada with solar, let alone charge your car. Get out the firewood.

So anyway, this next bit will seem like a bit of a diversion, so please bear with me. Another article I had read in Scientific American was by some dude who had taken an electronic circuit autocad system (yes they exist, have for a long time, they can simulate a proposed electronic circuit with great precision because they have mathematical formulas that pretty accurately describe all the components, transistors, resistors, capacitors, coils and transformers, you name it. Well, dude made a program that could use random mutation and selection to evolve working circuits buy setting end goals for the process. I missed that one though. They were telegraphing the rise of AI.

If you want investment advice, read Scientific American. They publish the future. If I were a conspiracy theorist, I would believe this is how the Illuminati communicates.

#103 Adrian on 12.19.17 at 1:43 am

#34 oncebittwiceshy on 12.18.17 at 7:29 pm

You nailed it exactly. The decline of asset prices causes a decline in FIRE sector incomes & wealth effect spending, which has the downstream effect of causing a recession and increasing defaults in the asset sector… which will drive the central bank to drop interest rates again, unless the federal government uses *significant* fiscal stimulus.

Figure 15 of the following essay by Professor Steve Keen shows a stylized version of how asset markets like real estate function as a leading indicator, and Figure 16 is the empirical data from the USA:

https://www.macrobusiness.com.au/2017/06/steve-keen-on-the-secret-source-of-eternal-australian-growth/

*****

#35 Screwed Canadian Millenial on 12.18.17 at 7:34 pm

The Republican Party machinery has been taken over by the oil billionaire Koch brothers & their 400 richest friends, who spent ~$890 million on the US 2016 election. In order to get funding from them to run in a primary, Republican candidates are required to sign a contract to uphold the Koch’s radical libertarian agenda to privilege the property rights of a wealthy minority over the human & civil rights of the majority of the population. Professor Nancy MacLean drew on personal correspondence between Charles Koch & “public choice theory” founder, James McGill Buchanan to write a book about what is happening titled “Democracy in Chains”:

https://youtu.be/EFhtPIvlxVw

*****

#38 Steve on 12.18.17 at 7:40 pm

This is very much like Japan in the ’90s, and if you look at the graph titled “Japan Household Debt and House Prices” in the link below, you can see that prices didn’t stagnate, but actually declined by more than 50%:

http://www.profstevekeen.com/data-on-credit-employment-and-house-prices/#Japan

The biggest difference will be that Canada is very much an immigrant nation, while Japan doesn’t really allow it. This will improve our underlying demographics over time, but we still currently have a massive private debt bubble to work through first.

#104 Adrian on 12.19.17 at 2:28 am

#49 Bobs ur uncle on 12.18.17 at 8:06 pm

Thanks for the link! Truly, sovereign debts aren’t a problem, at least not like persistent trade imbalances and very high *private* debt-to-gdp. Trade deficits cause dollar devaluation & import inflation, while high private debt-to-GDP crashes the economy when it stops growing quickly.

By comparison, sovereign debt – especially for investment – puts otherwise idle resources towards the process of wealth creation (if the economy is below potential). It also increases the money supply as the economy grows *without* adding debt to private balance sheets, the way commercial-bank-created money does:

How Austerity Works
https://youtu.be/0y5rP56OX78

*****

#55 Nonplused on 12.18.17 at 8:22 pm

Good read! Energy *is* the master resource! “Labour without energy is a corpse; capital without energy is a sculpture,” Professor Steve Keen.

*****

#65 FOUR FINGERS WATSON on 12.18.17 at 8:44 pm

Demand may not be falling in the bubble cities just yet, but there is a supply overhang driven by investor speculation that will probably come on to the market when maxed out debt levels combine with reduced access to credit & choke off price growth:

“Academic takes on Vancouver’s housing-supply ‘myth’”
November 17, 2017

“Dr. Rose went back to the 2001 census, covering a 15-year span [and] found that for each household added during this period, the region added 1.19 net units of housing. Put another way, for every 100 households that came along, Metro Vancouver added 119 net units of housing. And despite a surplus of housing stock, affordability has significantly worsened – a contradiction to the supply mantra.”

https://www.theglobeandmail.com/real-estate/vancouver/academic-takes-on-vancouvers-housing-supply-myth/article37015584/

#105 Smoking Man on 12.19.17 at 2:59 am

Lindsay Sheppard. Welcome to the machine.

#106 morrey on 12.19.17 at 3:13 am

so this is what will happen. For all those that can’t qualify for homes after B20 kicks in means that the slack will be picked up by even more offshore buyers grabbing RE. Plain as yr nose on yr face. Wait and see what happens.

The take-over is afoot

#107 Smoking Man on 12.19.17 at 3:26 am

Toxic Masculinity.

Scares the shit out of feminist male gobalist communists.

Kids should hate govt. Right of passage.

Not today. They love T2 and praverted celebrities.

Teachers is all I’m saying. Their not evil just stupid as shit.

Home School long branch apprenticeship.

Best advice I can offer in my current state of mind.

#108 Dolce Vita on 12.19.17 at 4:30 am

Garth, absolutely correct; however, as in all bubbles the fantatical RE Investors will say “it is different this time” and will come up with a 100 reasons as to why this will not affect the market or personally inconvenience their greed.

This is good.

A purge of these bad economic players will be healthy for the Cdn. economy. Rather than ploughing a ton of money in a single asset pyramiding scheme, a.k.a., YVR/416 RE, the money will go into other GDP Sectors and not FIRE.

Bonus: the “RE Fantatics” will be taken out of the economy for at least a decade…a good thing for Canada.

CONCLUSION to GARTH: Stop telling the fanatics B20 is bad. Encourage them to invest even more. It will make their implosion that much better for Cdn. GDP.

#109 Howard on 12.19.17 at 4:54 am

Women buying shoes or handbags must have note from husband.

#110 Howard on 12.19.17 at 5:15 am

#52 Screwed Canadian Boomer living in a gated community in Costa Rica! on 12.18.17 at 8:11 pm

@ #41….Mike Harris Common Sense Revolution made no sense.
Ontario was losing jobs during the 90s recession, and Mike Harris thought that cutting taxes for the corporations will create a type of “trickle-down effect” for jobs.
I was forced to apply for welfare in 1998, and I still have contempt for that social worker who suggested that I stand at the intersection of any major thoroughfare to panhandle and perform “squeegee” duties like cleaning car windows at stoplights.

——————————————-

Mike Harris’ policies made no sense….to lazy people. Or to union criminals.

To everyone else, they were great (well except Hwy 407 sale…that was bad).

#111 Howard on 12.19.17 at 5:22 am

#38 Steve on 12.18.17 at 7:40 pm

Garth,

I like dogs,

Everyone is talking about the possibility of a decline in house prices next year but, is there a possibility of a stagnation of prices, similar to what happened in Japan in the 90’s? I’m just wondering if there are any similarities between today and the Japanese economy in the 90’s

——————————————–

Zero chance. Japan’s population is declining and its government has decided to put its own citizens first by restricting immigration. Nothing wrong with a gradually declining population like Japan’s as long as quality of life is maintained (and it has).

In Canada, by contrast, all mainstream parties support massive immigration and constant pressure on the wages of ordinary workers. So whereas in Japan wages remain high and property becomes more and more affordable as the population thins out, in Canada the opposite will be true. Low wages and perma-bubble real estate in the GTA/GVR.

#112 I’m stupid on 12.19.17 at 5:32 am

#72 cottongham a bargin

You didn’t make a prediction, that would require evidence to support that prediction. You simply gave your opinion. Nothing to support your opinion yet you think it’s a statement of fact.

Opinions are like farts, just because you have one doesn’t mean you should let it out!

#113 Howard on 12.19.17 at 5:48 am

#26 I’m stupid on 12.18.17 at 7:02 pm

Bell, Telus, Rogers’s

They all have a promo if anyone is interested. $60 per month unlimited everything and 10gigs of data. Bring your own device.

—————————————–

Here in France, my cellphone plan :
– unlimited text
– 2 hours voice (fine for me, I’m not sociable and hate chatting on the phone)
– 5 GB of data
– no commitment, can switch/cancel any time
– no increased fees within the EU; calls/texts/data treated as if in France

Cost : 9.99 € / month (about $15 in Poloz Peso)

Data can be easily recharged at a nominal fee of 7€ per extra 2GB of data over and above the 5GB in the plan.

Canadians get screwed, and just lie there and take it.

#114 Howard on 12.19.17 at 5:55 am

#16 Penny Henny on 12.18.17 at 6:45 pm

“You may find it interesting that Richmond Hill detached median sold price has dropped a whopping $122k, down to $1,100,000, or a full 35% down from the peak in April,” says Toronto real estate broker Alex Prikhodco in his monthly report to us.-gt

How is $122k equal to 35% drop to $1,100,000?

——————————–

-$122K was the Oct-Nov monthly change

-35% is the total Mar-Nov change. $1680K down to $1100K.

#115 Howard on 12.19.17 at 6:01 am

#87 Howard on 12.19.17 at 5:55 am

#16 Penny Henny on 12.18.17 at 6:45 pm

“You may find it interesting that Richmond Hill detached median sold price has dropped a whopping $122k, down to $1,100,000, or a full 35% down from the peak in April,” says Toronto real estate broker Alex Prikhodco in his monthly report to us.-gt

How is $122k equal to 35% drop to $1,100,000?

——————————–

-$122K was the Oct-Nov monthly change

-35% is the total Mar-Nov change. $1680K down to $1100K.

—————————-

Sorry, that should be Nov-Dec and Mar-Dec, respectively.

#116 Under the radar on 12.19.17 at 6:30 am

Eliminating mortgage debt Was the gift of ultra low interest rates. Those who knew ultra low rates were temporary and retired debt are now on easy street . Some people do not believe an 8 per cent prime rate is possible – imagine the carnage then.

#117 Dharma Bum on 12.19.17 at 6:37 am

This is all really good news.
The sooner things get back to normal, the better.
There has been enough nonsense.
Based on incomes, GTA houses should only cost between $150,000.00 – $750,000.00 (excluding The Bridal path area, Forest Hill, The Kingsway, and Rosedale).
Come on crash!

#118 Cow Man on 12.19.17 at 6:48 am

Sir Garth:

Margaret Wente of the Globe & Mail commented this:

The only way to change the fundamentals is to introduce a plague virus that will wipe out all the boomers. You can only hope.

When I submitted nearly the exact comment two weeks ago you deleted it. Of course it is your blog.

Do you see Margaret here? — Garth

#119 Howard on 12.19.17 at 7:13 am

I don’t get the Richmond Hill hate. Out of all the 905 burbs, it’s the one I consider the most desirable. Some nice older areas near Yonge St. Easy and direct access to the city. It has a decent mix of people so it isn’t ghettoized like Markham or Brampton. McMansions, yes, but those are everywhere in the 905, and there are a fair number of nice townhomes along the Bathurst corridor.

Compared to a grim craphole like Milton or a wasteland like much of Mississauga, it’s quite a nice place.

#120 Jungle on 12.19.17 at 8:14 am

Can anyone explain what average price is being used above for Richmond Hill? I track Richmond Hill detach average for the last year and it’s no where the same as above.

Confusing because first he mentions median price on detach is down, then post the chart.

Which is it?

AN all average right now (condo, townhouse, semi, + detach) is 928K (Zolo) which doesn’t make sense either

#121 Rooster on 12.19.17 at 8:19 am

I think (hope) #2 April B’s post must have been satirical, but hard to say fo sho….. maybe we should adopt the universal symbol for satire ;-)

What worries me is that some impressionable child in Texarkana is going to read what gets posted here.

For the gentleman who called me yellow, I contracted jaundice in my youth, but it is slowly getting better. I just don’t have the energy to make it to the Klan meetings to whup some sense into you ;-)

For the real estate groupies: should we worry that a price crash will only attract more carpetbaggers? I think this is what #106 Surelock was intimating.

I read somewhere that you only lose if you sell. Has anyone proved that?

#122 maxx on 12.19.17 at 8:29 am

I still wouldn’t buy next year.

Let those horrid, pressed corn flake, lifeless design mold-holes hermetically sealed in plastic wrap acquire a bit more damp and black mold whilst prices carry on melting.
As for older “character” properties, check for asbestos and other toxic materials, such as in attics and early lathe and plaster. Buyers certainly have the time now.

Mobility, flexibility, liquidity.

Tick tock sellers, tick tock.

#123 robert james on 12.19.17 at 8:52 am

A longtime RE pumper here in BC has changed his tune… https://okanaganedge.net/2017/12/15/coming-housing-crash/

#124 Tbone on 12.19.17 at 8:56 am

#97 chelsea

I still would rather own , you will get market value for the property and you move on.
If you rent , you get to move on with squat and the landlord picks
Up the cash.

#125 Arse on 12.19.17 at 8:59 am

Mr. Garth Turner Is GOAT – Greatest Of All Time.

#126 Howard on 12.19.17 at 9:00 am

#118 Cow Man on 12.19.17 at 6:48 am

You beat me to it. Here’s a link to Maggie’s column if anyone is interested.

Love her or hate her, Margaret Wente is the only interesting, thought-provoking, iconoclastic columnist they’ve got.

How boomers and their progressive policies squeezed millennials out of the housing market :
https://www.theglobeandmail.com/opinion/how-boomers-and-their-progressive-policies-squeezed-millennials-out-the-housing-market/article37374297/

#127 robert james on 12.19.17 at 9:00 am

And of course we still have a real estate pumper working the crowd… I would believe Helmut before this guy… https://okanaganedge.net/2017/12/18/real-estate-predictions-aggravate/

#128 Gravy Train on 12.19.17 at 9:01 am

“Data from the CHSP [Canadian Housing Statistics Program] revealed that non-residents owned 3.4% of all residential properties in the Toronto census metropolitan area (CMA), while the value of these properties accounted for 3.0% of the total residential property value in that metropolitan area. In the Vancouver CMA, non-residents owned 4.8% of residential properties, accounting for 5.1% of total residential property value.

“Estimates of non-resident ownership varied by property type. In both metropolitan areas, non-resident ownership was more prevalent for condominium-apartments. Non-residents owned 7.2% of condominium-apartments in the Toronto CMA and 7.9% of these units in the Vancouver CMA. By comparison, non-residents owned 2.1% of single-detached houses in the Toronto CMA, and 3.2% of single-detached houses in the Vancouver CMA.”
https://www.statcan.gc.ca/eng/start

#129 Ronaldo on 12.19.17 at 9:07 am

#84 millmech on 12.18.17 at 10:38 pm

#61 Ronaldo
Ah the memories, had a friend buy into a $400,000 condo in Penticton, developer got distressed, unable to sell the other units. Two years later at auction a bigger and nicer unit than hers went for $180,000, I doubt she is in positive equity yet.
As for people stating that if real estate goes south the government will lower rates, that’s possible but fixed mortgages are set in the bond market. If the USA goes on a fast interest rate hike, Canadian mortgage holders might find that the banks could qualifying them at the fixed rate and with the B20 rules you could be having to qualify at maybe 8%. Going from 2.79% to 8% on $500,000, would cost you $1700/mth more and to qualify for that you have to now increase your income by around $5100/mth. This could get painful!
————————————————————–
Oh yes. And do you remember these little beauties that came up for sale for $840,000 each in the fall of 06. Here it is eleven years later and people are trying to flog them for half the price. People’s memories are so short. The other white elephant is La Casa just down the road from there. I have many other stories going back to the seventies of developments like these in the sunny Okanagan. The land of boom and bust. But of course, this can’t happen again can it. So many people got sucked into investments that went bust. The oil sands were the target for these shysters back then because of the big wages.

This was then:

http://www.6717000.com/blog/2009/05/discount-pricing-in-the-okanagan/

And now:

http://www.royallepageaccess.ca/listing/10138009-15-4215-westside-road-n-kelowna-british-columbia-v1z3w8-addresssubdivision/

#130 Bytor the Snow Dog on 12.19.17 at 9:33 am

@109 Howard-

I suspect that simply flipping the genders on that sign would elicit “interesting” responses from feminists.

#131 Gonkman on 12.19.17 at 9:46 am

#116 Under the radar on 12.19.17 at 6:30 am
Eliminating mortgage debt Was the gift of ultra low interest rates. Those who knew ultra low rates were temporary and retired debt are now on easy street . Some people do not believe an 8 per cent prime rate is possible – imagine the carnage then.

———————————————————–

I like easy street… I moved to easy street 3 years ago.

Mortgage Paid and Debt Free. Been paying ourselves for the past 3 years.

TFSA’s from $0 X 2 to $62K X 2 now in 3 years. Maxing out the Wifey’s RRSP over the next few.

I am retiring at 49 in a few years and wife 2 years after that.

I guess no one got the memo a few years ago.. My new song…

Sunny Days
Sweepin’ the clouds away
On my way to where the dividends are sweet

Can you tell me how to get,
How to get to Debt Free Retirement Street

Come and play
Everything’s A-OK
Indebted Friendly neighbors there
That’s where we meet

Can you tell me how to get…
How to get to Debt Free Retirement Street

It’s a magic carpet ride
Every door will open wide
To Happy people like you–
Happy people like
What a beautiful

Sunny Days
Sweepin’ the clouds away
On my way to where the air is sweet

Can you tell me how to get,
How to get to Debt Free Retirement Street…
How to get to…
How to get to Debt Free Retirement Street

#132 SilverSon on 12.19.17 at 9:55 am

Hey Garth – wouldn’t mind getting your opinion on whether or not it’s possible for Canada to go bankrupt. If so, what’s the probability of that happening and if you think there are investment strategies that can help shield us financially should it happen. With the attitude that Canada has towards debt and avoiding dealing with it, I wonder if bankruptcy could be on the horizon. Perhaps this might be a good topic for an upcoming post.

#133 Mike in Edm on 12.19.17 at 9:58 am

Owners will not sale…. look at this house build in 2015 in Edmonton.. https://www.realtor.ca/Residential/Single-Family/18062379/20-SYLVANCROFT-NW-Edmonton-Alberta-T5N0R1-Westmount

I have a lot of examples where the houses were listed 3-4 years ago and if they don’t get the price they don’t sell… Unless there is an interest rate hike big enough ( 0.5% doesn’t count) the market will stay at this level until income will catch up….
*****************************
I don’t disagree with you on the comments about not selling, but that particular house above is NOT the norm for Edmonton. It is in a very highly desirable location and like another person commented, probably listed for double the price of many others would be listed for.

As for not selling if they don’t get what they want (or in most cases, NEED), I’m positive there’s going to be 2 types of sellers in 2018… Those with equity in their homes (owned for years) and those without (new owners). The new owners will succumb to renting out their place for a year or 2 in hopes they will pay down some of the principle and prices rebound, end up hating being landlords, and will ultimately be stuck with a completely garbage ‘investment’ for themselves for 5+years.

The old owners with equity will lower their price if they really want to sell, which I suspect most will. Boomers can’t be bothered renting out their place. #1 – it’s not going to provide them with enough rental income and #2 – they don’t want to work all these years just to become amateur landlords. So they’ll lower their price the 5,10,15% required to sell and be done with it… Which will in turn screw those new house owners even more…. Which all equates to a slooowwww melt

#134 Victor V on 12.19.17 at 10:04 am

Foreign ownership jumps in Montreal condo market; below 5% in Toronto, Vancouver

https://www.bnn.ca/foreign-ownership-jumps-in-montreal-condo-market-below-5-in-toronto-vancouver-1.947934

OTTAWA – New research on the Canadian housing market shows foreign buyers account for a small portion of home and condominium owners in the country’s largest city.

Non-residents owned 3.4 per cent of all residential properties in Toronto, according to new housing statistics by Canada Mortgage and Housing Corp. and Statistics Canada.

In Vancouver, non-residents owned 4.8 per cent of residential properties.

#135 Hockey Dad on 12.19.17 at 10:15 am

#91 Smoking Man on 12.18.17 at 11:17 pm
I’m so detached from Canada right now. Best move I ever made. Sold Shlong Branch at peek market. Living the Dream in California.
Looking to join the writers union and hang out with the most deranged human beings that God ever created.
This is home sweet home for now.
………………………………………………………………
Stop lying with your constant BS. You lost your home. You were unemployed for over a year, went to the bank to extend a line of credit and had to sell your boat, then your home! Told us you were running your credit card to the max and defaulting. Then you were going into some therapy treatment business with a son. What happened to your own detox? What do you think we are all a bunch of stupid deplorables that follow you blindly like they follow that lying douche-bag Donald Trump! We have memories unlike you. You were fortunate to land a job and a TN. Count yourself lucky and don’t ever come back here to the Great White North. We don’t need the likes of you. We are Canadian and don’t stand for your BS, we play hockey players and fight like hell to keep our country free! We all live here have some form of civility with your constant BS.

#136 45north on 12.19.17 at 10:18 am

And following are the reasons why B20 will be the last straw breaking the back of residential real estate in most hoods in most markets. In the bubble cities it will help create and sustain a long, slow, resolute slide in values.

onceBitTwiceShy: replying to JR: Perhaps you’re naive, but more likely disingenuous as your real estate office tries to prop up a market heading into free fall.

that’s says it as well as anything: free fall

Cindy: Overextended, over-indebted, hanging on by a thread homeowners and speculators will see rising inventory and barely any movement, and start to panic. They will flood the market with inventory in the hopes of not completely losing their shirts. The fear will be contagious, and prices will start falling out of desperation. Everyone will want to get out while they still can.
So yes, I’m willing to take a guess that people will do what they always do when a market starts to turn. Panic. They already sniff fear, and that fear is only going to get worse.

that also says it: panic

#137 Smoking Man on 12.19.17 at 10:23 am

This puppy is going to the moon

https://venturebeat.com/2017/12/19/robert-bosch-venture-capital-bets-on-iota-as-it-invests-in-the-future-of-iot/

#138 Sonny on 12.19.17 at 10:26 am

Foreign ownership below 5 per cent in Toronto, Vancouver housing markets

https://www.theglobeandmail.com/news/national/foreign-ownership-in-toronto-vancouver-housing-markets-below-5-per-cent/article37381468/

Hon Mr. Turner confirmed by Stats Can.

#139 Centre Wing on 12.19.17 at 10:46 am

#135 Hockey Dad
Count yourself lucky and don’t ever come back here to the Great White North. We don’t need the likes of you.
—-
Ha! Sounds like a typical Liberal Party supporter thing to say. I thought a Canadian is a Canadian is a Canadian.

#140 Interest rate spike on the way on 12.19.17 at 10:47 am

The Fed has increased the money base by over 10% this year alone. With current real negative rates, inflationary pressures already in the pipeline from increased economic growth, and more on the way from the tax reform, the Fed may need to increase the overnight rate to 4% very soon.

https://www.cnbc.com/2017/12/17/interest-rates-fed-faces-tough-road-on-federal-funds-rate-inflation.html

#141 NEVER GIVE UP on 12.19.17 at 10:59 am

#106 morrey on 12.19.17 at 3:13 am
so this is what will happen. For all those that can’t qualify for homes after B20 kicks in means that the slack will be picked up by even more offshore buyers grabbing RE. Plain as yr nose on yr face. Wait and see what happens.

The take-over is afoot
================================
New Zealand is the only western country who understands the precious resource our land is.
They understand what all Asian countries have always understood. That Land is not for speculation by foreigners.

Most Asian Countries will not let you purchase land without jumping through extreme hoops. Even then you may only be able to own 49%.

Canadians the suckers we are allow our government masters to squander our land resource for the simple and shallow reason that they themselves are benefiting financially both personally and politically.

Our Masters care not about our children’s future nor their own children and grandchildren.

It seems like we are in a mentality of “grab what you can because the world is coming to an end anyway”!

#142 M on 12.19.17 at 11:19 am

An average working man can only afford 11/2-21/2 their yearly income. Whther you are on the Moon, in Africa, Mars, GTA, Moscow , New York or Pyongyang.
It is a UNIVERSAL rule of hard reality.

Everything ELSE is madness. Of the owner that accepted to enslave himself in debt, of the irresponsible bank that gave the man such a loan and of the elites that decided to make the money that cheap that madness spreads from moron to genius. Remember Newton ?

All one has to do is to wait its time to capitalize on such madness. Whether shorting Tesla (the dream on company) from 380 to 300 (and into bankruptcy in 2021) or shorting the hell out of HCG and canadian dollar.

These ar4e not gambles..but certainties dictated by the real facts on the ground with 50 to 1000 times return on investment.
All what one has to do is not go mad with the masses and the elites that lead those masses.

#143 MaxtheTax on 12.19.17 at 11:41 am

I’m preparing myself with adequate hydration from a sexy shaped bottle for the onslaught in today evening’s blog as Garth is gonna rub it in hard:
https://www.ctvnews.ca/business/foreign-buyers-are-small-portion-of-home-and-condo-owners-in-canada-cmhc-1.3727621
I still say foreigners should not be permitted to buy/own Canadian land: max lease 99 years. Look at Dubai, Israel, Switzerland for the prudent protection of land and resources upon the land.

#144 Brett in Calgary on 12.19.17 at 12:01 pm

Hey Garth,

No doubt you’ve seen this…

https://www.theglobeandmail.com/news/national/foreign-ownership-in-toronto-vancouver-housing-markets-below-5-per-cent/article37381468/

#145 Wrk.dover on 12.19.17 at 12:07 pm

#102 Nonplused on 12.19.17 at 1:16 am

———————————–

Not sure how your magazine can U-turn from 100% right to 100% wrong, but read Heat, by George Monibot. He has your way of thinking, and will expand the perimeter of your vision. He feigns optimistic idealism, while driving home the we are hooped, and why between the lines. Seven distinct chapters on seven distinct problems we face, with the exponential growth.

#146 Hockey Dad on 12.19.17 at 12:14 pm

#139 Centre Wing on 12.19.17 at 10:46 am

#135 Hockey Dad
Count yourself lucky and don’t ever come back here to the Great White North. We don’t need the likes of you.
—-
Ha! Sounds like a typical Liberal Party supporter thing to say. I thought a Canadian is a Canadian is a Canadian.
……………………………………………………………….
No you are wrong strong conservative all the way!
I’m just stating facts here, Smoking man is so full of BS.
I’m a Canadian that says yes we have issues here in our country, yes we can fix them. Its called an election. We are free to vote for whoever we choose. That Canadian is a Canadian is a Canadian garbage were not my words. Canadians have earned their country by blood and sweat over many years. I believe too many people abuse that hard won privilege and it should be revoked if you are a threat to humanity. We are a rough bunch but we are not Canukistan as SM always quotes.

#147 down_boy on 12.19.17 at 12:34 pm

Why I got out of bitcoin

(same reason I got out of real estate)

Market Cap. Price USD
$324,831,302,515 $19,391.52. Dec 19 2017
838.5 B 50k Est.
1.677 T. 100k
8.385 T 500k
16.77 T. 1m

Where will the money come from to feed Bitcoin’s market capitalization? What will the holders of bitcoin pay to transact? What will people do when they realize few can afford to participate due to high fees? How long will they wait to confirm a transaction?

If you buy one bitcoin today, and it goes to $100k, you will enjoy a return of 500%.
If you buy one DGB (an example alternative) and it goes $00.25 you will make a return of 500%

$20k invested in bitcoin would net $100k
$20k invested in DGB would net $100k

DGB takes seconds to transact and a few minutes to exchange. Fees are pennies per transaction. Bitcoin can take days to transact and blockchain congestion has pushed transaction fees over 10% of coin value. These fees must be deducted from profits returned.

Bitcoin will struggle to feed market cap as buyers get frustrated and transaction costs increase. More participants will exponentially slow the network. Mining will require expensive centralized systems owned by few players. Alternative currencies offer a range of fast and secure mining options.

I feel time is running out and the archaic bitcoin blockchain will be found out for its faults and the public will reject it for more advanced options.

Longterm “hodlers” may begin to feel trapped as the bitcoin price peaks and more capital is diverted to faster, cheaper options. I fear a position in bitcoin may be recoverable only too late.

I have traded out of my holdings in Bitcoin. My last $500 in btc will require a $60 in fees to exit. I may leave it in to say I was there, but I fear it will soon be beyond recovery as we experience a final surge of interested public, their subsequent awakening to alternative crypto-currencies, then a slow stagnation and decline, and a final stampede to exit. Infrastructure, futures markets, retail bids for bitcoin will be replaced by the next largest successor, then divest into a more stable and easily exchanged alternative based on utility and investment potential.

At this point, I see the potential to make far more returns in alternatives as bitcoin becomes a sump for misguided cash.

Bitcoin is range bound at $20k while others, such as BTC have now broken from their trailing % and move up on their own.

Alternatives would require less market capitalization to generate the same returns.

Establishing a regulated futures exchange for bitcoin, rather than the market cap of all crypto-currencies will be considered a short-sighted blunder designed by people who don’t understand the practical and investment advantages of crypto-currencies.

Bitcoin, I’m so glad we had this time together, but stick a fork in it, you’re done.

#148 Ubul on 12.19.17 at 12:38 pm

#141 M on 12.19.17 at 11:19 am

An average working man can only afford 11/2-21/2 their yearly income. Whther you are on the Moon, in Africa, Mars, GTA, Moscow , New York or Pyongyang.
It is a UNIVERSAL rule of hard reality.

Everything ELSE is madness.

Have you ever tried immigration (without any government sponsorship assistance)?

That is madness in financial terms.

Yet it is done. People are way more resilient than what your “UNIVERSAL rule of hard reality” suggest.

#149 Ronaldo on 12.19.17 at 12:39 pm

Interesting article on Bitcoin and how it’s being used. Just a matter of time now.

https://www.express.co.uk/finance/city/894096/Bitcoin-database-anonymity-privacy-identity-EU-crime-exchange-wallet-address

#150 Renter's Revenge! on 12.19.17 at 12:40 pm

#141 M on 12.19.17 at 11:19 am

“An average working man can only afford 11/2-21/2 their yearly income. Whether you are on the Moon, in Africa, Mars, GTA, Moscow , New York or Pyongyang.
It is a UNIVERSAL rule of hard reality.”

No, you work for 40 years and the government takes half. You’re not willing to put the other half towards “a home”? Shame on you. You’re a terrible Canadian :)

However, our elites recommend you only go as high as 19 times income, because you need to eat, and dead people can’t pay taxes or interest.

#151 Lee on 12.19.17 at 12:41 pm

Oh what a day to gloat for Garth.

#152 alex stanford on 12.19.17 at 12:44 pm

#11 TRUMP on 12.18.17 at 6:39 pm
So Bill MORNEAU and your PM TRUDEAU raised taxes on everyone but themselves….. What crooks they are.

And you PATHETIC CANADIANS just suck it up and let it happen…

What a disgrace to humanity… Go play hockey and drink beer while they take your future and your kid’s future from right under your nose!!!

———————————–

Kid’s future?
Voice of reason?
In Canada?

You are delusional on all accounts sir.

We like it that way.
And we can express our gender openly,
http://www.ohrc.on.ca/en/gender-identity-and-gender-expression-brochure

And are leading researcher in the transgender toilets science.

And Justin wears much nicer (organic) socks than Trump.

Don’t take it personal, Yankee Dude.
You suck. We rock.

#153 Shortymac on 12.19.17 at 12:45 pm

My god some of these comments…

Sure, because those 800/mon folks on welfare can totally afford the rent on your glass claptrap penthouse condo *eye roll*

#154 down_boy on 12.19.17 at 12:46 pm

down_boy on 12.19.17 at 12:34 pm
Why I got out of bitcoin

Correction, 4th to last para: “Bitcoin is range bound at $20k while others, such as BTC have now broken from their trailing % and move up on their own.”
BTC s/b BCH

#155 Victor V on 12.19.17 at 12:48 pm

Looks like foreign buyers aren’t the big problem in Canada’s housing market after all

http://business.financialpost.com/real-estate/foreign-investment-in-toronto-vancouver-housing-below-5-pct

#156 Kelsey on 12.19.17 at 2:19 pm

# 96 Bobs ur uncle

No doubt, the Republicans are hypocritical with their flip flop on deficit spending and the Obamacare repeal depending on who’s in power, kind of like the Dems and their sudden hysteria with Russian collusion. Outside of Rand Paul there aren’t many with integrity, just look at the Corker Kickback.

#157 AGuyInVancouver on 12.19.17 at 2:23 pm

#154 Victor V on 12.19.17 at 12:48 pm
Looks like foreign buyers aren’t the big problem in Canada’s housing market after all

http://business.financialpost.com/real-estate/foreign-investment-in-toronto-vancouver-housing-below-5-pct
_ _ _
That’s reported buyers and doesn’t take into account permanent residents others who are able to spirit money into Canada under the radar from family offshore.

#158 Overheardyou on 12.19.17 at 2:36 pm

#23 Cottingham a bargain on 12.18.17 at 6:57 pm
I own and live in Richmond Hill and I can tell you that the window to buy at reduced prices is closing fast as sales have picked up and prices firmed.

Open houses are garnering viewings and if priced fairly , selling.

It is but a short period of time before demand from specific ethnic groups simply swamps what little supply is out there along west side of Yonge Street to gamble road.

Anything south of major Mack to Hwy7 is a screaming buy right now .

——

Maybe you should get a second mortgage and buy an ‘investment’ home ;)

#159 Ed. on 12.19.17 at 2:38 pm

#153 down_boy on 12.19.17 at 12:46 pm
down_boy on 12.19.17 at 12:34 pm
Why I got out of bitcoin

Correction, 4th to last para: “Bitcoin is range bound at $20k while others, such as BTC have now broken from their trailing % and move up on their own.”
BTC s/b BCH

*************
Thanks for the clarification. For a moment there, I thought you didn’t have clue about what you were buying.

#160 John Dough on 12.19.17 at 2:40 pm

Do you think the people who were here first sat around jawing : “I blame the Dutch. No I blame the Spaniards. You’re both wrong, it’s the nouveau riche from France buying up everything. Something oughta be done.”

#161 Victor V on 12.19.17 at 2:42 pm

U.S. House approves final tax legislation

https://www.bnn.ca/u-s-house-approves-final-tax-legislation-1.947820

WASHINGTON — The Republican-controlled U.S. House of Representatives approved sweeping tax legislation on Tuesday, sending the final bill to the Senate where lawmakers were due to take up the package of tax cuts later in the evening.

The first overhaul of the U.S. tax system in over 30 years could be signed into law by U.S. President Donald Trump as soon as Wednesday, if both chambers of Congress approve the legislation.

#162 Victor V on 12.19.17 at 2:55 pm

#23 Cottingham a bargain on 12.18.17 at 6:57 pm

I own and live in Richmond Hill and I can tell you that the window to buy at reduced prices is closing fast as sales have picked up and prices firmed.

Open houses are garnering viewings and if priced fairly , selling.

It is but a short period of time before demand from specific ethnic groups simply swamps what little supply is out there along west side of Yonge Street to gamble road.

Anything south of major Mack to Hwy7 is a screaming buy right now .

========

Did you notice that ‘days on market’ is at a high of 20…a number that high has not been seen in years. Volume has dried up and with B20 in 2 weeks, the market will be toast. Another 20% downside coming next year, sorry to say.

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

#163 Dr. Dolittle on 12.19.17 at 3:01 pm

Researchers at the Haggis School of Home Economics have confirmed that urea formaldehyde concentrations in McMansions are at a level high enough to affect human behavior.
An observational study at the Richmond Hill Sunburn Market found that the Mc’s group were willing to buy potatoes already seasoned with salt, pepper and oil for $5.99/lb. The control group (from Brampton) preferred the unseasoned at $1.49/lb.
The effects were subtle but statistically significant.

#164 Overheardyou on 12.19.17 at 3:10 pm

#90 Screwed Canadian Millenial on 12.18.17 at 11:05 pm
#2 April B. on 12.18.17 at 6:10 pm

I volunteer at a food bank you sick parasite April Brockman and can tell you that poor people don’t have a chance in this province. People on Ontario Works get like $700 a month which is not even enough to cover rent, yet alone any other expenses.

——

While I don’t share April B.’s enthusiasm, being poor is a mindset. If you believe you are poor you will never be rich. No matter how much you make or own. Most important is to realize what you can do to enact positive change. You are in control of your own life.

#165 Screwed Canadian Millenial on 12.19.17 at 3:22 pm

Honest question for Garth. Who is going to finance the ANNUAL TRILLION DOLLAR DEFICITS that Trump is going to be running?

https://imgur.com/e2RpYuz

No way the rest of the world continues financing this. Other countries have made hard choices and reduced their budget deficits. Republicans are exploding the deficit to give tax cuts to Goldman Sachs and George Soros.

Rising rates, more inflation, this won’t end well.

And no.. fantasy GDP Growth won’t pay for it. Trump has already $200 BILLION in deficits in 2 months.

US budget deficit up sharply to $63.2 billion in October
http://business.financialpost.com/pmn/business-pmn/us-budget-deficit-up-sharply-to-63-2-billion-in-october

U.S. government posts $139 billion deficit in November
https://www.reuters.com/article/us-usa-economy-budget/u-s-government-posts-139-billion-deficit-in-november-idUSKBN1E62MR

#166 millmech on 12.19.17 at 3:32 pm

Now Vancouver landowners being taxed on the vacant land($40,000-$60,000 empty home tax) because she might build a house on it in the future. She wants to build a house but because of red tape cannot, but since she has thought of building a house she might as well pay for it. Seems to me that they are forcing landowners to sell, it will be interesting to see who buys.
This is awesome the amount of screwing people are getting by an over reaching city tax department and they are only going to try and get more.
I bet $100 to the SPCA that they will soon implement a non multi family housing tax on all single family homes, easy way to fill city coffers.
Typical Canadians, supplying the sand to be put in the vaseline themselves.

#167 alex stanford on 12.19.17 at 3:37 pm

He is still a minister.

Only in Canada.

https://ca.finance.yahoo.com/news/key-budget-themes-morneau-helping-184441666.html

#168 millmech on 12.19.17 at 3:57 pm

129 Ronaldo
You can never lose, housing always goes up.
They have $1,000,000 condos in Penticton and the average wage is between $15-$20/hr.
The good old Brokanagan!

#169 Sue on 12.19.17 at 4:26 pm

@#109 Howard on 12.19.17 at 4:54 am
Women buying shoes or handbags must have note from husband.

Interesting when i saw the Garths photo i was thinking the same as you. I always explain to my boys when a comment is made toward men in (or women) often a joking way. Turn it around like you have cleverly done and thats how to tell if its dicriminatory. Tough to a male these days.
Thank you for your clever response.
No disrespect to you Garth.
Im sure this will unleash the crazies….

#170 Raincouver on 12.19.17 at 4:29 pm

The HAM’s spark prices, and the locals fuel the momentum!

#171 Calgary Rip Off on 12.19.17 at 4:32 pm

That picture is lame. If I want something that is reasonably priced, I buy it. On major purchases I mention what is happening before I do it to my wife not because I need permission but because I want to include her.

What is the deal with so many guys in Canada that are subservient to their wives? That is totally messed up. Women in “power” is only a recent concept of maybe the last 40 years. Before then, it was men in charge. Men for the most part are bigger, stronger, smarter and faster. Why? Biology. Testosterone. Put progesterone or estrogen against testosterone. Who is going to win? Testosterone. Every time.

So no more lame pictures of men subservient to women. I’d rather die than be subjected to such nonsense. Perhaps this is why so many men are fat and drink so much and then emotionally there is nothing left, so they pop a couple viagra to keep their wives filled. No thank you very much.

#172 T on 12.19.17 at 5:25 pm

#146 down_boy on 12.19.17 at 12:34 pm

No one cares about your fantasy currency. Not one of these crypto currencies are worth a damn thing.

Get over it.

#173 Ed. on 12.19.17 at 5:33 pm

170 Calgary Rip Off on 12.19.17 at 4:32 pm
 “to keep their wives filled.”
************
Did you perhaps mean to write ” fulfilled ” ?

and please don’t forget the ;-)

#174 down_boy on 12.19.17 at 8:13 pm

#171 T on 12.19.17 at 5:25 pm
#146 down_boy on 12.19.17 at 12:34 pm

No one cares about your fantasy currency. Not one of these crypto currencies are worth a damn thing.

Get over it.

…..

Sure. Tell yourself what you must.

#175 TheSecretCode on 12.19.17 at 10:57 pm

+206.45 % on the day for bitcoin cash…currently halted…

Went from a little under 2k to just about 10K in a matter of hours tonight…wow!