Self-inflicted

“My former student,” says Jon, “who is a shift supervisor at Starbucks while studying music education just bought a condo… with her man who she hasn’t been dating more than a year. Don’t know what he does, but he’ll be commuting to it!”

And he adds: “There will always be a greater fool.”

The condo, turns out, is in Mission – an hour and a half drive from Vancouver. And you can bet the only reason she bought way out there is because of price. And here’s the giddy announcement…

A shift supervisor at Starbucks in BC, by the way, earns just over $14 an hour, or about $29,000 a year (if lucky enough to work F/T). But, as Jon suggests, a crappy income as an unskilled coffee-slinger is just one reason this girl’s rolling the dice with her future. Instead of being an unencumbered renter, she now has a mortgage. If she bought with the BF she’s also financially entangled with a dude in a way that could turn nasty. And she’s likely put 100% of her net worth into a concrete box just off the highway in the boonies, in a housing market riddled with risk, one week before the province brings down the hammer.

So why is she so happy? Excited? How did we ever get to the point where kids want to turn into their payment-addled, choice-starved parents? Why wouldn’t this babe want to take that music education and becomes rock legend in LA? If you’ve ever been to Mission, you might wonder.

Plus, she may have raided her RRSP to take the leap. Wouldn’t be a surprise.

The latest bank survey on this topic is dismal BeeMo says 40% of Canadians are sucking money out of their retirement savings (before being retired) instead of putting it in. The average withdrawal is about twenty grand and the No. 1 reason for raiding an RRSP is (of course) to buy a home. The next biggest reason is even scarier – “to help pay living expenses.” And coming in after that is debt repayment.

This ain’t good. Obviously. Money borrowed from retirement savings under the Home Buyers Plan must be paid back within 15 years, but we already know that half the people doing so never return the funds. We also know savings rates are falling and investing in tax shelters is on the decline. BMO asked about that, too. The reason Canadians are failing to prepare for the future is that they’ve screwed up today – 44% don’t have any money to invest with and another 25% must use it to pay debt.

Only 7% of Canadians have maxed their TFSAs, and 80% of the money in tax-free accounts in cash in savings accounts or GICs. Meanwhile kids like Jon’s student are happily Hoovering whatever money they’ve accumulated, plus swallowing oodles of debt, to live in a place they could rent for half the cost – and may well lose money on.

It’s worth noting the Vancouver-area market (like the GTA) has split into two. Experienced move-up detached-house buyers are staying away in droves, while the moisters continue to pile into condos – presumably because that’s all they can ‘afford.’ Just look at the sales-to-listings ratios in YVR. For detached homes it was a dismal 11.6%, but rockets to 57.2% for condominium apartments. The impact on prices is clear, with condos pushing ahead 27% in the past year, a three-fold increased over detached.

The same experience is playing out in the GTA, where overall sales (and prices) tanked in January.  The price of the average detached house crashed by $90,000, or 9.1%, while condo prices jumped 14.6%. And let’s put this into a national context – where monthly sales just fell by the greatest margin ever recorded – over 14%. The reason given: first-time buyers were rushing to purchase in November and December to ‘beat’ the new stress test, which then knocked prices lower. Sorry, kids.

So long as leveraged real estate is viewed as a riskless way to make easy money in a world where music majors work at coffee shops, this recklessness will continue.

Prepare now for when it ends.

214 comments ↓

#1 For those about to flop... on 02.16.18 at 5:36 pm

Pink Snow falling in Vancouver.

These guys are leaking Pink Oil,big time.

They were already staring a sizeable loss in the face and they just saw fit to lop another 64k off the Ol’ money tree in the backyard…

M43BC

2765 w 8th ave ,Vancouver.

Paid 2.58 million. June 2016

Asking 2.49

Then 2.45

Now 2.39

https://www.zolo.ca/vancouver-real-estate/2765-w-8th-avenue

2017-10-10 : $2,654,000
2018-01-24 : $2,459,000
2017-07-04 : $2,829,000
2017-09-05 : $2,719,000
2017-12-11 : $2,499,000

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#2 Doug t on 02.16.18 at 5:44 pm

For some the physical feeling that comes from “buying” is equal to an orgasm and that can be very addictive. But then after the climax (as in sex) one often looks around and wonders if they got caught up in the frenzie a little too much = guilt, remorse, feelings of emptiness

RATM

#3 Stan Brooks on 02.16.18 at 5:45 pm

I am kind of getting tired of this nonsense.

Every day for quite some time/over 10 years we read more stories about greater fools jumping into real estate that is at least 4-5 times overpriced. In bubble in the last 15 years.

So my question is: why are we looking for logic in mental institution?
Should we focus on the new socks of the dear leader instead?

Makes much more sense in such environment.

#4 Bruce on 02.16.18 at 5:45 pm

Who buys a property while they’re studying at uni?????

#5 crowdedelevatorfartz on 02.16.18 at 5:46 pm

Another millenial trying to imitate her Boomer parents………

#6 Rick on 02.16.18 at 5:46 pm

$14.00 per hour, becoming this much in debt, sad. No reason to celebrate.

#7 Millenial-falcon on 02.16.18 at 5:49 pm

Prices won’t budge to the downside , Canadians don’t sell at a loss or default

#8 Stan Brooks on 02.16.18 at 5:51 pm

I am split between the following:

https://www.hollywoodreporter.com/heat-vision/star-wars-justin-trudeaus-chewbacca-socks-cause-social-media-nerdgasm-1041504
(with Star Wars theme)
and

http://www.963bigfm.com/2018/01/26/justin-trudeau-socks-rubber-duck-davos/
(with George Soros/Davos theme)

#9 Nick Savage on 02.16.18 at 5:51 pm

Garth, there’s no way she raided her RRSP to put a down payment down. Do you really think Starbucks shift supervisors have RRSPs?

#10 Suede on 02.16.18 at 5:52 pm

early 20’s buying a condo.

Heads – she wins, prices rise and she’s the envy of her friends.

Tails – she loses and condo prices correct, cries afoul like everyone else will around her and feels a part of the herd that she lost. Then votes NDP to bail her and everyone else out because of the risk. Blames others for hardship.

For everything else, there’s mastercard.

#11 Pattullo on 02.16.18 at 5:53 pm

To make matters worse, BC NDP decides to spend 1.4B on a bridge, which makes it a $600,- cost per BC tax payer (w or w/o a car.)

spend, spend, spend, spend, spend.

#12 JSS on 02.16.18 at 5:53 pm

Hey, that music student might be the next axe player in metallica!
who knows.

#13 namename on 02.16.18 at 5:54 pm

interesting

#14 Cloudy on 02.16.18 at 5:58 pm

What ever happened to stress testing? Bank of Mom? Boyfriend making good money? BC gov’t “home equity partnership” program? All of the above? Last I heard, BC credit unions are playing ball and are not stress testing, so maybe there’s hope for the party to keep going in BC. Brutal.

#15 Rooster on 02.16.18 at 5:59 pm

Conversation overheard in a Liberal Gulag 30 years hence:

You had a condo? Luxury! We had to live in an abandoned hyperloop and were glad of it.

Aye, you were below ground? Luxury! We made do in a carbon tax shelter and had to collect soot from side of road to keep warm.

You had soot? Luxury!

#16 Bezengy on 02.16.18 at 6:00 pm

I very much doubt if new landlords who focus on monthly profit/loss numbers have ever considered that in 20 years when you sell your 500K condo it may be worth double what it is now, and as an investment property the owner will have to declare the 500 k increase in value as income, probably payable at the highest marginal tax rate. Forget expenses because you’ve already used them to reduce your yearly income on the property. Think you can dodge the tax man?, good luck! Only 50% taxable you say?, maybe for now, but I wouldn’t count on that either.

#17 conan on 02.16.18 at 6:04 pm

This guy is interesting, he is single handedly eliminating Islamophobia in England.

https://www.youtube.com/watch?v=5m3TM375914

who is he?

https://www.youtube.com/watch?v=FUjsnQ8bWEo

#18 Born and raised in mission on 02.16.18 at 6:04 pm

Hey Garth, you ever been to Mission?
Bc is the best province in Canada. You know that deep down. Ontario and Quebec are shit holes
Come to mission I will show you around and you can stay in my air bnb for free and it’s dog friendly
Samuel

#19 The boonies on 02.16.18 at 6:07 pm

Isn’t this what one of our regular posters is always advising the youngsters to do? Move to boonies and buy a cheap house?

#20 Texasboy on 02.16.18 at 6:09 pm

This won’t end well…

#21 crowdedelevatorfartz on 02.16.18 at 6:12 pm

@# Screeching, Caterwauling, Myopic
aka Screwed Canadian Millenial

“Rising interest rates are unfair …I havent bought yet”
‘Dropping housing prices are unfair ….because I may buy”
“Boomers should die faster so I can inheirit their money”
“Permanent jobs are nonexistant unless your a govt worker”
“Stats are useless unless they verify my arguement”
“Minimum wage at $14/hr is still too low. Raise it to $20”
“No one should be fired. Its mean and causes discomfort”
“Boomers had it easy. We have it harder”
“Boomers had icebergs for Grandparents. We have basement suites”.
“Boomers are selfish. Millenials deserve more”
“University teaches acceptance, Boomers are leeches”
“Boomers are stupid, Millenials will reelect Trudeau”

#22 millmech on 02.16.18 at 6:12 pm

Does she realize that she is basically earing $9.35/Hr when you add in the commute time, but hey she has a place of her own.

#23 People watching people on 02.16.18 at 6:15 pm

Landlord re-listed my rather large sky box. Last year 6 months on the market @ $1m with 50+ showings. No sale, many comparables sold for mid $900s. Relisted with a 3% discount, so far 5 showings (with at least 2 more this weekend), one Chinese looking dude, everyone else a melanin challenged moister, including the agents only viewings; casing the joint for their own listings (I was present and we chatted). Older, larger condo’s are a tough sell without all the upgrades. 1 + den or smaller, selling hot and heavy from the looks of things, which is about all a barista can afford, even with $14 minimum wage.

Chatted with some trades. New build residential roofers saying work is slowing, or uncertain. They pulled back on Xmas spending last year as they saw it coming, looking to reduce personal expenditures in general going forward. Industrial electricians are going balls to the wall though, businesses still expanding.

#24 Geoff on 02.16.18 at 6:16 pm

I wonder if she could make more busking? Do you have to pay taxes on busking income?

#25 young & foolish on 02.16.18 at 6:16 pm

So, basically no money in the bank, huge debts, and no life.

#26 @careeraftschool on 02.16.18 at 6:19 pm

Condo in Mission, BC? Is this a good idea? It depends where the couple will be working. If they plan on working in Downtown Vancouver than they can commute to work on the Westcoast Express. Takes an hour and you can sleep on the way there. If she wants to work at one of the three Starbucks in town then she can easily bike to work, it’s a small town. You won’t need two cars, you might not even need one. Huge savings.

Maybe buying a condo is a good thing. Forces people to think more seriously about their education and career choices. She can become a Music Teacher and double her income. All local school districts are hiring teachers and support staff. Also after school music tutors charge $30 to $50 per hour.

#27 crossbordershopper on 02.16.18 at 6:20 pm

surrey to mission, hum and they think they moved up. I guess its all relative.

#28 Steve on 02.16.18 at 6:27 pm

Cheap money makes people do crazy things. It’s like a wedding with an open bar. Free drinks. Soon enough the chocolate fountain is on its side. Then a pair of tuxedo pants gets snarled up in a ceiling fan and smoke pours out of its motor onto the dance floor. Which is kind of awesome until the sprinklers go off and the bride’s dress is covered in melting mascara. Free booze/ cheap money= cuckoo crazy time. It reminds me of a hauntingly beautiful song I once heard. It goes like this… “They busted the joint, took everybody down but me. I was over in the corner just as high as I could be.” What thrilling lyrics to preface what is guaranteed to be the show of the century. Imagine the twisted anecdotes this will create. I’m so glad to be sitting in the corner where society placed me. No debt, no payments, nothing anyone wants. Every year in my town there are thousands of families reduced to financial rubble trying to look rich to their peers. I’m just glad I’m living close to an auto wreckers. Let the bizzare self punitive circus begin!

#29 espressobob on 02.16.18 at 6:29 pm

I know a number of cafe owners who would give their back teeth for 30k a year. RE is a pipe dream.

#30 Screwed Canadian Smoking Man on 02.16.18 at 6:31 pm

DELETED

#31 Whipster on 02.16.18 at 6:31 pm

Thankfully my coworker (millennial) made a wise choice. She and her partner own in Vancouver. Decided to upgrade in other LM city, and considered keeping original as a rental. Mortgage broker encouraged them to take heloc of over 100k to beef up down payment for stress test. Good grief. Thankfully she used an online rate of return calculator to discover it would bring negative returns and has decided to sell and use proceeds for down payment. At least I know which MB to steer clear of ;)

#32 Mark on 02.16.18 at 6:34 pm

“Prices won’t budge to the downside , Canadians don’t sell at a loss or default”

Prices on Canadian RE, Vancouver/Toronto especially, have stagnated since 2013 (peak was in 2007 for Edmonton, 2011 for Calgary). I actually agree with you that prices might not move downwards a lot. But people who own other asset classes will see them outperform relative to RE.

In the 1990s, for instance, a typical downpayment of the era, around 25%, invested in 1990 in a TSE index fund at the time, would have been enough to buy an entire house of interest, in cash, by the end of the decade. While buyers of houses on credit at the time spent a whole decade making payments while having little to no equity to show for it.

Today the ratios are even more extreme, in terms of stock market undervaluation versus house price overvaluation, and a downpayment of as little as 10-15% of a house is likely to grow into enough of a downpayment to buy a house outright.

#33 Zapstrap on 02.16.18 at 6:34 pm

Maybe she likes sturgeon fishing.

#34 Penny Henny on 02.16.18 at 6:36 pm

#212 The Technical Analyst, CSTA, CPD on 02.16.18 at 4:34 pm
—————————————————————–
I don’t short either, it is beyond my risk tolerance and trading mantra. I’m a long term investor as well. Have you done a risk tolerance test BTW? Very insightful.
\\\\\\\\\\\\\\\\\\

I have and I am very comfortable with my decisions.
So far the toughest part has been getting all my money into the market. It was only last May that I sold in Etobicoke and moved to Niagara region. All of a sudden I had another bunch of money I needed to start working for me. Also I am retired so no more money is coming in, wife too. Me 4 years ago and her just one. We are both relatively young 53, 54.
So the biggest concern in the short term is not so much beating the market, or even staying with the market.
The most important thing right now is to not take a hit in the short term.
I am ok to lag in the first couple of years but can’t take a 30% drop in the short term.

After all that I appreciate your input and your advice.
Thanks

#35 Rocky on 02.16.18 at 6:36 pm

#14 you made my day, thanks! Such a classic

#36 Gladstone on 02.16.18 at 6:38 pm

#7 Millenial-falcon on 02.16.18 at 5:49 pm
Prices won’t budge to the downside , Canadians don’t sell at a loss or default

You are a Millenial-Moron. Keep sucking on your Pacifier.

#37 45north on 02.16.18 at 6:40 pm

“My former student,” says Jon, “who is a shift supervisor at Starbucks while studying music education just bought a condo… with her man

Looking at this young woman, here are three responses:

Garth runs his own blog – no charge. His message is don’t sign your life away for real estate

Kathleen Wynne is Premier of Ontario. She says give her a raise – $15 / hour

Justin Trudeau is Prime Minister of Canada. He says gender equality – train her as a welder

Reminds me of the story of the good samaritan – which of the three was her neighbour?

#38 Victor V on 02.16.18 at 6:41 pm

Canadians can’t stop using their homes as piggy banks

https://www.bnn.ca/canadians-can-t-stop-using-their-homes-as-piggy-banks-1.1001518

Canadians are borrowing against their houses at the fastest pace in more than five years, as home equity lines of credit emerge as a preferred means of accessing funds.

Heloc balances jumped 7.2 per cent in December from a year earlier, the fastest annual growth since 2012, reaching a record $230 billion, the Office of the Superintendent of Financial Institutions reported Thursday. All other types of consumer debt such as personal loans, credit card balances, car loans and overdrafts climbed just 3.2 per cent over the same period, less than half the pace of heloc growth.

Borrowers can tap helocs for up to 65 per cent of the value of their homes, and the funds are most commonly used for making renovations, investing and consolidating debt, according to a June 2017 report by the Financial Consumer Agency of Canada. “Houses are becoming piggy banks,” said Paul Gulberg, a Bloomberg Intelligence analyst. It’s “either greed based or need based.”

#39 Looney Baloney on 02.16.18 at 6:41 pm

Clearly, this broad doesn’t frequent this pathetic blog. Women need men to save them from themselves.

SPOCK: “Stonn. She is yours. After a time, you may find that having is not so pleasing a thing after all as wanting. It is not logical, but it is often true. ”

https://www.youtube.com/watch?v=WLUgGXca5uY

#40 young & foolish on 02.16.18 at 6:41 pm

When will debts matter again?

#41 Brilliant on 02.16.18 at 6:41 pm

That deal takes us one step closer to disaster. Full speed ahead. Now I need a Starbucks.

#42 Karma on 02.16.18 at 6:48 pm

Very interesting read on the media’s decline.

http://quillette.com/2018/02/15/the-peterson-principle-intellectual-complexity-and-journalistic-incompetence/

#43 Linda on 02.16.18 at 6:54 pm

‘For whomsoever the bank has joined together in legal debt, let nothing do them part.’ Well, that is certainly one way to ensure a pooling of the household finances. Sucks if it turns out that your squeeze isn’t ‘the one’ but hey, plenty of those who said ‘I do’ end up saying ‘actually, I don’t’ so what the heck, its been done before so ‘we know it works!’. Or doesn’t, as the case may be.

I’ll admit, I’m a little stunned by the commute that these purchasers were willing to embrace. Yes, the West Coast has warmer weather, but 90 minutes just to get to work one way – ack. That having been said, the long commute is part of city living. IF I caught the ‘right’ train & there were no delays I could get home in 45 minutes from my job. Realistically, it was usually an hour & 15 minutes, since I often got to see the tail lights of my bus departing as I stepped off the train. If I drove & there were no traffic issues, I normally could get home in 40 minutes. On one never to be forgotten occasion, it took over 3 hours, as there was a traffic incident on every single route I could take to get home.

My only question would be, was there no single family detached dwelling they could have afforded instead, given the long daily trek? Because if you are going to mire yourself in debt, may as well buy what you truly want. Of course, maybe they wanted a condo so all is well. Good luck to them, hope it is still a thrill a year from now.

#44 NoName on 02.16.18 at 6:54 pm

#218 Guy in Calgary on 02.16.18 at 5:12 pm
#189 NoName on 02.16.18 at 1:21 pm
#186 Guy in Calgary on 02.16.18 at 1:03 pm
#43 Lost…but not leased on 02.15.18 at 6:35 pm
Credit Unions are insured by a provincial organization so the amounts insured vary from province to province. Ontario credit unions are insured by DICO and I am pretty sure they have the same deposit guarantees as banks. AB credit unions are insured by CUDGC I believe and are 100% insured regardless of the amounts on deposit. Not sure about the other provinces.

hope that never comes to that claim on deposits, at that point its game over, regardless who is insures I doubet that will be $ for $, it will be more likely cents on a dollar.
_____________________________________

Something tells me you are just completely speculating without doing any research with regards to the reserves.

if one or two credit union fail i can see bail out, but in a case of banks gong down, good luck with claim.

http://www.greaterfool.ca/2011/05/13/dont-count-on-it/

#45 Danny on 02.16.18 at 6:57 pm

“point where kids want to turn into their payment-addled, choice-starved parents? ”

Funny how children follow their parents lead and even though they have had more education in most cases……..still they have this…..negative….lack of status class like distinction….like a ” loser ” felling if you rent and not own a place!

It’s almost a sociological disease. …you must own to be a somebody…

On the other hand its very much like when many child rearing women used to be asked at get togethers…”and
what work do you do?” and if the answer was “I am at home raising my children”…..the feeling was…..Oh….”so you don’t have a job and earn a living!”

It is about the society’s attitude about worth and value.

Property even a condo…. still is viewed simply as : “Personal value and worth….a status symbol “….definitely not a good analysis of investment.

And developers know it…..so they make condo buyers basically become their financial lenders as they turn over a much quicker profit than they use to when they built high rise rental towers…before condos existed.

What most condo owners don’t want to admit….is that it is still renting because the land and the common areas are shared just like in a rental high rise….the maintenance fees is really a “rental cost “…paid out every month and worst not subject to rent control.

If real estate prices don’t come down in condos at least
30 %….better to rent.

#46 R on 02.16.18 at 6:58 pm

Same old record. Why waste time on another fool.

#47 Spock on 02.16.18 at 7:00 pm

Maybe she was raiding the dude’s RRSP. Someone must be making money among the two.

——————
#9 Nick Savage on 02.16.18 at 5:51 pm
Garth, there’s no way she raided her RRSP to put a down payment down. Do you really think Starbucks shift supervisors have RRSPs?

#48 Reality is stark on 02.16.18 at 7:01 pm

It’s not going to be her loss with Starbuck’s wages.
It’s his loss.
Wait till he feels the pain.

#49 CTV News on 02.16.18 at 7:01 pm

Claiming executive privilege, Steve Bannon refused to answer the Senate Intelligence Committee’s questions. He responded “Pardon me?” to all 25 questions. Looks like Trump wants to pry the ignominy gold medal out of Nixon’s cold, dead, hands.

Back at home, Kathleen Wynne has made a personal donation to Patrick Brown’s re-election campaign – a case of cherry chapstick.

#50 islander on 02.16.18 at 7:04 pm

Hope this couple’s only hobbies are ‘long walks’ and ‘making love’. Good-bye money. However, they have a good chance of staying together as they’ll hardly ever see each other. Say hello to a 2 hour plus commute (each way) if they are travelling Vancouver /Mission. Better to invest in a caboose and hitch it to the ‘WestCoast express’!
Hey! What a brilliant idea. Let’s get these love birds into a moveable home that travels the rails! Problem solved.

#51 David on 02.16.18 at 7:05 pm

Her bigger mistake is buying with another person. This will likely lead to debacle. At least the mortgage is a forced savings program as she would otherwise not save a dime.

#52 Floppy Ears on 02.16.18 at 7:07 pm

For Those About To Flop, take your pink snow and shove it up your you know what.

#53 Keith on 02.16.18 at 7:09 pm

@ #9 Nick Savage

There are progressive employers out there. Less and less, but Starbucks is famous for it’s benefit packages even for part time with 20 hours a week.

They offer a company stock purchase plan at a discount, which is little short of amazing, along with a custom benefit package.

https://www.starbucks.ca/careers/working-at-starbucks

As much as I believe this woman is making a mistake, within Starbucks she could move up to assistant manager and store manager fairly quickly, and I hope she works in Mission because transportation costs on a commute would be a killer.

#54 Lost...but not leased on 02.16.18 at 7:11 pm

Mission?

Well Mission and area are home to a number
of Prison…err “Correction” facilities.

As a realtor friend of the family “warned”, many of the inmates have “family/friends/associates” that have moved to the area to be near them..kinda hinting that Mission is no longer a Bible Belt area that it may have been in the past, and perhaps why it has a rather high crime/murder rate.

#55 Chaddywack on 02.16.18 at 7:11 pm

Trading Surrey for Mission is like trading herpes for syphilis.

#56 canada on 02.16.18 at 7:13 pm

#19 Texasboy on 02.16.18 at 6:09 pm
This won’t end well…

correction my friend
Canadians never sell at a loss

btw…..do enjoy moving every 9 months?

#57 theoryAndPractice on 02.16.18 at 7:14 pm

#7 Millenial-falcon on 02.16.18 at 5:49 pm
“Prices won’t budge to the downside , Canadians don’t sell at a loss or default”
——————————————————————————
So, you checked all losses and defaults in Canada and all of them were Russians ?

#58 Lost...but not leased on 02.16.18 at 7:16 pm

Commuting:

Some of the best advice we received was on choosing the location where one wants to live versus where one would work.

If one works in say Vancouver and wishes to buy in Langley…rent accomodations for say one week in Langley , do the commute and take notes.

Make plans based on objective data and research, not house- horny moister whims.

#59 Parksville Prankster on 02.16.18 at 7:17 pm

… Andy Yan might have some thoughts on Vancouver real estate that feed into a much repeated meme on this blog. I’m unsure if Andy’s research is unbiased…

http://www.macleans.ca/economy/realestateeconomy/andy-yan-the-analyst-who-exposed-vancouvers-real-estate-disaster/

#60 Damifino on 02.16.18 at 7:27 pm

There will always be a greater fool
——————————

No, there won’t. Which is precisely the problem.

#61 Terry on 02.16.18 at 7:33 pm

An old Wall Street saying has it that when everybody’s getting into the market and even the shoeshine boy is giving stock tips (or the barber/hairdresser or the taxi driver or the waiter or the bartender), then it’s time to sell.

Could we say the same today about a shift supervisor at Starbucks who earns just over $ 14.00 an hour and has just bought a BC Condo? I smell a U.S. style subprime, liar loan, no income verification style housing collapse and HELOC debt bomb explosion is now upon us!

#62 Hugh Janus on 02.16.18 at 7:33 pm

Mission is far more attractive in price if you dont mind sharing the hood with hells angels and red scorpions taking care of business for the crackheads and the tweekers. Plus there are some correction centres nearby where you might be able to find part time work mopping up puke.

#63 Expat on 02.16.18 at 7:34 pm

Wow. I’m a Canadian who has been living in the US for the past 14 years. I loved growing up in Canada and have continually dreamed of returning to what I thought was a country of more rational and sensible people. However, as crazy as the US can be, I see that Canada is doing its darndest to catch up in the crazy sweepstakes. All of that is to say that I’m starting to wonder: what’s even the point of returning? I’m no worse off here, and, on the flip side, I’d be no better off there. And, Ontario – what in the world have you done? McGuinty/Wynne. Stunning. In 15 years the dynamic duo have planted the seeds of destruction of one of the once wealthiest jurisdictions on the planet.

I watched the PC debate last night via streaming. Caroline Mulroney seems the best. By far the smartest and savviest, but not quite ready (which is fine, she’s young!). The point being: who is going to stop the Liberals from destroying Ontario?

#64 Dr. Watson on 02.16.18 at 7:36 pm

Only 7% of Canadians have maxed their TFSAs,
*************

I confess I much prefer Trudeau’s 7% solution.

#65 jess on 02.16.18 at 7:37 pm

$1.8 Billion in India Bank Fraud Raises Fears of Ripple Effects

By MARIA ABI-HABIBFEB. 14, 2018
India: Scam Involving Diamond-Dealer Leaves State Bank Reeling

=========
abroad

“Based on these transactions, other banks appear to have advanced money to these customers abroad,” it said in a statement posted on the website of the city’s stock exchange.”
https://www.nytimes.com/2018/02/14/business/india-bank-fraud.html

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7650-india-scam-involving-diamond-dealer-leaves-state-bank-reeling

#66 Where's The Money Guido? on 02.16.18 at 7:43 pm

Re: #104 Banksalot on 02.15.18 at 10:07 pm

Turns out everyone in our industry (forestry) at that time had problems with their banks. Didn’t matter what bank. All of the banks decided all of our industry was at risk and they were going to get their money before anyone else got paid.

I’d be interested to know if there’s any bankers lurking in the sidelines, and hear their side to the story. Do the banks share information that way, and do they go in hard, before there’s any problems, just to make sure they get paid?
+++++++++++++++++++++++++++++++++++++++++++++++++

Found out just today that all banks share all info on their customers between each other.
So all banks, any bank in Canada, has all your info or can easily get it..

#67 theoryAndPractice on 02.16.18 at 7:45 pm

#55 Lost…but not leased on 02.16.18 at 7:16 pm
” Commuting:

Some of the best advice we received was on choosing the location where one wants to live versus where one would work.

If one works in say Vancouver and wishes to buy in Langley…rent accomodations for say one week in Langley , do the commute and take notes.”
—————————————————————–

Alternate and easier to implement, but more painful way is to be there in commute time and test the commute for morning and evening.

#68 Lost...but not leased on 02.16.18 at 7:48 pm

There is GOOD NEWS amongst all the doom and gloom .

Many predictions and theories have recently been verified and validated re: the actual paternity of our fearless(?)leader in Ottawa.

Viva Cuba Libre !!!

#69 Yorkville Renter on 02.16.18 at 7:49 pm

two points:

1) This girl’s parents have failed her.
2) Financial Literacy MUST be taught at school… same goes for critical thinking skills.

#70 Canadian Moose on 02.16.18 at 7:55 pm

Roinks, I agree with many of the dogs, this will not end well. I cannot for the life of me imagine a more painful commute. They will tire of it soon. Guaranteed and then the day of reckoning will come. Asta lavista baby! Lol

There’s a storm on the horizon and it’s not looking good. Aka the last scene from The Terminator.

I have two kids of my own and I cannot harp enough to them the distinction of renting vs buying in this current market. They will see the wisdom of daddy moose soon enough, as time rolls on.

Thoughts from the Hinterland and Happy Family Day weekend. Cheers

#71 NoName on 02.16.18 at 7:57 pm

#46 CTV News on 02.16.18 at 7:01 pm
Claiming executive privilege, Steve Bannon refused to answer the Senate Intelligence Committee’s questions. He responded “Pardon me?” to all 25 questions. Looks like Trump wants to pry the ignominy gold medal out of Nixon’s cold, dead, hands.

Back at home, Kathleen Wynne has made a personal donation to Patrick Brown’s re-election campaign – a case of cherry chapstick.

why did you do that, cherry chapstick.

https://www.youtube.com/watch?v=tAp9BKosZXs

#72 YVR Renter on 02.16.18 at 7:59 pm

Why does she think drivers will be any less rude anywhere else in Greater Vancouver?? I’m in sales, I drive a lot around all parts of Metro all day, I see unbelievably incredibly bad, rude, stupid and dangerous driving every day. Surrey seems tame to me. It’s every person for themselves here and everyone wants to be first. I thought the West Coast was supposed to be chilled? I see drivers that make Toronto look angelic, where I also was in sales. And commuted 2 hours in and 1.5 out every day. It wears you down quickly and kills your back. But public transit isn’t an option with a trunk full of drug samples for doctors. Now she’ll have 2 hrs in and back out to Mission to experience pickups and idiots pushing on her tail with gas at $1.40-1.49/litre. Oh wait, gas is cheaper in Abbotsford. There’s the upside!

#73 For those about to flop... on 02.16.18 at 7:59 pm

#52 Floppy Ears on 02.16.18 at 7:07 pm
For Those About To Flop, take your pink snow and shove it up your you know what.

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

Everything I write on here can be verified.

That has certain people on here terrified…

M43BC

#74 The Limited Sage on 02.16.18 at 8:00 pm

“Prepare now for when it ends.” – G.T.

Like reducing exposure to tsx/Canadian-centered etfs? I don’t see how this ends well, but they don’t call me the Limited Sage for nothing..

#75 TheSecretCode on 02.16.18 at 8:03 pm

Buying in Mission is a mistake unless you plan to live and work in Mission. Don’t even talk about that commute.

The commute in from Langley to Vancouver is vastly improved with new Port Mann and no more bridge tolls that were eating something like 160 per month + for those people.

All first time buyers snagging condos, moving past Langley to get a cheaper one in Abbotsford…this is not smart if you have to commute in.

Leave the whole lower mainland and BC all together.

Calgary.

#76 jess on 02.16.18 at 8:10 pm

Trump boasted that he was self-funding his campaign
and on the other hand …”Trump’s analysis of how money influences politics isn’t about straight bribery. It’s about building a long-term relationship in which each side does favors for the other. He gives to politicians, and then, he says, “When I need something from them, two years later, three years later, I call them.”

https://www.vox.com/2015/8/6/9114565/donald-trump-debate-money
===========
Hundreds of Americans were allegedly contacted and recruited to support pro-Trump efforts. Individuals were paid to attend Trump events, including one who went to several dressed like Mrs Clinton in prison garb, investigators say. They even allegedly ordered the construction of a mock cage for the Clinton impersonator that could be transported on the back of a flatbed truck.
===========================

spending 1m/day

Rallies themselves were organised and promoted. A Florida-based grassroots activist was allegedly wired money to purchase materials for a Miami event.

All in all, Russian operatives were effectively engaging in – and funding – traditional on-the-ground campaign activities.

#77 Mark on 02.16.18 at 8:11 pm

“There will always be a greater fool”

Historically the ‘greater fool’ shifts asset classes. Smart people bought stocks, rather than RE in 1990. They also ditched those stocks a decade later and bought, amongst other things, RE, when it was clear that the stocks were in a giant bubble.

Of course, talk to your typical Realtor, and its usually a ‘binary’ decision, buy a house or not. That’s why having someone like Garth in your life is vitally important, a non-biased sort of guy who isn’t afraid to tell you to buy a house if the metrics are right.

What’s that phrase after all, “bulls win, bears win, but pigs get slaughtered”? Or something like that.

#78 KLNR on 02.16.18 at 8:12 pm

@#63 Expat on 02.16.18 at 7:34 pm
Wow. I’m a Canadian who has been living in the US for the past 14 years. I loved growing up in Canada and have continually dreamed of returning to what I thought was a country of more rational and sensible people. However, as crazy as the US can be…
____________________

Well, at least we don’t have the rampant mass shootings here yet.

#79 TheSecretCode on 02.16.18 at 8:12 pm

How about some focus on CALGARY….it is a metro, they have universities, and yes there are jobs (even though slammed by the oil downturn).

I just did a count: 1,102 SFD’s listed right now in Calgary sub 500K

Insanely low prices on SFD’s, lots in the 300k…are you kidding me? Any neighborhood you want. Nice modern 3000sqft+ SFDs 400-500k…hundreds of them listed right now.

Calgary is a BUY if wanting to put roots down…the rental vacancy still very high so investment into rentals not lucrative = those buying might actually be buying to live in it, imagine that?

#80 KAC on 02.16.18 at 8:14 pm

#42 Danny
“What most condo owners don’t want to admit….is that it is still renting because the land and the common areas are shared just like in a rental high rise….the maintenance fees is really a “rental cost “…paid out every month and worst not subject to rent control.”

What a hilariously bizarre misunderstanding of the condominium form of ownership.

The “common property” includes the land underneath the property and it is proportionately owned by each individual owner. As the land (and other common property) increases in value so does the individual unit value. Unit owners have a legal ownership interest in the common property, renters have no such benefit.

Renters do not have ownership rights over the suite they live in. When a renter’s home increases in value the renter enjoys zero benefit.

Maintenance fees are just that. Most home owners want their property maintained to a decent level, maintenance fees make that possible and help to maintain or increase the property value. The size of the maintenance fee is decided by a vote of the owners.

Renters have no control over the level of maintenance in their buildings but rental buildings with high levels of maintenance will have those high maintenance costs factored into the rent.

Renting and owning are very different arrangements.

You’re right. Renting is cheaper. – Garth

#81 Mark on 02.16.18 at 8:18 pm

“How about some focus on CALGARY….”

Sure, prices peaked in 2011. So they’re much further along. But anecdotally the quality of the housing stock leaves a lot to be desired. The sort of GTA-style all brick construction is rare.

Having said that, Calgary RE competes with the equity of Calgary-based O&G companies that are trading beneath the replacement cost of their assets. So RE may very well be still inflated beyond fundamentals nonetheless. Infrastructure is also pretty crappy — shut down the Deerfoot and the city basically grinds to a halt.

#82 @Spectacle on 02.16.18 at 8:21 pm

#27 crossbordershopper on 02.16.18 at 6:20 pm
surrey to mission, hum and they think they moved up. I guess its all relative.

Huge:: Now That was funny. Thanx. M

#83 TurnerNation on 02.16.18 at 8:29 pm

Kanadians are in pain. I know this as one day last week CBC new site had three main page articles each with something about. Painful process or reconcilliation; pain of being different, this is painful, and so on.

Looking at all the faces in this Star article have you EVER seen such dourness and pain? What about our amazing house prices and freedums? Not enough?

(Bottom line, Kanadians are boring victims encouraged by a T2 actor and a T-rump Distractor)

https://www.thestar.com/news/investigations/2018/02/16/how-a-broken-jury-list-makes-ontario-justice-whiter-richer-and-less-like-your-community.html

#84 Pulp Faction on 02.16.18 at 8:41 pm

She had nothing.
Now, as a result of no extra effort, she has something. (or is happy to fool herself that she does).
Now she is successful.

End of dream.

#85 mathman on 02.16.18 at 8:42 pm

Starbucks AM – The legal fees alone on the transaction would eat over a months net income.

How do you buy a condo on $14/hour or even save the 5% – has to be more to this story. BF has some coin, or she and or he are still on the payroll (which is likely the case)

This is normally the playbook here in the GTA, you hear about someone you know that is a perpetual student, an artist, aspiring actor/actress (bartender) or someone with no real visible means of income – buying a property all the time. The truth which is somewhat obvious is we have a generation of people today, including Gen-Xer’s, who are still very much on the payroll.

There seems to be no sense of pride and a feeling that their parents owe them something. One of my good friends, who is pushing 40 and has a decent job told me not too long ago that her parents pay her phone bill. Instant loss of respect.

Low interest rates are the main problem, CMHC is equally as guilty is there is no differentiation and or reason for the banks to price risk. The major issue is parents, when you stopped breastfeeding in the early 1980’s, how do you feel you are helping your children by keeping them on the payroll and preventing them from developing their own sense of responsibility.

Interesting times – I’ve always valued my independence but apparently that is not a thing anymore.

Math

#86 TurnerNation on 02.16.18 at 8:42 pm

The hazards of funding variable expenses using a fixed income stream. Don’t they teach this in school? Uhhh..oh..Kanadian Marxist training camps run by Unionistas. Guess not.
(18 years of “education” to sling coffee: JK-Gr. 12 + Uni.)

Fixed income: $14/hour
Variable and always rising: Taxes, Condo Fees, home insurance. And interest rates if not fixed.

#87 TheSecretCode on 02.16.18 at 8:43 pm

Several people I know have moved from Vancouver Island and Vancouver to Calgary – from mild to not so mild weather? Got me thinking. Why?

The Kelowna rental house has just under 300k owing…300k+ appreciation on it in the last 3 years…(134k + in the last year alone…the last big uptick as next year will be flat, which happened 1.5 year after the big uptick in Vancouver)

Kelowna market value supposedly just under 800k for the SFD – crazy right?…about 790k at present. Just found the equivalent home in a good neighborhood in Calgary at just 495K!! And has been sitting for 60+days.

House in Calgary paid for in full if I sell off in Kelowna and grab the Calgary house and could rent for a very low price (hell renting out the whole house for $500 per month would still land me in net positive territory).

The inter provincial migration has finally calmed a bit (with Kelowna population inflow finally slowing 0.4% while building boom is scrambling to catch up from last few years…you know what this means…supply hitting ramping up – the peak coming, population inflow dropping below Canadian average and prices at all time highs…

I might be late to the party…but this is now happening…HELLO CALGARY (best RE opportunity since US in 2011).

#88 Reximus on 02.16.18 at 8:53 pm

That girl made the right decision, for her…I wish her well

#89 Adam on 02.16.18 at 8:55 pm

“Prepare now for when it ends.”

How? Imagine what the bailout will look like. How can all the ants prepare for the bailout of the grasshoppers? Serious question, I’m dying to know.

#90 NorthVanMan on 02.16.18 at 8:57 pm

I have been based in Van for two years now and for the first couple months was based in the Valley on the Surrey/Langley border just off hwy 1. I’m still traumatized from that stint of nightmare highway 1 commuting into the city. Since then the tolls were removed on the Port Mann bridge and the traffic can only be worse now. Most of my co-workers who live in Maple Ridge, Pitt, and Langley have been packing on the pounds just in the two years since I’ve known them…. there’s no time for anything but work when commuting 1.5 to 2 hours each way.

#91 Wrk.dover on 02.16.18 at 8:59 pm

Fifteen hours a week barrelling down the highway on minimum wage with a mortgage too, and [email protected] didn’t even wince.

When I made $14/hr while renting for $200/mo., I
could borrow thirty grand max for van, tools, supplies and equipment. Then I hit the wall at the same bank that gives me 1% now.

Trip on that!

#92 Leo Trollstoy on 02.16.18 at 9:02 pm

Now that we know that Canadian real estate, especially YVR and YYZ, peaked a year ago in the spring of 2017 the question is: what do people who bought homes do now?

Will they refi in 5?

Seems difficult to do but Canada loves its RE

#93 Lost...but not least on 02.16.18 at 9:09 pm

#80 KAC

One has to decode Garth’s comments..

The subtle advice is to chose one’s next/future re-incarnation as a dog…no worries, no obligations..no need for TFSA, RRSP’s Mortgages,Strata fees… …have a master that blogs about you ad nauseum

Cats? should buy pre-sale condos in Saskatchewan.

#94 Sven on 02.16.18 at 9:12 pm

I really enjoy this site. I think it hits the proverbial nail on the head in every post. However, could we please dedicate more time to what socks #justin is wearing as well as his most recent photo of his bum he has posted on Instagram?

– Sven the Salesman

#95 down_boy on 02.16.18 at 9:13 pm

Mission is a move up. Fresh air off Golden Ears and Stave lake coming down from Garibaldi. Great parks, commuter rail, cute downtown that’s always busy. Rural farms in the hills, easy to bugout on long weekends and with cheap gas and lower taxes. Lots of people head out to Mission to hangout. Surrey is nice if you like asphalt and outlet stores. Mission is nice if you like horses and a place for your dog to run. If I was going to plunk down on a place in the valley, Mission would be in the running. Why am I pitching it? I don’t think it’s fair to dis a whole community thousands of miles away especially from a quaint little ice cream shop. I also get tired of people picking on British Columbians just because we are smarter and better looking. It’s a curse.

I’ve been to Mission many times. Have you been to Belfountain? – Garth

#96 crowdedelevatorfartz on 02.16.18 at 9:16 pm

@#52 Floppy Ears

The truth is a little too close to home for comfort?
Bought a place in the past year or so?
Commission based Realtor without a sale for months?

Dont shoot the messenger.
He speaks the truth.

P.S.
Just wait til the end of March when, as Garth suggests, all those pre approved mortgages at lower rates and pre B20 rules……..evaporate.

:)

#97 Bramalea on 02.16.18 at 9:17 pm

@78 there are shootings every single day in Taranta. Every day someone gets shot.

#98 Leo Trollstoy on 02.16.18 at 9:18 pm

Canadian real estate had its run

Prices in YVR and YYZ have been going up for years until 2017 last year

The hangover will be epic

#99 Yanniel on 02.16.18 at 9:19 pm

Garth, since we struggle so much to put dollars away for savings and investing, would you consider writing a post about budgeting? Thanks.

#100 Bramalea on 02.16.18 at 9:20 pm

#76 Jess
Still moaning about Trump eh. Go to your safe space a cry or better yet get yourself a job.

#101 Fiendish Thingy on 02.16.18 at 9:24 pm

Mission is just down the road from me in Maple Ridge; both burgs were the last “affordable” communities in the lower mainland, and both will ultimately be the hardest hit in the RE correction. I predict 50-60% peak-to-trough, maybe more in Mission.

Don’t believe me? I lived through two major RE crashes in the SF Bay Area; look up The stats on the towns of Stockton and Tracy, they are the Maple Ridge and Mission of the Bay Area, and were some of the hardest hit communities in the crash of 2008. Stockton actually declared bankruptcy, and they had Silicon Valley folks shlepping 2+ hours each way to work…

#102 VICTORIA TEA PARTY on 02.16.18 at 9:26 pm

MILLENNIALS: THE GENERATION THAT GOD FORGOT?

Good for that young Millennial lady and her Starbucks hopes and dreams.

Once she stuffs $14 bucks an hour in her designer jeans, it’s all good after that, right?

Or not.

This condo adventure has transported an innocent from Surrey to Mission. Hmm.

I don’t know whether that’s going upstairs or downstairs in the larger scheme of things.

Both places have their negatives. But we won’t be getting into that here now will we? The crime media reports tell the tales.

But the scenery is stunning, especially Mount Baker across from the Mighty Fraser. Just don’t go near the water during the annual flood season. Wicked and cruel.

Meanwhile, I must assume the writer, of that heart-shaped despatch, now knows the difference between “father”, which she wrote, and “farther” or “further” which she meant to scribble.

I also hope that if literacy was an impediment there was someone familiar with the English language, beyond the Twitter Space, who got her through the contract details and that she knows the new responsibilities upon which she has embarked to God knows where.

Ah, yes, God.

I think many Millennials have been persuaded by their elite educators that God is so “yesterday”, but that whiney self-absorption is the “real” truth and the way.

But if our young condo owner one day gets a sense of profound emptiness about the way her life is going, serving snobby yuppies, then maybe something important is missing.

She’ll have to figure out that one.

Good luck there.

#103 VICTORIA TEA PARTY on 02.16.18 at 9:26 pm

MILLENNIALS: THE GENERATION THAT GOD FORGOT?

Good for that young Millennial lady and her Starbucks hopes and dreams.

Once she stuffs $14 bucks an hour in her designer jeans, it’s all good after that, right?

Or not.

This condo adventure has transported an innocent from Surrey to Mission. Hmm.

I don’t know whether that’s going upstairs or downstairs in the larger scheme of things.

Both places have their negatives. But we won’t be getting into that here now will we? The crime media reports tell the tales.

But the scenery is stunning, especially Mount Baker across from the Mighty Fraser. Just don’t go near the water during the annual flood season. Wicked and cruel.

Meanwhile, I must assume the writer, of that heart-shaped despatch, now knows the difference between “father”, which she wrote, and “farther” or “further” which she meant to scribble.

I also hope that if literacy was an impediment there was someone familiar with the English language, beyond the Twitter Space, who got her through the contract details and that she knows the new responsibilities upon which she has embarked to God knows where.

Ah, yes, God.

I think many Millennials have been persuaded by their elite educators that God is so “yesterday”, but that whiney self-absorption is the “real” truth and the way.

But if our young condo owner one day gets a sense of profound emptiness about the way her life is going, serving snobby yuppies, then maybe something important is missing.

She’ll have to figure out that one.

Good luck there.

#104 Bobs Urunlce on 02.16.18 at 9:39 pm

Hey People of Toronto,

There’s no such thing as the, “Manhattanization of Toronto”.

https://www.thestar.com/news/city_hall/2018/02/09/city-to-strategize-on-how-to-stop-toronto-from-becoming-playground-for-the-rich.html

A bunch of tall, shoddily built, crappily designed, glassy boxes does not a Manhattan make. At best, Toronto is being Los Angeles-ified.

#105 My Big Sister Told Me on 02.16.18 at 9:39 pm

Heading out this weekend to help some relatives settle in to a special care home and carry out the plan in place for their final years. Everyone should be so lucky as to help someone do this. Nothing like seeing first hand the importance/benefits of properly planning for the future –
when you are the most vulnerable.

#106 oncebittwiceshy on 02.16.18 at 9:40 pm

Adam on 02.16.18 at 8:55 pm
“Prepare now for when it ends.”

How? Imagine what the bailout will look like.
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

It's not that hard to imagine. Just go back to 1981 when interest rates blew the market apart and home prices in B.C. dropped in half.

The bailout was eye opening. Everyone was forgiven their mortgage loans, nobody was foreclosed on and life was great for every home owner.

Oops, sorry, that was what people like you were saying about interest rates going too high…."How? Imagine what the bailout will look like .. if they keep raising rates."

Then reality sunk in and people were crushed as their homes were foreclosed on, marriages were broken and life sucked for indebted home owners.

Do you really believe that this government cares about you any more than any previous government. Get a grip or … just try and sell your "investment".

#107 Mark on 02.16.18 at 9:42 pm

“Renters do not have ownership rights over the suite they live in. When a renter’s home increases in value the renter enjoys zero benefit.”

That’s right, but Renters do not have the ‘benefit’ of decreasing or stagnant prices (as seen in Canada since 2013, earlier in some cities).

Meanwhile those who invest in assets that are actually earning and going up in value benefit from the appreciation of such.

“what do people who bought homes do now?”

They’ll suffer as they need to refinance into higher spreads. Their stock-owning friends will see their portfolios double, maybe even triple in the next 5 years, while they’re stuck in their stagnant RE investment accumulating little to no equity.

As it stands, those who bought RE 5 years ago have seen minimal to no equity formation on a typical mortgage as prices have largely stagnated on identical properties since the 2013 apex in prices.

#108 down_boy on 02.16.18 at 9:49 pm

I read through some of the comments and I will say, “Yes” if you like windrift off the Fraser, news, commuting news, and sitting on plot in a grid with a neon glow, head south. If you like rugged north with it’s trails, peaks, waterfalls, blazing garden exposure, fine dining, growing light industry boutiques, shoppes, and the caché of what is the west coast experience, cross that bridge.

#109 TheSecretCode on 02.16.18 at 10:01 pm

Garth, have at look at this – immediate release by AG Eby tonight:

The NDP government sent out a press release late Friday evening from Attorney General David Eby in response to a news report.

“Recent media reports of money laundering through real estate in British Columbia, including today’s Globe and Mail story, are very serious and deeply troubling. The nature of these allegations, that this money-laundering activity is actively influencing our real estate market and is connected to the sale of life-destroying fentanyl, underline the critical importance of addressing money laundering urgently and not ignoring it. This story confirms our government’s commitment to taking action to crack down on money laundering and criminal activity in B.C.

Governance by media headline. You elected these guys. Enjoy the consequences. – Garth

#110 TheSecretCode on 02.16.18 at 10:05 pm

What is that BC realtors?

You not liking this guy Peter German?

#111 ShawnG in TO on 02.16.18 at 10:06 pm

> #4 Bruce on 02.16.18 at 5:45 pm
> Who buys a property while they’re studying at uni?????
musically gifted millennial
the future is bright

#112 Bottoms_Up on 02.16.18 at 10:10 pm

Check the Tokyo housing market from the 1980s. People were forced to buy tiny condos 2 hours out of town for $400,000.

Guess how that ended up.

#113 Rexx Rock on 02.16.18 at 10:17 pm

First of all,politicians hate renters.They don’t pay property tax and contribute to the coffers.The politicians agenda is to make it as horribly possible having to rent instead of to buy.Old substandard rental units,turnover,no tenant rights and the list goes on and on.Its the goverments job to make us buy and feed the machine,end of story.

#114 tccontrarian on 02.16.18 at 10:28 pm

#55 Chaddywack on 02.16.18 at 7:11 pm

” Trading Surrey for Mission is like trading herpes for syphilis.”
======================================
LOL…..Made my day. Thanks for the great sense of humour!

TCC

#115 Old Ron the Realtor on 02.16.18 at 10:29 pm

I liked the barista’s story Garth. I wish them all the best.

I recall many years ago, I sold a guy named Ramrati a shack out in south Scarborough, I mean it was rough. I can’t use his last name but it was about 35 letters long and he had wonderful stout wife and about a half dozen kids. Still don’t know how they fit into that house.

He is noteworthy, because of the many hundreds of properties I have sold over the years, his had the highest GDSR ( Gross Debt Service Ratio) I have ever worked with. Something north of 50% of gross income went into his Principal Interest and Taxes. There was no way I could get him a bank mortgage, so I think I VTB-ed (That stands for Vendor-Take-Back kids) two mortgages, and flogged the paper to one of the “Boys” for about 93 cents on the dollar. But that is not the point.

The point is. He didn’t own a car, and he walked to work to save the TTC fare. He worked in a Bubble Gum factory, and after work he would wait around for no shows for the night shift. If there was a shift available , he worked another 8 hours, walked home, slept, then did it again.

He repeated that formula for years and years. Eventually paying their little shack off. Kids grew up, went to college, became professionals, and moved away, and Ramrati and his stout wife are still there.

It is a nest egg now, but they really don’t care. He was ready to quit work about the time the bubble gum factory closed, and they always seemed to have enough. Still modest, he now proudly drives a 6 year old Corolla.

Hard work, deferred pleasure, and minimalism. What a concept.

What a sad-sounding life. – Garth

#116 YVR on 02.16.18 at 10:29 pm

Please keep your dogs in visual range this week if in Vancouver area. Most SPCAs have also got adopteees for most of their dogs.

#117 Terry on 02.16.18 at 10:36 pm

Patrick Brown back in the race! Never stop fighting Mr. Brown. If the truth is on your side ………….. you will be victorious!

Good Job !

#118 For those about to flop... on 02.16.18 at 10:45 pm

It is a nest egg now, but they really don’t care. He was ready to quit work about the time the bubble gum factory closed, and they always seemed to have enough. Still modest, he now proudly drives a 6 year old Corolla.

Hard work, deferred pleasure, and minimalism. What a concept.

What a sad-sounding life. – Garth

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

This guy was never in danger.

He worked at a bubble gum factory and would have known when things were about to pop…

M43BC

#119 Sam the Sham on 02.16.18 at 10:50 pm

I’m having trouble grasping the concept of the “an unencumbered renter”. How is being require to pay rent every month for the rest of your life being “unencumbered”. This rent is likely around $2,000 a month for a one bedroom pad in YVR or GTA.
It reminds me of the sequel in the “Good Fellas” movie: “Fuck you, pay me”

https://www.youtube.com/watch?v=bR68F6_4IY4

#120 GSEllievater on 02.16.18 at 10:51 pm

The one thing this blog never points out…ACTUAL cost of ownership vs. Rent.
A 400k mortgage only costs the buyer $750-900 a month in interest (at current rates). At a 400k mortgage this is CONSIDERABLY more floor space than what a $900 a month rent will get you.

Sure, owning means upkeep. But it also means customization. So when painting needs to be done, you can paint to your preference, not landlord beige! Let’s say you budget another $300 a month for upkeep and a $150 a month for taxes and the $300 goes into an investment account until it needs to be called upon for whatever around the house…

In this case, all-in, you are likely a ton better off than renting and trying to save whatever is leftover after rent. Yeah, million dollar McMansions are not realistic, I get it but there are plenty of homes available under $600k that equate to a better deal than renting. Oh right, but market could crash! And your bank could go belly up too…then what!?

#121 Boit Ruhnolds on 02.16.18 at 10:57 pm

#18 Born and raised in mission on 02.16.18 at 6:04 pm

Hey Garth, you ever been to Mission?
Bc is the best province in Canada. You know that deep down. Ontario and Quebec are shit holes
Come to mission I will show you around and you can stay in my air bnb for free and it’s dog friendly
Samuel”

I heard it was BYOB there….bring your own banjo!

#122 Boit Ruhnolds on 02.16.18 at 10:59 pm

Prepare now for when it ends.-Garth”

Garth that could have come right from Sun Tzu, in time of peace prepare for war, in time of war prepare for peace…

BTW why do most of your anecdotes involves Starbucks or Tim Hortons workers….

#123 TheSecretCode on 02.16.18 at 11:04 pm

Rumors are swirling that the FBI and Washington are actively involved in behind the scenes on this BC money laundering problem that appears to be financially massive and interconnected in the financial systems globally…

…what is being shared publicly is just the tip of the iceberg.

#124 Old Ron the Realtor on 02.16.18 at 11:05 pm

Garth–He was one of the happiest people I have ever known, particularly when he was bouncing his grandkids on his knee.

Old Ron’s Dad gave me lots of advice, most of which I forgot, but one of the nuggets that stuck with me was the following :

“Get what you want and pay the price”

Ramrati got what he wanted. Not everyone can say that.

#125 Tulips on 02.16.18 at 11:07 pm

#106 Mark on 02.16.18 at 9:42 pm
“Renters do not have ownership rights over the suite they live in. When a renter’s home increases in value the renter enjoys zero benefit.”

That’s right, but Renters do not have the ‘benefit’ of decreasing or stagnant prices (as seen in Canada since 2013, earlier in some cities).
——————————————————–
Ummm, not seen yet in other cities. The price of the average detched in Langley in 2013 was around 600k. Today, it’s 1M. Not exactly stagnant.

#126 Cookie Cutter on 02.16.18 at 11:07 pm

The house horny flock to Milton

http://forum.yorkbbs.ca/property/4661431.aspx

#127 Langley on 02.16.18 at 11:15 pm

Real estate in Langley townhomes seems to be going bananas. Sold mine at the end of December, 2 units now sold for more than 10% more.

Where’s the money coming from?

#128 IHCTD9 on 02.16.18 at 11:29 pm

#19 The boonies on 02.16.18 at 6:07 pm
Isn’t this what one of our regular posters is always advising the youngsters to do? Move to boonies and buy a cheap house
—————

Yep, plus work there too. Commuting sucks.

#129 TurnerNation on 02.16.18 at 11:31 pm

Last year’s Toronto expo with Baloney Robbins and Bullsht dog marked a top. Now they are doing it again.

https://realestatewealthexpo.com/toronto-2018

#130 Randy on 02.16.18 at 11:33 pm

Well, it is said that the two happiest days of a condo owners life are the day they buy a condo and the day they sell it. … ….

….or was it a boat ?

#131 Asterix1 on 02.16.18 at 11:38 pm

#112 Rexx Rock on 02.16.18 at 10:17 pm
First of all,politicians hate renters.They don’t pay property tax and contribute to the coffers.
________________________________________

Hilarious comment! Property tax is a joke compared to your personal income tax.

I guess I was not paying that 3,000$ to 4,000$ property tax when I was renting.

Yet, I was pumping around 25,000$ in personal income tax to those coffers that you speak off!

#132 TurnerNation on 02.16.18 at 11:52 pm

The burger at The Keg is up to $18 now from $16

Oh yea MF I took your advice to keep spending went out till wee hours several places and spent 3 figures. There ya go. Taxi drivers, bartenders and $tr!pper$ rejoice ;)

Footage was captured (I am the twerk-ee)

http://host3.torontonightclub.com/site/2018/01/22/old-go-clubbing/

M42ON

#133 Paul on 02.16.18 at 11:59 pm

#99 Yanniel on 02.16.18 at 9:19 pm
Garth, since we struggle so much to put dollars away for savings and investing, would you consider writing a post about budgeting? Thanks.
-———————————————————————————————
Here is a budget spend 30% less than what you make.
The end!

#134 SoggyShorts on 02.17.18 at 12:27 am

#86 TurnerNation on 02.16.18 at 8:42 pm

Fixed income: $14/hour
Variable and always rising: Taxes, Condo Fees, home insurance. And interest rates if not fixed.

*********************************
This is why my response on hearing about the stress test was “Wait…that hasn’t always been a thing?”
I find it absolutely nuts that anyone would lend anyone the max that they can afford. Rolling the dice that nothing bad will ever happen from any direction? Crazy.

#135 SoggyShorts on 02.17.18 at 12:35 am

#114 Old Ron the Realtor on 02.16.18 at 10:29 pm
I liked the barista’s story Garth. I wish them all the best.
I recall many years ago, I sold a guy named Ramrati a shack

****************************
Interesting. My first thought while reading was that they don’t make hard workers like that anymore.
The next was that it is strange to admire someone, but at the same time with every fiber of my being to be thankful I’m not them.
I have to wonder, if he hadn’t been shackled to that mortgage which was possibly in the double digits for interest, could he have worked less? Maybe spent more time with his 6 kids?
Did the piece of paper that sucked more than 50% of his gross earnings improve his life compared to renting?

On its face it sounds like you really worked hard to help out a guy who needed a break, but instead you may have broken him.

#136 Karma on 02.17.18 at 12:44 am

#112 Rexx Rock on 02.16.18 at 10:17 pm
“First of all,politicians hate renters.They don’t pay property tax and contribute to the coffers.The politicians agenda is to make it as horribly possible having to rent instead of to buy.Old substandard rental units,turnover,no tenant rights and the list goes on and on.Its the goverments job to make us buy and feed the machine,end of story.”

Of course renters pay property taxes. The rent goes to cover the costs of the landlord and the remaining above all expenses, including property tax, is the income to the landlord. In commercial properties, the vast majority of leases are explicit in that property taxes are the responsibility of the tenant, in proportion to the area used to the overall building.

#137 Watchful in Victoria on 02.17.18 at 12:49 am

I have said for the last few years that Vancouver looks like Miami in the 1980’s. There is no way that criminal behavior isn’t playing a part. An acquaintance of mine in Victoria just had a phone call from a major burgundy bank saying they didn’t want his dirty money after his Parent was put on trial for accepting bribes in another country. Dad wired him some money for a condo purchase and the Canadian Imperial Bank Of Hipocracy said they wanted him to take his business elsewhere. Why all of a sudden are the banks pretending they haven’t been jamming money down buyers throats for years, handing out HELOCS to people with no money down, and generally allowing people way more than they can realistically afford.

#138 Stan Brooks on 02.17.18 at 12:53 am

Governance by media headline. You elected these guys. Enjoy the consequences. – Garth

——————-

Isn’t this what every liberal is doing as well? photo ops and selfies?

……………………………………..

#103 Bobs Urunlce on 02.16.18 at 9:39 pm
Hey People of Toronto,

There’s no such thing as the, “Manhattanization of Toronto”.

——————————–

Of course there is not such thing.
But don;t waste your words on Torontonians.

Ever watched the movie ‘the dumb and the dumber’?

There are Canadian actors in it for a reason (well, born in Newmarket, close by)

#139 Stan Brooks on 02.17.18 at 1:04 am

#114 Old Ron the Realtor on 02.16.18 at 10:29 pm

That is the dumbest story I have ever heard.

It would make sense if it was 50 years ago/to pay the house.

But the story of paying the house, sending the (half dozen) kids to college and retiring these days (?!?) with wife not working while saving nothing (obviously working in a bubble gum factory with max/high ratio mortgage)? Please, this insults even the brainfrozen Canadian intelligence.

I actually know a doctors who did the above for 2 kids and still can’t retire?

The reason that this country accelerates fast down the toilet is exactly this: thieves convincing you how sacrifice is good for you, not for their profits.

‘Hard work, deferred pleasure, and minimalism. What a concept.’

To end the thieves you need to exterminate the gullible.

We are close to that point.

#140 Raging Ranter on 02.17.18 at 1:50 am

Old Ron, that story makes me want to drink hemlock. And that is the anecdote you, an experienced realtor, chose as representing success in Toronto real estate? You had better hope it never goes viral; it will single-handedly crash the GTA market.

#141 mousey on 02.17.18 at 1:58 am

Yep, I’m with the barista and her squeeze. All in with the hope and dreams. They are young, energetic…and have lots of time to recover from the potential financial misstep, if that is what purchasing in Mission is.

#142 morrey on 02.17.18 at 2:00 am

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

Everything I write on here can be verified.

That has certain people on here terrified…

M43BC
////////////////////////////

No. your posts are inane and none of your links lead to anything of use. what a bore. how do you spell MEANINGLESS

#143 Raging Ranter on 02.17.18 at 2:00 am

Hey Old Ron, you should print that story on your brochures.

“Now Ramrati and his wife are retired in the same beat up Scarborough shack, and he still has enough left over to make payments on his six year old Corolla. This could be you. Let me help you make it happen.”

HAHAHAHAHAHA!

#144 Joe2.0 on 02.17.18 at 2:26 am

Analogy time.
Drugs = House
Drug dealer =Bank
Get you hooked then up the price.
Again…

#145 Smoking Man on 02.17.18 at 2:30 am

Vegas bitches and hounds. Only took 7 hours.gps said 4. I almost smashed my phone to smitarings.

I attempted to never post here again because the phycos and lefy lunatics are circling The gf wagon. Thretining Garth who I got a man crush on.

Not cause he’s cute. But because he’s the man who flipped the bird to Harpo.

I will try again tomorrow not post. But I need help.

Garth ban me man. For your own good.

These people bitching about me are getting crazier.

I’m weak I post after you know who visits….

Ban me you bastard. Do it, be a man. Christ you have no idea what you are dealing with if you don’t

Pure metal case evil.

#146 paulo on 02.17.18 at 2:38 am

#114 Old Ron.

yes this sounds like a sad life,but i am guessing ramrati immigrated from 3rd world country and arrived with the shirt on his back. all things in life are relative,he likely enjoyed a higher standard of living than he would have back home,managed to put his kids through college, and has the shack to secure retirement hopefully.typical first generation immigrant story,made the best of what he had and improved his and his family’s life and future. this country was built by such people.

#147 Dolce Vita on 02.17.18 at 2:39 am

A Starbucks server studying music education buys a condo…draining all personal resources and with her man who she hasn’t been dating more than a year…

She should have watched “The Big Short”.

You know, the part where strippers with 3 properties and the same or more Mortgage Brokers that could not get a post-crash job as Walmart Greeters [or Starbucks “baristas”] were shocked that:

History repeats and that RE does indeed go down…sometimes spectacularly.

If nothing else before YVR RE crashes this year, we will have laugh out loud epitaphs like today’s…yet again, thanks for a good laugh with my morning “espresso longo” Garth (I read in between the lines that you too can be sardonic…nice).

#148 Dolce Vita on 02.17.18 at 2:57 am

#69 Yorkville Renter

2) Financial Literacy MUST be taught at school… same goes for critical thinking skills.

Having taught many of our current crop of Moisters as you prescribe, here is something you learn quickly:

a) You can lead them to the watering trough, but you can’t make them drink.

b) The average IQ of humanity = 100 meaning that half are below that measure (try marking their “work”).

If I read another person talking about teaching “critical thinking” skills, I’m going to scream out loud.

Critical thinking is acquired as life experiences, after decades of success & failure, and not from some book or someone “teaching” you this, including me and my short stint teaching at College and University (Mr. Put something back into society before retiring).

Try doing what you prescribe for at least a decade and get back to me about the efficacy of what you suggest.

#149 Millmech on 02.17.18 at 3:23 am

114
Thanks for the lovely story of a man totally indebted to his house that he tries to work 16 hrs a day 7 days a week.Imagine if he was a renter and got to spend all those extra shifts being a father to his children and a husband to his wife,experiences that he will never get back.Those times building memories with family are priceless,no amount of money is worth it!

#150 dr. talc on 02.17.18 at 4:20 am

this video is a comedy documentary about a west coast protest. some Canadians are so brainwashed they have made signs and walk around repeating things from television

https://www.youtube.com/watch?v=23Ou32ePS0s

#151 Karma on 02.17.18 at 5:20 am

#7 Millenial-falcon on 02.16.18 at 5:49 pm
“Prices won’t budge to the downside , Canadians don’t sell at a loss or default”

Perhaps… but the borrowers in this story did…

https://www.theglobeandmail.com/news/investigations/real-estate-money-laundering-and-drugs/article38004840/

#152 under the radar on 02.17.18 at 5:21 am

My 25 year old son’s 600 sq ft condo in Etobicoke sold yesterday after 6 days on the market for full list.
He nets , after tax and all expenses , 150k on a purchase price of 300k in less than 3 years. I suspect buyer is going to rent out the unit . I am unable to see how these boxes keep climbing in value………yet they do. By the way, had this unit been in the city core he would have doubled his money. No great reckoning unless rates move appreciably higher and fast.

#153 #3 of the Majestic 12 on 02.17.18 at 6:28 am

#102
More rightly, THE GENERATION THAT FORGOT GOD.

And you are correct, the worship of self is a poor and empty substitute.

#154 Big Daddy on 02.17.18 at 7:11 am

Wow….Mission….crowded with crackheads riding bicycles around town and breaking into cars……yeah….I wanna be there more often.

#155 Stan Brooks on 02.17.18 at 7:38 am

#145 paulo on 02.17.18 at 2:38 am
#114 Old Ron.

yes this sounds like a sad life,but i am guessing ramrati immigrated from 3rd world country and arrived with the shirt on his back. all things in life are relative,he likely enjoyed a higher standard of living than he would have back home,managed to put his kids through college, and has the shack to secure retirement hopefully.typical first generation immigrant story,made the best of what he had and improved his and his family’s life and future. this country was built by such people.

——————————-

If you did not realize that this is a made up story, then you are really living in a parallel universe.

Third world country?

Which planet you are living on?

People in such countries/like Turkey live much better and can afford 5 kids while Canadians have none.

Oh, I forgot, their purpose in life is to serve the mortgage, live to work not work to live.

So we need constant influx of immigrants so we can sell their cheap labour to our neighbors south making Canadian oligopolies rich.

Now there is a problem that the neighbors south realize this and are going to cut us off while we have no candidates from ‘3rd world countries’.

How many immigrants from China have you seen coming here in the last year or 2. Or educated Indians?

The flow is out of this place, both for human and financial capital.
Live under poloz, T2 and wild bill? Really?

#156 Stan Brooks on 02.17.18 at 7:43 am

#151 under the radar on 02.17.18 at 5:21 am

So you are saying 500 k (450 net of taxes and fees) for 600 sqft in sh..ty Etobicoke?

Really?

This is like 5 times the price of a nice brick apartment in Spain or 3 times the price of nice villa close to the beach there.

Hahahaha.
That made my day.

Etobicoke?

What a joke this country has become.

#157 Stan Brooks on 02.17.18 at 7:45 am

As I said, move your money out of this place before the collapse.

And mind these registered plans. The money in it is not yours yet.

#158 Stan Brooks on 02.17.18 at 7:50 am

#151 under the radar on 02.17.18 at 5:21 am

Here is similar unit for sale in North York, much better place for 400 k.

https://www.realtor.ca/Residential/Single-Family/19067528/1901–3-PEMBERTON-AVE-Toronto-Ontario-M2M4M1-Newtonbrook-East

Nice try.

#159 Rooster on 02.17.18 at 8:17 am

#138 Stan Brooks on 02.17.18 at 1:04 am

#114 Old Ron the Realtor on 02.16.18 at 10:29 pm

To end the thieves you need to exterminate the gullible.
We are close to that point
††††††

Stan, just remember to leave a note.

#160 Disagree on 02.17.18 at 8:22 am

I must disagree about some of the comments of the immigrant that bought a house. Chances are this was his dream. It might not be yours or mine… but that’s what makes the world go round. Some people have kids… some don’t. I think everyone is entilited to choose how they want to live. This man wanted some sort of security and he was willing to work for it without anyone’s help on this blog. It may sound sad… all those hours he worked. But a lot of people waste just as much time with other unproductive things. I respect it.

He wasted a life making bubble gum. Get a grip. – Garth

#161 Ramrati on 02.17.18 at 8:28 am

Before I came to Canada, the village shaman told me the secret to eternal life:

“Marry a stout woman, buy a shack in the coldest part of the world, and raise pigs.”

“Will I live forever?” I asked.

He said “No, but it will seem like forever.”

#162 Ed. on 02.17.18 at 8:39 am

#102 VICTORIA TEA PARTY on 02.16.18 at 9:26 pm

MILLENNIALS: THE GENERATION THAT GOD FORGOT?

Meanwhile, I must assume the writer, of that heart-shaped despatch, now knows the difference between “father”, which she wrote, and “farther” or “further” which she meant to scribble…..

Ah, yes, God.
_——_———–

Did you mean to write “dispatch” ?

Commas are helpful for the reader when used correctly, but not when used incorrectly.

Did you meant to write “DOG” ?

#163 maxx on 02.17.18 at 8:45 am

#7 Millenial-falcon on 02.16.18 at 5:49 pm

“Prices won’t budge to the downside , Canadians don’t sell at a loss or default”

Yes……that’s what makes them so smart. They wait until the house of cards falls apart. Then bitch and moan. Waaaaah!

Snap (up a property, preferably in a bidding war for extra smugness)…….crackle (cracks appear as interest rates and quality jobs move in opposite directions)…..and pop! Fubared finances. Possibly for life.

I’ve seen many idiot sellers watch values melt over 50% whilst refusing to budge. Morons, one and all as the process took years to unfold…..right in front of their eyes. It’s like they went from arrogance to deer-in-the-headlights without stopping to reason. Stunned peckers.

Canuckleheads are addicted to re at the DNA level. Gubbmint and realtards have killed the goose that laid the golden egg. The only way out of this mess is to restore the value of money.

Sorry. (not!)

#164 School of Hard Knocks on 02.17.18 at 8:59 am

#147 Dolce Vita on 02.17.18 at 2:57 am

#69 Yorkville Renter

2) Financial Literacy MUST be taught at school… same goes for critical thinking skills.

Having taught many of our current crop of Moisters as you prescribe, here is something you learn quickly:

a) You can lead them to the watering trough, but you can’t make them drink.

b) The average IQ of humanity = 100 meaning that half are below that measure (try marking their “work”).

Critical thinking is acquired as life experiences, after decades of success & failure, and not from some book or someone “teaching” you this, including me and my short stint teaching at College and University.

***********
Not all College and University students are geniuses, but their average IQ is higher than the average of humanity.

Critical thinking is an inherent human trait that prevents us from returning to the same dry watering hole year after year.

Maybe your lectures were too dry?

#165 GoatMan on 02.17.18 at 9:11 am

Shady lenders with drug-crime connections are using B.C. real estate
Read this https://www.theglobeandmail.com/news/investigations/real-estate-money-laundering-and-drugs/article38004840/
note the names.

Arm chair critters (yes, critters) can always ‘critter’ about anything and everything

#166 Pillboy on 02.17.18 at 9:16 am

I liked the barista’s story Garth. I wish them all the best.

I recall many years ago, I sold a guy named Ramrati a shack out in south Scarborough, I mean it was rough. I can’t use his last name but it was about 35 letters long and he had wonderful stout wife and about a half dozen kids. Still don’t know how they fit into that house.

He is noteworthy, because of the many hundreds of properties I have sold over the years, his had the highest GDSR ( Gross Debt Service Ratio) I have ever worked with. Something north of 50% of gross income went into his Principal Interest and Taxes. There was no way I could get him a bank mortgage, so I think I VTB-ed (That stands for Vendor-Take-Back kids) two mortgages, and flogged the paper to one of the “Boys” for about 93 cents on the dollar. But that is not the point.

The point is. He didn’t own a car, and he walked to work to save the TTC fare. He worked in a Bubble Gum factory, and after work he would wait around for no shows for the night shift. If there was a shift available , he worked another 8 hours, walked home, slept, then did it again.

He repeated that formula for years and years. Eventually paying their little shack off. Kids grew up, went to college, became professionals, and moved away, and Ramrati and his stout wife are still there.

It is a nest egg now, but they really don’t care. He was ready to quit work about the time the bubble gum factory closed, and they always seemed to have enough. Still modest, he now proudly drives a 6 year old Corolla.

Hard work, deferred pleasure, and minimalism. What a concept.

What a sad-sounding life. – Garth

—————————————-

Sad is a matter of perspective. I bet there are a lot of similar immigrant stories about persistence and hardwork.

My parents came from Hong Kong to Canada without much. Relatives commented how sad it was that my parents’ house didn’t have much furniture and how sad that was. Here’s a little dirty secret, you know the “Made in Canada” clothing? It was people like my mom sewing it for 50c a piece as a “contractor” that made it possible. My dad would toil at a machine shop in the boiling summer heat just so that my siblings and I would be able to get a solid footing. Their encouragement to us when school got tough was to remember that, “It’s better to have a tough time now for a short while, than to have a tough time for the rest of your life”.

I took that to heart and socked away all the money I had from working retail while in school. It’s the Lunar New Year, and we have a full table of food. My parents can afford a lot of luxuries now, living in the same house, and are retired. I splurged on a recent trip to Vegas for them, and they were happy, but didn’t find the opulence necessary. They constantly remind us that “If you’re never satisfied with what you’ve got, you’re never happy”.

#167 crowdedelevatorfartz on 02.17.18 at 9:30 am

@#141 morrey
“how do you spell MEANINGLESS”
+++++++

Well, apparently irony escapes you.

Flops posts are informative, verifiable, timely and useful.

Yours?
Not so much.

#168 Hamsterwheelie on 02.17.18 at 9:43 am

Renting…if you can find a place that has no bedbugs, if you can find a place that you won’t get kicked out of after a few years, if you don’t mind the other tenants, if its well maintained, then you can call that freedom if you want.
Buying a house at 10% down with the possibility of a 1000% return on your downpayment, do what you want with the place including becoming handy, fix it up and get paid when you sell for that work while living in a nicer place (no one does that for a rental) Buying means ypu essentially have a forced savings situation, buying means you can rent out part of the house w Airbnb or a basement apt if you need to, buying means you have access to a Heloc to pay off a high interest item like the odd credit card whopper or another house purchase.
Buying also means you should be smart and buy somewhere close to the core or major transit if you want to rent out, buying houses…buy low, wait until the time is right and sell high.
Sure – I was a renter for many years, shared a house with 6 people in downtown TO and it was a great time of life, always knew I would buy if the right place came along – brick, 2 storey, garage, parking, income potential, close to restos, galleries, jobs, culture – boom, found it, bought 4.
Opportunity can be found but its unlikely in a suburb of crapshacks in the middle of nowhere and same goes for a condo nearly anywhere – there’s always a newer one with pre-build pricing – run the numbers on condos and unless its in a historic building or a special/unusual/unique development it does not work to turn the kind of profits,with actual land, a sfd does. Thats my experience anyway. On the lookout for the next great house to buy because I love the challenge and the sooty brick dust – that must be the city gal in me.

To summarize: renters have bedbugs. Owners make 1,000% returns returns. Did I get that right? – Garth

#169 Penny Henny on 02.17.18 at 9:45 am

#114 Old Ron the Realtor on 02.16.18 at 10:29 pm
Hard work, deferred pleasure, and minimalism. What a concept.

What a sad-sounding life. – Garth

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

Many an immigrants dream.
Sacrifice so the kids can have a stable life, go to school, study hard and be professionals.
His place is paid for, he is going to be no burden to his kids. Looking back I bet you he wouldn’t do it any different.

If all people do is sacrifice for their offspring we don’t exactly move ahead as a society, do we? – Garth

#170 Leo Trollstoy on 02.17.18 at 9:54 am

#124 Tulips on 02.16.18 at 11:07 pm
The price of the average detched in Langley in 2013 was around 600k. Today, it’s 1M.

Canadians have enjoyed rising real estate prices for a long time, especially in the 5 years from 2012 to 2017 that they don’t know that things can be different

Toronto and Vancouver have been especially hot up until the spring of 2017

They’ll hang on until the payments become too painful … we’ll see what happens then…

#171 DELETED on 02.17.18 at 10:05 am

DELETED

#172 Serious Question on 02.17.18 at 10:07 am

Hi Garth,

I have a very serious question.

If you have minimal skills and no a financial assets, is declaring bankruptcy so bad?

The common situation I have seen a few times, described perfectly in your post.

A near minimum wage worker (likely part time, a barista, a secretary, janitor, etc.) and their spouse (who has a full time job, perhaps ~45K/year) are able to get just barely enough for a down payment.

I’ve personally seen a few cases where they would buy a 500K house, and we thought they were absolute nut jobs.

Guess what, that was 10 years ago and their house is now worth 1.5m.

#173 crowdedelevatorfartz on 02.17.18 at 10:08 am

@#121 Boit
“BTW why do most of your anecdotes involves Starbucks or Tim Hortons workers….”
++++++

They pass the smell test.
No elevators

#174 Dan on 02.17.18 at 10:16 am

Nothing will change in B.C.. too many corrupt politicians and corrupt real estate mafia types and the locals don’t want anything to hurt there hard earned equity

– by hard earned I mean, going to bank getting loan and then watching your property double every 3 years… like criminal Christy Clark said- in so many words..

We can’t change Anything because we can’t have real estate values go down- nothing to see here- lies, cheating, fraud, money laundering , selling out overseas, shadow flipping and on and on, if you are not in on it- sorry, you lose.

#175 crowdedelevatorfartz on 02.17.18 at 10:44 am

@#163 School of High Debtload
“Not all College and University students are geniuses, but their average IQ is higher than the average of humanity.”
++++++

Well, If I had to spend a year on a desert island with either an uneducated farmer or a newly graduated university student….I know it wouldnt be the student.

Because I’d be doing all the work while they endlessly prattled on about “synergies and efficiencies”, “empowerment”, “social engagement”, on and on and on ad nauseum until I announced,
“The latrine pit is full, go empty it.”

#176 K. McGarrett on 02.17.18 at 10:46 am

About investing. Some/many have been burned on the stock market (Nortel and others) and have long memories. Some have paid load fees, exit fees, management fees and not made the promised returns. Some are tired of paying tax (ie. capital gains, interest income) on money they have already paid tax on. Some find being landlord not so much fun and again, any profits are added to taxable income. Some have tried RRSP’s and were surprised to discover 30% withheld by the bank (without any interest paid) for over a year based on the assumption that you wouldn’t pay the tax on it when the day of reckoning arrived. Some have found their tax bracket is the same after retirement so that promised benefit hasn’t materialized. Some have waited weeks/months for that same mutual fund (In Toronto) to be sold and paid out.

Some have seen family members pay full cost in government retirement facilities because they were thrifty and saved while the resident in the next bed pays nothing because they saved nothing. Some have found that means tested benefits punish them for saving for retirement.

That’s enough for now.

Educate yourself. Stop being a victim. – Garth

#177 Dare you to prove I'm wrong on 02.17.18 at 10:52 am

DELETED

#178 Midnights on 02.17.18 at 10:59 am

“There Is An Acute Crisis Coming”: Apartment Developer

https://www.zerohedge.com/news/2018-02-17/there-acute-crisis-coming-apartment-developer

#179 Westcdn on 02.17.18 at 11:00 am

I figure I earned wages/salary less than $2 million notional over my working “career”. Thus, I have a hard time getting my mind around a million for a house. Fortunately, my former wife did better – we have a story if you want to hear it.

I went to see my latest granddaughter. I joked to my former that we nearing our tenth anniversary of separation – she likes me on a reduced basis. She favours gay people and is a feminist. I have no problem with that but she still wants me to change – Jesus. We haven’t remarried. I suppose it is mutual respect. Anyhow, having commitment to a better future matters – love is intangible but I do feel boring compared to other peoplekind.

My daughters tease me and I give them free passes to criticize. I can say at the end of the day, they do make me stronger. Recovering from an old failure, a toadie blocking my way said “you know enough to be dangerous”. The statement actually helped to heal my pride. I will not stop trying for better.

#180 Guy in Calgary on 02.17.18 at 11:14 am

Hey Garth,

Out of curiosity where did you see that the majority of those that use HBP are not paying them back? So people are just paying all the taxes instead? SMH

That’s what the stats say. It’s cheaper for them to include a small amount in taxable income than actually find the money to repay into their plans. House poor. – Garth

#181 chopstix on 02.17.18 at 11:19 am

DELETED

#182 Catalyst on 02.17.18 at 11:27 am

90 mins commute each way? Ouch. Get back to us in a year and either 1) you will have switched jobs or 2) you will be feeling miserable. Lets hope for #1. As someone who has an 8 minute ‘commute’ I wouldn’t trade it for 5k sqft 90 mins away.

#183 Guy in Calgary on 02.17.18 at 11:32 am

#79 TheSecretCode on 02.16.18 at 8:12 pm
How about some focus on CALGARY….it is a metro, they have universities, and yes there are jobs (even though slammed by the oil downturn).

I just did a count: 1,102 SFD’s listed right now in Calgary sub 500K

Insanely low prices on SFD’s, lots in the 300k…are you kidding me? Any neighborhood you want. Nice modern 3000sqft+ SFDs 400-500k…hundreds of them listed right now.

Calgary is a BUY if wanting to put roots down…the rental vacancy still very high so investment into rentals not lucrative = those buying might actually be buying to live in it, imagine that?

________________________________________

SSHH we are trying to keep this a secret. Don’t want people ruining what we have going on here :)

#184 VICTORIA TEA PARTY on 02.17.18 at 11:36 am

#161 Ed.

I wrote what I meant and meant what I wrote.

“Despatch” was a written military communcation, for exmple, that would have been sent from WW1 trenches to field HQ.

The word “dispatch” is usually employed when one person sends another person to do something. That could include you, for example, being sent by a nearest and dearest to go and buy a multicoloured hot water bottle on a dark and storm night.

Commas are in their correct places.

God is good.

#185 Damifino on 02.17.18 at 11:45 am

#175 K. McGarrett

Some are tired of paying tax (ie. capital gains, interest income) on money they have already paid tax on.
————————————

Huh? Are you suggesting capital gain and interest income should be tax free because the invested money that spawned it was also taxed at the time it was earned?

#186 For those about to flop... on 02.17.18 at 11:55 am

crowdedelevatorfartz on 02.17.18 at 9:30 am
@#141 morrey
“how do you spell MEANINGLESS”
+++++++

Well, apparently irony escapes you.

Flops posts are informative, verifiable, timely and useful.

Yours?
Not so much.

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

Thanks Crowdie.

That guy has been trying to shut me down for a while.

I will make a prediction.

He will fail…

M43BC

#187 Damifino on 02.17.18 at 11:55 am

#167 Hamsterwheelie on

Renting…if you can find a place that has no bedbugs, if you can find a place that you won’t get kicked out of after a few years, if you don’t mind the other tenants, if its well maintained, then you can call that freedom if you want.
—————————————–

That’s what I do have, and yes, I call it freedom.

#188 joblo on 02.17.18 at 12:04 pm

#160 Ramrati on 02.17.18 at 8:28 am

FAH!

#189 Dare you to prove I'm wrong on 02.17.18 at 12:08 pm

DELETED

#190 Screwed Canadian Millenial on 02.17.18 at 12:11 pm

Pretty sad, all these commenters making fun of this young Screwed Canadian Millennial just trying to get by in this sh*thole country as best she can. Not like it’s easy. You guys screwed things up pretty bad for us. As if a 1.5 hour commute is only a millennial thing. Doesn’t Garth drive into the Bay Street of Thieves all the way out from the hinterlands where people, dare I say it, vote Conservative. It’s a pretty common thing all over the GTA that people drive into Toronto from way out yonder. The Barrie to Toronto commute is becoming more and more common. Geez I live in Toronto, don’t even have a car anymore, but driving on the 401 is a goddamn nightmare disaster and it only gets worse every year. Let’s face it, living in this country is a gigantic waste of time that sucks the life out of you. Seems like half the commenters here don’t even live in Canada. Lucky bastards.

A shift supervisor at Starbucks in BC, by the way, earns just over $14 an hour, or about $29,000 a year (if lucky enough to work F/T) – Garth

——-

Wow.. almost like the job market in this country is a total disaster. Not just for her. For millions of Canadians, and especially new immigrants.

How did we ever get to this point – Garth

——

1 word.

You guessed it.

BOOMERS

#191 Stone on 02.17.18 at 12:26 pm

#114 Old Ron the Realtor on 02.16.18 at 10:29 pm
I liked the barista’s story Garth. I wish them all the best.

I recall many years ago, I sold a guy named Ramrati a shack out in south Scarborough, I mean it was rough. I can’t use his last name but it was about 35 letters long and he had wonderful stout wife and about a half dozen kids. Still don’t know how they fit into that house.

He is noteworthy, because of the many hundreds of properties I have sold over the years, his had the highest GDSR ( Gross Debt Service Ratio) I have ever worked with. Something north of 50% of gross income went into his Principal Interest and Taxes. There was no way I could get him a bank mortgage, so I think I VTB-ed (That stands for Vendor-Take-Back kids) two mortgages, and flogged the paper to one of the “Boys” for about 93 cents on the dollar. But that is not the point.

The point is. He didn’t own a car, and he walked to work to save the TTC fare. He worked in a Bubble Gum factory, and after work he would wait around for no shows for the night shift. If there was a shift available , he worked another 8 hours, walked home, slept, then did it again.

He repeated that formula for years and years. Eventually paying their little shack off. Kids grew up, went to college, became professionals, and moved away, and Ramrati and his stout wife are still there.

It is a nest egg now, but they really don’t care. He was ready to quit work about the time the bubble gum factory closed, and they always seemed to have enough. Still modest, he now proudly drives a 6 year old Corolla.

Hard work, deferred pleasure, and minimalism. What a concept.

What a sad-sounding life. – Garth

——-

What wasted potential. No thank you. That husk of a life is not worthwhile. You didn’t do him a service. Indentured servitude more like it.

#192 crowdedelevatorfartz on 02.17.18 at 12:30 pm

@#180 Asian Cutlery
“Deleted”
++++++++

You seem to have a masochistic preponderance to getting yourself “deleted” on a regular basis.

Were you ignored as a child?
Still ignored?

#193 crowdedelevatorfartz on 02.17.18 at 12:40 pm

@#187 Simpering Cretinous Moaner
aka Screwed Canadian Millenial.

Everything will be fine.
Just keep voting for your vote pandering hero Mr Millenial himself.
Justin “gender neutral” Trudeau.
His tax and spend policies will make all other Conservative govts before him pale in comparison.
Unless of course.
Voters,(insert inexperienced, impressionable, over educated, highly indebted, Millenials here) struggling through an economic slowdown, decide to switch teams…….

Just curious.
How long DOES it take to pay down a useless, pointless 100k student loan when one only brings in 29k per annum?

#194 morrey on 02.17.18 at 12:43 pm

crowdedelevatorfartz

Your links are useless. your posts are just hearsay as there is no verifiable proof for your innate statements. and half the board finds you boring.

as for me failing!! lol!!!

PS parse what we are saying to you and see if you can improve your posts. We are all rooting for you!

#195 Lost...but not leased on 02.17.18 at 12:46 pm

#175 K. McGarrett

I’ve noted in the past re my role as SOLE Executor for my Dad’s estate..he passed away in 2015.

My Mother passed away a couple of weeks ago… here is some more info from the “Estate War Zone”.

Locating the Will:
My mother had informed us that her will was located at a certain lawyers office. Long story short…they provided us a scanned copy of the will(only after the lawyer was convinced my mother was deceased)…which then identified myself and my sibling as co -executors.

Previous to this, my sibling had co-opted my mothers wishes of dual ” Power Of Attorney ” via acquiring Committeeship. Our relationship is acrimonius, but for the sake of Mom we acted civilly for funeral.

Having co-executors creates a problem..as the original will is required for probate, so the executors have to agree on a single lawyer. We are in the midst of determining this.

My sibling, under Committeeship, has to report to the Public Guardian and Trustee. I do not have access to my Mother’s financial records until Probate is complete (Probate effectively = the courts recognize the will as THE final WILL in order to move forward on tying up the estate.)

Given my sibling had her useless son living in my Mother’s home for 3 + years….could get interesting aka we suspect that ALL utilities(power, gas cable etc.) were paid for out of my Mother’s funds.

BTW I couldn’t do much as I had a Peace Bond(just expired) that restricted me.

With access to my Mother’s finances, I will review how her funds were invested. Was my sibling prudent..or as I suspected from Day 1…my Mother’s financial advisor felt threatened by my inquiries(pre Committeeship) and
recommended some sleazy Lawyer.

Over the 3 years, my mother paid the full shot (approx. $ 6,000/month for 2 years) till she became eligible for a subsidized bed…whereby she pays a % of her annual income( which in her case would be from investments.

I hear you re: those who have worked hard get hit most.
I have heard many stories of people sheltering assets via such strategies as Joint Accounts can avoid probate

Like tax avoidance…err reducing ones tax hits…pursue the options available via pre -planning and don’t be exploited by the system.

the will has been accessed

#196 Marlene from Victoria on 02.17.18 at 12:47 pm

Disappointing to read the snarky and judgmental condemnations here of an immigrant working hard at the bubble gum factory to raise up a family, with no privilege or special connections or more favourable tax rates to help him, just hard work.

“Last year saw the biggest increase in billionaires in history, one more every two days. Billionaires saw their wealth increase by $762bn in 12 months. This
huge increase could have ended global extreme poverty seven times over. 82% of all wealth created in the last year went to the top 1%, while the bottom
50% saw no increase at all.”

https://www.oxfam.ca/sites/default/files/summary_reward_work_not_wealth_en.pdf

82% of all wealth last year went to the top 1%.

Wow, is all I can say.

I think Bill Morneau will start to put us on the right track in about ten days. Let’s see.

#197 Fubared on 02.17.18 at 1:05 pm

I have a buddy that is in the same position. Condo right beside train tracks in Maple Ridge, works at UBC. Most guys are so desperate they will literally do anything for a woman and the scary thing is they pity me for being a single renter.

#198 MichaelJ on 02.17.18 at 1:15 pm

#52 Floppy Ears
#141 morrey

I’m actually happy to see your posts hungry realtors.
It seems that finally things are getting bad enough for you that you can’t help but -hiding behind online anonymity – try to hackle people who are actually put in time to give us facts!
What a sad bunch you are?
Time to return your luxury leases and pick up biking again.

Flop, I know I speak for many people here when I say Thank You for your time and the info you provide!

#199 Penny Henny on 02.17.18 at 1:16 pm

#168 Penny Henny on 02.17.18 at 9:45 am
#114 Old Ron the Realtor on 02.16.18 at 10:29 pm
Hard work, deferred pleasure, and minimalism. What a concept.

What a sad-sounding life. – Garth

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

Many an immigrants dream.
Sacrifice so the kids can have a stable life, go to school, study hard and be professionals.
His place is paid for, he is going to be no burden to his kids. Looking back I bet you he wouldn’t do it any different.

If all people do is sacrifice for their offspring we don’t exactly move ahead as a society, do we? – Garth

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

I would say that it depends on what level the family is starting at. Also you have to take into consideration someone’s beliefs.

#200 AGuyInVancouver on 02.17.18 at 1:23 pm

#108 & 122 Secret Code
Certainluy shocking revelations. Governments don’t make press releases Friday night unless there is something serious going on. What is clear is that for 16 years the BC Liberals turned a very blind eye to shady activity. Less emphasized is that our federal government, under both Conservatives and Liberals, did the same.

#201 Hamsterwheelie on 02.17.18 at 1:26 pm

#167 Garths response- well – its your blog and you can summarize my post that way as it pleases you. I have rented and it was great – I now own, and it’s great.
As you’re always saying – a diversified portfolio or better yet diversified opportunity, my point is; renting isn’t always great and neither is ownership. Make the right choices for what you can handle and what you can afford to lose – weigh the benefits, make some cash, be happy. (and steer clear of overpriced crapshacks in the boonies, condos and mismanaged rental properties :-)

#202 ww1 on 02.17.18 at 1:31 pm

https://www.weforum.org/agenda/2018/02/real-estate-bubbles-the-8-global-cities-at-risk

What else is there to say?

#203 Newcomer on 02.17.18 at 1:36 pm

#99 Yanniel on 02.16.18 at 9:19 pm
Garth, since we struggle so much to put dollars away for savings and investing, would you consider writing a post about budgeting? Thanks.
———–

If you want to get started before receiving Garth’s wisdom, go to http://www.youneedabudget.com. They are makers of commercial software but they are also educators. They have tons of videos and blogs on how to budget, and their software is also very good. They focus on people getting started with very tight budgets, but the system works well at much larger scales too. The key thing is that you choose where every penny goes, and so you notice where the waste is.

If you want some more general budget inspiration, try mrmoneymustache.com. A Canadian living the good life down south, he gets to the heart of how people make good (and bad) decisions about money.

#204 Ca$h money on 02.17.18 at 2:31 pm

Flop I appreciate everything you do for the blog. The stats are informative and helpful to get a sense of where things really stand.

If people don’t like your stats perhaps they should just skip them?! Very odd someone would take the time to post negative comments for no reason.

#205 crowdedelevatorfartz on 02.17.18 at 3:31 pm

@#193 Morley

Since you seem to unsuccessfully emulate me……..
Glad I could be your inspiretion.

:)
;

#206 DON on 02.17.18 at 3:41 pm

CTV BC – 32 yr old Realtor dies from a targeted shooting in west side Vancouver. Hmmm.

Sorry unable to paste link – Google

On another subject the new BC gov is hiring mortgage, gaming and credit union regulators and investigators prior to the new budget.

#207 DON on 02.17.18 at 3:47 pm

Flopper keep on flopping information on this blog. I will chip in and deal with your critics. Don”t worry I will use kind language.

I can’t stands it when idiots try to silence the truth.

#208 morrey on 02.17.18 at 5:43 pm

@crowdedelevatorfartz

inspiretion

… well that must be gratifying for you.

#209 45north on 02.17.18 at 7:14 pm

For those about to flop: He worked at a bubble gum factory and would have known when things were about to pop…

+1

#210 45north on 02.17.18 at 7:15 pm

ww1: UBS Global Real Estate Bubble Index: What else is there to say?

In terms of vulnerability, Toronto ranks as number one in the world and Vancouver ranks as number four in the world which makes Canada very vulnerable. The thing that really does matter is that in the combined area of Canada and the US, Canada is the most vulnerable. That means, prices in these two cities may crash – there is nothing to stop them. Looking at the GTA, if prices start to fall, North Bay is not going to cushion the fall. If prices in Vancouver fall, Smithers is not going to cushion the fall. Canadian governments will be powerless to slow the fall because the Canadian economy is very small compared to the American and unlike the US, Canada does not control the reserve currency of the world.

Wolf Richter on HoweStreet.com says in the US, most mortgages are 30 year fixed which means the interest rate doesn’t change for as long as you owe the mortgage. In Canada, the longest fixed rate is five years. Garth says that 40% of mortgages come up for renewal this year. Which means that Canada is extremely vulnerable to interest rate hikes.

Debtslavecreator: The dumb luck this country has had for years is coming to an end

#211 crowdedelevatorfartz on 02.17.18 at 8:29 pm

@#207 Morrey

hahahahaha.
Momentary lasp in alcohol consumption.
I cant spell “fartz” either but me mom’s still proud a me…….I’ll tell her you say “hi”!

#212 Go Kart Mozart on 02.17.18 at 8:42 pm

Those Cayman Island investors know that drug addicts put their fix above everything else.

#213 morrey on 02.18.18 at 1:32 am

@ #210

Moms always forgive and make allowances for their offspring.
Listen to her more often. put down the bottle and be a better sober person.

cheers

#214 Steven Rowlandson on 02.18.18 at 7:16 am

“So long as leveraged real estate is viewed as a riskless way to make easy money in a world where music majors work at coffee shops, this recklessness will continue.

Prepare now for when it ends.”

It will end very badly and take the smiley faced optimists by surprise. We are dealing with a incapacity to pay no matter what and it doesn’t matter if they have a job or not. Those that are well paid and have what they need don’t need more and those who don’t have can’t pay because everything they really need costs too much. That means no demand and no way to pay and live at the same time. That is a set up for a very big crash.