Enough

Freshly-showered and fumigated after moderating yesterday’s comments section, let’s try this again.

To summarize: government isn’t the answer. Politicians helped fuel the housing bubble. Now they clumsily crush homeowners. Better that Mr. Market were left on his own to keel over from rising rates and an ocean of debt. Instead, elected amateurs in Ontario and (especially) BC have opted to tax everything that moves (Chinese dudes, cowboys, cottage owners, the doctor class) and hope for the best. With the economy now so dependent on real estate and the bulk of middle-class net worth sitting in it, the stakes are huge. As stated yesterday, the outcome could be Biblical. And not in the angelic way.

Anyway, it’s time for a counterpoint to all those whiny, lefty moisters who feel entitled to a house and demand that the government make it happen. So, here’s George.

I greatly enjoy your blog, but I’m hoping you can help me understand a trend that I can’t quite grasp.  On your blog, I’m seeing constant complaints such as:

“It’s downright tragic”
“…being shut out by a bunch of greedy a-holes is a bitter thing…”
“…people cannot afford kids…”
“Move out while you still have a chance, i.e. young and with a future…”

Your advice recently has been “move, or shut up,” an understandable response, but I genuinely do not understand why people seem so desperate. I’m 25, married, have 2 kids, and make $79k (single income). No debt. Our rent is $1800 a month for a cozy Markham townhouse that we love. We own a used minivan and are comfortably socking away $10,000 per year, minimum. My wife stays at home with the kids, so we only need one vehicle and don’t need to pay for daycare. My work commute is 10 minutes, and we live close to family and friends. Life, for us, is wonderful.

So why does everybody else seem so miserable? My theory is that people (especially my age) are making bad life choices and choosing to blame others for their misery, or am I simply living beyond my means? Thanks! – George”

Apparently normal people do read this pathetic blog. Who knew?

Well, here’s more evidence why the housing market in BC (and Ontario, Alberta and most major markets) is destined to roll over, even without the heavy and misguided hand of socialist MPPs. Stock markets have now embraced the reality of rising interest rates. Despite swelling bond yields, investors have turned their focus to romping and robust corporate profits, strong (US) job creation, an easing of world nuclear tensions, business tax cuts and a hefty rise in global growth.

So what? So the Fed will increase its key rate three times this year, adding to the four hikes we got in the last year. The Bank of Canada absolutely will follow suit, with the usual lag. Count on three more increases here in the next 12 months, taking the bank prime to 4.25%. The benchmark Bank of Canada five-year mortgage will sit at just below 6% then, with mortgage borrowers having to qualify at that level or higher.

That’s a big deal. Huge. On its own, more than enough to turn a busy real estate market into a stagnant one. Add in record levels of household debt, half of it facing refinancing in the coming months – with the stress test in place – and the market goes into reverse. The hallowed soft landing. Now add in a 15% or 20% go-home tax in BC and Ontario, that massive ‘speculation’ tax creaming off $200 million from existing homeowners, the empty-houses tax, the luxury tax, the universal rent controls, the enhanced property tax and maybe (if Van’s crazy mayor gets his way) a flipping tax, and we’re begging for a crash.

As the loopy comments section demonstrated yesterday, many people crave this. They think real estate – which accounts for more of Canada’s economy than oil & gas and a full quarter of BC’s GDP – can be leveled and everything will stay the same. Except they can buy a house from some decimated rich guy for 50% off. Torches and pitchforks swarming over the castle moat.

You must feel pity for those who support the NDP’s tax-tax budget, believing the politically-induced houseageddon will let them move up to a bigger, nicer place. Don’t they understand their own home would be sliced in value, putting them in the same spot? If the economy sputters, surely jobs will be shed, wages reduced, employers impacted and families hit. And if this happens, as mentioned, when central banks are tightening monetary policy it exacerbates all.

Well, maybe this is drama queen talk. Laissez-faire, right-wing, free enterprise, rugged individual, capitalist fearmongering. Perhaps Comrade Horgan and the Dippers are economic geniuses who can accomplish what no prior administration has – make people wealthier by taxing them poorer. Let’s see.

This much is clear, though. Expectations are epic. People want gain without consequences. Loaves and fishes.

If BC were a stock, I’d short it.

254 comments ↓

#1 For those about to flop... on 02.23.18 at 4:42 pm

Recent Sale Report/Realtor Assistance Needed.

This house in North Vancouver 17 days ago.

It was in my Possible Pinkies Folder as they had a bit of leeway between buy and ask,but that is counting for less and less as the days go by.

Hopefully we get an answer to show what’s happening on the North Shore as not much else is happening above the 2 million dollar mark…

M43BC

2630 Tempe Knoll Drive, North Vancouver paid 1.63 asking 1.99

Nov 7:$2,298,000
Jan 25: $2,088,000

: – 210000.00 -9

https://www.zolo.ca/north-vancouver-real-estate/2630-tempe-knoll-drive

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAyN1RVQw==

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

Feel free to make a donation.

Flop For Fox Fund…

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

#2 Cabin fever on 02.23.18 at 4:47 pm

Hi Garth, I’m so confused… my parents have a house on Shuswap lake, it’s empty 99% of the time. Will they have to pay some sort of tax now ? My 2 sisters are fighting over who’s right….
Thanks
Louis12

If it’s in zone, then yup (the budget was a bit hazy – saying ‘central Okanagan’). Every year (2019 and beyond) they will get a bill for 2% of its appraised value. – Garth

#3 SpaceX on 02.23.18 at 4:49 pm

This is like a game of rockets. BC about to hit ground zero in real estate, the Dow Jones relaunching and the wine once again flowing through the fuel line. I’m glad my gas tank is diversified.

#4 Guy in Calgary on 02.23.18 at 4:52 pm

Then the trades will come over to Alberta for jobs since new housing will not be built at the same pace in BC. What is the end game here?

Imagine their surprise when we welcome them with open arms?

Oh wait, we have no jobs to give because you don’t want a federally approved pipeline either.

I consider myself to be a rational thinker. This crap though, I cannot wrap my head around.

#5 How does Flop know on 02.23.18 at 4:57 pm

I keep trying to be first to comment as an Olympic Vancouver Islandite, but that Flop dude keeps out performing me. Are you slipping him a heads up? I guess we’ll stick with growing Kandy Krush MJ on the Island – more our pace.

#6 crowdedelevatorfartz on 02.23.18 at 5:00 pm

Perhaps we could luck out and Kim Jong Un will nuke us…..

Big snow in Burnaby today.
ICBC rates goin up up up!

#7 Wait There on 02.23.18 at 5:01 pm

According to Garth
“People Want Gain Without Consequences”

Just happens I sell kits to some people (many millenials) who want to DIY and save money, but do not take the time to learn how first and when something goes wrong. It is your product and your fault that something did not go right. They never bothered to read the instructions and understand why. They want instant savings without investing in time to read. The older generation has a much lower incidence rate of this happening.

Amen to that statement.

#8 namename on 02.23.18 at 5:01 pm

Garth I think you are now and have been consistent.

You don’t like government intervention.

You didn’t like it when it created this bubble and you don’t like it now that it will level it.

We are headed for some scary times and are exiting some scary times…It is a Shit Show.

I worried as the bubble built and now I worried about what will happen to the job market when it implodes.

Government intervention made this happen and now Government intervention is going to make a different type of terrible happen.

How bad do you think it is going to get?

#9 Joe on 02.23.18 at 5:04 pm

In response to George:

Our lives seem eerily similar. I too rent a townhouse and have a stay at home wife. The key differences seem to be that I drive a new minivan, have one extra kid, support two of my in-laws, and sock away $30,000 per year.

Now that’s out of the way, let’s get one thing clear. My house is too “cozy” for comfort. I *want* more space. Doesn’t mean I’m “desperate” for it. But you’d better believe the current state of the world pisses me off.

#10 A J on 02.23.18 at 5:10 pm

Hey George, good for you. Humblebrag aside, everyone’s different. Has different wants and needs and situations. What’s so hard to grasp about that?

#11 greyhound on 02.23.18 at 5:12 pm

“If BC were a stock, I’d short it.”
Well said.

#12 Fuzzy Camel on 02.23.18 at 5:13 pm

What makes no sense is why are they overreacting now, about 6-8 years too late?

These PhD economists are really so dumb that they would leave rates at near 0 for almost a decade, then suddenly get cold feet and start cranking up rates, and this fast?

#13 MF on 02.23.18 at 5:14 pm

“So why does everybody else seem so miserable? My theory is that people (especially my age) are making bad life choices and choosing to blame others for their misery, or am I simply living beyond my means? Thanks! – George”

-Everyone is not miserable, just seems that way on this blog because it is predicated on the housing bubble..something that is screwing over the entire country.

MF

#14 Polly on 02.23.18 at 5:15 pm

Breaking: Wealthy old conservative man thinks government should stay out of the markets and his wallet, while young liberal blog dogs want government to intervene and tax the hell out of said wealthy old conservative.

Meanwhile good old George is chugging along, living within his means, and living a happy and full life. Keep it up George. Vs.

#15 Joe on 02.23.18 at 5:15 pm

“As the loopy comments section demonstrated yesterday, many people crave this.”

You bet I do.

“They think real estate – which accounts for more of Canada’s economy than oil & gas and a full quarter of BC’s GDP – can be leveled and everything will stay the same.”

I do?

“Except they can buy a house from some decimated rich guy for 50% off. Torches and pitchforks swarming over the castle moat.”

I’m sharpening my pitchfork as I type.

“You must feel pity for those who support the NDP’s tax-tax budget, believing the politically-induced houseageddon will let them move up to a bigger, nicer place. Don’t they understand their own home would be sliced in value, putting them in the same spot?”

Indeed I do. But this isn’t a problem since I rent.

“If the economy sputters, surely jobs will be shed, wages reduced, employers impacted and families hit.”

Lucky I work for an American company.

“And if this happens, as mentioned, when central banks are tightening monetary policy it exacerbates all.”

Bring it on.

Good thing it’s all about…you. – Garth

#16 DON on 02.23.18 at 5:16 pm

#4 Guy in Calgary on 02.23.18 at 4:52 pm

Then the trades will come over to Alberta for jobs since new housing will not be built at the same pace in BC. What is the end game here?

Imagine their surprise when we welcome them with open arms?

Oh wait, we have no jobs to give because you don’t want a federally approved pipeline either.

I consider myself to be a rational thinker. This crap though, I cannot wrap my head around.
********************

Here in BC I am not against the pipeline, would be better to ship gas though and created high paying jobs long term jobs in Canada.

Shipping sludge that sinks is ok – as long as it can be cleaned up and someone is mandated to clean it up (right away) why take the risk without proper analysis.

Why isn’t Kinder Morgan putting a plan forward that will mitigate the risks (to a certain extent) for all parties involved?

And renewables will continue to rise as technology advances. Not too say that oil will die out, but surely it will have competition. Even China is starting to clean up its act…slowly but surely.

It shouldn’t be too hard to do, but the media and special interests tell a somewhat distorted version of the truth.

#17 Wait There on 02.23.18 at 5:17 pm

When I needed a new car

I purchased an 8 year old Lexus from the Lexus dealer with 52K km on the odometer for less than 75% of what I would have to pay for a Corolla. Totally different driving and owning experience. Depreciation is less than Corolla and even insurance is less than a Corolla.

If only life itself was like a Lexus.

Knowing what cars to purchase and their running costs has a huge impact on your life and the savings can compound. After the house what is the second most costly thing. Errr… it is different… a house is an investment….. and yeah I heard a car is as well.

#18 MF on 02.23.18 at 5:17 pm

#6 Wait There on 02.23.18 at 5:01 pm

“The older generation has a much lower incidence rate of this happening.

Amen to that statement.”

-I work in a job that requires computer use. Cannot tell you how many older generations cry and complain about simple computer use (typing, using a mouse).

See what i did there?

MF

#19 jess on 02.23.18 at 5:18 pm

government isn’t the answer”…depends what country?

In a statement, Manafort maintained his innocence.
“Notwithstanding that Rick Gates pled today, I continue to maintain my innocence. I had hoped and expected my business colleague would have had the strength to continue the battle to prove our innocence,” Manafort said. “For reasons yet to surface he chose to do otherwise. This does not alter my commitment to defend myself against the untrue piled up charges contained in the indictments against me.”

========
The Russian state, at least for the moment, has decided not to arrest Navalny but to mock him, belittle him and undermine him. There is no need to take his accusations of government corruption seriously if they can be juxtaposed with video clips of women in fishnet stockings and bondage gear.

This time Navalny flipped the story back at them. Studying the photographs of the women who’d visited their office, his team used facial recognition software to identify one of them as Nastya Rybka, author of “How to Seduce a Billionaire” and purveyor of an Instagram account packed with photographs of Deripaska and his yacht
https://www.youtube.com/watch?v=RQZr2NgKPiU
Russian Tycoon Deripaska Quits AsHead Of Aluminum
EmpireRFE/RL 19 hours ago

https://www.washingtonpost.com/news/global-opinions/wp/2018/02/13/a-russian-dissident-pulls-off-a-virtuoso-trolling-of-the-putin-regime/?utm_term=.1c44645f47e3

#20 Bob Dog on 02.23.18 at 5:21 pm

Lets face it. If politicians were competent at anything, they would not be in politics.

Maybe its not all house lust as assumed here. I have no interest in owning a home. I had one once and couldn’t wait to get rid of it.

There are 2 huge issues for me.

1. A small number people are making huge sums of money without working or earning it. Much of this is tax free.

2. CMHC is an abomination that has accomplished the exact opposite of what was intended to do. When things fail the criminal banking cartel will be bailed out by CMHC and the tax payer.

People in Vancouver and Toronto can borrow billions form banisters so long as I am not on the hook to pay for it.

#21 islander on 02.23.18 at 5:22 pm

http://vancouverhouse.ca/
….keep your eye on this one for the current pulse of Vancouver’s luxury condo market……….should be interesting to see what happens with ‘Vancouver House’…..(still got a few storeys to go – 30 or so to bring it to 60 storeys)….
Marketed as a ‘work of art’ – a la Picasso……let’s see!

#22 MF on 02.23.18 at 5:23 pm

#11 Fuzzy Camel on 02.23.18 at 5:13 pm

“These PhD economists are really so dumb that they would leave rates at near 0 for almost a decade, then suddenly get cold feet and start cranking up rates, and this fast?”

-Yes they are. If anyone tells you they are an economist, it means they are a glorified historian of the economic past and nothing but a professional guesser about the future. It’s a joke.

Also, yes they are panicking now because they know they have screwed up. We have been at “full employment”..whatever that means…for years now. We are at ZIRP because?

MF

#23 TheSpangler on 02.23.18 at 5:30 pm

#11 Fuzzy Camel on 02.23.18 at 5:13 pm
What makes no sense is why are they overreacting now, about 6-8 years too late?

These PhD economists are really so dumb that they would leave rates at near 0 for almost a decade, then suddenly get cold feet and start cranking up rates, and this fast?

Speaking of dumb economists;

http://vancouversun.com/news/local-news/housing-taxes-could-put-recent-buyers-underwater-on-mortgages

#24 The Boulder on 02.23.18 at 5:37 pm

In the long run everything averages out. If you want to own a home, go ahead and buy within your means. Stress test is there to help, it should have been called stress free test.
My 2 cents, don’t rely only on realtor’s advice, do your own research. You can buy/sell without commissions, and it is a big saving.

#25 nah on 02.23.18 at 5:41 pm

So the Fed will increase its key rate three times this year, adding to the four hikes we got in the last year. The Bank of Canada absolutely will follow suit, with the usual lag. Count on three more increases here in the next 12 months, taking the bank prime to 4.25%.

……..

Fed has stated 4 is not in the cards, and 3 likely isn’t either. House od cards would collapse if rates go up too quickly. That ain’t tin foil talk either……as for Canada? Was an easy call to decrease exposure given the housing mess.

The Fed made no such announcement. The last thing a CB will do is collapse the economy. Up she goes. – Garth

#26 Paul on 02.23.18 at 5:45 pm

Now is the time to buy! This just gets better.

http://www.usedcowichan.com/classified-ad/Attn-Buyers–Sellers-JUST-REDUCED_31347398

#27 Kilt on 02.23.18 at 5:49 pm

I’m not sure I would short BC.
Shopify, Tesla, Valeant, home capital, weed stock and bitcoin I would short.
You are always going to have demand. Wealthy immigrants and retirees. A few extra taxes won’t scare them off. Anyone with money isn’t going to retire in Edmonton or Winnepeg.
Housebuilding will still continue. They will adjust prices as we have already seen. You might just see a few less brand new f350’s driving around as margins get leaner.

Kilt.

#28 BackToReality on 02.23.18 at 5:52 pm

Well obviously what the liberals have been doing for the past 16 years didn’t work. End up with the biggest deficits in our time in the biggest boom ever and nothing but cuts and ‘let the free market decide’ rhetoric. Obviously they were corrupt and while what the gov’t doing is heavy handed, there should have been the same outrage when all regulation was removed back in 2001, etc to let people go wild with real estate. if that’s ok then this move is ok too.

#29 DON on 02.23.18 at 5:52 pm

Interest rates increases are a daily read in the US news. I understand full well what Garth is talking about. He has never changed his tune, yes he does chum the waters once in a while to get a rise. But…consistent he is.

If you are bitching about your present condition then move to make your life better. If you no longer have any patience, then buy (risk on if you by above your means).

What is about too happen was always in the cards. Who are people gonna sell to (and get their money back)? All this talk about selling and leaving when sales are already going down and possible over the course of one week sales could fall of this earth.

Your sh*t is only worth as somebody is willing to pay and is a down market all hope is off the table.

#30 Lesser Ape on 02.23.18 at 5:56 pm

George, the fury is about inequality. Hedonic adaptation means that the absolute amount that people have doesn’t actually affect their happiness much. Instead, because humans are social animals, what matters is how much someone has compared to others.

So in Vancouver, you have a set of people who have become wealthy not by their own hard work, but rather by winning a housing lottery. And you have another set of people who have no hope of getting ahead because the housing lottery has increased their living expenses astronomically.

Then the winners tell the losers to either move away from their family, friends, and jobs, or to suck it up. That’s why people are angry, and also why people vote for the NDP, The Donald, the Nazis, and Hugo Chavez.

If your house is already burning down around you, there isn’t much downside to trying to extinguish the blaze with a swimming pool’s worth of gasoline. It might be enough to deprive the fire of oxygen, or it might just explode, but the house is already toast. Practically, an explosion won’t make the house any worse off, so there’s no real downside to trying out the gasoline idea.

This is why it’s a really bad idea to have gross wealth inequalities in society, even if society overall is getting wealthier. Wealth distribution matters.

#31 Linda on 02.23.18 at 5:57 pm

The belief apparently is that these new taxes & measures will not affect anyone who has not purchased. Magically, houses will be on sale for prices the current crop of house hunters can afford. This presumes first that the current owner will sell (hello, get-out-of-my-town tax) & further, that those looking to buy will 1) qualify to buy & 2) actually purchase. Vulching with government aid, if you will.

What will be interesting to see is just how much of the new tax revenue will go towards making ‘housing more affordable’. I’m cynical, so my bet is that the extra cash will disappear in general revenues, which may or may not be spent for the general public good.

#32 Stone on 02.23.18 at 5:58 pm

If BC were a stock, I’d short it.

———

Well, at least you see the bright side of things. There’s still money to be made. LOL

#33 it's called putting the nail on 02.23.18 at 6:00 pm

Perhaps Comrade Horgan and the Dippers are economic geniuses who can accomplish what no prior administration has – make people wealthier by taxing them poorer. Let’s see.

…….

in the coffin. And let the collateral damage be as it may.

dramatically decreased TSX exposure a yr ago………….. she’s still in the red ytd, lol…..could get ugly. GO CRASH GO!!!!!!

#34 crowdedelevatorfartz on 02.23.18 at 6:02 pm

@#20 islander

“Vancouver House” Ugh.

The only thing more pretentious than the eponymous name is the architech.

A “highend” highrise in the Westend….should be finished right around the time the Vancouver Real Estate market hits rock bottom.
Cant wait to read about the lawsuits when that hideous thing starts to leak……..

#35 Buddy on 02.23.18 at 6:03 pm

Yes George!!! We’re out there. Not miserable, very happy, and socking away money! I never thought I would have an opportunity to get wealthy, but my wife and I just might be on that path partially thanks to Garth and not buying a house! We’re worth about 90k now most of it in a diversified portfolio and its growing. We save close to 4k a month while enjoying awesome lifestyles filled with activities and a few trips a year. We’ll buy a house when we’re ready. Wealth and happiness over a house anyday.

#36 Question Garth... on 02.23.18 at 6:05 pm

What about the Loonie? Will it drop to 40 cents because of real estate prices collapsing into dust?

#37 Dog in The Fight on 02.23.18 at 6:10 pm

Every government needs some time in the penalty box. The BC Liberals were no exception, although since they picked an insider rather than Dianne Watts to lead the party leads me to conclude they need a longer time out. The NDP will be the NDP, the only thing really scary about them is they are driven by dogma. I voted for them to deal with the RE mess created in Vancouver, and they have delivered. I expect the kookaloos in the party will do what they always do. Soon we’ll have a national Hamster park, and be protecting stickle back fish in the Fraser valley, and photo radar will be back. They just can’t help themselves, sorta like a snake. In a few years BC will be in recession and it will be time for another change. Tic-toc, back and forth goes the pendulum. It is how our democracy should work. Never be tied to dogma, always vote in your interest.

#38 Peter Pan on 02.23.18 at 6:10 pm

What I learnt from Calgary since the drop of oil price is, house price is sticky.

#39 MADQ on 02.23.18 at 6:11 pm

I guess I am having trouble understanding what are you proposing to fix the affordability issue in BC, particularly in the Lower Mainland.

The market is completely out of control, you could argue that it has been for at least 8 years. You could blame the combination of low interest rates and FOMO as the #1 reason for this, other people believe that is foreign capital. Regardless of the real reason, its a mess.

The government has had a huge role on this, pumping real estate like there is no tomorrow; from giving 40 years amortizations, use your RSP savings, practically no downpayment required. I would say that government intervention _is_ the reason for FOMO, along w/ real estate cartel pushing its own agenda and social pressure (mainly family, as it has worked for them in the past).

Do you expect the government to do nothing? The message has to change, someone has to tell to people: ‘listen, real estate is out-of-control; do not use it as a retirement plan. If you do, don’t expect to become a multi-millonaire’.

I am all for free markets, capitalism and motivated people trying to make a money; but you must admit that its been a great ‘safe and guaranteed way to make money’ for too long.

The government thinks that it can interfere and hopefully deflate it in a controlled manner. We can argue that this won’t work because it has never worked; what do you propose?

I think I could fix the problem in one announcement to the people in BC without adding any taxes. Min. downpayment is now 25%, amortization 20 years. You sell your house in less than 5 years? You pay capital gains unless you move for a new job. The market will collapse overnight.

Is that what you want? A lot of people do…

Thanks for reading

#40 Joe on 02.23.18 at 6:14 pm

Good thing it’s all about…you. – Garth

And why not? You’ve said it yourself. For ten long years we’ve been brutally punishing savers in this country. Well, being a saver, I’m tired of it. It’s time for someone else to take their licks.

#41 zee on 02.23.18 at 6:15 pm

Garth, stock market was up today not because of robust economy because of rates are not moving up.

Nope. Profits. – Garth

#42 Mike on 02.23.18 at 6:16 pm

NDP in BC!!
Liberal at Federal!!
You got my vote. Crash the RE market!!

Anddd…….it won’t crash….Its Kanada.

#43 renter in Surrey on 02.23.18 at 6:19 pm

Governments screw up most of things they are trying to improve, no doubt.

However let’s not get too excited here.

15% increase in foreign buyers tax (from 0 to 15) had no effect, why 5% increase (from 15 to 20) would have effect?

2% tax on empty dwellings … they will be rented out

luxury tax on houses > $3 mil … if prices for Lamborghini go down 25%-nn% it makes no difference for regular folk who drive used honda civics

Even if houses in Langley drops 50% in value it is still around 500K (I doubt it will happen though). You can get nice almost new house around Dallas for about 250K, jobs there pays twice of Lanley’s incomes, so it is still make no sense.

The only thing that would make some difference is abolishment of CHMC, interest rates around 7%+, non-recursive mortgages, etc.

Until it happens, Price Stickiness of housing will prevent any material reduction of prices.
https://www.investopedia.com/terms/p/price_stickiness.asp

So prices will hover at current levels until inflation will catch up with them.
Move on people, business as usual.

#44 Stan Brooks on 02.23.18 at 6:19 pm

https://www.youtube.com/watch?v=fPO76Jlnz6c

Power and the money, money and the power
Minute after minute, hour after hour
Everybody’s running, but half of them ain’t lookin’
It’s going on in the kitchen, but I don’t know what’s cookin’
They say I gotta learn, but nobody’s here to teach me
If they can’t understand it, how can they reach me?
I guess they can’t, I guess they won’t
I guess they front; that’s why I know my life is out of luck, fool!

#45 Oakville Sucks on 02.23.18 at 6:19 pm

Oakville is suffering….down about 30% over last year

#46 Another Deckchair on 02.23.18 at 6:20 pm

@17 MF

“-I work in a job that requires computer use. Cannot tell you how many older generations cry and complain about simple computer use (typing, using a mouse).”

It cuts both ways.

I work with a bunch of millennials who have no clue how to write highly-parallel code, nor what a clock cycle is, and have no clue how to write optimized code. They have no idea what goes on under the hood, because they’ve never had to know.

I try my best to lead them on, because they are bright, but their years in university and, just the state of computers these days gives them a cocooned environment.

Bright (very) kids, and they do treat this boomer very well, but I feel sorry for them, not having the depth and breadth of computer skills required to do the job, but they were raised in a time when “if it don’t work in Visual Studio, it just don’t work”. (and, most are Ph.Ds, so *not* idiots by a long shot)

I do enjoy very much working with the “kids”, as there are a lot of bright minds, open, and willing to learn, without the generational issues that was around when I was a kid.

So, please cut the boomers some slack; sure, there’ll be idiot boomers, but there’ll be idiots of any generation, and don’t get sucked into the darkness, ok?

#47 HockeyBronzeMedalOrBust on 02.23.18 at 6:21 pm

Gotta get that pipeline built… So much $$ coming into Canada is a good thing. Better rich with options to sprinkle feel-goodery green slush projects. Nope, ban new pipelines but nobody talks about removing the ageing pipelines already the the ground.

#48 Garyg on 02.23.18 at 6:22 pm

I wonder how many other comments you dont post Garth…anyone who calls you on your bs ? Quit filling peoples heads with bs that you back pedal on. Stick to talking about your portfolios and quit the bs about RE!!!

#49 Specuskeptic on 02.23.18 at 6:23 pm

“You must feel pity for those who support the NDP’s tax-tax budget, believing the politically-induced houseageddon will let them move up to a bigger, nicer place. Don’t they understand their own home would be sliced in value, putting them in the same spot?”

…. except that you’ve recommended people rent. For those (re) entering the market, this is manna from heaven, no? Also, 0/40 was also gov’t interference (a la elfin deity if you’ll allow me to call him that as well)… just the other way around.

To be fair, I do recall you criticising that move at the time (2007 seems so long ago now)

In the end, and as you say, it will be the rise in rates that will crush… Who will be blamed when it comes and who should be?

#50 gfd on 02.23.18 at 6:29 pm

DELETED

#51 Reximus on 02.23.18 at 6:31 pm

#43 Oakville Sucks

Oakville is suffering….down about 30% over last year

mmmmm….no

https://oakville.listing.ca/real-estate-price-history.htm

#52 DQ on 02.23.18 at 6:33 pm

#14 Joe on 02.23.18 at 5:15 pm

I’m right there with you buddy. Forget Garth’s sarcastic comment that “it’s all about you”. It is about you, and me, and everyone else exactly like us who have been royally screwed even though we did everything right.

It should be all about those who worked hard, saved, didn’t buy crap housing at astronomical prices due to FOMO, and still lost the lottery due to the timing of when we were born. We shouldn’t be forced to move to Markham, Regina, St. Albert or whatever other godforsaken place in Canada is still cheap. Those places are cheap because they are god awful, employment prospects are dim, and no one wants to live there. Those are the places you move away from, not to.

When you work hard, go to school, beat your peers, make many multiples the median family income and still can’t afford a semi-decent 3 bed, 2 bath home to accommodate a family of 4 within a reasonable commute something does indeed need to change.

You cannot tell doctors and lawyers and executives and IT folk with household incomes of $250k that they should shut up and move to Abbotsford or Markham because cheap houses are never coming back. Those people deserve decent housing relatively close to urban centres. Those people are not “average” with respect to income, but they should be able to afford an “average” home within the city. They might not be the 1%, but they are certainly the 2-5%, and they, like me, are pissed. It doesn’t matter if 90% of the population can’t afford a SFD in YVR or GTA. That’s fine, that’s the way it should be. Those in the top 10% should be able to and right now that hasn’t been the case for many years. That’s who I’m talking about. Not the average, not the median, but the top end of the upper middle class. I’m no left wing dipper but bring on every conceivable tax in the universe and crash the whole damn thing. Enough is enough.

I do hope that everyone who bought in the last 5 odd year gets creamed. I welcome the smoking hole in the ground with tail fin sticking out. Well deserved as far as I’m concerned.

All we’re asking/hoping/praying for is mean reversion. We cannot continue to live at the far end of the bell curve in a 3+Std dev environment and then desperately try to avoid a crash in order to protect the precious “earned equity” of the last few years.

Let the entire thing burn to the ground. Those who bought long ago and won the lottery will be fine. Those who chased greater fools and even greater prices will be burned. Too bad, so sad. Those people are the ones who should be living in vans under a bridge.

We need to get back to a societal meritocracy where those who work hard, save money, and invest in a diversified portfolio without 20x leverage can actually afford a decent place to live for their families.

So yes Joe #14, like you, I hope for the mother of all crashes. 50-75% reduction. Let every realtor, construction worker, developer, drywaller, & audi dealer lose their jobs (and hopefully their overpriced homes). I fundamentally do not care. Yes, I want to see people go bankrupt. I want blood in the streets and when they finally capitulate I will be there to buy their house at 50-75% off while they cry at how the world is unfair. Karma is a B*&^%.

#53 Stan Brooks on 02.23.18 at 6:36 pm

Instead, elected amateurs in Ontario and (especially) BC have opted to tax everything that moves.

They can be more creative, for sure.
‘Taxing’ farts and burps
http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/7646857.stm

#54 unbalanced on 02.23.18 at 6:38 pm

All you ever read on here that it isn’t a right to own a house. Well guess what. The NDP don’t think its a right to own 2 properties. HA HA Just loven it

#55 james on 02.23.18 at 6:38 pm

Perhaps Comrade Horgan and the Dippers are economic geniuses who can accomplish what no prior administration has – make people wealthier by taxing them poorer. Let’s see.

———————————————-

Any objective examination of history shows that this will probably be true!

The interesting question is why has it also always been true that conservatives end up making the most stupid, destructive, financially illiterate decisions of all elected politicians?

Centre-left leaders here and in the USA have a powerful record of paying down deficits and building surpluses, while enhancing social equality.

Then conservative morons come in and “cut taxes to stimulate the economy” and screw it all up, racking up huge credit card bills for the next generation and making society poorer overall.

Happens every time.

Anyone, please answer – why are conservatives always such incompetent financial idiots?

NDP, Liberal, Greens, I don’t really care. Anything other than conservatives will be the best chance for Canadians when it comes to tax and finances.

#56 Nonplused on 02.23.18 at 6:38 pm

I thought I’d seen lawmaking as ridiculous as it could get, but these new BC real estate laws truly plumb new depths. How could they come up with something so draconian and complex?

So if you have a vacation home in Kelowna you have to pay 2% but if you have one in Fernie you don’t? What kind of law is this? It’s absurd! And let’s mention 2% as well, which is a breathtakingly high number. At least with income taxes you can be reasonably sure the person has the money coming in to pay, but with things like property taxes and this astonishingly high tax that is not the case. Taking Garth’s $600,000 cabin example, $12,000 a year is absurd. Even a person making $200,000 a year is going to have a hard time justifying that. It’ll take him or her nearly $24,000 in earned income to come up with that much money. That’s over 10% of his/her income! And since not very many people make that kind of money, I think there are going to be a lot of “for sale” signs springing up.

That’s the problem with politicians, they generally cannot do math. They think that there is an unlimited amount of money “out there” that they just have to find a way to tax. That there are hordes of people out there that just have way too much money and aren’t spending it all. That 1+1+1 can equal 5 if it’s taxes upon other taxes (which any tax you have to pay with after tax income is, and in the case of carbon taxes you get at least 3 levels as there is GST in there too).

Anyway, I predict a horrible domino effect that goes like this, starting in the spring:

Stage 1 A small flood of second homes is going to hit the market in BC this spring, including “out of area” properties as some non-residents bail. (If you are out of area you are good for 2019 but what about 2020? If the tax is deemed a success because some people had to pay it because they couldn’t bail right away it will be expanded, as all taxes always are.)

Stage 2 will be an unexpectedly large drop in prices and a near cease up of the BC real estate market because that large of a shift in supply and demand (all Albertans becoming sellers instead of holders all at once is a huge sudden shift that will take years to absorb.)

Stage 3 will be a large surge in unemployment as home construction virtually stops and tourism takes a big hit. Because of the way the economy works through “trickle-down” effects it won’t be just construction workers but everyone who depends on that money circulating through the economy will be affected from Home Depot to the local pub.

Stage 4 (probably a year later) a new wave of houses will come to market as the unemployed people have to bail too. At this point the price collapse becomes international news. Banks start tightening lending and the price decline spills all across Canada but not to the same extent as in BC. At this point the irony becomes almost too big to bear as houses are becoming more affordable but less people have jobs to afford them and no one wants to catch falling knife.

Stage 5 Condo prices in Canmore explode. Every farmer in Alberta who has land on a lake starts subdividing. RV sales are strong. Alberta unemployment drops as more and more Alberta money flees BC and tries to make do with what options they have at home.

Stage 6 BC goes into full panic mode as something not envisioned by the new taxes starts to unfold: Speculators, who would normally step in and buy when prices got to low, are nowhere to be found because they can’t risk the potential consequences of not being able to find a renter.

Stage 7 Fraud starts to appear as desperate Albertans start renting their cabins to each other to avoid the tax. This prompts the BC government to impose even more draconian measures to make sure the cabins are in fact occupied year round. Some wives start moving into the cabins year round and declaring themselves residents of BC.

Stage 8 The NDP gets re-elected, declares the policy to be a smashing success, doubles down by extending the area to the whole of BC, and raises the tax rate from 2% to 4% to compensate for falling revenues as house prices collapse by up to 50%. Now people really start to panic and nobody wants to go anywhere near BC properties not even the people who thought this would be a good thing. (i.e. the millennials who come to realize that falling house prices are just as unaffordable as rising ones because sure you can buy the house easier but then the money just disappears. Make a mortgage payment? Poof, it’s gone. Use a bonus to reduce your mortgage balance? Poof, that’s gone too. Need a HELOC to fix your car? No can do you are underwater.)

Stage 10 The international media moves from “Peoplekind” to other stories about how dumb Canadians are. International investments in Canada dry up completely as Canada becomes viewed as a politically unstable country with minimal property rights.

Stage 11 A self reinforcing feedback loop is now in place. The impact will be so bad that it will be 15-20 years before the housing market recovers, just like last time. Things get so bad that even net migration drops to record lows as immigrants look for brighter prospects in the US and abroad.

Of course that is just a best case scenario. Maybe nothing will happen and Albertans will just cough up their $12,000 a year and be grumpy. In that case the BC government will be praised for establishing their very own transfer payments on another province. After that smashing success expect to see transit fees on pipelines, railroads, and the highways. Want to get that grain to the west coast Manitoba? Ha ha ha you’ve got to get by Captain Tractor, perilous pirate of the Thompson river! “Stealing wheat and barly and all the other grains!” Captain Tractor of course used to plunder on the Saskatchewan river but now he works legally for the BC government, doing much the same sort of work.

#57 morrey on 02.23.18 at 6:40 pm

so… its not a two way street

“Condo developer demands 15% more money from buyers after New Westminster project hits delays”

#58 TheDood on 02.23.18 at 6:40 pm

#26 Kilt on 02.23.18 at 5:49 pm
I’m not sure I would short BC.
Shopify, Tesla, Valeant, home capital, weed stock and bitcoin I would short.
You are always going to have demand. Wealthy immigrants and retirees. A few extra taxes won’t scare them off. Anyone with money isn’t going to retire in Edmonton or Winnepeg.
Housebuilding will still continue. They will adjust prices as we have already seen. You might just see a few less brand new f350’s driving around as margins get leaner.
_______________________________

I wouldn’t be so sure…….
RE in BC is WAY WAY WAY overvalued, despite demand. People are starting to wake up to the fact that overpaying and going into epic debt is not a good life strategy. Despite YVR’s and the Island’s natural beauty, there are much, much cheaper, warmer, better alternatives overseas and south of the border. If the so called “wealthy immigrants” are not scared away by Comrade Horgan and the red brigade’s taxes, then they’re as dumb as the dummies who’ve overpaid and are in debt up to their eyeballs.

RE is done like dinner in BC. 1 year from now, 50-75% correction – that’s my guess and I’m stickin’ to it!

#59 Discarded Canadian Millenial on 02.23.18 at 6:44 pm

Garth,

I too would be shorting British Columbia if it were a stock, albeit for entirely different reasons. The “free market” has been doing a perfectly good job of choking off its major cities in a horrific anti-commons of exponentially appreciating $4 million bungalows for the past 15 or so years. Working age individuals have been leaving the province in droves.

Unless its economy could be sustained by flipping empty houses and condos between oligarchs, it appeared BC was in terminal decline long before the NDP came along to try (likely in vain) to clean up the mess.

#60 Anne on 02.23.18 at 6:44 pm

I think a few quotes from Stephen Hawking seem appropriate:

“Intelligence is the ability to adapt to change.” and

“People won’t have time for you if you’re always angry or complaining.”

;-)

#61 Leo Trollstoy on 02.23.18 at 6:46 pm

… people (especially my age) are making bad life choices and choosing to blame others for their misery…

Bingo

Complainers and whiners will always be unsuccessful

That’s the perfect outcome

And if you’re complaining about something that happened 20 years ago, like NORTEL, then you made REALLY bad choices

Lol

#62 Cto on 02.23.18 at 6:51 pm

I said it before and I’ll say it again.
The man clearly responsible for this housing nonsense is are pitiful Central Banker, the dithering poloz.
At minimum you should have left rates Alone 2 to 3 years ago instead of lowering them two points.
No government’s trying to stop the crisis that he created.

#63 Matthew on 02.23.18 at 6:52 pm

So are you saying it might be a bad time for someone like myself who is graduating in April looking to get into the real estate development business in the GVRD? Is the gravy train coming to an end?

#64 JSS on 02.23.18 at 6:52 pm

CIBC dividend increase yesterday
RBC dividend increase today

Rub tummy
Rub tummy

#65 What is that thing on 02.23.18 at 6:52 pm

Anyone that is long-term negative on Canadian RE should have his/her head examined.

#66 SoggyShorts on 02.23.18 at 6:53 pm

#8 Joe on 02.23.18 at 5:04 pm
In response to George:

Our lives seem eerily similar. I too rent a townhouse and have a stay at home wife. The key differences seem to be that I drive a new minivan, have one extra kid, support two of my in-laws, and sock away $30,000 per year.

Now that’s out of the way, let’s get one thing clear. My house is too “cozy” for comfort. I *want* more space. Doesn’t mean I’m “desperate” for it. But you’d better believe the current state of the world pisses me off.
***********************************
So even with 6 dependants you are saving 30K per year, have a new car, and somehow you are pissed off at the world?
What exactly do you expect? To support 10 people on 1 salary? 20?
Or maybe just the 7 of you and also be able to afford 2 townhomes? 2 new cars?

#67 Cto on 02.23.18 at 6:54 pm

Years from now they’ll be ready textbooks of how prime rates should never be lowered below 1.

#68 herestoyou on 02.23.18 at 6:54 pm

If the home prices drop by 30% or more it will bring them down to the high prices from three years ago when there was no housing bubble on Vancouver Island. You’re saying the fallout would be disastrous because of jobs lost in the construction industry / loss to realtors and all the offshoot employment plus the spending that resulted from the real estate bubble. So I guess that means that we go back to the same jobs / economy of three years ago which is the normal economy is it not? I’m happy for anyone who profited from this hot market through jobs etc but like the bubble itself – these things cannot go on forever and we go back to normal. Why is this so bad – it’s just going back to normal.

#69 What is that thing on 02.23.18 at 6:55 pm

Not to worry. If there was a negative RE impact, there would be big government intervention to bring things back on-line. Onwards and upwards.

#70 BikeMike on 02.23.18 at 6:58 pm

Good thing it’s all about…you. – Garth

I feel the same as #14 does – none of the folks crowing about their massive (leveraged) real estate gains seem to heed the thought that maybe things aren’t as good as they think. They also seem quite apt to tell me how stupid I am. It’s a bit hard to feel pity for folks in that boat when that’s the experience.

#71 What is that thing on 02.23.18 at 6:58 pm

“Now add in a 15% or 20% go-home tax in BC and Ontario, that massive ‘speculation’ tax creaming off $200 million from existing homeowners, the empty-houses tax, the luxury tax, the universal rent controls, the enhanced property tax and maybe (if Van’s crazy mayor gets his way) a flipping tax, and we’re begging for a crash.” – Garth

——————————————————-

Talk about having your cake and eating it too. Garth, I thought you stated many times that foreigners are not having an impact. How then, can a tax on them have an impact. Perception? Yeah, that explains it.

Most of those actions target locals. – Garth

#72 joblo on 02.23.18 at 7:01 pm

Best line I read this week:
“Trudeau is a miscarriage on the world stage.”

#73 Bezengy on 02.23.18 at 7:01 pm

George has found the secret to life. Find a wife, have kids, and get a job, and enjoy your friends. Good for him. He just needs to volunteer to help coach his kids in sports and he’ll be so bloody busy he won’t have time to think about complaining.

David Livingston gets his sentence Monday. I’m hoping he’ll get the maximum 10 years which is a small price to pay for his role in the Ontario liberals “crime of the century”. I sure hope Ontario voters are paying attention.

#74 Bucky on 02.23.18 at 7:01 pm

#8 Joe “The key differences seem to be that …one extra kid, support two of my in-laws, and sock away $30,000 per year…. I *want* more space”

Hmm, seems like one of these things needs to give. Choices, choices.

My BIL is in a situation like this, started as a “temporary” family help-out, has lasted for 25 years as the in-laws seemed to loose all motivation once they moved in (reverse millennials?). He has had to work 2 jobs, went bankrupt once, looks like hell. Thank god my wife and I moved 2 time zones away from this train wreck. Don’t be my BIL.

#75 For those about to flop... on 02.23.18 at 7:03 pm

Pink Snow falling in Vancouver.

The Turner Curse is alive and well.

These guys have come up with a new plan.

Basically the same price ,but have split the lot in half ,asking 1.388 each.

Turner Street is actually one of the more speculated on streets I have seen in Vancouver.

Mathers Avenue on the North Shore is constantly coming up too.

In Burnaby ,McKee ,Portland and Carson come up regularly.

As for Surrey, it is hard to remember anything memorable out that way because of all the numbers instead of names.

I just treat Surrey like big pothole.

I drive around it…

M43BC

2995 Turner Street, Vancouver paid 2.53 ass 2.53 asking 1.388 split lot 2.77 for both.

Feb 1:$2,788,000
Jul 12: $2,700,000
Change: – 88000.00 -3%

https://www.zolo.ca/vancouver-real-estate/2995-turner-street

https://www.zolo.ca/index.php?sarea=2995%20Turner%20Street,%20Vancouver&filter=1

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

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

Feel free to make a donation.

Flop For Fox Fund…

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

#76 Democracy Is Mob Rule on 02.23.18 at 7:04 pm

Garth

You could write this blog and disable the comments section. That would save you a lot of time and frustration. What do you gain from comments? Is it worth it?

Group therapy. – Garth

#77 HanMan3000 on 02.23.18 at 7:09 pm

#43 Oakville Sucks

Oakville is suffering….down about 30% over last year

——————————————————————

I presume you mean sales and not prices?

#78 Adrian on 02.23.18 at 7:10 pm

Your spin is truly impressive! I’ll give you that, Garth.

People have *had* gain without consequences – other than the stress of debt(!) – for *at least* the last ten to fifteen years. Real estate values rose because commercial banks & credit unions flooded the market with massive amounts of new debt-based money. They created it out of thin air – via the magic of balance sheets(!) – and real estate popped:

“Canada Change in Household Credit and Change in House Prices”
http://www.profstevekeen.com/data-on-credit-employment-and-house-prices/#Canada

So, sure people are house-horny! (Not me, though. I got student loans instead because no one had taught me about assets & liabilities by seventeen.) Steadily rising prices for a generation do tend skew one’s perspective, especially without understanding the broader context. I have literally had a coworker say, “But real-estate always goes up, doesn’t it?” They seemed genuinely confused at the possibility reality could be otherwise.

People have taken on ever greater amounts of debt to get in before it’s “too late,” not realizing that the steadily increasing debt-to-income & aggregate debt-to-GDP ratios were driving the entire process. Neo-classical economists have sold people a myth by insisting that banks are “merely intermediaries” between lenders & borrowers.

They are not. Commercial banks & credit unions originate deposit-money through the process of loan creation, and this is not constrained by the “money multiplier effect” – another myth(!) – on central bank created reserves. The Bank of England & Bundesbank of Germany have both recently published on the subject to say exactly that, in flat contradiction to mainstream economic thought at almost every university:

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

But, you can’t even really blame the banks, either, when they have the ideological cover of “experts.” Besides, their business model is to sell people debt and the more people lever-up, the more profit the banks make. And, they’re all competing with each other for market-share, so if they don’t perform well, people get fired. It’s musical chairs with a gun to your head. This obviously makes for a very difficult work environment, as we have seen from worker complaints that were all over the news:

“‘We are all doing it’: Employees at Canada’s 5 big banks speak out about pressure to dupe customers”
http://www.cbc.ca/news/business/banks-upselling-go-public-1.4023575

The result is a system with every incentive structure geared towards creating – & eventually blowing up – debt-fueled asset bubbles. That is what bank-financed asset markets will *inevitably* do, if left to themselves. I agree that taxes aren’t necessarily the answer, and idiots can definitely screw things up, especially when they’re given keys to the halls of power… But, when you say, universally, “government isn’t the answer,” you are simply misinformed or disingenuous.

Government regulation that is well-informed, non-partisan, and crafted to serve our public interest is *absolutely necessary* to create well-functioning markets. If history is anything to go by, well-regulated mixed-market systems have been the single greatest wealth-creators. Ever. But their critical flaw is the banking system, and it will drag us into a deflationary depression if we let bank-debt get a majority claim on everyone’s assets & income.

On a positive note, with the internet – & the burgeoning “internet of things” – we are now seeing the early stages of Capitalism’s eventual replacement: nearly-zero-marginal cost freeware created by the sharing economy. Imagine a world where you freely give away your skills doing what you love, and enough other people are doing the same that, with near-costless reproduction, almost everything becomes freely available. It’s a Capitalist’s nightmare & my dream come true! See:

“A World Beyond Markets”
https://youtu.be/1mJAE45LR8o

Unless your Rentier buddies can figure out a way to put tolls on that, too, Garth… (Yeah, I know… real estate. Lol!) Seriously, though, if you had to sacrifice Capitalism to get “Star Trek” replicators and a chance for everyone to do what they love rather than grind, would you? I know my answer.

#79 Nonplused on 02.23.18 at 7:11 pm

Hmm rereading my comment (because I find myself humorous) I realized that I opened a thought can of worms I didn’t realize previously. I’ll state it as its own sentence to highlight it as an epiphany:

Falling house prices are just as, if not more, unaffordable than rising house prices.

I think I captured it in the last comment but I think it’s important and it doesn’t get discussed much.

If house prices are rising or stable then money spent paying down the mortgage is still theoretically there when you go to sell. It’s in a different form, but you still have your money. And maybe some left over to pay the realtors.

But when house prices decline, poof, your money is all gone. You may not be able to sell and pay off the mortgage and the realtors. You’re screwed, glued, and tattooed. You are imprisoned by that debt and cannot even move for a better job. A good part of any equity you had and perhaps worked hard to pay in is gone. Poof. The money just disappears, like BreX or RIM. Gone. There isn’t even a smoke bomb to hide it leaving.

I think, in retrospect, we should have all clearly understood this for years by observing how central banks do not like deflation. Or should I say hate deflation. They have experience knowing that once it starts it’s pretty hard to stop. That’s why they want “stable prices” but err on the side of “manageable inflation” by which they mean 2%. The theory is nobody is really hurt by low inflation around 2% if wages and assets are all rising at that rate as well, including your house. But 2% deflation means debts, at least some debts, can’t be paid and that is a problem.

Be careful BC. There is an old saying: “Be careful what you wish for”. I think you just got it. But I don’t think you are going to like it.

#80 Penny Henny on 02.23.18 at 7:12 pm

#2 Cabin fever on 02.23.18 at 4:47 pm
Hi Garth, I’m so confused… my parents have a house on Shuswap lake, it’s empty 99% of the time. Will they have to pay some sort of tax now ? My 2 sisters are fighting over who’s right….
Thanks
Louis12

If it’s in zone, then yup (the budget was a bit hazy – saying ‘central Okanagan’). Every year (2019 and beyond) they will get a bill for 2% of its appraised value. – Garth
////////////

As it stands wouldn’t ultimately depend on if they pay taxes in the province of BC?

#81 fishman on 02.23.18 at 7:12 pm

B.C. is too exciting to quit. The ChiComs just took over the biggest old folks home company in the province & the primo Bental Centre downtown. Commies at the gate. Socialists through the gate. Natives gearing up to be the biggest developers in the city & the province after federal transfer of huge land bank. Mayor Moonbeams girlfriend’s mother in jail in China & the ChiComs are going to execute her unless the daughter comes up with 80 million they figure she got stashed in Vantown
Lil Potatoe takes 4 Sikh MP’s to India. Along for the ride & the innumerable photo ops, a B.C. Punjabi who took a pipe to Ujal Dosanj’s head for 80 stitches & failing to kill him proceeded to an Indian politician & was convicted of attempted murder. Sex, Crime, Money, Rock & Roll in real time with real people. And there’s so much more in the Best Place on Earth.

#82 Kilt on 02.23.18 at 7:13 pm

#54
TheDood.

Drop of 50% is a stretch. Maybe SFH in parts of greater van. There is just too much demand. I work with young well off mils. They all rent, save 50K a year and whine that they are priced out. If prices drop 30% most of them would dive in. If prices drop 50% buying to rent starts to make sense. I’d even look to pick up an investment property. A 30% drop from here wouldn’t be unreasonable. I’d say it would be welcome.
Kilt.

#83 Newcomer on 02.23.18 at 7:21 pm

The market is made up mostly of locals, and there is very little impact on locals in the new measures, except for those that are aimed at enforcing existing laws. As you have always said, Garth, out-of-towners don’t have any noticeable impact on the market. We can’t, therefore, really label those measures as government interference in the market. On the other hand, there will be an impact on perceptions. People imagined that they would be able to take advantage of the lawlessness encouraged by the liberals to sell their house to some corrupt Chinese official. Now that perception will change. And there is withdrawal of government intervention, just ask you wanted. They are killing the FTBP and talking about getting rid of the homeowner’s grant. That is the opposite of interference.

As for the consequences, someone said it yesterday, but I’ll say it again: a recession would be a good thing for the BC economy. People need to retool and focus on making goods and services instead of borrowing them. The province is drunk on debt and, while it might seem that it’s best to avoid the hangover for as long as possible, the longer you leave it, the worse it is. The NDP is holding an intervention. Not pleasant, but sometimes necessary.

When I moved here eleven years ago, it was a happier place than it is now. I hope that, in five years time, it will again be a place where all sorts of people do all sorts of things.

#84 Graeme on 02.23.18 at 7:22 pm

Central banks man! It’s as pointless to rage against them as it is to rage against the entitled socialist masses their rotten ZIRP/QE bailouts have wrought. Limitless cheap credit for too-big-to-fail (poorly run) enterprises found its way into stocks, houses, tuition, dubious da Vinci paintings, etc. They swung the pendulum to an extreme and now it’s coming back (and it won’t be stopping at a happy equilibrium). I’m on the same page as for the gov’t to keeps its hands off however a) I’m not at all surprised there is now a sizeable contingent wanting asset prices to crash and b) it does seem a bit hypocritical for us to say let the free market sort it out in light of what central banks have created. The social contract has been broken and these kids are pissed. I only expect it to get worse. Heaven help us if the US stumbles now and they blame it on the tax cuts and what they think is capitalism.

#85 Dan.t on 02.23.18 at 7:30 pm

you don’t like all the new taxes on empty homes and second residences just sell your place…funny how the pendulum swings…

you don’t like insane rents and crazy house prices, just move.

Suck it up. Ja gov screwed up so bad on the way up- or it was really by design and now they will do the same on the way down. Why is that a surprise?

I don’t live in Canada but get my RE fix here but seems to me…Average family struggling in most BC decent size city (or is 500k still chump change in BC?), liberals and elected leader have been corrupt as heck and in bed with developers, RE industry and who knows what else and it is so blatantly obvious that the people finally want change.

Pitch forks are out now (that seems very dramatic :-)) The younger generation might actually have some spunk after all.

Maybe everyone is being too dramatic, after all, houses where doomed here in 2010 but ended up doubling and condo’s tripling all over the lower mainland and anywhere near YVR.

Maybe nothing happens. Maybe I ll buy pre-sale now.

#86 Zapstrap on 02.23.18 at 7:33 pm

Never forget … BC should always be beautiful, and the LM – Southern VI regions should also always have the mildest weather in the country. That’s gotta count for a lot in a country that starts on the 49th parallel.

It snowed in Burnaby today, right? Plus 8 in NS and Ontario. – Garth

#87 Guy in Calgary on 02.23.18 at 7:35 pm

The big money will move or pay the tax. This will hurt the middle class.

#88 Vancouver House on 02.23.18 at 7:36 pm

#20 islander

Vancouver House will probably do well.
It’s by Bjarke Ingels.
Watch the Netflix docu “Design” who did an episode on him. Truly fascinating stuff!

It’s hard to see how condos that fashionable could ever do badly value-wise.

#89 yvr_lurker on 02.23.18 at 7:40 pm

I was fully expecting Garth to choose a less contentious topic for today, but instead he has chosen to double-down on his position from the last two days. Let me do so likewise in point form:

1. By letting housing in YVR be decided solely by “free-market” conditions since the liberals took power in 2001, local families in YVR have been unwittingly competing for housing in a GLOBAL market-place against offshore investors with loads of cash to park in real estate. This leads to so many empty homes, households headed by “students” with 20K annual incomes (with the breadwinner still overseas safe from the CRA), and all sorts of loopholes and outright corruption to mask the true amount of foreign ownership. Hard for locals to compete in this global monopoly board with local incomes stagnant, and rather few local high-paying jobs etc. We are not London, NYC, Singapore, Hong Kong, Silicon Valley, etc, where there
are so many more lucrative opportunities. Hopefully the true extent of the influence of the foreign money will be uncovered once all the loopholes have been exposed and then closed (Eby-German report will shed some light on this). This extreme run-up of prices (now both
rentals and entry-level condos) in the core of the city has spurred a wave of huge price increases all through the outer reaches of the lower mainland as locals try to get some STABLE foothold in order to start a family etc…. Still, starting from zero, with no direct inheritance
or “family plan”, it will take years for a young couple to save for a 625K basic townhouse in the outer reaches of Langley

http://www.livewellrealestate.ca/langley-townhouses?gclid=EAIaIQobChMIy6HBqaS92QIVj2V-Ch1T7ATaEAAYBCAAEgLHVvD_BwE

The “free-market” dogma of the Liberals (Socreds) and developers has been simply:World Class = Real Estate prices comparable to NYC, London, HK, etc… Come park your cash here, everything is for sale to
the highest global bidder. Is this the type of World Class city we want? Do we want YVR to resemble Monaco? YVR was already rather World Class prior to 2005. It had film festivals, green spaces, inexpensive
local skiing, diverse restaurants, and vibrant local communities (come see the ghost-towers at Coal Harbour at nighttime in contrast).

2. Supply side economics: “Affordability will be reduced if we can just increase the supply of housing units”. Response: land has become so very expensive in YVR in that new condo towers in the core of the
city are typically of the luxury model type, with pre-sales typically flipped several times with no taxes paid until the end. The trend of offshore pre-sales and flipping is now permeating much of the lower
mainland. “Oh for sure, let’s just simply increase the supply of these luxury units, and all will be good (sarcastic):”

http://business.financialpost.com/real-estate/rpt-vancouver-condo-rush-sparks-local-and-foreign-flipping-frenzy

3. Opportunity costs: The high-cost of housing has been a detrimental factor for many startups seeking to attract and then retain high skill employees, which ultimately leads to higher paying jobs. Many articles
on this topic, such as

https://www.bnn.ca/borderline-ridiculous-vancouver-tech-leader-warns-home-prices-hurting-competitiveness-1.682279

Just because the real estate sector may tank somewhat, does not mean that the whole economy will do likewise: new sectors greatly impacted by the afforability crisis in retaining workers will likely do much better and lead the transition in our economy away our collective
real-estate-mania. The next generation of Vancouverites will benefit from this transition. Do you think Amazon chose not to come to Vancouver because of the NDP? Don’t think so.

I have little faith that “Mr. Market” will correct without a strong intervention. Although I own a home in the core and will be affected by these changes, I am still fully supportive of the measures brought forth by
the NDP this week. Other countries have also recognized the need for some strong housing controls (New Zealand, Australia). In my view, the
NDP has taken a step in the right direction.

#90 conan on 02.23.18 at 7:42 pm

If BC were a stock, I’d short it.- Garth

If potholes on Ottawa’s streets was a stock, I’d go long on it.

Looking at the graphs now…… yowzer.

https://i.imgur.com/RYYovsj.jpg

#91 Andrew Woburn on 02.23.18 at 7:43 pm

– Are Driving Bans Coming for German Cities?

“A court ruling could ban millions of diesel cars from German city centers, rendering the vehicles worthless. The federal government has considered responding with free public transportation and by forcing car manufacturers to submit to new requirements.”

http://www.spiegel.de/international/germany/emissions-violations-have-german-cities-facing-driving-bans-a-1194269.html

#92 BlorgDorg on 02.23.18 at 7:47 pm

BRING ON THE CONSEQUENCES

WOOF WOOF WOOF

#93 Joe on 02.23.18 at 7:51 pm

“Don’t be my BIL.” — Bucky

No worries there. I didn’t mean to give the wrong impression. My in-laws are good people who have never imposed anything on me.

#94 Okanagan Mainline RE Board on 02.23.18 at 7:53 pm

OMREB Tanis Read says no consultation on tax.

Changes to B.C.’s foreign buyer’s tax are being slammed by the association representing Okanagan realtors.

“The change has significantly reduced the budget for my clients who are looking to move to Canada from Europe,” said Tanis Read, president of the Okanagan Mainline Real Estate Board.

“It’s distressing that the province didn’t consult with the industry as a trusted partner, not an adversary, and perhaps there could have been more concrete solutions.”

“No one in this region believes this is a problem here and this move will have a lot of unintended negative consequences,’ she said.

If it is not a problem then why are you so mad Tanis?

Something smells here.

#95 HEY INSENSITIVE GEORGE on 02.23.18 at 7:54 pm

DELETED

#96 Karma on 02.23.18 at 7:55 pm

#96 The Limited Sage on 02.22.18 at 7:05 pm
“I wonder how Starbucks girl is feeling right about now..”

LOL!

#97 A123 on 02.23.18 at 7:56 pm

#12MF
Everyone is not miserable, just seems that way on this blog because it is predicated on the housing bubble..something that is screwing over the entire country.

MF
———-
Many people are not miserable, because they are oblivious to what is happening around them , are smug in the fact that their housing investment has appreciated and manage day by day.
People who read and comment on this blog are more aware of issues related to housing and the economy.
Many Canadians are not aware of issues, do not listen to the news and economic forecasts and come election time will go out and an vote for Mr. Socks because he is a cool dude.
But, when until they want to sell their home and it is not worth what they thought, they will cry loud and hard. Just like that couple that bought a home in Oshawa and the new models were $90,000 less.They hit the news and were crying about how they were done in and things were not fair.
I used to think Americans were ignorant.
But, many Canadians are not far behind.

#98 I like it! on 02.23.18 at 7:56 pm

DELETED

#99 Trusted Partner? on 02.23.18 at 7:58 pm

“It’s distressing that the province didn’t consult with the industry as a trusted partner, not an adversary, and perhaps there could have been more concrete solutions.”

Trusted partner?

Sorry, your trusted partner Christy and the Libs were voted out for not being trust worthy with the people of BC and selling them out.

NDP don’t trust realtors and will not stand for your real estate corruption anymore.

#100 Dolce Vita on 02.23.18 at 8:01 pm

Humanity does not know moderation. When things go bad, change swings from 0 to 180 degrees and the converse is true. You never see the middle position.

You should know that by now Garth. Still, rail away. It makes for some classic humorous bloodletting prose.

I agree with many of the Commenters today that have saved, diversified, worked hard, achieved top 10% earnings yet, denied a basic home due to RE as Ponzi Scheme by foreign or domestic.

Let it burn down.

Purge the economy of its bad players for a decade or more. The economy will be better off for it and lead to Creative Destruction.

The Millennials will never learn otherwise as the generations before them have. They will come to realize that they are no wiser than those that came before them…as we all did.

It isn’t different this time. History merely repeats.

Hubris and avarice never end well.

#101 Parksville Prankster on 02.23.18 at 8:02 pm

An Albertan friend recently purchased a vacation property in our fine town of Parksville on a local strip called ‘Resort Drive’. The town bylaw states that the units cannot be occupied for more than 180 days per year by the owner, and must either be left vacant, rented out directly, or placed in the rental pool.

Some back of the napkin calculations suggest: A purchase price of around 420K, with 20% down gives a mortgage of around 336K. If she does interest payments only of say 4% ($13,440 per year), municipal taxes of about another $2,000 per year, condo fees about $4,800 per year, insurance about $1,500 per year, utilities say around $5,000 per year, then her holding costs, excluding the opportunity costs of the 20% down would be about $26,740 per year or about $2,228.33 per month. Considering these units rent out for around $2,500 per month in the slow season, she will be absolutely under water if she has to pay another 2% for being a non-B.C. resident, and also for not having the place as her primary residence. I wonder how clogged the exits will be, or if folks will hold them and hope for a capital appreciation in the future to offset a potential present day cash flow loss. CAP rates like this don’t make any financial sense at all.

#102 Observing on 02.23.18 at 8:05 pm

Realtors are still delusional about the factors effecting the current housing market. Most add zero value to the actual transaction. The handful I know are slimier than slimer from the ghostbusters.

Housing tax and gas tax generate a tonne of cash for the government. They do not want to see lower prices.

Imagine if we changed the way we built homes or powered our cars? Tax dollars would dry up. Time for a shakeup, we have the technology.

Unfortunately the current system stifles innovation. Will only get worse if we elect a bunch of racist right wing cons into parliment (who only want to continue the old way of thinking).

#103 house on Shuswap lake on 02.23.18 at 8:05 pm

Good news re Shuswap Lake empty homes. I just got off the phone with Andy Weaver. Your house WILL be occupied, by squatters. The Govt will protect their rights but only if they don’t speak English, French and others are going to be welcomed and immune making the tax a moot point for you.

Here is what you have to do to in order to sell your place: If there is a squatter present on a property you want to buy, write a clause into your offer and make it a pre-condition of your putting down a deposit or buying the property that there is no adverse possession issue. You can just talk with the owner making it clear that there will be no purchase if there is a squatter issue. This works particularly well if the owner is Mexican and can go through the somewhat long process of getting the authorities to evict the squatter. Or use a Mexican lawyer/real estate agent to come to a ’solution’ (payment) to get rid of the problem before you buy.

I forgot to ask you. Is Shuswap in Mexico? Funny name isn’t it?

#104 waiting on the westcoast on 02.23.18 at 8:10 pm

Garth – good luck with this crowd.

Even though I am going to immensely benefit from a crash (bulk of my assets are US based) and I rent, I do not want to see both BC and Canada get crushed because of reactionary politics.

People want government to help them get a house or save their job…

What they don’t understand is that government exacerbates natural cycles and makes them far worse.

Both ways… The up cycle would have ended earlier, the down cycle might not be as deep.

Oh well – let the whining continue and rationalizations for destroying people’s lives…

#105 Lost...but not leased on 02.23.18 at 8:10 pm

Here in BC..some thoughts and comments

My late fathers home doubled in price in the course of 2 years. Luckily we sold..but a price drop of say 50% is possible(ie back to 2016 prices)…homes in the same neighbourhood aren’t selling and are into haircuts.

My late mothers home sold..but prices flatlined for last 2+years…a decline is likely…again out in nick of time.

Recreational property was bought in 1974. This is where it gets interesting. We are in the Cariboo..south central BC..not in the NDP target zone…at least yet.

The cabin is approx. 400 sq ft…wood stove..no plumbing or electric…not insulated..a grade above a lean to. Suffice it to say it is “grandfathered”.

Our accountant stated that re my Father estate, pay the capital gains hit on his 1/2 ownership, which we did. Then my mother’s estate will pay her share(even though it was owned jointly ..title transferred to her upon his passing)

It would be interesting if the NDP starts to extend the tax boundaries…as our cabin would NOT pass muster as a rentable unit…nothing is really up to code. I could easily turn it into a garage/shed by say storing some tires , lawnmowers etc in it…voila..no cabin

Many recreational properties are in remote areas and would never attract tenants. They are a separate class of property altogether.

I have also noted a stagnation in prices. Many millenials were never brought up in a cabin culture…they wouldn’t know which end of an axe to hold and how to swing it. IMHO, this facet of the RE market is one to watch…it may collapse faster/quicker as the older generation struggles to find buyers?

Me??? I want out ASAP when my mother’s estate settles..sick of doing all the maintenance etc while my idiot sibling and their useless family elbow us out of the use. Novelty for me wore off long ago…F’ em.

Lesson???..bail on recreational property asap…the NDP is only getting started.

#106 Pink Snow Vernon BC on 02.23.18 at 8:11 pm

7228 Lakeridge Place Vernon, BC

Listed at 649k

https://propertyguys.com/property/index/id/51872

Bought last July for 690K

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

41k loss ………probably more like 70k loss once the dust settles on this one.

plus whatever property guys charge on top of that, plus all the transfer fees and costs associated in acquiring the place just 7 months ago.

#107 Mark’s friend on 02.23.18 at 8:14 pm

You write well – I’ll give you that. You call Mr. Horgan comrade. That’s not nice. He was elected by the majority of B.C. People – please respect that.

Why don’t you move to B.C.? Then you can give some constructive criticism – instead of just shooting from the weeds (❄️)

A majority of people (57%) did not vote NDP (40%). Perhaps you should learn more about B.C. – Garth

#108 Jay (not that one) on 02.23.18 at 8:16 pm

I’d be all for letting the house of cards collapse on it’s own, but as we all know: the folks who are profiting right now will also be the first ones hat in hand demanding the government step in and spend my money to save them when it does.

In 2008, I was in the “hands off” camp. Instead we got Canada’s economic action plan for make benefit glorious nation of Kazakhstan up here, and trillions in bailouts and stimulus down south. We aren’t going to get laissez-faire. That being the case, if we’re inevitably going to save these idiots when the obvious crash occurs, then it is sensible to try to tilt the table a bit so we’re spending less when it does happen.

Rather that than China, where the government has been trying to keep the housing bubble going indefinitely.

#109 just a dude on 02.23.18 at 8:18 pm

Garth, thanks for posting this superbly refreshing note from young George. Gives me hope!

Well done, George! Keep it up and do all you can to instil your well-rounded, grounded and responsible qualities to your kids. It’s the best you could ever do for them as a parent.

#110 Dolce Vita on 02.23.18 at 8:22 pm

20% YVR RE price drop Garth?

Understatement.

I thought the same as you.

You know, people will list their “investment” properties at about this time and if no offers, will start to slowly drop prices to sell.

I was going to cite MyRealtyCheck “Multiple Change Properties” as evidence that it will be shallow price drops in YVR come April/May and followed by “motivated” selling by September as the “bills” pour in and put a cramp on summer vacationing’s lifestyle.

No such thing.

Take a look at their new line chart “Average $ Change by Month” (well, new to me as I have not visited the site in some time).

Bear in mind these are list prices for all types of properties, not just detached homes, on the MyRealtyCheck website.

That is no 20% price drop trend shown in that chart.

That chart is chronicling the 2018 RE Price Drop Armageddon in YVR.

#111 Karma on 02.23.18 at 8:23 pm

#128 NEVER GIVE UP on 02.22.18 at 7:54 pm
“SCM never bothered me one bit?

Whats all the fuss?

I got much more riled up when the realtors were on the blog trying to pump up property prices.”

He was very agist against Boomers. Garth is a Boomer, and thus wouldn’t put up with his crap any more.

#112 crossbordershopper on 02.23.18 at 8:27 pm

amazing such a large country and the government controls all the real estate. People have to accept less in life, i dont know why they want it all.
you are not free till you want nothing. dont be controlled by the media or your friends and family. they dont have your best interest, they are extending their view, values, and wants and desires on others. its about control.
so back to freedom, be your own person, accept less, want less, be happy. you will never have a big enough place or enough toys to fill it, its futile. and in the end we all end up in a six foot box, you cant take it with you.

#113 Adrian on 02.23.18 at 8:28 pm

“It snowed in Burnaby today, right? Plus 8 in NS and Ontario. – Garth”

Lol! Don’t be ridiculous! This is the first – maybe second – *real* snow-day all winter! Can anywhere else in Canada say that? Brrr! It’ll be spring here next week. Or maybe the week after ;)

#114 Doc on 02.23.18 at 8:28 pm

You’re right about group therapy Garth. Your facilitator comments are infrequent and thoughtful and move the conversation back to a point of view. The best demonstrate wisdom but the feisty or witty ones make me laugh too. A virtual therapy with anonymity-drop in whenever you want and experience feedback from wise elders, foolish youth-(not ageist, its just that youth repels wisdom) esotericists, enlightened souls and the great middle of the road types that make the world work. Generally interesting, occasionally disheartening and occasionally just great nuggets with no cost to the taxpayer. Good idea..

#115 Trojan House on 02.23.18 at 8:30 pm

#9 A J on 02.23.18 at 5:10 pm

“Hey George, good for you. Humblebrag aside, everyone’s different. Has different wants and needs and situations. What’s so hard to grasp about that?”

Right. So go buy that house and have a $750,000 mortgage & buy that $54,000 Audi A4 if that’s what you want & buy that cottage & take that trip to Costa Rica every year. Just don’t cry and whine about it when you’re a debt slave and don’t have any savings!

#116 Karma on 02.23.18 at 8:30 pm

“The article is a year old and the finance minister yesterday confirmed all Canadians with rec or second homes in B.C. that are not rented out full-time will be taxed. – Garth”

Just a reminder, the new tax will be applied only in Metro Van, CRD, Nanaimo Regional District, Kelowna and West Kelowna.

So Albertans that have properties on the many other lakes and towns not listed above will be tax-free.

For now, says the finance minister. – Garth

#117 Vancouver on 02.23.18 at 8:31 pm

Hej George, good for you.. but try to live in Lower Mainland on $79K income with two kids, let alone finding townhouse for $1800. Just saying…

#118 Dead Cat Bounce on 02.23.18 at 8:35 pm

#92 Okanagan Mainline RE Board on 02.23.18 at 7:53 pm

“It’s distressing that the province didn’t consult with the industry as a trusted partner, not an adversary, and perhaps there could have been more concrete solutions.”
——————————————————————

Realtor ? Trusted partner ???

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA !

#119 NV Landlord no more on 02.23.18 at 8:36 pm

Short BC ? – definitely we should. This is a disaster!

RE is worth 25% of BC’s GDP? !
Holy cow! I knew it was huge but not that big.

But in a couple of years Quebec, NS, NB and PEI will be sending BC huge transfer payments! Maybe then we’ll have $10.00 daycare, and cheaper university tuition.

Also remember Trudeau is a former drama teacher. On this trip he’s just enjoying playing dress-up!

#120 maxx on 02.23.18 at 8:40 pm

#121 Gurpal Samjit on 02.22.18 at 7:43 pm

Oh…but they’re sooo photogenic.
Collectively don’t look much over….ummmm….100?:

https://www.spencerfernando.com/2018/02/22/video-speaking-india-trudeau-forgets-old-canada/

….and to round out the slate of “state visit” entertainment:

https://www.youtube.com/watch?v=3b2WNZqiwTk

and

https://www.youtube.com/watch?v=3b2WNZqiwTk

#121 Trojan House on 02.23.18 at 8:41 pm

#50 DQ on 02.23.18 at 6:33 pm

“Yes, I want to see people go bankrupt. I want blood in the streets and when they finally capitulate I will be there to buy their house at 50-75% off while they cry at how the world is unfair. Karma is a B*&^%.”

Geesus! They would sound exactly like you right now! Try telling people in some dirt poor country in Africa or the barrios of Rio who live in shacks or mud huts your dilemma. Poor you with your first world problems!

Garth is absolutely right – FOMO has driven the market in YYZ & YVR to astronomical heights. And you are feeding right into the frenzy.

#122 TheSecretCode on 02.23.18 at 8:42 pm

In Kelowna. Greeted with negative -15 Celsius weather outside today…frozen. Pounding the for sale sign into frozen ground is not an easy task. Good thing someone else is doing it. They probably use an ice auger like what they do for putting fence posts in.

So, I am on the ground in Kelowna continuing with meetings and collecting local information.

Check this out:

2,200 strictly rental buildings 50% complete and coming on line this year in Kelowna. A confidential real estate insider source has told me that the current less than 1% rental vacancy is going to increase to 4.5% by year end and early 2019.

So, I went to a place today in the Lower Mission. Brand new flats, condos and town homes, full size gym, lounge, walking/biking distance to everything, beach etc. $1,350 for the town home. They are throwing in a year free Telus TV and High Speed Internet.

Mission Flats.

Pets / dog friendly, a dog run, an organic community garden…

2,000 + units strictly rental buildings like this coming in Kelowna. No worries of being kicked out due to selling. The guy told me no annual rent increases as they want to keep the prices around the 32% of the average income mark.

Basement suites out in suburbs like Wilden, Upper Mission, West Kelowna will no longer get the $1,600-$2,000+ per month currently being paid by many basement dwellers sleeping with Black Widow spiders.

Banks have allowed borrowing against an SFD to include these basement suite incomes…and when you can’t get the income that you originally thought, your bank won’t care and it will be up to you to figure out how to replace the 300-400 dollar per month loss…this all adds up to bankruptcy for highly leverage people.

Another sell signal for investors of Kelowna SFDs.

Like I said…perfect storm has arrived in beating down equity gains in BC…interest rates hikes still ongoing being the biggest threat.

And Calgary SFDs are the best buy opportunity in Western Canada right now since USA SFDs in 2011.

#123 FOUR FINGERS WATSON on 02.23.18 at 8:45 pm

A majority of people (57%) did not vote NDP (40%). Perhaps you should learn more about B.C. – Garth
………………………..

Better to have a coalition government than the 39%”majority” fruit show we have in Ottawa.

#124 A J on 02.23.18 at 8:46 pm

#113 Trojan House

….

Who are you talking to? Did I say I wanted that?

#125 TheDood on 02.23.18 at 8:46 pm

#80 Kilt on 02.23.18 at 7:13 pm
#54
TheDood.

Drop of 50% is a stretch. Maybe SFH in parts of greater van. There is just too much demand. I work with young well off mils. They all rent, save 50K a year and whine that they are priced out. If prices drop 30% most of them would dive in. If prices drop 50% buying to rent starts to make sense. I’d even look to pick up an investment property. A 30% drop from here wouldn’t be unreasonable. I’d say it would be welcome.
Kilt.
___________________________________

I think demand is overstated and overrated. For every mil that can afford to stay, how many cannot? There is simply no industry paying the kind of $ required to make a decent living. Nice place, but far too expensive to stay and make a go of it.

#126 pay your taxes on 02.23.18 at 8:51 pm

#1 Flop

Back in ’87 my parents bought a house a few doors down from that one for 286k with an unfinished basement. Prices have risen almost unabated since then. It used to be a middle/upper middle class hood populated by small business owners and management types. Not sure who is buying in now at those prices.

The house we moved out of was purchased for 86k in ’79 and sold for 286k in ’87. That generation made big coin on real estate too.

#127 Karma on 02.23.18 at 8:53 pm

“To summarize: government isn’t the answer. Politicians helped fuel the housing bubble. Now they clumsily crush homeowners. Better that Mr. Market were left on his own to keel over from rising rates and an ocean of debt. Instead, elected amateurs in Ontario and (especially) BC have opted to tax everything that moves (Chinese dudes, cowboys, cottage owners, the doctor class) and hope for the best.”

There is a beautiful quote by Frederic Bastiat that sums up this situation:

“The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.”

http://files.libertyfund.org/pll/quotes/196.html

#128 Muttley O'Toole on 02.23.18 at 8:55 pm

Off topic, but the view from down-under is that this MUST be one of Canada’s problems,surely.
(Just like our PM, although Turnbull would be a bit more aware of making a prime dick-head of himself in a foreign country).

https://www.dailytelegraph.com.au/blogs/tim-blair/justin-trudeaus-subcontinental-cultural-appropriation-tour/news-st

#129 TheSecretCode on 02.23.18 at 8:55 pm

Best bang for buck (buyers market) of SFDs in all of Canada:

#1 – Montreal, QC.

#2 – Calgary, AB.

Worst bang for buck (sellers market) on SFDs in all of Canada right now:

#1 – Vancouver and Lower Mainland.

#2 – Victoria, BC.

#3 – Toronto and GTA.

#4 – Kelowna, BC.

#130 Financial Orchid on 02.23.18 at 8:59 pm

Like a lot of moisters here, I read Garth’s blog daily because it keeps millennials like myself more level headed — balancing interest rate hike reality with glossy staged home pinterest photos. Oh the possibilities!

As a homeowner, I want appreciation, but as a domestic worker watching the gap between house price and wages widen by the hour worries me as I ponder where I could house my future kids in Canada, or I should rephrase –condo my future kids if in Van/Tor.

Any millennial should be concerned with not only the direction of realty prices but where the future is headed, what skills will be in most demand, what new problems will need to be solved as industries evolve, and how to capitalize on innovation opportunities.

That is how we can move our society forward. We can’t take the same career risk to make an impact when we’re saddled with an unmanageable mortgage for the rest of our prime working years.

http://financialorchid.com/how-i-envision-2028-to-look-like

#131 Ustabe on 02.23.18 at 9:03 pm

May I humbly point out that a great many of Garth’s regular posters should investigate therapy?

Garth has obviously found his preferred method but I feel a lot of you would benefit massively from a 4 day ayahuasca retreat in Costa Rica.

Or almost any Central or South American country where shamanism is prevalent.

Ulcers, digestive issues and hypertension are evident in many of your posts. Fix that or prepare to move to a condo close to an emergency clinic.

#132 For those about to flop... on 02.23.18 at 9:09 pm

#126 pay your taxes on 02.23.18 at 8:51 pm
#1 Flop

Back in ’87 my parents bought a house a few doors down from that one for 286k with an unfinished basement. Prices have risen almost unabated since then. It used to be a middle/upper middle class hood populated by small business owners and management types. Not sure who is buying in now at those prices.

The house we moved out of was purchased for 86k in ’79 and sold for 286k in ’87. That generation made big coin on real estate too.

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

Hey Pay , here’s some old sales history on that one.

Only goes back to early 90’s but you get to see what happens when someone forgets to put the lid back on the sauce bottle…

M43BC

https://www.propertyinsight.ca/2630-tempe-knoll-drive-north-vancouver-bc-uedwcefqkv4e

#133 Capt. Serious on 02.23.18 at 9:10 pm

The problem with politicians is that their job is actually getting elected or re-elected, not working for the people. Try selling tough medicine to the public. Remember when Hudak came out and said he’d take on Ontario public unions? Eviscerated.
100% government should have stayed out of encouraging house purchasing. Also OSFI fell asleep at the switch. Overcorrection will happen, because people are notoriously bad at grasping complex feedback loops.

#134 For those about to flop... on 02.23.18 at 9:12 pm

Pink Snow Vernon BC on 02.23.18 at 8:11 pm
7228 Lakeridge Place Vernon, BC

Listed at 649k

https://propertyguys.com/property/index/id/51872

Bought last July for 690K

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

41k loss ………probably more like 70k loss once the dust settles on this one.

plus whatever property guys charge on top of that, plus all the transfer fees and costs associated in acquiring the place just 7 months ago

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

I got a franchise in Vernon now?

This thing is getting out of control…

M43BC

#135 Lorne on 02.23.18 at 9:12 pm

A majority of people (57%) did not vote NDP (40%). Perhaps you should learn more about B.C. – Garth
…..
I do know a bit about BC having lived here all my life. A majority of the people (57%) DID vote NDP & Green and those 2 parties are legitimately in power in BC.
This seems to be much faired and better than the 39% “Lieberal” majority dictatorships of the past.

People voting Green did not vote NDP. Nor was there a vote on coalition government. My statement stands. – Garth

#136 ImGonnaBeSick on 02.23.18 at 9:13 pm

What is find ironic is that everyone on here has friends, family members, co-workers that all have “multiple” houses yet you still can’t figure out whose to blame for exponential house price increases… Gotta be the Chinese, gotta be the drugs… No dummies, it’s your brother in law, your aunt Margaret, and Bob from work… The supposedly tell you this every day and at every party…

#137 Karma on 02.23.18 at 9:14 pm

#175 Mattl on 02.22.18 at 9:03 pm
“My absolute fave posters on this blog are the ones chearing for a 50 drop – which would take us back to to 2012ish in Vancouver, with no awareness of what the fallout from that big a crash would entail”

Really depends on the product.

If my parents’ old home went down by 50%, it would likely be what it was worth in 2005 or 2009 after the crash.

If it was my two old condos (owned at different times), then it would be never, as it would be worth less than the presale price (pre-GST) on both, lol.

However, if it was my parents’ Yaletown condo, it would be 2005 pricing, in which it wasn’t even completed yet.

Yes, the economy would crash hard though. But that won’t happen anyways since 50% is far too much of a drop.

#138 Screwed Canadian Millenial on 02.23.18 at 9:16 pm

GONE

#139 Invesrx on 02.23.18 at 9:20 pm

All these factors listed to cool real estate, yet no big reduction in heated markets like Toronto, reverting to the mean.

It’s different here.

#140 45north on 02.23.18 at 9:24 pm

Nonplused: Anyway, I predict a horrible domino effect that goes like this, starting in the spring:

from Stage 1 to Stage 11

it’s a lot simpler and quicker

here’s Garth from yesterday: If prices in Van drop just 25%, which suddenly seems like a no-brainer possibility, a stunning one quarter of all households with mortgages go into negative equity. That means their mortgages are greater in size than their property is actually worth. Yikes. And not only would they have a monster debt and have shed their savings/downpayment, but mortgage rates are guaranteed to increase this year and next, completely diddling the family balance sheet.

“if prices in Vancouver drop 25%, then one quarter of all households with mortgages go into negative equity.” this would pretty much guarantee that the delinquency rate would increase by a factor of 10. Which fact the banks would instantly recognize and they would react by withdrawing credit. I would say from all of BC. The immediate effect would be to slow real estate transactions in British Columbia. I’m talking about a downward spiral with no floor. Factors which would stop or slow the downward spiral are absent – high levels of equity and solid fundamentals.

I didn’t spell out the possibility of a downward spiral yesterday because I thought it was obvious but I guess not. The British Columbia Government fails to recognize the precarious position of real estate and by extension the whole economy. By the comments on this blog, there are a lot of people in BC who don’t recognize the precarious position they’re in. Yesterday I did mention The Big Short which is a movie about the collapse of the American Housing Market. The US Government took drastic action to keep the economy afloat including dropping the interest rate from 5% to 0%. This option is not available to Canada. In fact we’re moving in the opposite direction. Another big advantage the Americans have is that most of their mortgages are 30-year fixed – the interest rate stays the same for 30 years. In comparison all Canadian mortgages would be called adjustable rate.

I have family in British Columbia. I live in Ottawa. I have a stake in British Columbia but the BC Government is acting in reckless disregard of the economy. It’s like they’re gambling at a high-stakes table but don’t know the rules.

#141 IHCTD9 on 02.23.18 at 9:26 pm

#405 Mandria on 02.23.18 at 6:21 pm
@ IHCTD9

Ok no problem…but realize that if you tell us to leave that you have no right to…nurses, technical services, garbage collection, wastewater services, chefs and fine dining…the middle and working classes keep a city running. We are not asking for McMansions, affordable basic rentals in non-central areas are not too much to ask. It’s worth pointing out that rentals in the far flung GTA come with similar price tags. Wish us away if you want but realize exactly what you are doing. I worked my way up from nothing to the top 5% of earners and I’m no whiner but Toronto is eating itself. I give it a year and I leave…be careful what you wish for.
————

I agree Toronto is going to keep getting worse 100%.

Still does not change the facts. The GTA never was cheap, never will be. Incomes aren’t keeping pace, new business and investments in same are being chased south.

Might as well get moving with a plan if you’re not expecting to make the scratch required to buy a house. Either that or get used to the idea that you will rent till death.

#142 Screwed Canadian Millenial on 02.23.18 at 9:28 pm

STILL GONE

#143 IHCTD9 on 02.23.18 at 9:31 pm

#406 Mandria on 02.23.18 at 6:27 pm
@ IHCTD9

Good luck with true self sufficiency though…let me know how it goes after your first self-done hydro transformer repair
—————-

Thanks, but transformers aren’t in the game plan as I won’t be producing high voltage.

Either way, luck’s got nothing to do with repair work.

#144 Smoking Man on 02.23.18 at 9:38 pm

No comment.

#145 Andrewt on 02.23.18 at 9:54 pm

Anyone doubting the Fed will raise may want to tak a gander at the latest as the minutes of the last meeting were released.

“And the minutes did suggest the Fed might eventually raise rates to a level higher than financial markets presently anticipate. Fed officials predicted in December that the Fed’s benchmark rate would come to rest around 2.8 percent, well below its precrisis level. The rate is currently in a range between 1.25 percent and 1.5 percent.

At the January meeting, some Fed officials raised the possibility that the strength of economic growth might raise that ceiling.”

https://mobile.nytimes.com/2018/02/21/business/economy/fed-economy.html

#146 jane24 on 02.23.18 at 9:58 pm

Garth I have followed you since the 1980’s when you wrote a RE and financial advice column in the TO Sun. I am sure it wasn’t the Toronto Star as they have always been lefties. I have learned all my financial smarts from you and I am grateful. I retired recently at 59 and have your recommended no debts, simple comfortable house and one million in other assets on average lifetime wages. We lived simply and happily and saved. Thank you but with these arguments you may be on the wrong side of history.

Western democracies are changing world wide as average people realise that globalisation where services and goods are produced only by the cheapest world wide supplier and job automation is encouraged only rewards the global elite. The average voter gets screwed. The average voter is now angry and is starting to use their vote against said global elite. This is why we have Trump and Brexit and the NDP in BC and Poland refusing to do anything the elitest EU wants them too and Germany with no actual govt for 6 months now and an Italian election in 2 weeks where most of the parties are anti-everything. The list of protest by the average Joe is endless. Changing times that we have to adapt too as per Stephen Hawking’s famous quote.

I know that you are sick of this belief but average Canadians do indeed need average houses to raise their families in within their own country. Corrupt Canada has been up for sale to the highest bidder for years and this is both morally and financially wrong. A home is not an investment commodity. Without homes for local people, nothing else works.

Had to laugh at the BC realtor referring to RE sales as an industry. What exactly does RE sales produce with folk selling houses to each other.

You are a 1%er lecturing me on elites? – Garth

#147 DON on 02.23.18 at 10:00 pm

#86 Zapstrap on 02.23.18 at 7:33 pm

Never forget … BC should always be beautiful, and the LM – Southern VI regions should also always have the mildest weather in the country. That’s gotta count for a lot in a country that starts on the 49th parallel.

It snowed in Burnaby today, right? Plus 8 in NS and Ontario. – Garth

*******************
Snowed in Victoria so far two out of three nights. Damp Freezing feeling. Probably will be blamed for low sales.

I told you budget reaction would be Biblical. – Garth

#148 Ryan on 02.23.18 at 10:14 pm

In about 10-20 years, Canada will be Venezuela 2.0. At that time, the USA will come in and take us over. They will be broke too but will need our resources. We could also go the way of Yugoslavia did and split up into smaller countries. Plan accordingly, the writing is on the wall. Look into getting a second passport for somewhere. I hope this doesn’t happen but the writing is on the wall.

#149 jane24 on 02.23.18 at 10:16 pm

I have also noticed that the RE agents who regularly used to pump RE and gainsay Garth on this site have gone from our comments section. Says it all.

#150 IHCTD9 on 02.23.18 at 10:22 pm

#9 Joe on 02.23.18 at 5:04 pm

Now that’s out of the way, let’s get one thing clear. My house is too “cozy” for comfort. I *want* more space. Doesn’t mean I’m “desperate” for it. But you’d better believe the current state of the world pisses me off.
—————

Heh, welcome to the club. My house is turning 148 this year. It needs lots of attention, all the time. I *want* less maintenance, but moving into a place I feel is worth it means blowing half a mil right now. #### that, I can still climb up on the roof, plus I think my kids are old enough now to climb up there too :).

#151 waiting on the westcoast on 02.23.18 at 10:25 pm

I told you budget reaction would be Biblical. – Garth

Great – next are the frogs, bugs, 4 horsepeople…

#152 Pete from St. Cesaire on 02.23.18 at 10:25 pm

In about 10-20 years, Canada will be Venezuela 2.0. At that time, the USA will come in and take us over. They will be broke too but will need our resources. We could also go the way of Yugoslavia did and split up into smaller countries. Plan accordingly, the writing is on the wall. Look into getting a second passport for somewhere. I hope this doesn’t happen but the writing is on the wall.
——————————————————————
You got that right, that is the master plan, but it may come faster than that. Remember one of the ‘official’ reasons for the US invading Libya was because Gaddafi supposedly gave money to and welcomed home the convicted terrorist who brought down that flight over Lockerbie, Scotland. Think about that.

#153 guru on 02.23.18 at 10:33 pm

a GTA townhouse just closed a few days ago where appraisal came in about $150k lower than purchase price. Buyer had to pour in a higher downpayment and go non-bank to secure a loan just to close the deal…… Looked up MLS and see 5 other same towns listed for $200k higher than this guys appraised value…. Front line stats don’t lie, this ship is about to get wrecked in the next few months, just wait and watch for it.

#154 guru on 02.23.18 at 10:39 pm

as mentioned before, the full impact of B20 won’t hit until early March…… i can see the initial drips of what is about to come for those that are post-jan 1st loan applicants…. The pull forward demand in Dec, Jan, Feb was the last chance for sellers to cash out. Watch for supply to spiked dramatically in the next few weeks to new historical levels.

#155 Samson Nights on 02.23.18 at 10:42 pm

#20 Bob Dog on 02.23.18 at 5:21 pm
“….CMHC is an abomination that has accomplished the exact opposite of what was intended to do….”

Actually, the CMHC has accomplished exactly what the Canadian Bankers Association lobbied it to do.

#156 Dead Cat Bounce on 02.23.18 at 10:42 pm

#149 jane24 on 02.23.18 at 10:16 pm
I have also noticed that the RE agents who regularly used to pump RE and gainsay Garth on this site have gone from our comments section. Says it all.
——————————————————————

In YVR there shoveling snow for some extra cash.

M54BC

#157 IHCTD9 on 02.23.18 at 10:44 pm

I know that you are sick of this belief but average Canadians do indeed need average houses to raise their families in within their own country. Corrupt Canada has been up for sale to the highest bidder for years and this is both morally and financially wrong. A home is not an investment commodity. Without homes for local people, nothing else works.
———

I don’t disagree, but the above paragraph applies to two cities in the entire country. Populous yes, lots of economic activity and jobs for sure, but options for living better elsewhere abound.

Evolution is tough, just ask Detroit. Much better to be ahead of the curve, and ahead of the crowd in finding prosperity elsewhere.

The fact is, no one would be selling a house for 10x income if there wasn’t someone there ready to pay it. That sucks for those who can’t do so, but electing idiots will not change anything for the better.

Anyway, watching BC commit harakiri will be interesting, and scary too if you live in Ontario.

#158 KLNR on 02.23.18 at 10:55 pm

Hmm, hate to live where George lives. surrounded by all that negativity. Not to many miserable people in my part of TO. Life’s what you make it – stop pining for the fjords.

#159 Yorkville Renter on 02.23.18 at 10:55 pm

pro tip for moaning/whining (i.e., posting) here… keep it short.
no one wants or cares to read a second, third, fourth post

#160 gr on 02.23.18 at 10:58 pm

“If BC were a stock, I’d short it.”

I am a “moister” from BC originally and I effectively did: I left. And everyone I know my age is either leaving or in the process to do so. Good luck NDP/Greens!

#161 chopstix on 02.23.18 at 11:11 pm

we got snow in vancouver today 15 or so cm….lovely stuff..my god i’ll take it ANY DAY over the constant piss and dreary gray we can get for days..no WEEKS at a time.
in Nov we set a record since the 60s with 29 out of 30 days of rain…i think mid jan to mid feb was similar.

when it is snowy and cold but sunny at least you can go out and enjoy the liquid sunshine…here the pussies think -6 is freezing (too funy)….i’ll take it anyday over gray and rain and moderate temps…we all say ‘go out and play in the snow!’…who the hell says that when it rains…vancouver can be sooo over built up at times…sure when it’s sunny it’s nice…but that friggin’ endless rain and gray will just sap the life out you….this comes from someone who’s lived in both TO and Scamcouver for over 2 decades each.

#162 Samson Nights on 02.23.18 at 11:13 pm

#146 jane24 on 02.23.18 at 9:58 pm
You are a 1%er lecturing me on elites? – Garth

She compliments you for your insight on helping her save a million (peanuts in today’s world) on ‘average lifetime wages’ and you slam her as a 1%er? Seriously?

I stated the obvious. No slam. – Garth

#163 I don’t usually post..but on 02.23.18 at 11:28 pm

The anger probably comes from the fact that this blog just a couple years ago was ripping on millenials with FOMO and “being priced out forever” and now in 2018 is in a very ‘isn’t is obvious’ tone advising millenials that they’ve been priced out and therefore should immigrate away from their lives in the city they probably love, and people they probably love.

Heartless?

#164 psychintheblog on 02.23.18 at 11:28 pm

#76 Democracy Is Mob Rule on 02.23.18 at 7:04 pm

Garth

You could write this blog and disable the comments section. That would save you a lot of time and frustration. What do you gain from comments? Is it worth it?

Group therapy. – Garth”

That’s community service right there and altruistic service so the taxpayers dont get hit with a medical bill for psychotherapy……yet….maybe it is just a deferral and the crash will cause a huge spike in psych assessments, some of which will be blamed on this blog therapy!

#165 chopstix on 02.23.18 at 11:33 pm

#86 Zapstrap on 02.23.18 at 7:33 pm
Never forget … BC should always be beautiful, and the LM – Southern VI regions should also always have the mildest weather in the country. That’s gotta count for a lot in a country that starts on the 49th parallel.

It snowed in Burnaby today, right? Plus 8 in NS and Ontario. – Garth
——————————————————–
yuppers,…and sooooo gorgeous too…yet many flip the f*k out and cancel appts or coming to work…wankers.
‘vancouver soft’ as we from other provinces (or even from up north or the interior where it’s colder with mor snow) will snicker about the locals.

#166 AisA on 02.23.18 at 11:33 pm

Caught a quip about getting used to “renting to death if you live in the gta”…. as opposed to what? Renting from the bank and paying interest and property taxes and repairs on WW1 homes to death? People have become as distorted as the market, granted one drives the other and vice versa at times, but gee wiz golly.

#167 psychintheblog on 02.23.18 at 11:37 pm

#131 Ustabe on 02.23.18 at 9:03 pm
… I feel a lot of you would benefit massively from a 4 day ayahuasca retreat in Costa Rica.

Or almost any Central or South American country where shamanism is prevalent.

Ulcers, digestive issues and hypertension are evident in many of your posts. Fix that or prepare to move to a condo close to an emergency clinic.”

This is the root of today’s problem. People are crapping themselves over the economy, and this poster wants everyone to go overseas to take a dump while in a yoga pose and chanting “I am okay, I am okay”! This is called fiddling while Rome burns, in spandex!

#168 Leo Trollstoy on 02.23.18 at 11:46 pm

Toronto real estate prices peaked last year

It’s been downhill since

Except for condos

Stop whining

#169 Bottoms_Up on 02.23.18 at 11:46 pm

Not sure how George is doing it, other than receiving probably an additional $800/mo childcare benefits that will be significantly reduced when his kids reach age 6.

How will he afford dance classes or summer hockey or ski equipment and lessons? I really don’t get how a family can pay $1800/mo rent, save $10,000/yr, eat healthy food, and lead a fulfilling life.

#170 Bottoms_Up on 02.23.18 at 11:55 pm

#79 Nonplused on 02.23.18 at 7:11 pm
—————————-
Yes and even current owners with a bit of equity start to feel the pain as they are no longer building equity in their house despite making the payments. Also, those wishing to buy can get burned by catching a falling knife, or may lose their job in a fastly weakening economy.

#171 Old Ron the Realtor on 02.24.18 at 12:02 am

@ JANE 24: Still here. Calling it as I see it :

But folks if you need to put things in perspective, I recommend this website : https://www.purdue.edu/impactearth/

#172 FOUR FINGERS WATSON on 02.24.18 at 12:04 am

People voting Green did not vote NDP. Nor was there a vote on coalition government. My statement stands. – Garth
…………………

That is not how our system works and you know it. Shame on you.

It is. Coalitions are rare since they thwart democracy. – Garth

#173 SWL1976 on 02.24.18 at 12:08 am

Garth,

You deserve some sort of blog saint, iron man award after this week. Wow, from the gone of SCM to the dealing with the we all want a house anywhere we want crowd. What a week it has been.

I’m still blown away at how people think the same form of government that created the mess will all of the sudden fix the mess. Pipe dreams. No wonder they are making dope legal.

Looks like the pendulum is about to swing hard in the opposite direction. Tax, tax, tax and more tax. One needs not be a weather man to know which way the wind is blowing.

Anyways, I still enjoy and read your blog everyday. What a wealth of knowledge you choose to share

#174 Karlhungus on 02.24.18 at 12:35 am

Alberta real estate is not doomed. This is the bottom. Upwards from here, you’ll see

#175 Smoking Man on 02.24.18 at 12:47 am

I got to hand it to Butts. As much as I chirp him in a respective way on Twitter. The basterds don’t block me.

I can’t figure that bastard out.

SCM if you want to chirp and still have the right to chirp. Be respectful..

Difference between experience and youthful insanity.

I’m here your not grasshopper.

#176 Entrepreneur on 02.24.18 at 1:09 am

Most people are poor and only want to be able to have a comfortable lifestyle. And nothing more.

Andrew Weaver and the Green Party picked the NDP to form the Government of B.C. as they have more in common than the Liberals. Some voters didn’t approve of this but the majority did. I say it was a great call.

And I think Elizabeth May missed her calling when people were hoping that the Federal Greens join the Federal NDP.

And yes, I agree with #146 jane24…on globalization and automation and what it is doing to the ordinary person who live within boundaries.

#177 Howard on 02.24.18 at 1:35 am

The latest from PM DressUp’s vacation to India.

He thinks Canada is 100 years old.

https://m.youtube.com/watch?v=_1QQsQe6oDc

#178 Ray on 02.24.18 at 1:36 am

I read an interesting article in Stratfor Worldview (subscription). This is a forecast of world trends from 2015 to 2025. In summary, (very much précised), they predict Europe and Russia will become more volatile, China will grow more slowly, and the US will remain as the world anchor of political and financial stability. To me, it says, “Don’t short the USA”

https://worldview.stratfor.com/article/decade-forecast-2015-2025#/entry/jsconnect?client_id=644347316&target=%2Fdiscussion%2Fembed%3Fp%3D%252Fdiscussion%252Fembed%252F%26vanilla_identifier%3D277849%26vanilla_url%3Dhttps%253A%252F%252Fworldview.stratfor.com%252Farticle%252Fdecade-forecast-2015-2025%26vanilla_category_id%3D1%26title%3DDecade%2BForecast%253A%2B2015-2025

#179 morrey on 02.24.18 at 2:37 am

fun facts

“The Liberals received 796,672 votes, or 40.36 per cent of the total; the New Democratic Party received 795,106 votes, or 40.28 per cent of the total; the Green Party received 332,387 votes, or 16.84 per cent of the total; and other candidates received 49,749 votes, or 2.52 per cent of the total.”

40% plus 16% = 56%

Nice try. But nobody voted for a coalition. – Garth

#180 NEVER GIVE UP on 02.24.18 at 2:50 am

The so called “FREE MARKET” is as rotten as a Bangkok Hooker on a Sunday morning after the Navy left town!

A real Free market would not have the interventions of CMHC. Governments allowing 40 year and no money down mortgages. Also preferential treatment to foreign students.

The list goes on and on as we have heard ad infinitum since the beginning of this blog.

No I am not buying into the rhetoric that the Present NDP Government is “INTERVENING” in the market.
No, I prefer to think of it as countering the CRIMINAL element that came before.

When you Steal money from people in various ways you are also stealing “LIFE” from them.

Money supports long life and satisfaction from life and also happiness from the fruits of honest labor.

Shame on those financial WHORES who took what does not belong to them by fraudulent means. By hook or by Crook! By fiddling with Government policy and CMHC diddling.

In your Death Bed be sure to tell your children you lived an honest life! That would be your last lie!

#181 Tiger1960 on 02.24.18 at 2:58 am

Scm was working for me I found out this is a f55kingIdiot don’t think it was the same one but it doesn’t know it’s even fired because its that stupid
Are you kidding me these things walk on earth and actually were born disgusting they walk around and talk around like they are God

#182 NEVER GIVE UP on 02.24.18 at 3:05 am

#149 jane24 on 02.23.18 at 10:16 pm
I have also noticed that the RE agents who regularly used to pump RE and gainsay Garth on this site have gone from our comments section. Says it all.=====
====================================
Yeah.. Remember BPOE? Can anyone remember the names of the ones who left us over the years?

#183 NEVER GIVE UP on 02.24.18 at 3:24 am

While I am ranting about ripoffs. I should tell you all about the most egregious ripoff of all. It may not be the largest in terms of $ but is is a steady suck from good peoples pocketbooks just the same.

The scam is called GS1. It is worldwide and is a
coordinated scam that all governments share in the immoral proceeds of.

They charge all businesses who need a bar code from$700 to many thousands per year for the “use of 5 digits” Seriously. 5 numbers that you could pick out of thin air to make a bar code company number from.

It used to be you paid a central authority a few hundred bucks to have you number forever but they got to thinkin’ Why not charge everybody forever?!

So now you can’t have a 5 digit company number for your company. You can only rent it on an ever increasing scale.

To this day you can get “free” numbers for book coding from a lady sitting at a desk in Ottawa that you can call directly and she will issue as many numbers as you want, FREE. But it is only for books. That is called the ISBN numbers. Same thing as a bar code but they will bite your head off if you misconstrue the two.

The GS1 people recognize their need to make themselves look legit so they organize meetings on how to improve your business etc. No one goes to them.

They use 4 syllable words and industry jargon to keep onlookers thinking they are earning their keep.

But , no they are only letting you have a 5 digit number that pertains to your company and you simply add 5 more digits to that to represent the widget you are selling and you have a UPC A code that is read by every bar code scanner everywhere.

I would bet my life that there are direct payments to all sitting governments for the “right” to do this scam. Sadly payola, Payoffs, whatever you want to call it are very hard to verify and they are easy to execute even in legal ways.

You as a consumer are paying a few extra cents for every purchase because of this scam.

Magic! Almost as corrupt as the CREA!

#184 Tony on 02.24.18 at 3:58 am

Re: #27 Kilt on 02.23.18 at 5:49 pm

Home Capital is a screaming buy not a short sale. The stock should push past the 25 dollar mark on their first quarter earnings this year.

#185 Two-thirds on 02.24.18 at 4:16 am

While I fundamentally agree with government intervention often having unintended (bad) consequences, experience has shown that the only remedy for a bubble is for it to pop.

“Creative destruction”, recessions, corrections. They are all more or less inescapable ways to deal with runaway economies and “irrational exuberance.” It is no different with RE. As the American RE experience showed during the great recession, obscene debts had to be purged, (with many wiped out in the process) but after a while, values stabilized, the economy recovered, and life carried on.

So yes, indeed some governments seems to be doing much to accelerate the process, but is there really a point in delaying the inevitable?

As this pathetic blog has said many times: This will not end well. If so, why not take the medicine sooner rather than later?

We will all suffer during the reset, but truly, everyone has something to feel bad about already: savers are mad, spenders are sleepless. Renters feel shunned, owners fear losses. The poor feel neglected, the rich, under attack. Employees cry foul, employers just cry. Canadians feel sidelined, foreigners and out of towners are targets. Is there anyone left other than George who is not aggravated already?

Every boom is followed by a bust, just like every bull follows a bear. If Canada’s time of reckoning has come, better batten down the hatches and get ready for a few tough years, than keep waiting on the dentist’s chair! After the storm, the sun will return.

Pain now, healing tomorrow. Why wait any longer?

#186 Rexx Rock on 02.24.18 at 4:56 am

First of all lets get it straight,intersts rates may go up 0.5% in the next year.Done,finito and kaput.No rate hikes for next year or later. Rate reduction like always when there is a recession.The fed is talking fairy tale rate hikes,have we heard this before.Remember there debt is 20 trillion.Just like Poloz the clown spewing all his bullshit.They have no credibity.They”re liars,thats there job to make everybody feel everything is getting better.Don’t worry,you may be surprised 5 year fixed rates under 2% in the next couple of years!As for the NDP,they didn’t go far enough.They should bring up criminal investagations against the Liberals and lay some heavy charges for the crooked politicians.

#187 Stan Brooks on 02.24.18 at 5:24 am

#146 jane24 on 02.23.18 at 9:58 pm

great post.

Homes were elevated to preferable investments by policies (Small down payment, ‘insurance’/who the heck came up with this one?, no tax on capital gains etc) with sole intend being benefit of the banks oligopoly.

the same applies to communications, insurance, retail etc. oligopolies of the connected, not the capable.

Of course the political elite is serving the rich, backed by corrupted media. Just look at T2 financial minister policies and actions.

TFW – Temporary Foreign Workers program for example is something that liberals boosted.

Why if there intend is to defend the middle class and there are so many young people who graduate and can not find a job here?

Makes no sense unless we accept the thesis that the purpose of politicians is to provide cheap labour to the oligopolies/ruling elite.

soma clarification is needed:

1. One per-center based on income is not the definition of elite. A doctor in BC or ON that can not afford a house any more is not member of the elite.

Elite does not have income from labour, but from capital.

2. The statement that a society is free when everyone from anywhere around the world can buy a house there is simply wrong. Go and try to get a house in Switzerland. I guess they are not free?
I rather be a non free Swiss citizen than ‘free’ debt slave.

The statement that a house is not right is also very wrong.

It almost always was, until the bankers decided to make house investments so they can profit.

There were times when a house was never bought with debt, what is wrong with that?

A house is a place to live.
Converting it to investment tool increases competition and prices, but also creates room for catastrophic declines when jobs disappear in the big expensive cities and the justification for owning the house also disappears with the jobs.

Look at Detroit. Poster child of automation and outsourcing that both greatly accelerate today. It can’s happen here? Yes, it can and will.

Affordable houses of 2 mil in not so livable suburbs with disappearing jobs.

A recipe for disaster.

#188 Stan Brooks on 02.24.18 at 5:29 am

Ah, and regressive archaic but complex tax system based in almost its entirety on taxing the poor and the middle class, the labour, the workers.

Not the wealthy.

So guess what is going to happen when the jobs disappear and the wealthy refuse to be taxed.

Tax workers and small businesses to death and then introduce forced labour?

It is already happening, looking at the wild bill problems with the budget despite the theft from the small businesses.

Simplify the tax system.
Fire the incompetent french villa guy.

#189 under the radar on 02.24.18 at 5:41 am

Wealth gap widened exponentially because of soaring land values . In population centres (YYZ) this will continue as higher densities around major transit and employment hubs is provincial policy. Land capable of being assembled for high rise residential ( the most density ) becomes centre ice and translates into another condo unit starting at $1000 per foot. Better get used to it if City living is your thing. This does not mean that supply imbalances cannot cause price fluctuations or that over leveraged sellers will not get a haircut. What it means is that the cost of admission is not going down for new projects and existing single family housing around transit and employment hubs becomes more valuable .

#190 BillyBob on 02.24.18 at 5:47 am

Just wanted to say…

GO CZECH REPUBLIC! :-)

#191 meslippery on 02.24.18 at 6:38 am

#17 Wait There on 02.23.18 at 5:17 pm
If only life itself was like a Lexus.
—————-
I had no idea alexus was 8 years old.
alexus turn on the radio.
alexus call smoking man ask if he knows how old you are?

#192 FOUR FINGERS WATSON on 02.24.18 at 7:10 am

People voting Green did not vote NDP. Nor was there a vote on coalition government. My statement stands. – Garth
…………………

That is not how our system works and you know it. Shame on you.

It is. Coalitions are rare since they thwart democracy. – Garth
……………………

Of the 28 countries in the EU, only the UK, Malta, and Spain have single parties in power, with the others being led by coalitions. Some governments, such as Angela Merkel’s in Germany and Francois Hollande’s in France, have coalitions where the senior party is so strong that popular perception is that it rules alone.May 12, 2015

This is not Europe. – Garth

#193 FOUR FINGERS WATSON on 02.24.18 at 7:20 am

It is. Coalitions are rare since they thwart democracy. – Garth
……………………

YOU need a good thwart Garth. When was the last time you were thwarted ?

#194 Howard on 02.24.18 at 7:34 am

Coalitions are rare since they thwart democracy. – Garth

Nice try. But nobody voted for a coalition. – Garth

———————————————

Is it more democratic for the BC Liberals, having won 41% of the vote, to exercice absolute power, or for NDP and Greens (40% + 16%) to govern jointly?

In the Westminster style of government we inherited, whichever group commands the majority of the legislature has the right to govern.

Wrong. The coalition was cooked up by the second-place and third-place parties to usurp power from the one which achieved more votes. Just a fact. – Garth

#195 AJ Steelown on 02.24.18 at 7:41 am

Garth, you’ve over simplified matters (that’s a nice way of saying you’re wrong). You can’t have “no government intervention” about a policy on foreigner ownership. You either have a good policy, a bad policy or no policy (which is a bad policy). We have a wall of water (foreign owners), we either build a wall to keep the water contained, build a net to make sure junk doesn’t flow in, or do nothing. Worse we could close our eyes while we let some bulldoze close to the shore so more water comes in. Is that adequate policy?
This is a grade 2 level no brainer.
Doing nothing, as a government, to foreign purchases- and more f%^#^*g tragically, at the cost of locals, is criminal. Heads should roll.
Canadian corporations are ripe for money laundering. They’re shady AF. Everyone knows that. This is impacting everyone. Enough all ready. It’s time to do another option besides digging next to the shore.
We don’t have the data. Purposefully. We have all the people on this comment section- for YEARS- stating there’s an issue.
BC= Short term pain for long term gain. Should have happened years ago.
Now let’s get on with it.

While surveys show 65% of BCers blame someone else (Chinese dudes) for high real estate prices, the house lust and aggression displayed on this blog this week shows clearly where the impetus originates. This is confirms by stats – from the industry, the province and the federal government. You are fighting the wrong battle. – Garth

#196 maxx on 02.24.18 at 7:42 am

@ #120 Maxx

Sorry dawgs, repeated the second link twice, duh. Meant to include this one:

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

#197 LivinLarge on 02.24.18 at 7:49 am

What’s this blog’s term for “livin’ in a fantasy”? “I’m 25, married, have 2 kids, and make $79k (single income). No debt.” Just how many 25 y/o don’t have education based debt? Not many. Sure, possible but it’s possible that aliens built the pyramids, possible but seriously unlikely.

What’s the point of exhibiting a totally rare example?

Back around 2001 there was a woman begging in front of the bank at Yonge and Bloor. A reporter followed her and discovered that she owned multiple homes and cars and was a long way away from being poor. Street corner begging was her “career” and she was quite good at it. Again, unique but actually not proving any meaningful point,

#198 Elcheapo on 02.24.18 at 8:48 am

Mr Turner, sir, that’s not how Westminster parliamentary democracy works and you know it. We don’t hold a single election, we hold one per riding to elect our representatives. The representatives then gather in parliament and they themselves decide who forms the government. Coalitions are often the result. Completely and utterly legitimate. Your comments border on intellectual dishonesty.

I’ve stood for election, been elected, sat in Parliament and run to be the leader of a national party. So, I have a fair idea how things work. The vast majority of people vote for party and leader, not the local rep. Also, elected representatives play a scant role in choosing the leader and none in the decision to form government. So cute you think that way, though. – Garth

#199 FOUR FINGERS WATSON on 02.24.18 at 8:49 am

It is. Coalitions are rare since they thwart democracy. – Garth
……………………

Of the 28 countries in the EU, only the UK, Malta, and Spain have single parties in power, with the others being led by coalitions. Some governments, such as Angela Merkel’s in Germany and Francois Hollande’s in France, have coalitions where the senior party is so strong that popular perception is that it rules alone.May 12, 2015

This is not Europe. – Garth
…………………………………

……and it is not a democracy either, not when the Turd Libs rule with 39% of the popular vote.

That was telling. – Garth

#200 Mandria on 02.24.18 at 8:50 am

@IHCTD9

I can afford to buy…I choose to have a balanced diversified portfolio instead.

Other “world cities” have put policies into place to keep their middle class. I don’t get where this empathy-devoid attitude comes from in Toronto. I loved Toronto when I moved here in 2008 (ironically to escape the fall out of a different property bubble) but I guess a decade is enough…time to dust off that second citizenship and move on back to greener pastures.

#201 crowdedelevatorfartz on 02.24.18 at 8:53 am

@#92 Okanagan Mainlining RE Cartel
“It’s distressing that the province didn’t consult with the industry as a trusted partner, not an adversary….”

++++++

“Trusted partner”?
Uhhh, sorry but your past obscenely profitable association with the Liberal Party kinda negated any “trust” the NDP might have.

As for “advice” given by a commision based cartel?
I can only imagine.
More home owner grants?
No speculation taxes?
Pass a “Realtor Only Law” forcing prople to use realtors?

The arrogance of your “profession” is only surpassed by your greed and delusions of grandure.
Enjoy the looming meltdown in sales and lost commissions.

You’ve ALL brought it on yourselves

#202 Ace Goodheart on 02.24.18 at 8:59 am

The B.C. Provincial government has forgotten about mountains.

These large, rocky things create natural barriers to trade, movement of people and goods, and also are responsible for most of the world’s micro climates.

Despite living next to one of the most extensive mountain ranges on the planet, John Horgan’s government has apparently not noticed that any of the large, rocky things are there.

BC is cut in half by mountains. A whole bunch of them. From the ground, they don’t look that big. Fly over them, and you immediately see the problem.

To the East, BC is basically an Albertan vacation spot. There is very little else going on there. To the west you have Vancouver and all of its satellites, and all of BC’s major industries and job centres.

Put a 2% speculation tax on all BC real estate, and the Albertans will leave. That will make eastern BC into an economically depressed ghost town type situation. And that is exactly what is going to happen.

Provincial premiers should look at maps.

#203 Victor V on 02.24.18 at 9:05 am

New home sales have plummeted in Toronto this year

https://www.blogto.com/city/2018/02/new-home-sales-toronto-plummeted-2018/

#204 crowdedelevatorfartz on 02.24.18 at 9:36 am

@#138, 142 Screwed Canadian Millenial

I’d say the photo of you at the top of this blog sticking you tongue out is more than enough publicity for you…..

#205 Mark on 02.24.18 at 9:37 am

Be careful what you wish for…

#206 Dan from Richmond Hill on 02.24.18 at 9:41 am

What is wrong with a coalition?

#207 dave in kincardine on 02.24.18 at 9:42 am

Expectations are Epic. Interesting phrase. Seems right…

http://stockcharts.com/h-sc/ui?s=SPY&p=W&yr=20&mn=0&dy=0&id=p56829487619&a=579583761&listNum=1

#208 Mac on 02.24.18 at 9:49 am

Ahhh…Canukistan. The land where punitive taxation is the answer to everyone’s shitty life choices. Unreal.

#209 Opportunity Cost of Living on 02.24.18 at 10:07 am

Someone once said “shirtsleeves to shirtsleeves in three generations”, or as they say in Van City “Fu bu guo san dai.” Of course, that was written at a time when well-connected neer-do-wells could attain high political office, and whore mongering was tolerated, if not encouraged. The press corp knew who buttered their scones.

Today we have a free press where everyone can be a correspondent, but truth has been the first casualty. Greed and willful ignorance are what’s on the menu. The poor blame the rich, and the rich blame the Government, and the Government blames the guys who were in before.

Some people want a bigger pie, and some want just a slice. The only people who can afford to help the poor are the poor themselves. There just aren’t enough rich people to eat.

The Troglodytes had housing problems too, as do most developed countries. The under-developed world’s solution is shantytowns, like Leslieville but bigger. There are two things the Government can do. Fix mortgage rates for the length of the amortization period, as in the US. Forbid the CMHC from issuing bonds and cap the insurance at 50% of the value of an average home. But what do I know, I just sell seashells.

#210 Steven Rowlandson on 02.24.18 at 10:24 am

“Don’t they understand their own home would be sliced in value, putting them in the same spot?”

Real estate is a place to live! It is not a GD investment!
Do we have to go to the extreme of making real estate prices and rents illegal and punishable by death to end this genocidal attack on the country and its founding people?

#211 Howard on 02.24.18 at 10:27 am

#194 Howard on 02.24.18 at 7:34 am
Coalitions are rare since they thwart democracy. – Garth

Nice try. But nobody voted for a coalition. – Garth

———————————————

Is it more democratic for the BC Liberals, having won 41% of the vote, to exercice absolute power, or for NDP and Greens (40% + 16%) to govern jointly?

In the Westminster style of government we inherited, whichever group commands the majority of the legislature has the right to govern.

Wrong. The coalition was cooked up by the second-place and third-place parties to usurp power from the one which achieved more votes. Just a fact. – Garth

———————————————

And that “usurping” of power is entirely legitimate under our Westminster democracy. You may not prefer it but that’s how the system works in Canada, UK, Australia, NZ, and many other democracies within and beyond the Commonwealth.

The BC Libs did not have the confidence of the Legislature, so the Lieutenant-Governor gave the NDP and Greens a chance to form a government. The only alternative would be to provoke another election.

Although I think Harper is a good man and a decent PM, for me his lowest moment occurred post-2008 election when he accused the Libs/NDP/Bloc pact of trying to “steal” the election. An absurdity, for the same reason above.

The point of this useless conversation was to correct the misstatement that the majority voted NDP. It did not. Over & out. – Garth

#212 Ronaldo on 02.24.18 at 10:40 am

Many in Canada will face this in retirement, unfortunately.

https://www.theatlantic.com/business/archive/2018/02/pensions-safety-net-california/553970/

#213 Newcomer on 02.24.18 at 11:02 am

Nice try. But nobody voted for a coalition. – Garth
—–

I did, as did essentially everyone voting Green. Think about it. What else could we have been expecting, Green majority? Lots of my NDP voting friends were hoping for the same thing. We got the best of both worlds.

#214 ben on 02.24.18 at 11:04 am

Fed raising rates is all you need to know.

I’m guessing people here have a plan to shift into USD out of CAD – what is the most efficient way to do this? Simply have a USD account with someone like TD? Buy a Russel 2000 ETF?

Poloz can say all he wants that “it’s time to raise” but he has his balls tied to the chassis of the FED’s Hummer. And they started the engine.

#215 Midnights on 02.24.18 at 11:15 am

Coming to B.C…
Enough is enough: Tenants join landlord in Bay Area exodus

#216 Midnights on 02.24.18 at 11:16 am

https://www.google.ca/amp/s/www.mercurynews.com/2018/02/23/enough-is-enough-tenants-join-landlord-in-bay-area-exodus/amp/

Sorry the link

#217 Capt. Serious on 02.24.18 at 11:35 am

A lot of people are missing the point here. The point is if the government hadn’t interfered in the housing market at all, going way back to CMHC, 40 year amortizations, not stress test etc, we wouldn’t be in such a pickle. Now politicians are trying to “fix” the problem, and they’ll likely make it worse because that’s what they do. The market is always more efficient than anything government can do. The government should be in the business of setting up regulations to avoid things blowing up, not trying to “fix” them and engineer them to a particular place.
/rant off

#218 Guy in Calgary on 02.24.18 at 11:39 am

#52 DQ on 02.23.18 at 6:33 pm

Everyone gets a medal!

Because… reasons… fairness…. jealousy… I think you hit them all.

People take risks to get wealthy. People risked everything buying a house and some did very well. Some didn’t take the risk and missed out. Such is life.

People also take risks by moving. Sometimes that pays off too.

#219 vic on 02.24.18 at 11:41 am

You know one way or another this bubble has to deflate..so if its the government who does it so be it. The real issue is there is way way too much debt in this country mainly in real estate and real estate has become way too big a component of the economy. Hence this fantasy has to end at some point and there will be a lot of pain and so be it..it should have been dealt with 10 years ago but the bubble was allowed to get even bigger and the bust will be even worse.
I dont have any sympathy for anyone who bought into these markets in the past 10 years and especially people who have second homes in BC..I mean cry me a fricking river..anyone with two homes does not need sympathy.
I have no problem with the BC government doing this as nothing else has worked so far. In the end it doesnt really matter how the bubble pops but its high time it does and so be it if we have a multi year recession..one way or another the debt levels need to bebrought down and a strong lasting recession will do the trick.

#220 Howard on 02.24.18 at 11:49 am

#203 Victor V on 02.24.18 at 9:05 am
New home sales have plummeted in Toronto this year

https://www.blogto.com/city/2018/02/new-home-sales-toronto-plummeted-2018/

————————————-

The BILD reports that the benchmark price for available new single-family homes was $1,229,454, last month. Condominiums, on the other hand, went for an average of $714,430 – 40.8 per cent above last January.

Jesus H. Christ…

#221 Guy in Calgary on 02.24.18 at 11:49 am

#100 Dolce Vita on 02.23.18 at 8:01 pm
Humanity does not know moderation. When things go bad, change swings from 0 to 180 degrees and the converse is true. You never see the middle position.

You should know that by now Garth. Still, rail away. It makes for some classic humorous bloodletting prose.

I agree with many of the Commenters today that have saved, diversified, worked hard, achieved top 10% earnings yet, denied a basic home due to RE as Ponzi Scheme by foreign or domestic.
————————————————————-

Caveat: They are denied real estate in the core of a few large cities. A lot of the countries real estate is accessible to these kinds of people. Just like San Fran and New York, Van and Toronto are not.

#222 Denizen of Eglinton on 02.24.18 at 11:54 am

Just wanted to stop by and congratulate George on scoring a Markham townhouse for 1800/mo

#223 DON on 02.24.18 at 12:02 pm

#160 gr on 02.23.18 at 10:58 pm

“If BC were a stock, I’d short it.”

I am a “moister” from BC originally and I effectively did: I left. And everyone I know my age is either leaving or in the process to do so. Good luck NDP/Greens!
*******************

The former corrupt government let this happen…hence the migration out of this Province. You left as a result of them. Put blame where blame is deserved.

#224 DON on 02.24.18 at 12:06 pm

#163 I don’t usually post..but on 02.23.18 at 11:28 pm

The anger probably comes from the fact that this blog just a couple years ago was ripping on millenials with FOMO and “being priced out forever” and now in 2018 is in a very ‘isn’t is obvious’ tone advising millenials that they’ve been priced out and therefore should immigrate away from their lives in the city they probably love, and people they probably love.

Heartless?
***************

Well wrecklessness meets reality. Maybe they shouldn’t have listened to all those heartless realtors, parents and friends who assured them prices will always go up forever. There is a movie they should watch, Reality Bites.

#225 DON on 02.24.18 at 12:10 pm

#149 jane24 on 02.23.18 at 10:16 pm

I have also noticed that the RE agents who regularly used to pump RE and gainsay Garth on this site have gone from our comments section. Says it all.
****************

I am saddened by the loss of Devils Advocate, Josef and all the rest of our ex-realtor blog dogs.

#226 akashic record on 02.24.18 at 12:12 pm

DELETED

#227 Wrk.dover on 02.24.18 at 12:19 pm

RBC, for example, charges just over 2.5 % to exchange from US>CDN over and above the rate.

Buy your money from a person with US money they would be selling to a bank. If, 2.5% matters to you.

#228 Wrk.dover on 02.24.18 at 12:20 pm

And 2.5% from CDN>US too.

#229 senta on 02.24.18 at 12:22 pm

I am pretty sure “George” is also shopping at goodwill and buying groceries at dollarama – but good for him. 25 years old and 2 kids, wow – he is one serious dude in a hurry. Kudo’s to him – he stands head and shoulders above his peers and the generation before him.

#230 isuckless on 02.24.18 at 12:24 pm

Over&out is not proper radio communication. You can only use over or out, not both.

This is a blog. We also have a special handshake. – Garth

#231 Guy in Toronto on 02.24.18 at 12:30 pm

#218 Guy in Calgary on 02.24.18 at 11:39 am
#52 DQ on 02.23.18 at 6:33 pm

Everyone gets a medal!

Because… reasons… fairness…. jealousy… I think you hit them all.

People take risks to get wealthy. People risked everything buying a house and some did very well. Some didn’t take the risk and missed out. Such is life.

People also take risks by moving. Sometimes that pays off too.

——————————————————-

Such a sage response to an excellent, beautifully crafted and relevant initial post by DQ. Dude, do us a favour, step back from the keyboard, grab a Timbit and stay in Calgary. I’m sure the weather there this year has frozen plenty of your brain cells, made evident by your trolish lack of comprehension and creativity.

#232 DON on 02.24.18 at 12:38 pm

#186 Rexx Rock on 02.24.18 at 4:56 am

First of all lets get it straight,intersts rates may go up 0.5% in the next year.Done,finito and kaput.No rate hikes for next year or later. Rate reduction like always when there is a recession.The fed is talking fairy tale rate hikes,have we heard this before.Remember there debt is 20 trillion.Just like Poloz the clown spewing all his bullshit.They have no credibity.They”re liars,thats there job to make everybody feel everything is getting better.Don’t worry,you may be surprised 5 year fixed rates under 2% in the next couple of years!As for the NDP,they didn’t go far enough.They should bring up criminal investagations against the Liberals and lay some heavy charges for the crooked politicians.
****************

A recession is also a house value killer…less jobs.

Agree on the corruption…BC needs a drastic house cleaning an it flows right into the ranks of the civil service. Lots of friends of friends with no or little qualifications filling high paying jobs. The toxic environments are everywhere. 16 years of coordinated corruption – especially under Christy Clark’s regime.

#233 DON on 02.24.18 at 12:41 pm

#194 Howard on 02.24.18 at 7:34 am

Coalitions are rare since they thwart democracy. – Garth

Nice try. But nobody voted for a coalition. – Garth

———————————————

Is it more democratic for the BC Liberals, having won 41% of the vote, to exercice absolute power, or for NDP and Greens (40% + 16%) to govern jointly?

In the Westminster style of government we inherited, whichever group commands the majority of the legislature has the right to govern.

Wrong. The coalition was cooked up by the second-place and third-place parties to usurp power from the one which achieved more votes. Just a fact. – Garth
********************

I think it is time to relook at our version of democracy. 40% is not a majority. Maybe it is time to evolve our version.

#234 SunShowers on 02.24.18 at 12:53 pm

“I genuinely do not understand why people seem so desperate. I’m 25, married, have 2 kids, and make $79k (single income).”

——————————

New rule. If one person has a higher individual income than the median FAMILY income, they’re not allowed to pontificate about how “easy” it is to save.

If George and his wife truly were like the average Canadian family, they would need 2 incomes to pull in 79k per year, meaning their savings would be totally eliminated by day care costs alone, much less any additional costs associated with possibly needing a second vehicle.

Of course, George and his squeeze could have foregone the screamers and lived (& saved) happily on their 2 incomes, but then they’d have to deal with the constant brow beating from boomers about how selfish they are.

#235 ShawnG in To on 02.24.18 at 1:02 pm

230 comments, what’s one more eh?

-hike the taxes to crash housing
-hike foreign tax to reduce money laundering
-i’m middle class i deserve a place here
-i’m poor gimme affordable housing

when does the government really care about the little guys? these people are so cute.

over the years governments have gotten hundreds of millions of dollars from housing transactions. these money are not wasted. they were used to buy special interest groups and feed friends. now that the sales have crashed (not price, not relevant) government is actually worried. but they aren’t stupid. more taxes on foreign buyers, more taxes on empty units, more taxes on luxury, etc etc. now do you see what they are doing?

hey Mr T, you were on the inside once, tell us some stories.

on second thought, dont, that’ll get this blog shutdown for sure.

i only vote for the party that cut gov spending.

#236 ben on 02.24.18 at 1:07 pm

Quite crazy to say people take risks on housing and deserve the gains.

1. the state forced non-home owners to bail out home owners via ultra-low rates

2. home “owners” (most rent from the bank) have made huge gains despite adding no value. This is basically poison for an economy as would-be wealth creators see the writing on the wall and become rentiers (wealth appropriators).

Anyone writing that home owners deserve their gains are flying in the face of people I bet they would claim to agree with, such as Adam Smith. They are confusing wealth creation and wealth appropriation.

The latter occurs through land gains. Prices go up, for the gain to be realised the “investor” must sell to someone else, who then has to pledge to do real work to pay more to the “investor” who has done nothing, for the exact same pile of bricks.

This crops up over and over on this blog. I really don’t see how anyone who as read much can argue with it. My suspicion is the people saying it is fair are those who gained directly, having done no work and never having had to think about the other side of the coin.

It’s very lazy stuff.

#237 Guy in Calgary on 02.24.18 at 1:23 pm

#210 Steven Rowlandson on 02.24.18 at 10:24 am
“Don’t they understand their own home would be sliced in value, putting them in the same spot?”

Real estate is a place to live! It is not a GD investment!
Do we have to go to the extreme of making real estate prices and rents illegal and punishable by death to end this genocidal attack on the country and its founding people?
—————————————————————-

The original Canadians were mostly killed off a long time ago by our ancestors my friend. Calling the appreciation of real estate genocidal is a tad extreme me thinks, especially considering that vast majority of the country is affordable. You are correct though, real estate is a place to live, like a car is to drive. You can own the car, lease a car, finance a car or rent a car. In all 4 scenarios, you end up driving the car.

#238 waiting on the westcoast on 02.24.18 at 1:27 pm

I like the first part the post system. It gives the group that won an effective dictatorship for four years to do what they want. And then we get to give them a grade on it. Yes, it leaves out the voices of smaller groups that may have won a percentage of the population but did not get enough in any one district to win a seat. Maybe the senate should stay on in an advisory capacity but be elected proportionally.

I do think it would be good to allocate a percentage of the seats to proportional representation. You could have 80% of the commons based on first past the post and the remaining 20% on the total percentage of votes. This would still drive a more stable system (less coalitions) but still give voice to smaller parties.

The European pure proportional systems are far too fragmented to work effectively. Italy has until only recently had governments that could only last a year or two until the coalition faltered and forced reelections… Not a great system to accomplish things.

#239 AGuyInVancouver on 02.24.18 at 1:30 pm

#233 DON on 02.24.18 at 12:41 pm

I think it is time to relook at our version of democracy. 40% is not a majority. Maybe it is time to evolve our version.
_ _ _
What a ridiculous comment. Look at most of the world’s democracies in the world, ruling parties rarely get a majority. Please don’t think the clown car system south of the border, with just two parties, is a preferred example for anything. The world is more nuanced than Black vs White.

#240 Ronaldo on 02.24.18 at 1:34 pm

#218 Guy in Calgary on 02.24.18 at 11:39 am

#52 DQ on 02.23.18 at 6:33 pm

Everyone gets a medal!

Because… reasons… fairness…. jealousy… I think you hit them all.

People take risks to get wealthy. People risked everything buying a house and some did very well. Some didn’t take the risk and missed out. Such is life.

People also take risks by moving. Sometimes that pays off too.
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Life is risky, period. As a former boss and former cop once said to me, “I know it’s going to be a good day when I wake up without a ‘toe tag’.” Unfortunately, he died shortly after retirement at 65. A huge chain smoker who died of lung cancer. RIP Stu.

https://www.psychologytoday.com/blog/living-life-purpose/201107/the-risk-living-deeply

#241 Ronaldo on 02.24.18 at 1:39 pm

#220 Howard on 02.24.18 at 11:49 am

The BILD reports that the benchmark price for available new single-family homes was $1,229,454, last month. Condominiums, on the other hand, went for an average of $714,430 – 40.8 per cent above last January.

Jesus H. Christ…
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Amen to that Howard. We all know what comes next. It will be different this time. It’ll be much worse.

#242 Ronaldo on 02.24.18 at 2:04 pm

What a difference 15 days makes. My DIY diversified/balanced portfolio 58% fixed income and 42% equity is back to even from a 2.8% loss ytd 3 weeks ago. How did others fare?

#243 SoggyShorts on 02.24.18 at 2:54 pm

#197 LivinLarge on 02.24.18 at 7:49 am
What’s this blog’s term for “livin’ in a fantasy”? “I’m 25, married, have 2 kids, and make $79k (single income). No debt.” Just how many 25 y/o don’t have education based debt? Not many. Sure, possible but it’s possible that aliens built the pyramids, possible but seriously unlikely.
What’s the point of exhibiting a totally rare example?

************************************
Do mills not work while in uni? Is that not a thing anymore? Or work for a year to save up for uni?

The other possibility is no post-secondary. He’s only making $40/h, or possibly less+ some overtime.
If he started in a trade right out of highschool 7 years ago, he could definitely be up to that by now.

Note: Barista is not a trade.

#244 45north on 02.24.18 at 3:10 pm

Two-thirds: This will not end well. If so, why not take the medicine sooner rather than later?

because two-thirds is better than none and I mean that a 33% crash in house prices is better than a 100% crash. This ain’t no movie. The politicians that govern British Columbia need to figure out how to preserve the real estate market. Their total arrogance is beyond belief – here is a list of property owners that they have cast aside:
foreigners, people who live outside of Canada
Canadians who live outside of BC
people who own more than one property in BC

Talking about the politicians who govern BC, their underlying belief is that they have received the real estate market directly from God who has promised sales-volume and prices will be maintained. In his mind, John Horgan came down from Grouse Mountain carrying stone tablets.

#245 Khoek on 02.24.18 at 4:03 pm

The crash will come. Whether brought on by government or by the market, it will come. It will be a bloodbath.

Railing against government for bringing about the crash and somehow suggesting that it would be less severe if it were handled by the market is disingenuous. A crash brought on by government can at least have policy undone do control the slide. When the market’s in charge you have to scrable to enact policy to fight it (ask Obama).

As for the crash devastating the economy, that will be universal no matter the source of the crash. Those of us how are smart know this and have been preparing for years. We don’t own real estate. Our money isn’t invested in Canadian FiRE industries and likely isn’t much invested in Canada period. We work at jobs not tied to the Canadian economy. We are ready to take advantage of what’s to come in part because of you. Stop pretending this isn’t what you’ve been preaching for 10 years.

#246 Lorne on 02.24.18 at 4:36 pm

#233 DON on 02.24.18 at 12:41 pm

I think it is time to relook at our version of democracy. 40% is not a majority. Maybe it is time to evolve our version.
_ _ _
What a ridiculous comment. Look at most of the world’s democracies in the world, ruling parties rarely get a majority. Please don’t think the clown car system south of the border, with just two parties, is a preferred example for anything. The world is more nuanced than Black vs White.
……….
Ruling parties rarely get a majority because the majority of countries in the world utilize proportional representation, promised to us by Trudeau but since reengaged, and now BC gets a chance to one again lead the country by implementing this in a vote this coming fall.

I think it is time to relook at our version of democracy. 40% is not a majority. Maybe it is time to evolve our version.
………..

#247 chopstix on 02.24.18 at 4:52 pm

and to be fair to my vancouver neighbours when i called them wankers and ‘vancouver softies’: i was just in a ‘stir the pot’ mode with a few too many glasses of red last night. many don’t mind the snow either it seems…also many aren’t used to colder weather (it is temperate mostly here after all) and the city’s response to heavy snowfall is limited (not in their budget the amt of salt trucks, given the days of snow doesn’t warrant it).
..but i must admit that it is nice to watch them squirm when it does snow.
friendly shout out: at least get snow tires on..like c’mon no excuse for that oversight… many drivers i know don’t have them in the lower mainland during the winter.

#248 What is happening on 02.24.18 at 5:06 pm

As a die hard Green/NDPer (will vote Liberal only if Doug Ford becomes PC leader-ugh), what are the NDP doing?! Social justice as it relates to housing is getting the homeless decent shelter, not shovelling yuppie Millenials into overpriced duplexes. You know things are dire when a former Conservative MP is pointing out how xenophobic the NDP’s anti-foreign buyer tax is. Strange days.

#249 JRT on 02.24.18 at 9:05 pm

George should be an example, but unfortunately most people want the latest things. Hopefully as your children get older you don’t send them off to government schools to be indoctrinated. At least with you wife at home, they won’t end up as day care brats.

As for Whistler somehow being exempt from the tax. Many wealthy socialist Demoncrats own property there and they “lobbied” the government to exempt them.

#250 Midnights on 02.25.18 at 2:04 am

Lmbo… who does the CRA leave out?

https://www.armstrongeconomics.com/world-news/taxes/canada-taxes-dependents/

#251 ben on 02.25.18 at 10:33 am

Quebec is already sending BC big transfer payments. There is a finite amount of stuff that exists now and will exist in the future. Quebecers are helping to manufacture plenty of that stuff. It’s called wealth *creation*.

In BC they are making nothing and passing around bits of paper saying they have more and more of the % of CAD in existence.

That is a transfer. That’s how the rentier Brits “earn” their way in life.

#252 45north on 02.25.18 at 2:43 pm

Khoek: The crash will come. Whether brought on by government or by the market, it will come. It will be a bloodbath.

Railing against government for bringing about the crash and somehow suggesting that it would be less severe if it were handled by the market is disingenuous. A crash brought on by government can at least have the policy undone to control the slide. When the market’s in charge you have to scrabble to enact policy to fight it .

“the crash will come” as if it will be binary – yes or no – rather than 50 shades of grey. It is 50 shades of grey. I am railing against the Dippers for bringing about the crash, for making it more severe. More damaging to the economy of British Columbia. As I have said on this blog many times, the governments of this country do not have the power of the US. The crash in BC will be worse than the American housing crash of 2006 to 2008.

“A crash brought on by government can at least have the policy undone to control the slide”. True in the narrow sense that laws can be reversed, the Dippers can be voted out but a bubble once popped, remains popped. It’s the underlying psychology. As smoking man says herdonomics.

Why don’t we make a rendezvous a year from now? February 25, 2018. Let’s both post on this blog to visit the BC situation.

#253 45north on 02.25.18 at 2:44 pm

rendezvous February 25, 2019

#254 JD on 02.27.18 at 9:44 am

Mr. George is 25 and his partner perhaps the same. At this age, most humans still have relatively large fuses. Thus allowing them to shunt the excess current and not blow up. The material of that fuse is a composite of upbringing habits and moral values of the circle the individual is growing in and the genetic code of ancestors. Current invasion of the kind will wear this “FUSE” swiftly especially when moral values around are rapidly altered by “invading” cultures! Assimilating cultures bring the wealth of experience and progress, “invading” = regress!
Enjoy Mr. G while you can.
I have my pair of pink glasses to give you, as they quit working for me in the present environment. Perhaps you will find them useful rather soon, like, the moment your kids start to bring home stories and experiences different than you have presently.
Feel free to ask…