The misplay

Nicole is crestfallen. What looked like a great plan to downsize, reduce debt and nuke stress has yielded the opposite. What now?

“My husband and I bought a small, detached house in Toronto several years ago, had a kid, and then decided it was time to get out of the gritty city and move to the country,” she tells me. “It just so happened that we were trying to make this transition last spring when the housing market was going crazy, but that wasn’t our impetus.  We bought a lovely little house outside Hamilton (for less than the appraised value of the TO house… we were trying to be prudent), then listed our Toronto house in early May.  It didn’t sell and we only got one offer that was way under asking.”

“Our real estate agent suggested we try renting the house out for a year with the aim to put it on the market once the real estate situation had stabilized again.  We successfully rented it for a year for enough to *mostly* cover our costs (which involved remortgaging it to close on the new property and living with very tight budget that leaves zero room for things like home repairs).  The time is coming up to think about selling, but the detached housing market in that area of TO is still flaccid, with our house now likely having dropped in value by about $70K (according to comparable homes in the area).  If it sold as things look right now, we fear that we’d have moved and ended up with an increased mortgage, versus ending with a decreased mortgage (the original goal).  If we rent it out for another year, we don’t know if the value of that house will hold, increase slightly, or slip lower still.

“We are desperately trying to responsibly reduce our debt but we’re not sure what the Toronto market is going to do in the next year or so… would it be wiser to sell this year, or next?    What are your predictions for the detached housing market in west Toronto? Thank you kindly for any time you have for us on this matter.  Any advice would be greatly appreciated!”

What a classic set of mistakes. First, buying before you sell. Second, trying to time the housing market. Third, renting out real estate you should dump.

Gone, Nicki, are the days when anyone should purchase a property before the existing one has been listed and firmly sold . Real estate’s quickly become illiquid in many places, including once-sizzling Toronto hoods. Sure, I know people fret and cry out, “but where will we live?” after they’ve agreed to sell. But get over it. Buying is easier than selling and you can always move into the car.

As for renting out a place you can’t sell for what you’re asking, forget it. A bad move. Never is it cash flow-positive when you factor in the non-productive equity sitting there, plus financing, property tax, insurance, maintenance and the hassle of tenants. The rent received is lumped atop employment income and taxed to the max. And if the tenants decide not to move out, you can’t make them. Seriously. The negative cash flow on condos is bad enough. On detached places it’s truly grim.

Finally, N, you should have lowered the price and stayed last May until a buyer materialized. Yes, prices have fallen about 10% for detacheds since, and there’s more to come. Here are some recent facts to chill you and everyone else who thinks the Big Smoke real estate market will spring back this rutting season.

We’ve experienced only a few weeks of the mortgage stress test, but it’s absolutely having an impact. Mortgage brokers report the big banks are punting about 20% of all applicants, sending these people scurrying to credit unions, private lenders or guys making home loans from their vans. The borrowers often end up getting less money and paying more for it. That means they’ll pay less for a house, too.

But wait. The credit union option (they are not now required to stress-test people) may soon dry up. Quebec’s securities regulator is on the verge of demanding all credit unions in that province adopt the B20 guidelines by the end of next month. Biggie Desjardins is already voluntarily implementing it, and by the end of the year you can be sure giants from Meridien (Ontario) to Vancity (BC) will be following suit. More downward price pressure.

Plus, we’ll all be borrowing at higher rates this year. The next Fed increase in the States will likely be March 21st, and then two – maybe three- additional increases by the world’s key central bank after that. More in 2019

Said a big Fed poohbah on Friday: “It makes sense to think about three or four rate increases in 2018. We should be moving ahead with a rate increase relatively soon, in the near future.” The Bank of Canada will follow suit, lest the dollar tank and Trump flip out alleging our falling currency is a trade weapon. Safe to assume at least two hikes in Canada this year, taking five-year mortgages at about 4% and the stress test to 6%.

Already the impacts are being felt. Toronto sales down 18% last month. Resale detached houses plopping by 9%. Newly-built home sales crashing in January by 48%. More money draining out of land-based housing and flipping over into condos. Not good for you, Nicole.

Finally, more evidence our collective house lust has landed us in a bad place. In the last year borrowing on lines of credit secured by real estate jumped more than 7%, even as interest rates were rising. We owe a stunning $230 billion in floating-rate, demand loans (in addition to $1.3 trillion in mortgages)

Clearly people have been using their homes as banking machines, often tapping into the equity just to make ends meet and service other debts. A quarter of people are paying nothing on the principal and most HELOCs remain in place until a property is sold. As real estate loses value, those borrowings get harder to handle.

Get the drift, Nicki? The odds of your house restoring in value this year are probably zero. The odds of it losing value, overwhelming. And meanwhile you’re shedding money every month carrying two places, while subsidizing a happy renter.

Suck it up. List. Discount. Sell. And remember.

220 comments ↓

#1 Penny Henny on 02.25.18 at 2:09 pm

That dog is such a show off.

#2 JakeR on 02.25.18 at 2:16 pm

“most of that borrowing will be refinanced this year.”

I guess I don’t understand. Why would such a large segment of the population refinance within a single year? Aren’t mortgage terms usually five years long?

Real estate sales exploded five years ago, and when rates crashed many took two and three-year variables. It’s time. – Garth

#3 Penny Henny on 02.25.18 at 2:18 pm

Get the drift, Nicki? The odds of your house restoring in value this year are probably zero. The odds of it losing value, overwhelming. And meanwhile you’re shedding money every month carrying two places, while subsidizing a happy renter.-GT

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

What about the stress, that’s the real killer.

#4 Axehead on 02.25.18 at 2:27 pm

List them both and live in the one left over.

#5 earthboundmisfit on 02.25.18 at 2:28 pm

You’ve an amazing talent for writing the same thing six days a week and yet always, somehow, making it sound different. Ever think about going into politics?

#6 Mikey McBain DDS on 02.25.18 at 2:32 pm

Why not sell both units and move to the Prairies? Very cheap standard of living. Great opportunities and growth in Central Canada for many years ahead!

#7 Stone on 02.25.18 at 2:36 pm

#4 Axehead on 02.25.18 at 2:27 pm
List them both and live in the one left over.

——

Sell both and rent. A life without stress and money in your pocket is a worthy goal.

#8 Fish on 02.25.18 at 2:38 pm

Location, location, location,

#9 Ron on 02.25.18 at 2:53 pm

What do recommend for someone renting out a cash flow positive property they bought years ago? Keep it or sell and invest in a diversified portfolio?

Bets are there’s no positive return when the current value of equity is factored in. If so, sell and invest. – Garth

#10 crowdedelevatorfartz on 02.25.18 at 3:04 pm

Drop your price.
Sell.
While you still can………..

#11 Fuzzy Camel on 02.25.18 at 3:05 pm

I’m seeing houses that the owners paid $800,000+ on the rental market for $1800. Property taxes in my area are about 1.24%, meaning they are paying close to $9500 / year in property taxes. That means a whopping $9500 a year towards a mortgage that costs, assuming 20% down, about $2800 / month.

I’m no expert, but buyers are essentially renting at a substantial loss right.

#12 Dan.t on 02.25.18 at 3:15 pm

That sounds encouraging. I don’t get it, I thought houses in Canada double every 1.89 years. What’s up. Oh sorry, that is condos in B.C..

It’s Canadian real estate, economics don’t apply. As long as everyone keeps buying it’s all good- who cares about that interest rate stuff and emergency rates and debt and credit restrictions- I mean giving zero down 40 year mortgage and massive money to millions off house horny Canadians and 20 other awesome policies and letting them fight over a limited supply of housing stock probably didn’t cause massive currency devaluation and insane asset appreciation.

Just wait 1.89 years and sell at a 70% gain. Simple. I mean 700k is peanut to rich Canadians. Look a B.C., you get a garage and you can park your car there year round in Van for that. It’s nothing.

Forget about gov debt, household debt, increase in taxes, hodl. Oh wait that advice is for crypto.

#13 Fluorine on 02.25.18 at 3:21 pm

The stress of carrying 2 properties is real…

So glad we ditched our rental condo in Edmonton last October! Plugging the negative cashflow hole (after property taxes and condo fees, which only go up) since rent prices tanked was a no brainer.

The investment income that will be coming in is nice, but the real bonus is no stress trying to find a renter after ours moved out of province, worrying about falling RE prices, the 1000s of new builds coming on line in the same area, the B20 bomb and rates going up…

#14 Sf on 02.25.18 at 3:23 pm

As a renter I am pretty sure I am being heavily subsidized. I am renting a 3 bedroom house with a loft and study, front and backyard in Waterloo.
It would probably cost 550K. My rent is $1800/month.

There is now rent control and even if the landlord wanted to move back in the tenant recieves compensatio

I discourage my inlaws from becoming landlords. Unless there is capital appreciation there is no way you could make money.

#15 Dee on 02.25.18 at 3:27 pm

You only have a few weeks left to list. Bloodbath will be recognized by all soon. Bottom is a few years away. Tick tock

#16 Never thought of it like that on 02.25.18 at 3:28 pm

DELETED

#17 Pppppp on 02.25.18 at 3:35 pm

My question about the empty house rules. If I buy a condo in Vancouver and it is my principal residence. Then I go travel for 8 months of the year, will I be hit with the tax?

#18 Screwed Canadian Millenial on 02.25.18 at 3:38 pm

GONE

#19 NEVER GIVE UP on 02.25.18 at 3:39 pm

#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 ageist against Boomers. Garth is a Boomer, and thus wouldn’t put up with his crap any more.
==================================

It just strikes me as a lot of people on this
Blog who are in fact older ( I am 62) are showing an inability to handle criticism.

Even Garth posted a diatribe against people who are complaining about hurt feelings a while back.

I guess if I am older then only I am allowed to self criticize and not some squeaky little “Millennial”.

It so happens that I agree with most of what he says. If I am protected by my age to self criticize then that in itself could be called “ageist” as well, could it not?

#20 NEVER GIVE UP on 02.25.18 at 3:42 pm

Everyone is so sensitive and NIMBY these days.

No wonder we can’t get a good Strip bar approved anymore!

#21 Fuzzy Camel on 02.25.18 at 3:47 pm

Garth, The day Jerome Powell was appointed to the Fed, the market dropped, BIG time. Coincidence? What are your thoughts of the new Fed chair?

Jerome Powell, listen to his speeches, is anti-bubble as they come, and wants to raise interest rates to flush out unproductive asset bubbles.

Stock market might not crash, but I doubt the sweet gains will continue. Real estate is doomed at this point, he wants 5 rates hikes this year.

Coincidence. – Garth

#22 New West on 02.25.18 at 4:03 pm

Talked to an acquaintance last week and she is caught in this same type of scenario. Bought a townhouse to be closer to work and her kid’s school back in October. The real estate agent assured her and her husband that the townhouse in East Van they were moving from would sell in a week. It didn’t. They ended up with three offers – one lowball from developer, one where the financing didn’t go through, one that was some kind of shady offer (she did not go into details). They turned down the lowball and shady offer, and ended up taking the place off the market because “things will be better in the spring”. It’s sitting empty now, so not even any rent to offset the mortgage. They want to keep it nice for when they list it in the spring.

She is frantic and looks like hell. Her and her husband make maybe 100K between them and they are now carrying two mortgages in the lower Mainland. She told me they’ve gone through all their savings, and are dipping into the RRSPS just to keep the lights on and the daycare paid. It was so sad – she just kept saying “Things will turn around in the spring, right? Prices will start going up again, right?” And there wasn’t anything I could say, really – all I could do was make comforting noises.

I know it might sound odd, but it’s beginning to feel a little like 1981…….maybe history not repeating, but there is a certain rhyme.

#23 Dolce Vita on 02.25.18 at 4:10 pm

Well, greed cost them $70K.

Extend and Pretend, which is what they are going to do, will cost them more.

Why April/May will have some discounting per Nicole’s thinking. She’s already made her mind up what she thinks her TO place is worth.

Not realizing that buyers are fewer and with less money to spend.

She’ll ignore your advice Garth, and yet again, another shill advice seeker that in the end, think they are smarter than you.

September will be when the great RE asset devaluation happens. Plenty of Nicole’s out there and just as clueless, in financial stress & loaded with hubris (and greed).

They will pay a hefty price, including Nicole.

#24 kommykim on 02.25.18 at 4:14 pm

Garth,
Who moderates the comments section when the main story is by one of your guest bloggers?

Kim

Do you think I’d actually give the wheel to one of those kids? – Garth

#25 Stan Brooks on 02.25.18 at 4:15 pm

Keep the house.

It is in the center in the diversity universe where everyone wants to live/GTA.

Imminently the prices will keep going up as billionaires from around the world come to Toronto desperate to own real estate here, no matter the cost.

Great weather, a lot of fun stuff to do, great politicians.
Still cheap place.

Except a parking spot to fetch soon 200 k and a house 5 millions.

#26 Motivated Seller on 02.25.18 at 4:18 pm

Two friends went thru the same process 20 years apart. Both refused the “insulting” initial offers and about 2 1/2 years and several brokers later, both gladly accepted ~$100k and $200k less. They had no regrets about losing the money, because the stress of two houses was just too much. Sell for whatever you can get, count your blessings and enjoy your new house.

#27 Bezengy on 02.25.18 at 4:18 pm

Congratulations to our Olympic Athletes on a job well done. You make us proud. As for Mr. Dressup trying to steal your thunder in the midst of the Olympics and embarrassing the entire country in the process, shame on him. His next apology should be to our Olympians.

#28 Millennial falcon on 02.25.18 at 4:24 pm

I’ve done the math as I was looking to invest in a investment condo. The only way to cash flow positive is to own the property out right, no mortgage. Condo fees, hydro and property tax alone would eat up about just over half of what I could rent it for. Then your taxed on whatever is left…Your left with almost nothing. That’s not taking into consideration any special assessment fees or leaky faucets to repair. And of course, as Garth loves to point out, the lost earning power of the invested money..calculated at 7 % for some reason. Any way, it’s a terrible investment.

#29 DON on 02.25.18 at 4:25 pm

Real estate always goes up…my trusted commission based best friend realtor told me so. All I had to do is swallow the cup of cognitive dissonance or recency bias he gave me.

It is sad though…watching the slow moving train wreck. Back to reality.

Life defining moments. Sell now! And salvage your stress level.

#30 FNAiks on 02.25.18 at 4:30 pm

Renting in southern Etobicoke with a price to rent of 36.5. Just signed an upgrade and my new ratio will be 66.7. Math is hard.
Friends just found out they bought a house with lead pipes. Apparently they’re jealous of our rental. I never imagined something so horrible would ever be uttered in a social setting in the GTA. Maybe there is hope for us poor renters.

#31 Athlete Dog on 02.25.18 at 4:31 pm

A family member has 2 dogs . The vet surgeon said that dogs should avoid aerial athletics ( catching a frisbee or tennis ball high in the air). One dog torn acl, 3 grand to repair, dog had to wear a halo for 2 weeks and be babysat for 3 weeks. The other dog bulging disk in the back, 8 grand to repair and had to be babysat for a month. Good thing their mom and dad have some scrilla.

#32 Smoking Man on 02.25.18 at 4:33 pm

Last year when the price of a detached home in Toronto got 10 years worth of a price spike in 2 months what the hell did you think would happen.

Many boomers net worth is in there homes. What will happen if the decline continues and they all panic sell.

Get out NOW!!!!!

#33 DON on 02.25.18 at 4:46 pm

Two sets of friends. One couple recently sold to get out of financial stress. The other couple had a realtor come by. Houseneecs work so they are taming out 100k HELOC to renovate to sell?

Same old tried and tested realtor advice in a drastically changing environment.

Cannot make this stuff up!

#34 For those about to flop... on 02.25.18 at 4:51 pm

CONFIRMED PINK SNOW.

O.k,so we have some confirmation about some losses we already knew about.

This one was not far from where I lived and probably seemed like a slam dunk at the time,but unfortunately for them the market turned.

The details…

Paid 1.51 March 2016

Sold 1.58 December 2017

And so the numbers don’t look too bad but they had at least 2 stages of renovations after it failed to take flight,kitchens ,bathrooms all the good stuff.

Then after a while on the market, painted the exterior and landscaped a bit.

This case is a good example of why I encourage the people that help me on this blog to report any extra details as they come in handy, because on the surface it looks like no damage was done but when all the expenses were settled it was probably a 150k mistake…

M43BC

Sold on December 11th 2017 for 1.58

5540 WINDSOR ST VANCOUVER paid 1.51 March 2016 ass 1.60 2017

https://www.zolo.ca/vancouver-real-estate/5540-windsor-street

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

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

Feel free to make a donation.

Flop For Fox Fund…

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

#35 For those about to flop... on 02.25.18 at 5:03 pm

CONFIRMED PINK SNOW

Yet another one where the numbers don’t look too bad but after the expenses monster attacks you are left with a sizeable wound.

The details…

Paid 3.28 February 2016

Sold 3.34 January 2018

And so just like the last one they got a little bit more than they paid but it wasn’t enough.

We don’t know about renovations and such and so with known expenses and a little for opportunities lost I will pencil this one down as a 170k loss…

M43BC

Sold on December 8 2017

2756 33RD AVE W VANCOUVER paid 3.28 February 2016 ass3.39 2017 asking 3.88

https://www.zolo.ca/index.php?sarea=2756%20W%2033rd%20Avenue,%20Vancouver&ptype_condo=1&ptype_house=1&ptype_townhouse=1&filter=1

https://www.zolo.ca/vancouver-real-estate/2756-w-33rd-avenue

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

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

Feel free to make a donation.

Flop For Fox Fund…

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

#36 AACI Home-Dog on 02.25.18 at 5:04 pm

Good photo. I bet he landed that !

#37 paul on 02.25.18 at 5:14 pm

#24 kommykim on 02.25.18 at 4:14 pm

Garth,
Who moderates the comments section when the main story is by one of your guest bloggers?

Kim

Do you think I’d actually give the wheel to one of those kids? – Garth
—————————————————————–
Come on Garth,
Give them the wheel, oh wait they were eating Tide Pods last week!

#38 For those about to flop... on 02.25.18 at 5:21 pm

CONFIRMED PINK SNOW.

This is another one that perhaps got off lightly,going with the theme of the day.

Had some heavier losses in December ,confirmed by Broadway,but I can only report them as they are cleared by b.c assessment.

The details…

Paid 1.18 March 2017

Sold 1.21 December 2017

And so after a fairly quick turnaround after listing it not long after buying it ,and perhaps realizing they had bought into a deteriorating market they got out and minimized their losses.

A small dusting of Pink Snow ,but still probably a 60k lesson when everything was tallied up…

M43BC

Sold on December 22nd for 1.21 pink snow.

3041 Noel Dr,Burnaby. Paid 1.18 March 2016 ass 1.19 2017

Jun 2:$1,348,000
Oct 8: $1,248,000
Change: – 100000.00 -7%

https://www.zolo.ca/burnaby-real-estate/3041-noel-drive

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

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

Feel free to make a donation.

Flop For Fox Fund…

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

#39 For those about to flop... on 02.25.18 at 5:34 pm

CONFIRMED PINK SNOW.

This one has been updated and yet I wait for losses to be confirmed from back earlier in the fall.

The details…

Paid 2.7 March 2017

Sold 2.8 December 2017

Another quick turnaround after they probably sussed out what was happening quicker than a lot of speculators have.

Limited the damage, but probably a 100k touch up after all is said and done…

M43BC

Sold on December 14th 2017 for 2.8

4107 w 12th ave ,Vancouver.paid 2.7 March 2017 asking 2.98

https://www.zolo.ca/vancouver-real-estate/4107-w-12th-avenue

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

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

Feel free to make a donation.

Flop For Fox Fund…

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

#40 Soy Boy PM's Tailor on 02.25.18 at 5:36 pm

#30 FNAiks on 02.25.18 at 4:30 pm
Renting in southern Etobicoke with a price to rent of 36.5. Just signed an upgrade and my new ratio will be 66.7.
=========================
My ratio is 40. I’m jealous!

#41 Interstellar Old Yeller on 02.25.18 at 5:36 pm

What kind of mansion did Nicole buy in Hamilton that her Toronto detached, even today, would have a smaller mortgage? Is there a HELOC on the place? That’s still debt, Nicole.

#42 Frey on 02.25.18 at 5:39 pm

Does anyone actually read For Those About to Flop’s posts, or does everyone just scroll past them like I do?

They take up space on the blog and are so boring. Siigh. So tired of hearing about “pink snow” “pink pumpkins” “pink” everything. We get it. Prices are unsustainable and will deflate. Do you really have nothing better to do than contrast and compare house prices in posts that people scroll past because of how annoying and frequent they are?
Just sayin.

#43 RudyGQ on 02.25.18 at 5:42 pm

I surmise that there is no ‘real’ real estate problem in Canada. If housing pricing and supply were a ‘real’ issue there would be broadly participated protests in front of legislative buildings coast to coast. Currently that is not happening. One can find more people lining up for new development offerings than involved in political demonstrations for change in this sector. Albeit there are local boots on the ground protests (tweeting/facebooking/snapchatting does not count) sprinkled in certain pockets of the country, nothing of significance is happening that will be remembered generations from now. Politicians are unmoved by this and offer token fixes to satisfy the financially illiterate voters. However, as always and forever will be, the biggest power broker making waves in real estate is Mr. Market. If you refuse/don’t understand this universal truth, then heaven help you and your offspring.

#44 DON on 02.25.18 at 5:52 pm

#42 Frey on 02.25.18 at 5:39 pm

Does anyone actually read For Those About to Flop’s posts, or does everyone just scroll past them like I do?

They take up space on the blog and are so boring. Siigh. So tired of hearing about “pink snow” “pink pumpkins” “pink” everything. We get it. Prices are unsustainable and will deflate. Do you really have nothing better to do than contrast and compare house prices in posts that people scroll past because of how annoying and frequent they are?
Just sayin.
********************************

I read them…you don’t have to.

The mouse or a flick of a finger enables you to scroll past.

#45 SoggyShorts on 02.25.18 at 5:55 pm

#39 MF on 02.24.18 at 5:36 pm
#22 SoggyShorts on 02.24.18 at 4:07 pm

“Same goes for delivery. Does the guy who carried 3 pizzas from his car to my door deserve 50% more than the guy who carried 2?”

-An incredibly naive comment.
*************************************
You are being ridiculous.
The pizza delivery guy didn’t up sell me anything, so answer these questions
1. “Is carrying $40 in pizza to my door worth 100% more in tips than carrying a $20 pizza?”
2. “If they have a special on, and the $40 in pizzas I ordered last month are $30 today, should I tip him less?”

Note: I tip the pizza guy $10 regardless of what the bill is.
————————————————-
#39 MF on 02.24.18 at 5:36 pm
What about the server who is able to upsell for the restaurant, and bring the bill higher?

This is the kind of server that the restaurant needs because it brings in revenue, and the server gets tipped accordingly for their effort.
1. If the server is doing a good job upselling and making the restaurant more money, that server should make a higher wage than other servers who do not.
2. If the server makes an upsell recommendation, and I’m happy about it, of course I will tip more.

Example #1
The waiter suggests some nice appetizers or tempts me with desert, and I order some. This is now more work for the waiter, and they have given me more service: the tip goes up.

Example #2 :
The waiter recommends a different, more expensive bottle of wine than I asked for because they think “it is a better pairing” the tip goes up. NOT because my bill is higher, but because they gave me additional service. Normally the choice of food is all mine, and is then up to the cooks and my taste buds, and therefore has no reflection in the tip, but in this example the waiter made a specific suggestion, and even if I don’t like the wine, they made extra effort= extra tip.

Example #3:
If I’m at a restaurant with free refills, and the waiter brings me 10 refills without being asked, and never leaves me thirsty, the tip goes UP. There is no change in my bill, but they gave more service, they get more tips.

I’ve tipped 100% at Denny’s after truly great service and 5% at the Keg after the worst service I’ve had.
More importantly those tips were $30 and $5 respectively, because that’s the level of work I felt they did.

If I shouldn’t be basing my tips on the quality of service, then they should just jack the prices 20%, put the servers on wage+commision, and have a no tipping policy.

When I was a waiter I loved that I could increase my income by being better at my job, and working harder. Sure it wasn’t a 100% correlation because some people tip/don’t tip for the wrong reasons, but overall if I was the best waiter on shift, I made the most money.

Since leaving the industry years ago, I took that with me and haven’t had a salary/wage job in almost 10 years. Piece rate is the fairest way to get paid, second would be a small wage and performance bonuses.

#46 Cindy on 02.25.18 at 5:55 pm

#41 Does anyone actually read For Those About to Flop’s posts, or does everyone just scroll past them like I do?

They take up space on the blog and are so boring. Siigh. So tired of hearing about “pink snow” “pink pumpkins” “pink” everything. We get it. Prices are unsustainable and will deflate. Do you really have nothing better to do than contrast and compare house prices in posts that people scroll past because of how annoying and frequent they are?
Just sayin.
_____________________________________________

Please keep scrolling by then.

Some of us find it interesting to read about what’s really happening in the market. Thanks Flop!! Don’t listen to haters.

#47 Wrong on 02.25.18 at 5:57 pm

There will not be 4 rate increases this year . Stop mongering ,Garth

Let’s discuss this in December. – Garth

#48 Nicki!! on 02.25.18 at 5:59 pm

Vultures , like myself , patiently await …….your house is stupid overvalued . In time , i may put in a bid

To add to our real estate fleet …:)

#49 jess on 02.25.18 at 6:00 pm

Geithner : program – HAMP intended to help homeowners really ‘ foamed the runway’ for banks.
barofsky
http://www.nytimes.com/2012/07/25/books/bailout-by-neil-barofsky.html
===============

The profit is in the churn.
https://theintercept.com/2018/02/21/citigroup-citi-puerto-rico-debt/
==========

#50 Madcat on 02.25.18 at 6:02 pm

20 years ago I was newly married and had just purchased a townhouse in Burnaby with my husband. Our unit happened to be near the real estate post. I remember feeling annoyed that Realtors would hang so many ‘for sale’ signs on the post that they ended up draping along the grass… LOL! I look forward to seeing those signs again.

#51 Andrew Woburn on 02.25.18 at 6:06 pm

and by the end of the year you can be sure giants from Meridien (Ontario) to Vancity (BC) will be following suit.
=====================

I pulled all of our cash out of Vancity when I realized what a risk magnet they had become. They are not covered by Federal Deposit Insurance.

They are covered by an apparently much more generous provincial deposit insurance program. It occurred to me that the BC Liberals might have designed this apparently unlimited coverage program to help drive BC prices by encouraging the unwary populace to provide endless low interest deposits to finance the R/E boom. Perhaps I am just shallow and cynical.

I couldn’t find anything much that backed this program other than the good faith of the BC government. Any one who has lived in BC for more than five minutes and still trusts in the good faith of its politicians shouldn’t be allowed out without a minder. If you’ve got $200K at the Kelowna Fruit Canners Credit Union, you’re probably safe. If Vancity starts to stagger, not so much.

Being old, nasty and grizzled, I remember BC credit unions got into massive trouble in the early 80’s. Strangely enough it resulted from reckless ending on real estate. Yes, in those antediluvian days, real estate went down as well as up. Quite suddenly as I remember.

If I were the BC Minister of Finance I would be looking carefully at the contingent liabilities that could arise from the BC deposit insurance program and its potential impact on borrowing costs. Then I would log into Amazon Prime and order new underwear.

The Vancity folks have always seemed to have better relationships with the NDP than with the other guys so my guess is Garth is right and there will be a gentle meeting of the minds about risk reduction. I also wouldn’t be overly surprised if Vancity becomes a federal corporation like its major BC rival, Coast Capital.

#52 No Debt on 02.25.18 at 6:13 pm

What a classic set of mistakes.

Overlooked the biggy which I suspect provoked the question about west GTA prices – The commute!!

I’ve long maintained that those who make the mistake of thinking they’d be clever and buy out Hamilton way to embrace the dream (and save some cash) and commute would regret the choice.

#53 gfd on 02.25.18 at 6:14 pm

Longer you wait, Nicole, Hocus Pocus Financial Solutions or Sodom & Gomorrah Real Estate Services may be your limited option.

#54 Fish on 02.25.18 at 6:15 pm

RE

#31 Athlete Dog on 02.25.18 at 4:31 pm
A family member has 2 dogs . The vet surgeon said that dogs should avoid aerial athletics ( catching a frisbee or tennis ball high in the air). One dog torn acl, 3 grand to repair, dog had to wear a halo for 2 weeks and be babysat for 3 weeks. The other dog bulging disk in the back, 8 grand to repair and had to be babysat for a month. Good thing their mom and dad have some scrilla.

Try swimming, time will tell they say only good dog
Go to,heaven

#55 ANON on 02.25.18 at 6:16 pm

…when the housing market was going crazy, but that wasn’t our impetus

Sure it wasn’t … :)

#56 Fish on 02.25.18 at 6:18 pm

Meant to say all dogs go to heaven

#57 Rick on 02.25.18 at 6:26 pm

“Real estate sales exploded five years ago, and when rates crashed many took two and three-year variables. It’s time. – Garth”

Spot on! We bought SFH east van 1.1M end of 2012. Renewed end of 2017 @ 3.19% appraised at 2.1M. Made 200K/yr sitting on a house I worry what my kids will have to make to afford a place.

Keep an eye out for 2023 when 50% of people renew their 2018 mortgages at normal 6-7% rates. Could be a shock to the over extended with low appraised properties. Year to buy will probably be 2024 similar to previous 12 yr cycles 2012, 2000, 1988

#58 NEVER GIVE UP is 100% correct - SCM on 02.25.18 at 6:28 pm

GONE

#59 YVR Renter on 02.25.18 at 6:29 pm

Remember a few days ago I mentioned the empty house in Shaughnessy that had burnt down last fall? Well, it gets even more interesting…with remote links to Mr. Socks himself and a corrupt businessman who is neglecting to preserve and rebuild what is left of this Historic home, despite city rulings….. deadlines have passed. But the owner of this empty home had Mr. Trudeau at his other mansion to improve links for wealth Chinese immigration per the articles below. It’s so quintessentially typical of what has messed up YVR.

https://www.theglobeandmail.com/real-estate/vancouver/fire-damaged-vancouver-mansion-sparks-heritage-fight/article38029243/

http://www.cbc.ca/news/canada/british-columbia/shaughnessy-mansion-fire-slavageable-heritage-status-1.4548080

#60 Fish on 02.25.18 at 6:31 pm

please let’s not forget about wild bill,

#61 under the radar on 02.25.18 at 6:31 pm

For those about to flop,
keep on posting . haters gonna hate ,as the truth hurts.

#62 FOUR FINGERS WATSON on 02.25.18 at 6:33 pm

#17 Pppppp on 02.25.18 at 3:35 pm
My question about the empty house rules. If I buy a condo in Vancouver and it is my principal residence. Then I go travel for 8 months of the year, will I be hit with the tax?
………………………..

I am currently travelling in Asia while my condo in Kelowna sits empty. I pay my gas and electric and cable bills online and i can do my income tax return online too. I also pre-pay my property taxes for a year when i am home.I might install an on off light timer next time i am home just to avoid any possible entanglements. There is no reason for the PTB to think that my place is a “vacant flipper condo”. I don’t think I have anything to worry about since I am not part of the problem they are trying to correct.

#63 oopswediditagain on 02.25.18 at 6:38 pm

Well Flop, you may have made the bigtime. Lol. Well, at least the price drops are getting media attention.

https://thinkpol.ca/2018/02/24/home-prices-fall-73-metro-vancouver-bc-budget-begins-bite/

“Asking prices for homes in Metro Vancouver are falling ‒ in one case by as much as 73% ‒ suggesting that budget measures announced by the NDP government to promote affordable housing by tackling rampant crime, corruption and speculation in the real estate market is beginning to work even before they come into force.”

#64 Parksville Prankster on 02.25.18 at 6:39 pm

The Fat Lady hasn’t sung yet on Vancouver Island real estate prices, but there’s definitely the sound of humming and someone warming up off of stage right.

#65 YVR Renter on 02.25.18 at 6:39 pm

#39- Floppy – hey 4107 West 12th is near us and was for sale forever last year! There’s an even crazier shack -looks like a hillbilly shack or chicken coup – for sale on 14th now for $3 million. CRAZY NUTS! https://www.zolo.ca/vancouver-real-estate/4213-w-14th-avenue

#66 Jungle on 02.25.18 at 6:40 pm

Get that house on the market and priced to sell, slightly underprice your competition and make it show really well.

Do this fast because pre Ofsi mortgage applications expire April, after that, I don’t see any excelleration in spring or summer.

#67 Last of the Boomers on 02.25.18 at 6:41 pm

Fascinating conversation on “This Week in Money” podcast regarding the state of the real estate market in West Vancouver. Starts at approximate the 10 minute mark.

https://www.google.ca/search?q=this+week+in+money&rlz=1C9BKJA_enCA590CA590&oq=this+week+in+&aqs=chrome.3.69i57j0l3.6759j0j8&hl=en-US&sourceid=chrome-mobile&ie=UTF-8

#68 YVR Renter on 02.25.18 at 6:42 pm

Love Flop’s posts!
Ignore #46, Cindy, she’s a grump

#69 Cheekmonster on 02.25.18 at 6:43 pm

Buying in Hamilton and working in Toronto is a nightmare. Gotta take a Go bus from downtown then transfer over to the train which is often mind-numbing, germ (flu) infested, packed and it’s a long sad ride back.

OR DRIVE and deal with a nightmare traffic jams all the way especially the after you get past Burlington (403 and Skyway).

#70 oopswediditagain on 02.25.18 at 6:45 pm

“What a classic set of mistakes. First, buying before you sell.”

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

It's also a classic line by real estate agents.

"In this "hot" market it's always best to buy something first. Your house will sell without a problem. I just happen to have a house listed just outside of Hamilton that should be just right for you."

Translation: "I'm trying to dump one of my "investments" just outside of Hamilton and I need a pigeon to buy it fast."

#71 Russ on 02.25.18 at 6:56 pm

Thoughts on Flights, Food and Fs.

A hold-over from the weekend conversations:

– In the United Airline mishandling of a passenger. I side with the Doc, as he had a paid fare & a boarding pass with seat assignment. That is a pretty strong contract in force. If the airline wants to renegotiate the contract it needs to find a better way than calling the cops, beating up the customer and dragging them into illegal detention. Irregardless of having employees that “need” to get somewhere, a little more effort in negotiating with other contract holders (seated) would have prevented this occurrence.

BTW, Delta has learned from this. I recently traveled 4 flights with them in the USA on the dirt cheap economy fare. Our seat assignment was handled at the boarding gate, even with connecting flights. I won’t do that again, although I see it is a good way for Delta to avoid the United experience. Smart corporate.

– Tipping decisions are difficult enough without social pressure. I like the European experience where the posted price is what you pay. For North America I generally tip 5 – 20%, excluding taxes, and based on service & time spent at the table. I recall a busy night at a place where we wanted to linger a bit and let the waitress know at the beginning, but ordering and food and dropping the bill was rushed, so I wasn’t there long enough to tip well. Just saying.

– I only consider higher volume ETFs for the meat & potatoes part, which I thought was pretty obvious to most people. I did get nailed in a high dividend trust a few years back in the hobby account, but that is partially why I have it eh. :)

#72 TurnerNation on 02.25.18 at 6:56 pm

Can SCM be limited to two GONE posts per day?? :-(

I once dated someone like her (spilled more ink than tears).

#Quota

#73 JSS on 02.25.18 at 7:00 pm

When do we vultch? How long do we wait?

#74 john m on 02.25.18 at 7:09 pm

Purchasing a rental property even in good times can be a life changing experiment…one i tried and never ever,ever again…..

#75 For those about to flop... on 02.25.18 at 7:13 pm

#65 YVR Renter on 02.25.18 at 6:39 pm
#39- Floppy – hey 4107 West 12th is near us and was for sale forever last year! There’s an even crazier shack -looks like a hillbilly shack or chicken coup – for sale on 14th now for $3 million. CRAZY NUTS! https://www.zolo.ca/vancouver-real-estate/4213-w-14th-avenue

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

Yes indeed,they are in trouble.

Already ran that one on here and it sits in my Pink Snow Folder.

Thanks for the help…

M43BC

4213 w 14th ave, Vancouver. Paid 2.88 Feb 2016 ass2.86 2017

On 3.07

https://www.zolo.ca/vancouver-real-estate/4213-w-14th-avenue

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

#76 jess on 02.25.18 at 7:15 pm

The Chinese government said Friday that it took temporary control of Anbang and will prosecute founder Wu Xiaohui for alleged fraud, cementing the downfall of a dealmaker whose aggressive global expansion came to symbolize the overreach of the country’s debt-laden conglomerates. The government said it would consider “all or partial” sales of Anbang’s assets, without providing more details.

https://www.bloomberg.com/news/articles/2018-02-23/anbang-seizure-whets-buyers-appetites-for-buildings-across-u-s

#77 T on 02.25.18 at 7:16 pm

#42 Frey on 02.25.18 at 5:39 pm

Does anyone actually read For Those About to Flop’s posts, or does everyone just scroll past them like I do?

————

Absolutely.

I tend to scroll past whiners such as yourself, however. Unless the comment is too ignorant to ignore.

It must be a huge strain on you to scroll past a comment… so hard to do and not feel hard done by.

#78 Chico on 02.25.18 at 7:17 pm

#72 TurnerNation on 02.25.18 at 6:56 pm

Can SCM be limited to two GONE posts per day?? :-(

I once dated someone like her (spilled more ink than tears).

———————————————————-

Were you a sucker for punishment?

#79 Stone on 02.25.18 at 7:31 pm

#72 TurnerNation on 02.25.18 at 6:56 pm
Can SCM be limited to two GONE posts per day?? :-(

I once dated someone like her (spilled more ink than tears).

#Quota

———

I vote for never seeing it again, in any shape or form. GONE is so last week when it comes to SCM.

Please and thank you.

#80 Post on 02.25.18 at 7:32 pm

Coast Capital Savings is offering a term deposit for 33 months at 4%. Plus it is convertible to a new term deposit at any time if rates should rise.

So Garth maintains that a balanced portfolio should return 6% per year on average. Then you have to deduct advisory fees.

The spread on the above 2 rates is getting pretty close.
And one comes with a guaranteed night of sleep, especially entering a phase of volatile markets – stock and bonds.

Interest is fully taxable, remember. Capital gains and dividends are not. Last year a balanced portfolio yielded almost 11%, and has averaged 7% over the last eight. And does [email protected] give you advice on tax strategies, retirement planning and marital relations? – Garth

#81 Howard on 02.25.18 at 7:38 pm

While in graduate school at McMaster, I once did that Hamilton-Toronto commute for a 4-month placement. Never again. Four months of rising at 5am, catch the GO bus from Hunter & James. Ride would often be 2 hours+ especially as it was winter, and a snowy one that year. Then schlepp from Union Station up to my office near Dundas and University. GO train would have been faster but far less comfortable, the bright lights and draftiness, just awful first thing in the morning. I was constantly exhausted and miserable for those 4 months and that’s for a healthy person in his 20s.

#82 SimplyPut7 on 02.25.18 at 7:39 pm

#11 Fuzzy Camel on 02.25.18 at 3:05 pm

In Toronto, it’s probably about $5,000 – $5,500

https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/property-tax-calculator/property-tax-calculator/

But it gets worse, most of the condo buyers were hoping to sell the assignment or flip the property as soon as the building was finished.

Of all the people I know who own condos, none of them were planning on holding on to them for more than 5 years. The condos are poorly made, the elevators break down a lot, the amenities in the building are not as great or designed as marketed during the pre-sale of the condo, the units are small and cramp and built in areas of Toronto that don’t always have the best amenities outside of the building without the need some type of transportation; which can be costly, because many speculators were cheap and didn’t buy the parking lot for the unit they purchased.

At some point, the GTA is going to have to have a plan for all of the local/domestic speculators who no longer qualify for the condos they purchased in 2016 and 2017 because of higher interest rates, B20 or due to speculators who knew they were never in a financial position to own the property for more than 10 years; but they were hoping to flip it in the short-term (without CRA finding out about the sale of the non-principal residence home).

I don’t know what developers are going to do when they realize the people who would have bought condos as primary residence stop buying pre-sale condos; because resale townhouses and detached homes in the GTA cost less than their shoebox pre-sale condo in downtown Toronto. And, there are not enough domestic/foreign speculators or flippers to meet the requirements to start building on the land they bought to develop the condo.

#83 For those about to flop... on 02.25.18 at 7:42 pm

42 Frey on 02.25.18 at 5:39 pm
Does anyone actually read For Those About to Flop’s posts, or does everyone just scroll past them like I do?

They take up space on the blog and are so boring. Siigh. So tired of hearing about “pink snow” “pink pumpkins” “pink” everything. We get it. Prices are unsustainable and will deflate. Do you really have nothing better to do than contrast and compare house prices in posts that people scroll past because of how annoying and frequent they are?
Just sayin.

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

Ah crap, I knew I was going to get whacked when I saw that it was a slow news day.

This happens every couple of weeks and goes with the territory.

I will try to clear a few things up.

My Pink Snow posts are supposed to capture the rolling history of what is happening in Vancouver real estate at the time and so people can look back at different stages and see what was happening at various stages.

One of the reasons I believe that the information is so valuable is because it is delivered in a timely manner and I follow it through from go to whoa.

Thinkpol for instance ran an article a while ago and there were people on the blog oohing and aahing about it and trying to draw my attention to it and some of the addresses I had presented and some I hadn’t.

One of the houses on Jaskow Dr,Richmond was purchased for 1.9 and supposedly sold for 1.69.

Thinkpol to my knowledge did not follow up as I did.

I presented the sale and received confirmation someone with access to the Mls and will show it as CONFIRMED PINK SNOW like the houses above when the database is updated.

Oopswediditagain just showed another Thinkpol article and immediately upon inspection the one on Eagleridge Dr jumped out at me because I just presented it the other day.

People speculate why I do what I do,there are multiple reasons for this.

They include…

I try to give back to the people on the blog with all the other stuff they help me out with.

I try to give back to the boss of this blog ,while he handles the big picture I try to show what’s happening on a micro scale.

I try to honour my beloved blog buddy Boom, after I promised him and his family I was going to try and make a difference on the blog like he did.

I had been trying to incorporate what I had seen on the blog in my neighborhood onto the blog, but was worried about not being able to hang with the cool kids on the blog anymore.

Then Boom passed and I found my strength.

Roy H. Stacey ( Boom ) is the steel in my spine.

I will not bend.

I will not break…

M43BC

#84 Nonplused on 02.25.18 at 7:43 pm

Back to the BC second home or cottage tax, as I believe this will be the pin that finally bursts the bubble.

I have a friend who isn’t even in zone and he’s listing. As he put it “I’ve had enough of their crazy laws, crazy politicians, and crazy citizens. I planned to retire there but I want out.”

That’s only one guy, but it’s only been a few days.

One of the problems you have with a central bank is that they set the interest rate according to whatever they consider to be the most pressing issue in all of the area affected, and so in Canada that is Ontario. The central bank of Canada does not give a rat’s ass what happens 300 miles outside of Toronto. Therefore we should call it the central bank of Toronto. We saw this in the late 70’s and early 80’s when rate policy was designed around Ontario but through low interest rates created a boom in Alberta followed by a huge bust when they raised rates. This is exactly what is going on now. Toronto house prices are getting too high and the economy in Ontario is doing ok, so rates will rise and they don’t give a flying **** about what is going to happen in Alberta or BC. Same as they didn’t when they lowered rates.

The center of the the empire is New York. The center of the Canadian property of the Empire is Toronto. Rates will always reflect what is best for New York first and if you are in Canada Toronto second. BC doesn’t even matter. It’s too far away and doesn’t have enough people. It is, in essence, a remote logging and wilderness adventure operation. Nobody in Toronto is going to care what happens to Vancouver, never did, never will.

But I think BC has shot themselves in the foot. Instead of just letting gradually rising rates cool the market gradually, they just forced the sale of many units that otherwise would have not been listed. The timing couldn’t be worse. I can’t remember what % of GDP Garth said was due to home construction (oh wait Google says it’s north of 13%), but that amount of BC GDP just ended. And that of course means that 13% of all other GDP also goes away because those workers won’t be spending any money or building anything anymore. So BC just lopped 20% or so right of the top. Yikes!

#85 NoName on 02.25.18 at 7:44 pm

@mf and soft shorts and others going back and forth on service and tips

I think Netflix has it if not you can buy it YouTube for 4cad.
Waiting
https://youtu.be/N3TRToHrNWc

#86 Post on 02.25.18 at 7:49 pm

Garth, I agree about the advice, the tax advatage, strategies and planning.

But I think we all know that it’s pretty foolish to extrapolate future earnings from past bull market performance.

If rates keep going up (and I think that you do), term deposit rates are heading up too and the spread between term deposits and managed financial accounts is going to diasapear quick.

Possible, but unlikely. Unless you have enough money already, invest in growth assets. – Garth

#87 Terry on 02.25.18 at 7:50 pm

“Plus, we’ll all be borrowing at higher rates this year. The next Fed increase in the States will likely be March 21st, and then two – maybe three- additional increases by the world’s key central bank after that. More in 2019”

It does look like interest rates are heading towards the big 10% mark probably by the year 2024 or 2025 by the latest. Double digit interest rates in just over 5 years from now. Now we’re getting back to normal.

#88 Oakville sucks on 02.25.18 at 7:50 pm

Guys, just check out Mongohouse.com for analysis of the GTA market. Oakville for example has dropped 30 to 35% from peak values last spring! I saw it in my neighbourhood and it’s very scary. Most houses are also replacing for sale signs with for. Lease signs!

#89 Happy Housing Crash Everyone! on 02.25.18 at 7:52 pm

You dirty SHYSTERS just ruined another family in the Housing Crash that will only get worse. Many are on the verge of going bankrupt. Many will lose their home and their money losing investment home. The financial pain will keep growing as rates will go up and up and up and up. You DIRTY SHYSTERS do not have the educational background for a minimum wage job . Most of you are useless and provide zero value.

Happy Housing Crash Everyone!

Millennials most of you are plain stupid and SHYSTERS know it. Stop buying anything and watch prices crash like a waterfall. Every SHYSTER laughs at the stupid millennial generation

#90 Fish on 02.25.18 at 7:55 pm

46 Cindy on 02.25.18 at 5:55 pm
#41 Does anyone actually read For Those About to Flop’s posts, or does everyone just scroll past them like I do?

They take up space on the blog and are so boring. Siigh. So tired of hearing about “pink snow” “pink pumpkins” “pink” everything. We get it. Prices are unsustainable and will deflate. Do you really have nothing better to do than contrast and compare house prices in posts that people scroll past because of how annoying and frequent they are?
Just sayin.
_____________________________________________

Please keep scrolling by then.

Some of us find it interesting to read about what’s really happening in the market. Thanks Flop!! Don’t listen to haters.
???????????????????????

You mean understand, I guess good to be out
Price will fall, they should come down

#91 Fluorine on 02.25.18 at 7:56 pm

#71 Russ

Was it League Assets Corp? “The Blue Book of Real Estate Syndication”…

Luckily I’m lazy… I almost got sucked into that! haha

#92 priceless on 02.25.18 at 8:06 pm

Do you think I’d actually give the wheel to one of those kids? – Garth

…………

#93 Interstellar Old Yeller on 02.25.18 at 8:09 pm

#83 For those about to flop… on 02.25.18 at 7:42 pm

Nice to see a mention of BOOM! I miss his contributions. I hope his family is doing well.

Flop: sometimes I scan your posts and sometimes I don’t. When I’m in the right mindset for it I find it’s interesting to hear about things happening on the ground (won’t extrapolate too far from anecdotes, but still interesting). Share as you see fit and our host will allow.

#94 Protea on 02.25.18 at 8:18 pm

For those about to flop… Yes I read them and find them very informative as they apply to me living in Vancouver. Keep them coming and remember its a free blog censorship on applies to the nut cases who post nothing of value !!

#95 45north on 02.25.18 at 8:18 pm

Fuzzy Camel: The day Jerome Powell was appointed to the Fed, the market dropped, BIG time. Coincidence? What are your thoughts of the new Fed chair?

Danielle DiMartino Booth:

https://www.youtube.com/watch?time_continue=3&v=vvt_-isaFN0

she worked nine years as a senior analyst for the US Fed and was an advisor to US Fed President Richard Fisher. In her words and in her tone, there is a sense of urgency. She advocates shrinking the balance sheet which means reversing QE. She points to Jerome Powell the current head of the Federal Reserve who took a $1 salary in order to convince Congress of the perils of the US defaulting on the debt. He says that the US Fed needs a strong exit strategy when and how the US Fed will shrink the balance sheet. She says that for the whole of 2017, the US Fed was in Def Con 1 – in other words it was injecting liquidity as if Bear Stearns and Lehman Brothers were failing every day. She points out that Mario Draghi is the President of the European Central Bank and that he will be replaced in September this year. She mocks and ridicules the European Central Bank for buying and holding junk bonds. She asks the question: What has to happen to financial markets to allow reversal of QE? She points to the New York Fed moving its trading desk from NYC to Aurora Illinois next to the Chicago Mercantile Exchange. In response to the flooding caused by Hurricane Sandy. She says it’s the over intrusiveness and magnitude of this financial engineering experiment that is beyond the mandate of the US Fed.

God bless Jerome Powell

#96 Calamity Jane on 02.25.18 at 8:19 pm

#89 HHCE

Take it easy on the Millennials there… you can’t really think boomers are all that brilliant with the latest numbers showing they’re retiring WITH DEBT. Lets not even get started on those incompetent Gen Xers hahaha. Just teasing…. please don’t ban me, I’m no SCM.

I’d be interested to know who on the blog falls into the Xennial generation. For those who haven’t heard the term it’s the group born into a unique cohort between 1977-1985 who had an analogue early childhood (like Gen X) but a digital teenage/adulthood (like Millennialls) and easily adapted to new technology. Apparently Xennials get the Gen X cynicism and Millenial optimism. They don’t quite fit in Gen X and they don’t quite fit in Millenial as their experience has straddled both cohorts.

I took a break from reading the blog for a bit and am trying to catch up but has there been a survey on % of each generation that visits / contributes? Did I miss that somewhere? I’d love to know how it breaks down.

#97 Tony on 02.25.18 at 8:20 pm

Re: #21 Fuzzy Camel on 02.25.18 at 3:47 pm

Gregory Mannarino just said the opposite of what you said about Powell on Friday on youtube, citing that as the reason the stock market gained heavily that day. The use of the word dovish doesn’t sound like even three rate hikes are assured this year out of America.

#98 Fish on 02.25.18 at 8:26 pm

Where is the mayor of Milton, or on a bus heading to town with furniture and some brink job money in his pocket
out of a job, with all tax cuts that will come well let’s hope not wild bill will be tightens Tuesday

#99 Dead Cat Bounce on 02.25.18 at 8:26 pm

#42 Frey on 02.25.18 at 5:39 pm

——————————————————————

I read Flop’s posts !!!
My bet is your a bored Realtor at a empty “open house”

#100 Samson Nights on 02.25.18 at 8:27 pm

#58 NEVER GIVE UP is 100% correct – SCM on 02.25.18 at 6:28 pm
GONE

You know when a blog has gone completely off the rails when it becomes so ideologically closed-minded it refuses to allow a different perspective repeatedly backed up with facts.

#101 The Great Gazoo on 02.25.18 at 8:33 pm

#83 For those about to flop.

“Roy H. Stacey ( Boom ) is the steel in my spine.

I will not bend.

I will not break…”

——————————————————-

Keep up the good work – it is appreciated.

#102 The man with two brains on 02.25.18 at 8:37 pm

if she bought 7yrs ago in west TO and doubled her money, and comes here to ask for predictions???
by renting it for a year she unnecessarily complicated her future claim for the PR exemption, so the agent has no brain.
doesn’t her husband have a brain?

#103 Jo on 02.25.18 at 8:39 pm

46 Cindy
Flop is one of my favorite posters, I always look for his comments. Thanks Flop your posts are awesome.

#104 ImGonnaBeSick on 02.25.18 at 8:39 pm

What do you think Mr. Garth and blog dogs? Bill Morneau still going to be ejected this year? He’s been non-existent since the Christmas break, presumably working up new ways to destroy the current tax system… here’s hoping.

#105 Jo on 02.25.18 at 8:41 pm

Re Flop, sorry Cindy that should have been 42 Frey.

#106 Linda on 02.25.18 at 8:42 pm

Way I see it, Nicole has two options. Continue to carry two properties betting that markets will eventually recover or relinquish the dream that the Toronto property will sell for over asking & take whatever reasonable deal comes along, IF one does. By reasonable, at least getting what they paid for the house or if that isn’t possible, then selling for as close to the original purchase price as they can get. Because human nature being what it is, the vultures are circling & everyone is going to want to wait for price drops rather than buy.

#107 For those about to flop... on 02.25.18 at 8:45 pm

#135 Bby renter on 02.25.18 at 6:16 pm

Flop….

I would love to help you out on the Richmond listing but my realtor only has me set up for detached homes in Burnaby, North Van and certain parts of Vancouver as these are the parts of the city I’m considering when we decide to jump back into the market…one day.
I asked ber to expand the search but i think there is a limit on number of neighborhoods or quantity of listings on the Private Client Services website. I could be wrong so I’ll ask again when i see her next.
I check out that site every other day so i’ll comment if any of your inquiries fall into those neighborhoods.

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

Hey BR,

Not sure what price point are you looking at?

2355 Panorama Dr , North Vancouver got basically back what they paid 1.97/1.99

Not sure what happened at 1791 Ralph St ,North Vancouver but you might find that one of interest as well.

If you find out what happened to this one in Burnaby it might help you out a bit as well…

M43BC

Sold on January 11 2018

https://www.bcassessment.ca/Property/Info/QTAwMDAzV0ZFOA==

https://www.zolo.ca/burnaby-real-estate/4582-sunland-place

4582 Sunland Place, Burnaby, BC, V5J 3A4 paid 1.3 March 2016 asking 1.19
2016-10-15 : $1,399,000
2017-01-11 : $1,299,000
2017-02-02 : $1,499,000
2017-05-08 : $1,480,000
2017-06-07 : $1,380,000
2017-11-13 : $1,449,000
2017-11-17 : $1,199,000

#108 acdel on 02.25.18 at 8:46 pm

#96 Calamity Jane

Kinda tough on Gen-X crowd considering we grew up with all the technological changes that occurred from mid 70’s to current. Hey, video killed the radio star!

Most Mills are decent,intelligent, hard working folks, like every generation there are those that just do not get it; although I have to admit (as a gen-x dude) that the age group between 24 to 34 (not all) are a peculiar generation, many lack common sense and have a great amount of built up frustration towards the previous generation although the previous generations also had to go through hell and back to make a living.

Who I do feel for is the current generation and new borns, competing against new technology, taxed to death, lied to, and being formed not to be free thinking individuals but self serving drones. I hope they fight back!

#109 Russ on 02.25.18 at 8:54 pm

Fluorine on 02.25.18 at 7:56 pm

#71 Russ

Was it League Assets Corp? “The Blue Book of Real Estate Syndication”…

Luckily I’m lazy… I almost got sucked into that! haha
==========================

Nope.

Eagle Energy trust.
Butt Hey, Alberta was doing okay before the NDP got in!

I might be in a position to “average down”… :)

#110 Pete on 02.25.18 at 8:55 pm

#89 Happy Housing Crash Everyone!
——————————————-

I think most mill’s are getting poor advice or none at all, but the media are to blame more than anyone! The media fuelled the frenzy through their ignorance. Reporters are just as poorly educated as RE agents.

#111 SoggyShorts on 02.25.18 at 8:57 pm

#85 NoName on 02.25.18 at 7:44 pm
@mf and soft shorts and others going back and forth on service and tips

I think Netflix has it if not you can buy it YouTube for 4cad.
Waiting
https://youtu.be/N3TRToHrNWc

**********************************
Nice clip, and a funny movie if memory serves. I actually worked at a place that had the slowest crappiest milkshake machine, and whenever we got busy it was “broken, sorry”
That probably cost me some tips due to customer disappointment, but that’s fair.

#112 TS on 02.25.18 at 8:59 pm

Hilarious,

Go to an Area of Newmarket on Realtor.ca that has people trying to sell 1.5 million dollar houses

The area statistics say that the household income is $196,900. Yeah, great…. that’s probably more than 96% of Canadians.

But it still is like half of what you need to comfortably afford a 1.5 million dollar house.

like, where do these people think the buyers are going to come from?

#113 SoggyShorts on 02.25.18 at 9:01 pm

#100 Samson Nights on 02.25.18 at 8:27 pm
#58 NEVER GIVE UP is 100% correct – SCM on 02.25.18 at 6:28 pm
GONE

You know when a blog has gone completely off the rails when it becomes so ideologically closed-minded it refuses to allow a different perspective repeatedly backed up with facts.

*****************************
From what I’ve seen over the years, different perspectives are welcome even if unsupported by facts. But if you can’t share your perspective without being insulting, you may be warned and eventually asked to leave. Honestly I’ve never been on a forum where the owner gave the same person a dozen warnings, banned them and then gave them yet another chance before banning them permanently. In most cases you’d be lucky to get a 3 strike rule.

#114 Fish on 02.25.18 at 9:02 pm

Not to mention the army and helicopter and 3 legged dogs, and people driving crazy I’m Milton I heard there was a women there waiting for St Patrick day dress in green what a sight never on my wildness Dreams and big truck ready to drive

#115 David on 02.25.18 at 9:04 pm

In real estate, the first offer is usually the best offer you’re going to get.

#116 akashic record on 02.25.18 at 9:06 pm

Globalism was supposed to bring democracy to China, politicians, like Clinton, who implemented it promised for the Western public.

Just the opposite is happening, Apple just followed other US corporate giants to bend over to the economically, militarily thriving Communist dictatorship.

https://www.engadget.com/2018/02/25/apple-will-store-icloud-keys-in-china/

#117 jane24 on 02.25.18 at 9:20 pm

You do have to have empathy for all those who brought before they sold or are or will be in over their heads They have never experienced a long term RE down market before. They were in school for the 1980s one. All that they thought they knew about investing is about to turn around 100%. Most RE agents are in the same boat. No experience of a declining market. Rules have totally changed. There will be many many stories like this in 2018.

As an elderly previous RE agent I can tell you that in a down market the first offer is ALWAYS the best offer. Don’t chase a declining market down. Get ahead of the price drop. The cheapest home still sells. Oh and any home is only worth what a buyer will pay. Who cares what you think your home is worth.

#118 Smartalox on 02.25.18 at 9:35 pm

Count me in as another fan of the Flopper!

For me, the best part of Flop’s posts are the numbers. Especially the difference between what the property is assessed at, and what it sells for. Because the property value assessments published in January are actually conducted during the previous July, they’re a seriously lagging indicator of the state of the market. Think of it as a 180-day moving average.

The data in Flop’s posts shows that homes on the west side of Vancouver linger on the market, selling only for prices about 20% less than the most recently assessed values. These prices are setting the market, the cutting edge of the market trend.

If places are selling for 20% below assessed in the richest market in the region, why would anyone pay more elsewhere?

And how is that discount changing over time? if market prices are 20% lower than assessed by July, it’ll be reflected in next year’s assessment. Then we’ll see if decreased demand keeps sales 20% of below those new assessments.

Keep up the good work, Flop, don’t listen to Frey.

Probably just a specu-vestor with a bunch of inventory that isn’t selling!

M44BC

#119 Andrewt on 02.25.18 at 9:36 pm

#69 Cheekmonster on 02.25.18 at 6:43 pm
Buying in Hamilton and working in Toronto is a nightmare. Gotta take a Go bus from downtown then transfer over to the train which is often mind-numbing, germ (flu) infested, packed and it’s a long sad ride back.

OR DRIVE and deal with a nightmare traffic jams all the way especially the after you get past Burlington (403 and Skyway).
—-

Tell me about it. I’ve got a colleague at work. Got married- had a 1bdrm condo in Liberty Village, but the hormones started kicking in so they moved to a bigger place on a street with trees in Hamilton- this while still working in downtown T.O.

So now they’re gonna renting the condo out, but renting themselves in another house in Hamilton- and looking for a place to buy.

Of course in their price range they’ve only been looking in Ancaster and beyond, and so now they are frustrated. Not exactly walking distance from the GO train like they pictured it.

It’s only been 6 months and already the commute is becoming a strain.

It was all supposed to fall into place.

#120 Al on 02.25.18 at 9:37 pm

Keep on renting.

You get to write off 10% of all of your primary house expenses such as mortgage interest, utilities, phone, Internet and more.

Also, while you are starting things up yo can claim negative income for up to 3 years as you get the rental going and moving toward positive cash flow.

This negative rental income offsets your personal income. Get smart with deductions in these 3 years. Especially this tax year as it was your start up year.

Imagine your primary house mortgage is partially tax deductible when you own a rental. It’s amazing.

Debt is okay as long as you are comfortable financially.

Increase the rent as your one full year is up, follow the provincial rules, get smarter wih write offs and just push through these next 3-5 years and then the pressure will be off a bit.

And stop worrying.

Garth’s posts won’t help with the worrying part though!

#121 SoggyShorts on 02.25.18 at 9:37 pm

#42 Frey on 02.25.18 at 5:39 pm
Does anyone actually read For Those About to Flop’s posts, or does everyone just scroll past them like I do?
***********************
Apparently some do. I use a filter on my browser to block out all of his posts. It’s useful info, and should be shared somewhere (perhaps on another blog?), but for me I just don’t care if some house sold for a 5% loss. It does nothing for me.

@Flop nothing against you, it’s just the subject I don’t care about.

#122 @Spectacle on 02.25.18 at 9:40 pm

paul on 02.25.18 at 5:14 pm
#24 kommykim on 02.25.18 at 4:14 pm

Garth,
Who moderates the comments section when the main story is by one of your guest bloggers?

Kim

Do you think I’d actually give the wheel to one of those kids? – Garth
—————————————————————–
Come on Garth,
Give them the wheel, oh wait they were eating Tide Pods last week!
—————————- Dude ,
Corona so came out my nose with that one!

Ps:: and Nicki didn’t even provide the requisite suck-up email opening! Ok, She has bigger things on her plate to deal with for the next 30 years.

#123 Boonerator on 02.25.18 at 9:42 pm

I am at the leading edge of boomers (1947) and I found SCM’s tirades against my supposed generation more amusing than anything. (“Supposed” is a whole another topic)
I was imagining spittle flying in time with the typing.

As for flop, please let him post as much as he wants. Actual data here is welcome and he provides it.

#124 acdel on 02.25.18 at 9:45 pm

#103 Jo

Whether the person is an ex realtor or not (for me I could care less); like you, I enjoy his/her posts, just trying to be politically correct and respectful, anyways, actually I enjoy all the posts, Garth has given us a platform to do so, although I do not know how he puts up with us! :)

#125 Fish on 02.25.18 at 9:56 pm

115 David on 02.25.18 at 9:04 pm
In real estate, the first offer is usually the best offer you’re going to get.

no, not necessarily location location location, especially if it by water trust me

#126 Ray Skunk on 02.25.18 at 10:00 pm

Lots of Nicoles out there.

As I posted last week, people are not listing, waiting for the “recovery”. Those that are, list at the same price as they listed for (but couldn’t sell at) last year – totally oblivious to the change or trying to go against the grain.

Looked at three turds houses today that aren’t budging. When my Realtor sends me the latest, my first question is “was this previously listed?” More often than not; yes it was, and for the same price.

As for what I looked at today that’s not shifting:
– House 1- shoddy side addition with baseboard heaters, mouldy smell in the basement
– House 2 – cute enough, but tiny bedrooms, dead mouse in the basement
– House 3 – looked shite from the outside, smelt shite on the inside. Turned around and walked right back out again

Happy renting for the next little while!

#127 Fish on 02.25.18 at 10:06 pm

best to wait, rent and invest and see

#128 45north on 02.25.18 at 10:16 pm

Nonplused: I have a friend who isn’t even in zone and he’s listing. As he put it “I’ve had enough of their crazy laws, crazy politicians, and crazy citizens. I planned to retire there but I want out.”

I don’t know about BC, but I do know about Ontario. People from Toronto bought cottages in Muskoka and Parry Sound District. Drive up on the weekend and spend money. And of course, the nature of the cottages shifted over the years. Cottages used to be two season cottages – from the inside, you saw the outside siding. There was a Quebec heater in the middle and there was an outhouse. Over the years the standard was upgraded – insulation, wall board and in-door plumbing. Highway 11 was constantly upgraded so the practical limit of travel was extended outwards. And airline travel became easier and cheaper – Florida, even Europe became practical. The upgrade of Highway 11 was a double edged sword – it bypassed little towns like Burks Falls, Sundridge and South River. Why bother stopping? You get what you need and drive.

Your friend may list but he probably won’t sell. Still if he doesn’t go at all, he’s not going to buy gas or groceries. He won’t be don’t any fixing up. That’s a $1000 the locals don’t see.

#129 guru on 02.25.18 at 10:18 pm

not a tax expert but did she just screw herself over by renting it out?. House value increased by $240k over the past 7 years but now she rented it out for 1 year means she now has to file capital gains for $30k when it’s sold?

Anyways, full impact of B20 will hit by mid March, but we can see in the frontlines how many applicants are being punted in the past few months. IMO, the start of the great condo crash in the GTA will may materialize when speculators exit in droves this year (increasing rates, lack of buyers due to B20, surge in supply, increasing maint. fees and special assessments). Having lived in a new condo previously, many discard these condos once it hits the shelf-life of 7-8 years.

#130 ShawnG in TO on 02.25.18 at 10:20 pm

> #100 Samson Nights on 02.25.18 at 8:27 pm
> You know when a blog has gone completely
… blah blah

lol
ok snowflake, if ideology is so important to you why don’t you join the user comments on cnn.com? what? they don’t have one?

#131 Ronaldo on 02.25.18 at 10:22 pm

#57 Rick

”Spot on! We bought SFH east van 1.1M end of 2012. Renewed end of 2017 @ 3.19% appraised at 2.1M. Made 200K/yr sitting on a house I worry what my kids will have to make to afford a place.”
——————————————————————
You just made a million for doing nothing. Surely you can afford to split half the gains with them and ease your worries.

#132 @Spectacle on 02.25.18 at 10:24 pm

Re: #59 neat article you cited ::

Quote:: “Mr. Pan and his wife had been on a Chinese government “list of dishonest persons” …

And Trudeau-fancy-socks attended another house of Pans ( not yet torched down) to get money, and to circumvent current laws to enable ease of entry for other friends like that ( known international, dishonest persons…) .

You understand how bad you make the Prime Minister out, to say nothing of arsonist , wanted corrupt businessmen flipping properties.

:: Good work ::

#133 islander on 02.25.18 at 10:35 pm

#117 jane24
You said it Jane! “in a down market the first offer is ALWAYS the best offer. Don’t chase a declining market down. Get ahead of the price drop. The cheapest home still sells. Oh, and any home is only worth what a buyer will pay.:
Funny how that works – isn’t it??….yeah you can’t actually force anyone to buy your property!
Also in this climate – avoid ‘bridging loans’/ buying before you sell main residence/using HELOC loans to ‘fix up’ property for sale/etc…..
Once the tide turns the property market is no place for amateurs.

Thanks again Garth – don’t know how you do it!!

#134 Ben Dover on 02.25.18 at 10:40 pm

***Jane24 on 02.25.18 at 9:20 pm
You do have to have empathy for all those who brought before they sold or are or will be in over their heads They have never experienced a long term RE down market before. They were in school for the 1980s one. All that they thought they knew about investing is about to turn around 100%. Most RE agents are in the same boat. No experience of a declining market. Rules have totally changed. There will be many many stories like this in 2018.

As an elderly previous RE agent I can tell you that in a down market the first offer is ALWAYS the best offer. Don’t chase a declining market down. Get ahead of the price drop. The cheapest home still sells. Oh and any home is only worth what a buyer will pay. Who cares what you think your home is worth. ****

Great post..totally spot on.
Many are new Canadian’s that never experienced any of the previous down turns.

#135 Slowly Boiling Frogs on 02.25.18 at 10:40 pm

#43 RudyGQ on 02.25.18 at 5:42 pm

I surmise that there is no ‘real’ real estate problem in Canada. If housing pricing and supply were a ‘real’ issue there would be broadly participated protests in front of legislative buildings coast to coast. Currently that is not happening.
—————————————–

That’s because Canadians as a general rule bitch, whine and complain in private about issues like this.

A quote from Henry David Thoreau (1817–62) says it all: “The mass of men lead lives of quiet desperation.”

Their financial pain and stress will be much like Nicole’s in Garth’s blog. It’s very real, but to most of the people that no her it is probably not very visible.

#136 Slowly Boiling Frogs on 02.25.18 at 10:42 pm

I type faster than I read. It should have been:

It’s very real, but to most of the people that know her it is probably not very visible.

#137 Ronaldo on 02.25.18 at 10:45 pm

Keep up the good work Flop. Maybe you could provide some info on an area that I have followed over the past few years and that is the Mt. Pleasant area between King Ed and 16th Avenue and Main and Cambie. Interesting things have been happening in this area over the years with prices. Lots of tear downs and rebuilds and huge profits being made.

#138 High Park DeRanger on 02.25.18 at 10:57 pm

Hello ladies and gents,

One technical question: when you count price-to-rent ratio, how do you account for the maintenance fees and taxes?

Let me offer an example:
* A 2-bdrm condo is listed for $620,000 in our neck of the woods (for the curious, the listing is here: https://www.realtor.ca/Residential/Single-Family/19083944/708–60-SOUTHPORT-ST-Toronto-Ontario-M6S3N4-High-Park-Swansea)

* City of Toronto tax estimator says that takes should be around $360/month.

* Maintenance fees are $725/month.

So your monthly expenses before anything are $725+$360 = $1,085.

We rent a better unit for $1,500/month.

Here’s where it gets curious for me.

If I looked at straight price-to-rent ratio, I’d be looking at $620,000 / (12 * $1,500) = 34.4.

But if you account your mandatory expenses with maintenance and taxes for the unit, they eat a cool grand. So that’s like taking a grand off of my monthly rent (because that grand would stay in my pocket).

So is it then the case that price-to-rent becomes:
$620,000 / (12 * $500) = 103 ?

If so – wow. Just wow. I mean, even at the ratio of 34, we’d never buy. But at a ratio of 103, we have reached the ludicrous level. And we’ll happily continue to rent.

#139 Mark on 02.25.18 at 11:09 pm

“Coast Capital Savings is offering a term deposit for 33 months at 4%. Plus it is convertible to a new term deposit at any time if rates should rise.”

Scary, that they feel the need to offer such rates, when the big banks can borrow for half as much with ease. Might reflect upon the state of their balance sheet. Given that they’re not FDIC insured, you should consider just what exactly you’re entitled to if there is a failure of the institution.

#140 BillyBob on 02.25.18 at 11:12 pm

#71 Russ on 02.25.18 at 6:56 pm
Thoughts on Flights, Food and Fs.

A hold-over from the weekend conversations:

– In the United Airline mishandling of a passenger. I side with the Doc, as he had a paid fare & a boarding pass with seat assignment. That is a pretty strong contract in force. If the airline wants to renegotiate the contract it needs to find a better way than calling the cops, beating up the customer and dragging them into illegal detention. Irregardless of having employees that “need” to get somewhere, a little more effort in negotiating with other contract holders (seated) would have prevented this occurrence.

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

Absolutely incorrect premise. Your contract with the airline permits them to remove you completely at their discretion, up to the time of takeoff, with appropriate compensation of course. They explicitly reserve the right to do so – read it and weep. An instruction to remove yourself from an aircraft is not a “renegotiation”.

You have no “right” to a seat simply because you bought a ticket or have a boarding pass. Removing you from a flight is not a breach of contract. ESPECIALLY if a passenger is considered disruptive.

It may come as a surprise, but kicking and screaming like a little girl qualifies as “disruptive”.

People need to read the tariffs sometime. They would probably be surprised.

#141 Pppppp on 02.25.18 at 11:19 pm

#96 Calamity Jane on 02.25.18 at 8:19 pm
#89 HHCE

Take it easy on the Millennials there… you can’t really think boomers are all that brilliant with the latest numbers showing they’re retiring WITH DEBT. Lets not even get started on those incompetent Gen Xers hahaha. Just teasing…. please don’t ban me, I’m no SCM.

I’d be interested to know who on the blog falls into the Xennial generation. For those who haven’t heard the term it’s the group born into a unique cohort between 1977-1985 who had an analogue early childhood (like Gen X) but a digital teenage/adulthood (like Millennialls) and easily adapted to new technology. Apparently Xennials get the Gen X cynicism and Millenial optimism. They don’t quite fit in Gen X and they don’t quite fit in Millenial as their experience has straddled both cohorts.

_____________________

I am one.

Growing up analog is important for the formation of the person.

My greatest challenge in life was graduating as an engineer into the high tech collapse. Had a job lined up and everything.

Then 2008 came just as I finally paid off all debt and invested 3years into the market.

It’s a generation where the first lesson of adulthood is about recession.

Every generation has their own fight I guess.

#142 BillyBob on 02.25.18 at 11:32 pm

And what is with the weird obsession with trying to label everyone by demographic? If we were making wide generalizations based on skin colour it wouldn’t be considered appropriate, but somehow the fine nuances of made-up terms to describe people born in such and such a years merits endless analysis….?? Ugh.

Who cares. Just accept that most people are selfish morons, and move on. Much simpler.

#143 Chaddywack on 02.25.18 at 11:37 pm

@ #42 Frey

Not only do I read Flop’s posts, many days I just go “ctrl+F” on my keyboard and type in “flop” and read the applicable posts :)

#144 Bby renter on 02.25.18 at 11:37 pm

Flop,

Thanks. No price point as we are in no rush to buy (price to rent ratio is 63) but I like to keep an eye on certain neighbourhoods while we sit on the sidelines.

1791 Ralph St sold right away for $1,450,000. It was listed and sold on Nov. 16th 2017.

4582 Sunland Place sold for $1,299,000 on Jan 11th 2018 after 57 days on the market.

Keep up the good work. I appreciate it and it sounds like others on this blog do too.

#145 Mr. Whipple on 02.25.18 at 11:43 pm

President Trump is reportedly pushing for his personal plumber, John Dunkin to head the CIA. “John’s revered around here at the White House, he’s really a charmin guy. Nobody can fix leaks like John can”, the President said. “Sometimes it can get pretty disgusting draining the swamp all day by myself.”

When asked about Dunkin’s credentials for such an important job, Trump said “People rely too much on a piece of paper, I just look at what a man produces. John is not just a plumber, Munchin let me in on a little secret, and get a load of this – John was the stunt double in Slumdog! That takes a lot of guts, and I want a guy like that by my side.”

#146 Ronaldo on 02.25.18 at 11:47 pm

#117 Jane24

As an elderly previous RE agent I can tell you that in a down market the first offer is ALWAYS the best offer. Don’t chase a declining market down. Get ahead of the price drop. The cheapest home still sells. Oh and any home is only worth what a buyer will pay. Who cares what you think your home is worth.
—————————————————————–
Absolutely true. In mid eighties took a job in another city, purchased a home in the new location before I sold my current home. Got an appraisal and put the home up for sale. Had an offer 14% lower than appraisal and turned it down. House sat for 9 months empty, no offers. Became a reluctant landlord. Lots of problems with renters. Lots of damage done. Finally sold 5 years later. The price I got was what I had been offered 5 years before which was my 1st offer. Luckily my mortgage on the house was quite small so did not affect me financially as the job I took paid three times more than I’d been paid in previous job. Still, a lot of equity not working for me and barely getting enough rent to cover costs. A hard lesson.

#147 Stan Brooks on 02.25.18 at 11:50 pm

#117 jane24 on 02.25.18 at 9:20 pm
You do have to have empathy for all those who brought before they sold or are or will be in over their heads They have never experienced a long term RE down market before. They were in school for the 1980s one. All that they thought they knew about investing is about to turn around 100%. Most RE agents are in the same boat. No experience of a declining market. Rules have totally changed. There will be many many stories like this in 2018.

As an elderly previous RE agent I can tell you that in a down market the first offer is ALWAYS the best offer. Don’t chase a declining market down. Get ahead of the price drop. The cheapest home still sells. Oh and any home is only worth what a buyer will pay. Who cares what you think your home is worth.

———————————-

I don’t have an empathy for them.
Just a short prayer.

They are grown up adults who should be responsible for their own decisions.
When one loses on the stock market there is no empathy for him.

Part of life is to be allowed to fail, when you make a mistake. It should be learning experience, if not fatal, and for many people it will prove to be a fatal mistake financially.

We wanted it that way, ‘affordable’ houses at 1.5-2 mils in the GTA suburbs.

#148 When Will They Raise Rates? on 02.25.18 at 11:51 pm

#117 jane24 on 02.25.18 at 9:20 pm

You do have to have empathy for all those who brought before they sold or are or will be in over their heads

——–

Not an ounce of empathy. I hope they get absolutely crushed.

#149 YVR2ZRH on 02.25.18 at 11:56 pm

#17 & #62.

For the empty home tax while you are travelling.

It is essentially based on your tax status. While travelling, you are likely still a tax resident of Canada and thus, this home is your permanent residence and your tax address. Thus, you are likely not subject to the tax.

These tax names “Empty home tax” and “Speculation tax” are not really accurate. The Empty Home Tax is essentially a tax on residences not being used as a permanent residence of someone (either on an owned- or rented-basis).

Speculation tax – This is more like a “Alternative Minimum Wealth Tax” which provides for a minimum amount of BC taxes for you based on your real estate assets in British Columbia. This can then be credited against your BC income taxes. This one is a bit of a tough one to work out because it is either going to capture a lot of people they don’t really intend to – or it’s just not going to catch the ones they want to catch.

Ultimately – for the “Spec tax” to work – it is going to mean that you can’t have no income in BC yet own real estate assets without being subject to significant tax. This tax will be very significant as it could result in 20,000-30,000 units coming online due to people being taxed into selling. This is exactly as the tax is intended to do so don’t run around talking about “unintended consequences”. The intention is: 1.) Tax people into selling if people are not permanently living in the unit, 2.) Push the prices as low as possible to bring back in line with local incomes.

#150 EmmEmm on 02.26.18 at 12:01 am

#30 FNAiks on 02.25.18 at 4:30 pm
Renting in southern Etobicoke with a price to rent of 36.5. Just signed an upgrade and my new ratio will be 66.7. Math is hard.

Not sure if people are factoring in the heat, water and hydro and parking ?

#151 Bby renter on 02.26.18 at 12:02 am

Flop,

Thanks. No price point as we are in no rush to buy (current price to rent ratio is 63) but I like to keep an eye on certain neighborhoods while we sit on the sidelines.

1791 Ralph St sold right away for $1,450,000. Listed and sale entered on Nov. 16th 2017.

4582 Sunland place sold for $1,299,000 on Jan 11th 2018 after 57 days on the market.

Keep up the good work. I appreciate it and it sounds like other on this blog do too.

#152 Hiding On the Backstreets on 02.26.18 at 12:10 am

@ #42 Frey on 02.25.18 at 5:39 pm

“Does anyone actually read For Those About to Flop’s posts, or does everyone just scroll past them like I do?

They take up space on the blog and are so boring. Siigh. So tired of hearing about “pink snow” “pink pumpkins” “pink” everything. We get it. Prices are unsustainable and will deflate. Do you really have nothing better to do than contrast and compare house prices in posts that people scroll past because of how annoying and frequent they are?
Just sayin.”
—————–
I hear ya. Scroll……scroll. Annoying pink posts. Can’t believe people give a crap, but I guess some do.
Does the phrase “get a life” pop into anyone’s head?

#153 Karma on 02.26.18 at 12:12 am

#19 NEVER GIVE UP on 02.25.18 at 3:39 pm
“#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 ageist against Boomers. Garth is a Boomer, and thus wouldn’t put up with his crap any more.
==================================

It just strikes me as a lot of people on this
Blog who are in fact older ( I am 62) are showing an inability to handle criticism.

Even Garth posted a diatribe against people who are complaining about hurt feelings a while back.

I guess if I am older then only I am allowed to self criticize and not some squeaky little “Millennial”.

It so happens that I agree with most of what he says. If I am protected by my age to self criticize then that in itself could be called “ageist” as well, could it not?”

————————————-

Criticism is fine if it’s balanced. But SCM was not balanced in criticism of Boomers. Perhaps he had decent points on being anti-Conservative, but that’s not a reason to hate on another generation (that’s Garth’s job). The sheer number of people who responded with glee at his ejection shows you how much his diatribes were disliked.

#154 yorkville renter on 02.26.18 at 12:37 am

RE: Commuting from Hamilton to Toronto for work.

I was in Chicago once for work, and on the way to O’Hare the cab driver says to me “I don’t understand people who buy a home so far away from the city ‘for their kids’ only to be stuck in traffic and never get to see their kids”. Brilliant.

You HAVE to go to work… 5 days a week… Why make your life miserable Mon-Fri? For a bigger yard? To store more meaningless “stuff”?

People want to “Keep up with the Kardasians” and have mortgaged/borrowed themselves to the hilt to “feel successful”

Better to rent and live care-free than own and constantly be stressed out.

My commute, by transit, is about 20 minutes…a 32 minute walk door-to-door.

Life if great!

#155 Stan Brooks on 02.26.18 at 12:47 am

Of course everything about low inflation was just that, lies:

https://globalnews.ca/news/3478535/why-is-canadas-inflation-rate-so-low-when-life-is-so-expensive/

The authors proceeded to note that StatsCan’s New Housing Price Index, which forms parts of the agency’s estimate of shelter costs, registered virtually no change for the Vancouver market since 2008.

“We are also baffled by the reported cumulative increase of only 37 per cent for the Toronto NHPI since 2008 (vs. 118 per cent according to resale market data),” wrote Marion and Arseneau.

They also noted rent inflation averages near a record low of one per cent in Toronto, Montreal and Vancouver.

And that’s despite the fact that headlines about doubling rents in Toronto recently prompted the Ontario government to boost rent controls in the province.

When asked about it, StatsCan told Global News it doesn’t believe CPI “significantly” underestimates shelter costs.

Discussing why its measure of home prices for new homes in Vancouver and Toronto shows such little change over the past decade or so, StatsCan said that the index excludes condos and “for quality adjustment purposes” tends to focus on buildings in areas far from urban centres where price appreciation might be lower.

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

Statistics working on believes, not facts!

Keep in mind that CPI ‘index’ (in reality a big giant lie) is used to index retirement savings/CPP, old age etc.

Of course Poloz has no comments on this. In his mind there is no inflation.

Real inflation is north of 6 % annually for the last 10-15 years. It may accelerate to above 8 or even 10 % this year alone due to price shock from rent increases and minimum wage increases.

Politicians will lie about it and retirements will be screwed.

Poloz will not increase rates due to NAFTA uncertainty.
I guarantee that we will see maybe 1 rate hike the whole year 2018. Maybe 1.

stay away form CAD nominated assets and TSX.

#156 Karma on 02.26.18 at 12:53 am

#57 Rick on 02.25.18 at 6:26 pm
“Real estate sales exploded five years ago, and when rates crashed many took two and three-year variables. It’s time. – Garth”

Spot on! We bought SFH east van 1.1M end of 2012. Renewed end of 2017 @ 3.19% appraised at 2.1M. Made 200K/yr sitting on a house I worry what my kids will have to make to afford a place.

Keep an eye out for 2023 when 50% of people renew their 2018 mortgages at normal 6-7% rates. Could be a shock to the over extended with low appraised properties. Year to buy will probably be 2024 similar to previous 12 yr cycles 2012, 2000, 1988″
——————————-

It’s probably down to $1.9m now, and will be $1.7m by summer. Mortgage rates are now 3.39%-3.59% depending on the bank.

#157 crowdedelevatorfartz on 02.26.18 at 1:06 am

@#42 Frayed
“They take up space on the blog and are so boring. Siigh. So tired of hearing about “pink snow” “pink pumpkins” “pink” everything. We get it. Prices are unsustainable and will deflate.”
++++++

Let me guess.
You’re either a realtor that doesnt want potential clients to know that “Now is NOT an good time to buy”.
OR
You’re an idiot that just bought.

#158 US TRADE WAR WITH VANCOUVER on 02.26.18 at 1:18 am

TRUMP HIRES NAVARRO…..TRADE WAR WITH CHINA STARTS. And play this out….there is no farking way that Trump is going to allow Chinese goods going through Vancouver so……..Vancouver has seen God and God is putting his houses in BC for sale

https://www.zerohedge.com/news/2018-02-25/trump-pivots-toward-trade-wars-promotion-trade-uber-hawk-peter-navarro

#159 Nonplused on 02.26.18 at 2:16 am

Why are we even having a conversation about Flop? His/her comments are somewhat repetitive but you can scroll right over them just like everyone scrolls over mine and yours. He/she is fine.

#160 Myra Andrews on 02.26.18 at 2:27 am

Flop if I only have a few minutes to read the blog I do a quick scan to look for your posts and read just those ones. So please keep posting.

#161 Interstellar Old Yeller on 02.26.18 at 2:29 am

#96 Calamity Jane on 02.25.18 at 8:19 pm

Older Xennial here, married to same. Timing-wise, I think we are luckier than Millennials.

Having started on the analog versions, first, we easily find pleasure in simple, non-digital things and have more patience and attention span for slower (but effective) solutions. We remember when we didn’t have a world’s worth of information at our fingertips and appreciate the wonder of it.

Labour market trends seem to have generally gotten tougher for the young-and-starting-out.

We had money to sink into equities for the last decade, which were some pretty good investing years. Those who partnered up and settled down in their 20s had access to more affordable housing (alas, we met later than that).

We’re old enough to meaningfully indulge in 80s nostalgia. Stranger Things!!

#162 NoName on 02.26.18 at 2:31 am

I posted something similar before.

http://review.chicagobooth.edu/behavioral-science/2018/article/how-poverty-changes-your-mind-set

#163 SimplyPut7 on 02.26.18 at 2:42 am

#89 Happy Housing Crash Everyone! on 02.25.18 at 7:52 pm
#110 Pete on 02.25.18 at 8:55 pm

Greed makes people do dumb things not lack of education.

There are many Canadians and immigrants who grew up in a time when college or university was not a requirement to make a living and/or never had the opportunity to go to college or university. They could have followed general rules of life such as “if it’s too good to be true” or “don’t put all of your eggs into one basket” to avoid some of the pitfalls some of the most highly educated people in the world are falling into.

Take for example all of the speculators/flippers in Toronto real estate who don’t know how much trouble they are already in and are subsidizing their tenants rent instead of selling at a loss, increasing the likelihood they will take decades to recover from their poor financial decisions.

Or people who buy Bitcoin with credit cards hoping to make a return before the monthly statement is due, or people who think Tesla’s market cap is proof that it is a profitable car manufacturer even though it has publicly reported negative cash flows for most quarters in the past 5 years.

I have met many real estate agents who used to be teachers or accountants. Overeducated people make the same mistakes as people with less education.

#164 Terry Zabolega on 02.26.18 at 2:50 am

House sold for …

http://www.stockhouse.com/companies/bullboard?symbol=t.hcg&postid=27619140

#165 Bill Ferguson on 02.26.18 at 3:27 am

Hiya, Flop!

I know I certainly appreciate your posts, so keep them coming!

You (and anyone else out there) may be interested in joining my FB site called, “Metro Vancouver Housing Collapse” where we share “News and views” about what is REALLY going on out there…

We now have 330 member (and counting!) since Nov. 11, 2017 when the site first began.

#166 BillyBob on 02.26.18 at 5:55 am

#147 Stan Brooks on 02.25.18 at 11:50 pm

Part of life is to be allowed to fail, when you make a mistake. It should be learning experience, if not fatal, and for many people it will prove to be a fatal mistake financially.

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

Truer words were never spoken. You learn far, far more from your failures than your successes.

Education is expensive, beeyatches.

#167 MF on 02.26.18 at 7:08 am

#85 NoName on 02.25.18 at 7:44 pm

https://youtu.be/N3TRToHrNWc

-Haha!! Yes! Thanks for that NoName!

Simply one of the greatest cinematic experiences there’s ever been! A giant in film in its own right. A masterpiece of epic proportions!

My old manager took us to see it as a “field trip” when it came out.

Highly recommended for anyone who has ever worked in a restaurant.

MF

#168 #3 of the majestic 12 on 02.26.18 at 7:18 am

#162 No Name

Interesting read…thanks for posting. I recognized some of my own decision making at various life stages…having been “mouse poor”, “well-to-do”and “comfortable”.
It’s been a ride for sure.
Thanks again

#169 Stone on 02.26.18 at 7:23 am

#120 Al on 02.25.18 at 9:37 pm
Keep on renting.

You get to write off 10% of all of your primary house expenses such as mortgage interest, utilities, phone, Internet and more.

Also, while you are starting things up yo can claim negative income for up to 3 years as you get the rental going and moving toward positive cash flow.

This negative rental income offsets your personal income. Get smart with deductions in these 3 years. Especially this tax year as it was your start up year.

Imagine your primary house mortgage is partially tax deductible when you own a rental. It’s amazing.

Debt is okay as long as you are comfortable financially.

Increase the rent as your one full year is up, follow the provincial rules, get smarter wih write offs and just push through these next 3-5 years and then the pressure will be off a bit.

And stop worrying.

Garth’s posts won’t help with the worrying part though!

———-

And how’s the average Canadian handling debt? Hmmmmm…wonder, wonder. Apocalypse now? LMAO!

I just don’t understand why everyone wants to be saddled with debt. No debt = bad. Lots of debt = good. I must have missed that class.

You are correct. Garth’s posts won’t help with the worrying part though! Sigh…

#170 tiptoethruthetulips on 02.26.18 at 7:34 am

Garth,

If one of the bloggers in the great unwashed steerage comments section sends you a tip in bitcoin as thanks for your great advice, will you report it to the CRA given the recent crackdown on tips

#171 dharma bum on 02.26.18 at 7:38 am

Nicki, regarding your Toronto house, take the Boss’s advice:

“Baby this town rips the bones from your back
It’s a death trap, it’s a suicide rap
We gotta get out while we’re young
`Cause tramps like us, baby we were born to run”.

#172 SimplyPut7 on 02.26.18 at 7:40 am

#164 Terry Zabolega on 02.26.18 at 2:50 am

Shhhhhh – don’t tell people.

There’s another Real Estate Wealth Expo taking place soon. Pitbull is coming back and this time he’s bringing Sylvester Stallone.

https://realestatewealthexpo.com/toronto-2018

A sold-out crowd is great for businesses in the city of Toronto.

#173 tiptoethruthetulips on 02.26.18 at 7:52 am

#62 FOUR FINGERS WATSON on 02.25.18 at 6:33 pm

#17 Pppppp on 02.25.18 at 3:35 pm
My question about the empty house rules. If I buy a condo in Vancouver and it is my principal residence. Then I go travel for 8 months of the year, will I be hit with the tax?
………………………..

I am currently travelling in Asia while my condo in Kelowna sits empty. I pay my gas and electric and cable bills online and i can do my income tax return online too. I also pre-pay my property taxes for a year when i am home.I might install an on off light timer next time i am home just to avoid any possible entanglements. There is no reason for the PTB to think that my place is a “vacant flipper condo”. I don’t think I have anything to worry about since I am not part of the problem they are trying to correct.”

Very clever…but the feds are even more clever. They are hiring scat-trackers to check your pipes and see if you are really there and are “regular”. Unless Elon Musk is able to invent a timer-based scat emission device, your are literally up poop creek without a paddle!

#174 crowdedelevatorfartz on 02.26.18 at 8:11 am

@#152 Hiding on the Backstreets waiting for another real estate commission.

“Does the phrase “get a life” pop into anyone’s head?”
+++++++
Well actually.
When i read your comments.
Yes.

#175 joblo on 02.26.18 at 8:51 am

http://www.scmp.com/week-asia/geopolitics/article/2134781/trump-jr-outshines-trudeau-thats-how-bad-india-canada-ties

Keep up the good work Justin.

#176 Old Ron the Realtor on 02.26.18 at 8:59 am

@ Dog Athlete: Could not agree more. Dogs are cursorial hunters. They love to chase a ball or a stick. But you are absolutely correct, leaping and bending as seen in the photo can do serious harm. No Frisbees. Fido will thank you, and you will save a fortune in Vet bills.

As for the market, we have the GTA February numbers out on Friday or next Monday.

#177 IHCTD9 on 02.26.18 at 9:06 am

Once the spook is formally on in the GTA, it will be interesting to see what effects will be seen out here in the windswept tundra of semi-rural Ontario.

Many folks out here build, live in for a year, then sell pocketing the tax free gains. This was a good life for many among my generation, and the generation before.

A few guys I know made INSANE profits on their house sale last spring. They directly benefitted from those who lived in the GTA and sold for millions – some homes here even ended up with bidding wars between different GTA based buyers.

I expect the top end to get pounded to oblivion. I also expect a long term reset in the “going rate” for a very nice brand spanking new home on an acre. At the peak last spring, a house like this was about a half Mil. They amount to a fancy Colorado, or souped up basic bungalow.

The higher end out here NEEDS GTA money to hold current pricing as nobody who already lives here is going to pay a 1/2 Mil for a fancy Colorado. Every guy I know who sold in the spring for big $ did so to GTA escapees.

#178 Stan Brooks on 02.26.18 at 9:39 am

As there is a big number of Warren Buffett fans here:

https://www.cnbc.com/2018/02/26/buffett-when-choosing-between-stocks-and-bonds-i-would-choose-equities-in-a-minute.html

———————————

Warren Buffett believes long-term investors should buy stocks over bonds.

“If you had to choose between buying long-term bonds or equities, I would choose equities in a minute,” he told CNBC’s “Squawk Box” on Monday in a wide-ranging interview. “If I were going to own a 30-year government bond or own equities for 30 years, I think equities will considerably outperform that 30-year bond.”

“So far this year, we’ve been a net buyer” of stocks, he added.

In his annual letter to Berkshire Hathaway shareholders released on Saturday, Buffett blasted the belief that bonds were a lower-risk investment over the long term. He recommended investors stay in equities due to the negative impact from inflation on the purchasing power of fixed-income holdings.

“I want to quickly acknowledge that in any upcoming day, week or even year, stocks will be riskier — far riskier — than short-term U.S. bonds,” he wrote. “As an investor’s investment horizon lengthens, however, a diversified portfolio of U.S. equities becomes progressively less risky than bonds, assuming that the stocks are purchased at a sensible multiple of earnings relative to then-prevailing interest rates.”

“It is a terrible mistake for investors with long-term horizons – among them, pension funds, college endowments and savings-minded individuals — to measure their investment ‘risk’ by their portfolio’s ratio of bonds to stocks. Often, high-grade bonds in an investment portfolio increase its risk.”

————————————

Notes:

Buffett expects bonds to under-perform long term due to inflation.

Buying bonds is a terrible mistake.

Specially true for bonds issued in CAD.

I quoted 6 % but there are sources estimating real inflation in Canada in the 7-8 % on average annually for the last 10 years, accelerating quickly lately.

Mind that when dilettantes from BOC tell you/lie to you that inflation (whatever they mean by that) is 1.7 % and you experience it as 10 % + lately.

A note that BOC can not and will not increase rates meaningfully, maybe 1-2 raises from here on until the ‘top’ in their cycle/1 this year.

If you are on fixed income you will be screwed with indexing around 1 %, going into deep poverty in the next decade.

You basically will be paying for the bit credit orgy with 50 %, maybe even 70 % reduction of your income in real terms.

Retirement is quickly becoming mission impossible.

#179 Keith in Rio on 02.26.18 at 9:40 am

https://www.zerohedge.com/news/2018-02-25/real-estate-bubbles-these-8-global-cities-are-risk

It may have already been posted here, but in this link, UBS has Toronto listed as being the #1 RE bubble city in the world, with Vancouver as fourth.

I wonder what our dear leader “Mr. Dressup” will do when it bursts ? Maybe put on a yellow C21 jacket ?

#180 Penny Henny on 02.26.18 at 9:41 am

#42 Frey on 02.25.18 at 5:39 pm
Does anyone actually read For Those About to Flop’s posts, or does everyone just scroll past them like I do?
//////////

I’m a scroller

#181 Hiding On the Backstreets on 02.26.18 at 10:12 am

@ #174 crowdedelevatorfartz on 02.26.18 at 8:11 am

@#152 Hiding on the Backstreets waiting for another real estate commission.

“Does the phrase “get a life” pop into anyone’s head?”
+++++++
Well actually.
When i read your comments.
Yes.

———–
Haha. Funny. Funny nickname too. Is it a prerequisite to hate realtors before commenting on this site?
And no, I’m not a realtor. I guess I’m just neutral on the subject. I don’t get all the realtor hate on here.
If people think realtors are overpriced, just sell privately.

And I have a life. I’m off work today, hence the comment at 10:12 am!

#182 Stan Brooks on 02.26.18 at 10:24 am

The honorable finance minster is presenting the budget on 2 meetings:

1. One with the big business few days ago.
2. One last Friday with Grade 6 students in Toronto, with actual Q&A.

https://ca.finance.yahoo.com/news/federal-firewall-budget-plan-long-174557187.html

maybe he did not like what the business told him so now he looks for input from audience with similar financial intelligence?
———
There have been repeated calls on Morneau to cut business taxes and — thanks to a surprisingly strong economy last year — to finally lay out a detailed path back to balanced books.

But Morneau, long a vocal champion of playing the long game, has all but ruled out that there will be specific measures Tuesday that respond to the U.S. direction, saying last week that he wouldn’t act in an “impulsive way” to the U.S. corporate tax cuts.

————-

He is coming for your money.

#183 Stan Brooks on 02.26.18 at 10:30 am

http://www.benefitscanada.com/news/new-oas-and-cpp-and-benefit-amounts-take-effect-for-2018-108699

So CPP will be increased by 1.5 % and OAS by the juuuuuuge 0.2 % or 1 CAD s per month for max benefit.

Wondering what to spend that wealth on?

#184 Ace Goodheart on 02.26.18 at 10:38 am

Toronto’s a dead market. No one has any money. It’s the usual boom bust situation. Easy to figure out by using the “goldilocks” rule of middle class affordability. In a hot market, a house must cost at or slightly less than a middle class family, using every means of financing at their disposal and borrowing as much as they can, can afford. That is the “goldilocks” price point.

Once you pass that point, sales go off a cliff, prices stagnate and the market enters a period of decline. This decline can last for 10 years or more.

Toronto has entered that decline.

It happened in the 1990s and now it is happening again. People lost their shirts. I still hear stories at our local watering hole from older fellows who had 5 or six rentals going, all financed to the max, and lost their entire net worth and then some in the 1990s crash. I don’t think Anthony Robins or Pit Bull are among them, but Pit Bull is a singer and Anthony is a motivational speaker. I don’t think either of them made their money off of real estate.

There is also a disturbing trend developing in the condo market. That trend is “teaser” condo fees. The condo market seems to lack regulation, and of course it is basically a factory with retail stores selling housing. As usual in retail, without regulation you get problems.

The latest is the “teaser” condo fee, which is very low the first few years and then goes up thereafter. The idea of backloading maintenance fees is great if you’re in the business of selling condo units, but it is not so great if you are buying these units either on a fixed income or as an investment.

The condo unit retails for what the average person can afford to pay in condo fees and mortgage and interest. Mortgages have all of their interest “front end loaded” so it is paid at the start, with the interest free period coming at the end. Condo fees apparently do this backwards, borrowing from the capital account at the start, and then making up the difference in increased fees down the line.

The result is the units become more expensive to live in, as the owner pays down their mortgage.

If you can see what I’m talking about here, it will make you upset and angry. If not then I am not very good at explaining myself.

What is basically happening is the condo builder, who is borrowing to build the condo, is back end loading their interest onto the buyer, payable in five years’ time. It is a way of increasing profit, with the buyer then paying that increased profit, with interest, as increased fees down the line.

The condo market badly needs regulation. It operates as a retail store for housing, with about 80-90% of the money that flows through being borrowed. Think of a new condo building as a large, 25 year loan split into shares, and each unit holder as a payor of that loan, with interest.

If you pay the first five years’ condo fees out of capital, and then charge them back to the owners after that, then you can borrow more at the start, sell the units for a higher price, and your return on the borrowed capital is higher.

#185 Greater Fool on 02.26.18 at 10:40 am

I will just leave this here:

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

#186 For those about to flop... on 02.26.18 at 10:47 am

Warning for Frey: Look away ,they have pink coloured states…

M43BC

“Here are the Most & Least Expensive States for Health Insurance.

Health insurance is a hotly debated political issue in the United States. It’s something we all need, but it is often expensive and out of reach for some people. While the health insurance debate takes place at the national level, health insurance rates actually vary between states. The two maps below show health insurance rates by state and average annual deductibles with a silver plan. Find your state and see how it compares to others.

In the map above, states are split into four categories based on average monthly premiums per person. States colored red have an average monthly premium of between $651 and $780, states colored pink are between $451 and $550, states colored light green are between $451 and $550 and states colored dark green are between $411 and $450. The data were collected from United Benefit Advisors.

The Five States with Lowest Monthly Premiums
Hawaii: $411

Idaho: $415

Utah: $423

Arkansas: $431

Mississippi: $432

The Five States with the Highest Monthly Premiums
Alaska: $780

Wyoming: $662

New York: $624

Vermont: $607

New Jersey: $591

In this map, states are split into four categories based on the average annual deductible with a silver plan. States colored dark purple have an average annual deductible of between $5,000 and $6,913, states colored light purple are between $4,000 and $4,999, states colored teal are between $3,000 and $3,999 and states colored dark teal are between $1,733 and $2,999. The data were collected from Stride Health. The figures were calculated based on the average of four popular silver plan deductibles from each state for single males, age 40 years old, non-smokers and annual income of $51,640 (the median income for males of that age). The data were collected from Stride Health.

The Five States with Highest Annual Deductibles
Florida: $6,913

Indiana: $6,763

Ohio: $6,625

Georgia: $6,188

New Hampshire: $6,163

The Five States with the Lowest Annual Deductibles
Pennsylvania: $1,733

Oklahoma: $1,863

New Jersey: $2,075

Massachusetts: $2,125

New York: $2,175

In the first map of the average health insurance rates, it is plain to see that most states fall into the bottom two categories. Wyoming and Alaska have the most expensive average health insurance rates in the country. Only 11 states fall into the second highest category of between $551 and $650 per month on average. Average annual deductibles are more spread out compared to health insurance rates. States in the Midwest region, with some notable exceptions in the rust belt, have low deductibles compared to the rest of the country.

The rust belt is the region with the worst overall health insurance in terms of both costs and deductibles, but there are a few outliers. This is true of the south to a lesser extent. Deductibles are high in the south, but the premiums are generally lower. Indiana appears to have the worst combination of health insurance premiums and deductibles. The state has the 13th highest average monthly premium at $552 and the second highest a deductible in the country at $6,763. A study by the Rand Corporation found that some hospitals in Indiana charge more than three times what they charge Medicare for the same procedures. Neighboring Illinois is a close second for the worst outcome with the ninth highest average monthly premium at $552 and the 11th highest average annual deductible at $5,325.

There doesn’t appear to be a connection between monthly premiums and annual deductible. Take for example New York and New Jersey. New York has the third highest average monthly premium at $624 per month on average, yet it has the fifth lowest deductible in the country at $2,175. New Jersey has a similar trend. The state has fifth highest monthly premium at $591 per month on average, but it also has the third lowest annual deductible at $2,075 on average. People in New York and New Jersey pay more per month but pay less towards their deductible over all.

Now compare New York and New Jersey to Nevada and Kentucky. Nevada has the ninth lowest average monthly premium at $445 per month and also the ninth highest annual deductible in the country at $5,513 on average. Kentucky has the seventh lowest average monthly premium at $437 and the 13th highest deductible at $5,025. Although people in Kentucky and Nevada pay less per month on health insurance than people in New York and Kentucky, they have to pay far more towards their deductible if they need medical care. Currently Nevada is in the process or creating its own health insurance exchange to help people money.

Alaska is by far the most expensive at $780 per month on average. But despite the high monthly premiums, Alaska’s average annual deductible is right around average at $3,750. The federal government alleges that Alaska has anticompetitive healthcare laws that raises health insurance costs and hurts consumers. Hawaii has to lowest monthly premiums in the country at $411 per month on average and the seventh lowest average annual deductible at $2,750. When taking into account both monthly health insurance premiums and annual deductibles, Hawaii comes out on top compared to other states.

Both average monthly health insurance costs and average annual deductibles vary over the 50 states. But it’s not easy to tell what your deductible will based on your monthly health insurance costs, as the data shows. It’s best to take both factors into consideration. Based on these two factors, Hawaii has the best overall health care outcome. But if you spend all your day at the beach, your stress levels are so low you might not even need health care!”

https://howmuch.net/articles/health-insurance-rates-by-state

#187 For those about to flop... on 02.26.18 at 11:04 am

#151 Bby renter on 02.26.18 at 12:02 am
Flop,

Thanks. No price point as we are in no rush to buy (current price to rent ratio is 63) but I like to keep an eye on certain neighborhoods while we sit on the sidelines.

1791 Ralph St sold right away for $1,450,000. Listed and sale entered on Nov. 16th 2017.

4582 Sunland place sold for $1,299,000 on Jan 11th 2018 after 57 days on the market.

Keep up the good work. I appreciate it and it sounds like other on this blog do too.

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

Hey BR,you see the problem with the current system?

Ralph st. really struggled and lost money after they paid 1.52 in February 2016, they had it for sale since July 2017 and had to chop the price down a lot and took a hit ,but it comes up in the system as a quick easy sale close to ask.

Probably a 150k loss when all things considered.

The second one at Sunland lost money too after paying 1.3 in March 2016.

The losses are piling up and these ones are only a third of the way up the Vancouver tree.

People don’t want this information being circulated and so I will continue to get abused but I will focus on people like yourself that appreciate the effort…

M43BC

1791 Ralph st,North Vancouver paid 1.52 February 2016 ass 1.58 2017

Jul 25:$1,689,000
Nov 6: $1,499,900
Change: – 189100.00 -11%

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

https://www.zolo.ca/north-vancouver-real-estate/1791-ralph-street

#188 Smoking Man on 02.26.18 at 11:05 am

Teachers confrence to open up about how great communism is. Yep can’t make this stuff up.

https://www.campusreform.org/?ID=10561

#189 Samantha @ LifeOnCredit.ca on 02.26.18 at 11:22 am

Trading a detached house in TO for a detached in Hamilton and losing money in the process requires special financial skills. Apparently some people possess such skills :).

#190 Happy Housing Crash Everyone! on 02.26.18 at 11:24 am

You filthy dirty USELESS SHYSTER parasites. This has been common knowledge for years.
http://business.financialpost.com/news/fp-street/mortgage-fraud-prompts-sp-to-lower-canada-bank-risk-metric

#191 NEVER GIVE UP on 02.26.18 at 11:29 am

#153 Karma on 02.26.18 at 12:12 am
#19 NEVER GIVE UP on 02.25.18 at 3:39 pm
“#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 ageist against Boomers. Garth is a Boomer, and thus wouldn’t put up with his crap any more.
==================================

It just strikes me as a lot of people on this
Blog who are in fact older ( I am 62) are showing an inability to handle criticism.

Even Garth posted a diatribe against people who are complaining about hurt feelings a while back.

I guess if I am older then only I am allowed to self criticize and not some squeaky little “Millennial”.

It so happens that I agree with most of what he says. If I am protected by my age to self criticize then that in itself could be called “ageist” as well, could it not?”

————————————-

Criticism is fine if it’s balanced. But SCM was not balanced in criticism of Boomers. Perhaps he had decent points on being anti-Conservative, but that’s not a reason to hate on another generation (that’s Garth’s job). The sheer number of people who responded with glee at his ejection shows you how much his diatribes were disliked.
==================================
It just seems like Mob Rule when a bunch of people complain their feelings are hurt and want to quash opinion when all you have to do is scroll past posters you do not like or respect.
After all he advertises at the top of every post exactly what you would want to avoid “SCM”

#192 How many characters can you get in the name field so you can post entire comments like SCM? Let's find out shall we? on 02.26.18 at 11:30 am

Just sayin’.

#193 The Ideal Town on 02.26.18 at 12:06 pm

It would have a population of 8,500 that is growing 5% annually. All the goods and services are in place with a balance of demographics. On any given day the population grows to as much as 20,000 for work, shopping, and having fun. The average home sells for under $220K, and high end for $320K on a huge lot that would sell in Toronto for $2 million. The average family income will rival Toronto with many at $200K plus. The cost of living is low with restaurants and stores everywhere; business is good because none are for sell. The regional hospital is located there, and the International airport is 50 miles away. Does such exist
in Canada? I am not telling!

#194 Damifino on 02.26.18 at 12:27 pm

#147 Stan Brooks

When one loses on the stock market there is no empathy for him.
————————————

Quite right. During the GFC I had about 200K go ‘missing’ for a while. No one cared. They called it ‘just desserts’. Within 18 months, all that cash and more found it’s way home again. Then they called it profiting on the backs of others. Mr. Market doesn’t care either way, be it equities or houses.

#195 Comfort Peacock on 02.26.18 at 12:31 pm

POTUS Trump has appointed his #2 favourite sky pilot (after the GREAT Billy G.) to head the FAA.

Commencing immediately, all US bound Westjet flights will reserve the #2 washroom for pilot use only. That is all.

#196 Milly on 02.26.18 at 12:36 pm

Might be a stupid question…

But say, in a non-inflated real estate environment when buying is beneficial, how much of your portfolio should you liquidate to put a down payment on the place? Is there an interest rate threshold where it’s worth liquidating all of it? Or Is it better to keep some of that cash flow? It seems depressing to get rid of investments and put it all in a home just to start again.

Thanks :)

#197 Stan Brooks on 02.26.18 at 12:53 pm

You won’t find this in a Canadian newspaper.

https://economictimes.indiatimes.com/news/politics-and-nation/why-justin-trudeaus-india-tour-turned-out-to-be-a-diplomatic-disaster/articleshow/63059621.cms

Speaks volumes on the state of democracy/or the lack of such.

#198 Myra Andrews on 02.26.18 at 12:54 pm

Found this government bulletin about the speculation tax

https://www2.gov.bc.ca/assets/gov/taxes/property-taxes/publications/is-2018-001-speculation-tax.pdf

#199 Victor V on 02.26.18 at 1:22 pm

S&P warns more mortgage fraud could emerge at Canadian banks

https://www.bnn.ca/s-p-warns-more-mortgage-fraud-could-emerge-at-canadian-banks-1.1009395

#200 Newcomer on 02.26.18 at 1:23 pm

#153 Karma on 02.26.18 at 12:12 am
….

Criticism is fine if it’s balanced.
——–

This is a modern misconception based on recent practices in journalism. Most of the time, it just offers an opportunity for outrage-based entertainment.

The truth is, there is no benefit to pointing out the benefits to the environment that Pol Pot’s policies provided, or how well the trains ran under Mussolini. A person can reach perfectly good conclusions without striving for balance.

SCM was making an argument and even though it was a stupid argument most of the time, it would not have been improved by him offering a counterpoint to his own position.

#201 A J on 02.26.18 at 1:52 pm

#181 Ace Goodheart

I agree, there is so much fraud in the condo market. Especially when it comes to building materials. I was looking at condos last year when a friend of mine in the trades told me to never, ever purchase a new-build condo. That they’re often built shoddily and then the owner is left holding the bag. And forced to pay out more and more money in condo fees as things bust and break. I’d much rather buy a condo that was built 20 years ago, than deal with a new build made out of plastic and particleboard.

#202 Howard on 02.26.18 at 1:57 pm

#189 The Ideal Town on 02.26.18 at 12:06 pm

It would have a population of 8,500 that is growing 5% annually. All the goods and services are in place with a balance of demographics. On any given day the population grows to as much as 20,000 for work, shopping, and having fun. The average home sells for under $220K, and high end for $320K on a huge lot that would sell in Toronto for $2 million. The average family income will rival Toronto with many at $200K plus. The cost of living is low with restaurants and stores everywhere; business is good because none are for sell. The regional hospital is located there, and the International airport is 50 miles away. Does such exist
in Canada? I am not telling!

———————————-

Hmm.

Gananoque, ON?

Close to Ottawa airport…

#203 TSX on 02.26.18 at 2:46 pm

ytd;

TSX- -3.50% (XIC)
HXS- +4.61% (spy)

well, thank goodness the TSX is on its way ….no?

good grief

#204 PastThePeak on 02.26.18 at 2:52 pm

#201 Howard on 02.26.18 at 1:57 pm
#189 The Ideal Town on 02.26.18 at 12:06 pm

It would have a population of 8,500 that is growing 5% annually. All the goods and services are in place with a balance of demographics. On any given day the population grows to as much as 20,000 for work, shopping, and having fun. The average home sells for under $220K, and high end for $320K on a huge lot that would sell in Toronto for $2 million. The average family income will rival Toronto with many at $200K plus. The cost of living is low with restaurants and stores everywhere; business is good because none are for sell. The regional hospital is located there, and the International airport is 50 miles away. Does such exist
in Canada? I am not telling!

———————————-
Hmm.

Gananoque, ON?

Close to Ottawa airport…
======================

No community near Ottawa that I am aware of would fit the influx to over triple population in a day, with lots of shops & restaurants, with that low a price point for housing.

Either in the prairies or out east I would say, in some affluent neighbourhood near a larger city.

#205 JohnFrank on 02.26.18 at 2:52 pm

I came across a better Mongohouse yesterday, called Bungol. Their website is significantly better, and not plastered with ads. They also have rental data, which is good if you are looking to invest in real estate and rent it out.

https://www.bungol.ca

The owner has a post on RFD, I’ve been giving him feedback and he’s very responsive.

https://forums.redflagdeals.com/we-building-best-real-estate-database-toronto-2166932/

#206 Ace Goodheart on 02.26.18 at 2:58 pm

RE: #200 A J on 02.26.18 at 1:52 pm

Totally agree. They are now building multi level condo buildings entirely of particle board. This includes even the supporting beams for each level, which are some form of composite particle board beam, rather than an actual wooden beam. Some of these particle board buildings are five or more stories in height.

If we had hurricanes up here, these things would get shredded like a kleenex going through a fan. I just wonder about the increasing presence of tornadoes and how these things are going to withstand that. Honestly I expect it will be like Dorothy and the Wizard sort of stuff. “We’re not in Kansas/ Barrie/ Alliston/ Bradford anymore”.

Another thing people have to watch about condos is what is happening on the first floor. I have found many buildings, especially new builds, where there is no separation in condo fees for, for example, a large, well known franchise donut shop, and an individual condo owner.

We all know that say, a Mickey Dees or a Timmies is going to use more water and electricity than your grandmother in her retirement condo. However, the unit owners all pay into the same expense fees pool, and the expenses are then paid from the total. So really what is happening, is the condo unit holders are subsidizing the businesses operating on the first floor. The rate of subsidization can be substantial.

#207 YVRMC on 02.26.18 at 3:09 pm

Re #188 …. I never minded SCMs opinion , just the arrrogant condescending manner in which the twat waffle delivered it …..

#208 YVRMC on 02.26.18 at 3:11 pm

That should have read #191

#209 joblo on 02.26.18 at 3:13 pm

https://youtu.be/UE5wAZPMd98

Kanada’s new Mr. Dressup

Justin Trudeau

#210 Nice Place on 02.26.18 at 3:22 pm

#201 Howard: Not even close, as for myself came upon it by chance while looking elsewhere. I saw something, and spent many hours looking at everything. Let’s just say that hydro expenses would not be a problem, or anything else. Those that are complaining get looking for greener pastures. I also see business opportunity there.

#211 paulo on 02.26.18 at 3:43 pm

#198 Victor

Considering the average income {97%} of familys in yvr &yyz is below the minimum income required to make a purchase even with a 50% down payment at current values,is there really much doubt! a great house of cards.

#212 IHCTD9 on 02.26.18 at 3:52 pm

#192 The Ideal Town on 02.26.18 at 12:06 pm
It would have a population of 8,500 that is growing 5% annually. All the goods and services are in place with a balance of demographics. On any given day the population grows to as much as 20,000 for work, shopping, and having fun. The average home sells for under $220K, and high end for $320K on a huge lot that would sell in Toronto for $2 million. The average family income will rival Toronto with many at $200K plus. The cost of living is low with restaurants and stores everywhere; business is good because none are for sell. The regional hospital is located there, and the International airport is 50 miles away. Does such exist
in Canada? I am not telling!
_________________

Lots of places like that in Canada. I live 10 minutes outside a medium City where I work, while two more even bigger ones are 1/2 hr away one of them where my wife works. Our household income is near double the median for Toronto. A nice house in my little hamlet is 280-350K with 2-5 acres. A small airport close by, or take a coach to Toronto (1-4 hrs. away depending on traffic).

Awesome place to start and raise a family. The little village I live in now is full of millennial and gen x families. When I moved in, it was pretty much all old widowed women who actually worked on the farms when they were still farms. The housing stock has doubled in 15 years, population down my street is easily 3-4X now compared to around 2000 – old ladies out, young couples in. 5 years later the house has 3-5 person family inside.

Ah yes, no debt, big bank, toys enough, no Xanax required, no traffic jams, and a 90% homogeneous society.

#213 Bryn on 02.26.18 at 3:55 pm

I enjoy flops posts. Keep it up flop. :)

#214 Freebird on 02.26.18 at 3:56 pm

#80
…And does [email protected] give you advice on tax strategies, retirement planning and marital relations? – Garth
_

Garth, seems like you, Ryan and Doug are either preaching to the choir or talking to the deaf. You guys are patient persistent…or both. It’s appreciated by most.

#215 Guy in Calgary on 02.26.18 at 5:04 pm

#108 acdel on 02.25.18 at 8:46 pm

My generation (mil, born 1988) as access to information like no other generation has had. Because of this, we simply learned not to trust anyone. Politicians are corrupt, markets are engineered, policy is created to benefit the wealthy, we are taxed into oblivion and we are constantly lied to.

But at the end of the day, we don’t all complain. A lot of us are out here just trying to do the best we can with what we have. Same as previous generations.

Having access to information does not mean it’s good info. For example, “politicians are corrupt, markets are engineered, policy is created to benefit the wealthy,” is a incredibly flawed generalization. You will learn this. – Garth

#216 under the radar on 02.26.18 at 5:20 pm

“We all know that say, a Mickey Dees or a Timmies is going to use more water and electricity than your grandmother in her retirement condo. However, the unit owners all pay into the same expense fees pool, and the expenses are then paid from the total. So really what is happening, is the condo unit holders are subsidizing the businesses operating on the first floor. The rate of subsidization can be substantial.”
Total nonsense, commercial units are separately metered and common expenses are based on unit size expressed as percentage interest of the common elements. Where facilities are shared , such as parking , their is a cost sharing agreement.

#217 I,see,debt,people on 02.26.18 at 6:20 pm

keep those pink sheets coming flop! they brighten up my day :)

#218 Al on 02.26.18 at 8:59 pm

@ Stone.

Hey Stone man.

Quick reply.

Who cares about how the average canadian is hand long debt. We don’t know. Almost all of us live pay to pay so it’s all the same. It’s tight.

But foe this girl she said the rent mostly covers all expenses, likely including the mortgage principle.

And of that is the case she is making money because paying your mortgage principle is forced savings..assuming she hold the house for a while and either gets he same price or higher and if she holds for a while it will be higher despite garths doom and gloom o life other than stocks because he is a stock guy.

So she is fine.

I am into rentals ad granted it is cash tight for sure but over the long haul real estate provides 4 times more reen than stocks because of the leverage factor. For %20 down you get 100% ownership of the asset that grows at 3-5% on average over the long haul.

Stocks are the minor leagues.

Real estate is where the big boys play.

#219 Doug in London on 02.26.18 at 10:49 pm

Buying another place before you sell your old place. I’m being sucked into the time tunnel again, back to 1990 when this all happened before and many people were burned because they got caught in a declining market. Say, has anyone heard that brand new tune Blue Sky Mine by Midnight Oil from Australia?

They should have cashed in that winning lottery ticket in Toronto when the bidding wars were still going on and got a premium price.

#220 gary smith on 02.27.18 at 1:05 pm

Re: Excited Renters

For people with second+third homes as investments that they can’t flip- will they sell for a loss or rent out?

If they rent out, do you think it will be for a “deal”, or to cover expenses?

GS