Are we there yet?

So far in March, house sales in Calgary are down 31% from last year. In Victoria, about the same. Toronto, also, has dropped double-digits.

In the Lower Mainland and across BC nobody believes this unless they’re trying to sell a property, but the buyers – especially for detached homes – have been retreating. Here are the latest numbers from the provincial RE association (so they have to be true…)

The national stats came out Thursday, and confirm what this pathetic blog told you to expect a few months ago. Sales were down 6.5% nationally from January to February (that is a disaster). The year/year plop was 17%, while inventory rose 8%. The average price of houses, coast-to-coast, fell 5% from last February.

So what does this mean?

It was the second consecutive monthly erosion, which has not happened for more than a decade. Sales are at the lowest level in five years, and declines occurred in 75% of all markets, with the biggest pain being felt in the bubble regions of the GTA and LM. Last month sales nationally were 7% below the 10-yar average, and lower than year-ago levels in 80% of all cities. Ugly.

Here’s what the national graph looks like…

Okay, the market sucked last month. We get it. Now what?

Expect worse. The tone will be set in BC, where Comrade Premier Horgan’s politburo has imposed a wild-eyed ‘speculation tax’ which is really just a levy on anyone wealthy enough to have two properties with diddly to do with speculation. Caught in the snare are long-time vacation-home owners who live in Alberta, Ontario or elsewhere in troubled BC. This joins the 20% go-home tax for foreigners, the increased property tax and the empty-houses tax. Those people who voted NDP so they could cause a politically-motivated housing crash are on the path to success.

In Ontario, more politics. Pivotal election in June. The new alpha male, big-dog PC leader says he will eliminate the 15% Chinese dudes tax. The wily, progressive, interventionist premier wants more social housing, rent controls and – with the mama of all debts – more taxes. It’s shaping up to be a classic right-left battle and if Big Dog gets nipped, you can imagine the results.

Meanwhile, the macro context continues to dim. Trump’s new economic guy (he killed the old one) says he wants the Fed to ‘let the economy rip’ which, of course, means even-higher interest rates. Meanwhile the US prez freely admits he made up facts about trade when meeting with Mr. Dressup, which tells you how deeply he values and respects Canada, while hinting how NAFTA will turn out. If we don’t roll over, he slaps on the 25% steel tariff and, poof, there goes Hamilton.

The outcome?

As stated, 2018 will be the worst year for housing markets in a decade. Sales will languish. Prices drift lower. Already, detacheds in YVR are going unsold and unloved. McMansions in some 905 burbs have lost a third of their value since last spring. Most decidedly, there is more to come. If history’s any guide, with the key spring market in April will come a lot more listings, further tapping the shallow pool of existing buyers. US rates will be higher again next Wednesday, pushing up bond market yields and, sooner or later, mortgage costs.

Remember it will be at least early summer before we know the impact B20 had had on the markets. By that time, astute people buying in the frenzied urban fringe will pay little more than half what greater fools did just twelve months ago. Sometimes it pays not to listen to mom.

 

267 comments ↓

#1 But Kudlow also said this... on 03.15.18 at 5:44 pm

From Kudlow interview: “Kudlow: the profit picture is good. It’s looking real good, and growth is not inflationary just let it rip for heaven’s sakes. The market is going to take care of itself. The story takes care of itself let it rip the fed will do what it has to do, but I hope they don’t overdo it.” From the latter sentence, one gets the impression he does not agree with 4 rate hikes this year, and is arguing more for 2 or at most 3.

The Fed could not care less what he thinks. – Garth

#2 TRUMP on 03.15.18 at 5:45 pm

More of the same old…

You can’t FIX stupid!!!!!!

#3 FATLADY on 03.15.18 at 5:46 pm

I once use to get lost in the shuffle.

Now I just shuffle with the lost.

#4 Reality is stark on 03.15.18 at 5:50 pm

Million dollar losses and ruined lives. Remember in Canada the banks get your first born. You can’t just hand them the keys. They screw you for life unlike the USA.
When our banks lent to the Reichman’s without any due diligence they went and raped the average Canadian for the losses with full government support.
Feminism has guaranteed your divorce.
Real estate agents sold you down the river.

#5 Samson Nights on 03.15.18 at 5:52 pm

Actually, 2018 will be the ‘best’ year for housing markets in a decade, as housing is plucked from the hands of speckers, realtors, and shady mortgage brokers, and placed back in the traditional hands of families.

Housing should never have been allowed to become a ‘market’ for Canadians (nor foreigners) in the first place.

#6 Mark on 03.15.18 at 5:53 pm

With volume collapsing, the RE sell siders won’t be able to pull the scam of claiming that prices are rising when the only increases to the ‘average selling price’ experienced in most of Canada were just artifacts of the drastically changed sales mix since the 2013 peak.

The sales collapse is even worse than implied as the amount of new supply brought to market over the past few years has been enormous. Normalized to the increase in supply (or even to the number of Realtors, which has also grown substantially since the 2013 pricing peak), its basically doom and gloom. Billions in commissions not collected. An entire supply chain associated with the resale RE industry with a huge gap in demand relative to the extreme amount of capacity that has been fomented.

The loonie is reacting as though Poloz is done, and done for a long time. Policy rate cuts may even be in the cards due to the consumer price deflation that is almost certainly in the future. Even though the market is acting irrationally by marking the loonie down (rate cuts should strengthen, not weaken the loonie), such situation is likely to be temporary as Canada’s cadre of leveraged hyper-consumers go into a state of hyper-austerity. Buying up loonies to repay debt denominated in loonies instead of using their wages to purchase foreign imports such as vacations.

The big question that arises is whether the country will embrace socialism, or reject the socialism that has brought us to this mess. The upcoming Ontario election will be one to watch. Doug Ford is casting himself as a reformer to the decades of socialist nonsense perpetrated on the province under various administrations under all three flavours of government. Can he pull it off? It will be interesting to see.

#7 David on 03.15.18 at 5:53 pm

Except in Ottawa, MTL, where the full CMA will have an excellent year followed by another great year. So good not to be in the GTA. There are other places to live, and things are pretty darn good, liquid, and robust

#8 Howard on 03.15.18 at 5:54 pm

The new alpha male, big-dog PC leader says he will eliminate the 15% Chinese dudes tax.

He’s going to have to explain to his lower-income, working class base why it’s wrong to ask foreign zillionaires to pay what, for the latter, is an inconsequential tax to help pay for the upkeep of the city and province in which Ford Nation must live and work.

#9 Smartalox on 03.15.18 at 5:55 pm

So, the Ides of March have arrived.

Now what?

#10 mitzerboyakaQueencityKidd on 03.15.18 at 5:55 pm

Beware of the Ides of March

#11 friend to cats on 03.15.18 at 5:56 pm

Not even Secretary, “Economic Advisor” about as meaningful as Michael Flynn and probably as useless. Good for the occasional comment and then dismissed, or arrested…

#12 Howard on 03.15.18 at 5:57 pm

If we don’t roll over, he slaps on the 25% steel tariff and, poof, there goes Hamilton.

That’ll be lights out for blog dog “Rental Property Math”.

#13 Andrewski on 03.15.18 at 6:00 pm

Meanwhile…

https://www.cmhc-schl.gc.ca/en/hoficlincl/observer/observer_235.cfm?obssource=observer-en&obsmedium=email&obscampaign=obs-20180315-consumer-credit

#14 dakkie on 03.15.18 at 6:00 pm

DELETED

#15 A J on 03.15.18 at 6:02 pm

“Sometimes it pays not to listen to mom.” Yup. Or Mom’s friends. Or Mom’s siblings. Or any other Baby Boomer who spouts the fortune they made off their real estate purchase. Different times we’re in now. And some are still living in the past where real estate was a solid investment. Now it’s a ball and chain you carry for life. The real estate obsessed need a good glass of cold water in the face.

#16 Nonplused on 03.15.18 at 6:06 pm

Embedded in this article is an absolute must watch video:

https://www.spencerfernando.com/2018/03/02/train-wreck-watch-trudeaus-incoherent-attempt-discuss-steel-tariffs/

It would be funny if it wasn’t so sad.

#17 yeahyeahandthegogo on 03.15.18 at 6:06 pm

Garth, the ndp is already looking into protecting BC’ers who have vacation homes here. The tax has not been finalized yet is what they say. I personally think that people who have two properties are super rich and deserve whatever taxes we can throw at them, but the NDP disagrees, allegedly. Just FYI.

#18 Your local driver on 03.15.18 at 6:08 pm

Garth deserves a spanking for allowing his pooch to stick his arms and head out of the car window. One sideswipe accident, and that pooch is either crippled for life or in a cemetery.

#19 rental property math on 03.15.18 at 6:08 pm

Scrap the foreign buyer tax Dougie, we’re rootin’ for you! Allow landlords to collect damage deposits and take back units upon lease expiry too. Go Doug Go!

#20 YYZer on 03.15.18 at 6:11 pm

Well, it didn’t take long for the new PC leader to proclaim he’s going to kill the foreign buyer tax in GTA if elected. This is:
* GOOD news for realtors, developers and those looking to park foreign / illegal $ in our real estate market.
* BAD news for local residents struggling to afford housing a bearable commute from work.

With all due respect to Garth – I have been avid reader for years after all – I believe there is way more foreign/illegal money in this market that he believes there is. Here are links to 2 articles based on research/investigatations :

http://vancouversun.com/opinion/columnists/douglas-todd-death-taxes-and-the-terrible-injustice-of-metro-vancouvers-housing-crisis
https://www.theglobeandmail.com/news/investigations/real-estate-money-laundering-and-drugs/article38004840/

If you don’t agree with dropping this tax, you need to write, email, tweet, and let your local PC candidate / Doug Ford / PC party know you don’t approve.

With one-time PC leader Tim Hudak now CEO of the Ontario Real Estate Association, I guess the reversal on foreign buyer tax shouldn’t surprise any of us.

#21 waiting on the westcoast on 03.15.18 at 6:13 pm

#6 Mark reminds us of the ol’ sales mix of 2013…

I know it’s getting old that I am reminding everyone that it never gets old hearing Mark claim housing prices peaked in 2013.. ;-)

#22 rental property math on 03.15.18 at 6:13 pm

#12 Howard on 03.15.18 at 5:57 pm
If we don’t roll over, he slaps on the 25% steel tariff and, poof, there goes Hamilton.

That’ll be lights out for blog dog “Rental Property Math”.

——
Haven’t been here for weeks thanks for thinking of me. When the lights go out I’ll let you know. I hear those LED bulbs last 10 years.

#23 Guy in Calgary on 03.15.18 at 6:15 pm

Volume definitely down in Calgary. Friend here is a realtor and acknowledges that. One thing to consider which certainly has some merit is that we have had a TONNE of snow this year. This snow has also accumulated as we didn’t have much in the way of Chinooks. The reason I mention this is because most residential roads in the burbs are not plowed. No salt here either. It is a royal pain in the ass to drive in. When it is warm, the roads are flooded. This has most certainly reduced the number of showing and open houses as no one wants to go out driving in this crap unless it is for work, food or booze.

#24 Samson Nights on 03.15.18 at 6:16 pm

Classic DoFo hypocrisy.

Remove the foreign buyer specker tax and stick more Canadian families into ‘the projects’.

How long until DoFo Nation voters put down their Sunshine Girls long enough to realize their fake anti-elitist and fake champion of the middle/working class is playing them like banjos?

#25 waiting on the westcoast on 03.15.18 at 6:17 pm

Garth – Happy Belated Birthday!

The lesson is less government at any time is the best solution. Anytime someone in government tells you they can fix things, it is just an excuse to rob you. Government has a role but we should try to keep that as limited as viable.

And it works on the way up and down in any market…

#26 Reynolds531 on 03.15.18 at 6:20 pm

I don’t know if Doug Ford will be good for Ontario but if the liberals get back in, I’m going to go find a nice spot for my box in the woods. Because that’s where we will all be living.

#27 jessica r on 03.15.18 at 6:21 pm

Thank-you Mr. Turner for supporting the real estate industry as you do.

Your graph clearly shows that the past 7 times the home sales have dipped down to/or below the 10 year average that they shoot back up past it – 100% correlation!

This is a great window of opportunity to get into the market and build equity for future security. Thank-you again.

#28 ben on 03.15.18 at 6:21 pm

CADUSD at .766. Thing is the boomers want to cash out on high housing. So they gotta keep rates low. But then the boomers can’t afford to eat.

It’s a bind.

#29 AGuyInVancouver on 03.15.18 at 6:23 pm

#8 Howard on 03.15.18 at 5:54 pm
The new alpha male, big-dog PC leader says he will eliminate the 15% Chinese dudes tax.

He’s going to have to explain to his lower-income, working class base why it’s wrong to ask foreign zillionaires to pay what, for the latter, is an inconsequential tax to help pay for the upkeep of the city and province in which Ford Nation must live and work.
_ _ _
Because he takes his marching order from another failed Tory leader, Tim Hudak, that’s why!

#30 JSS on 03.15.18 at 6:24 pm

Eventually, vultching day will come in real estate.

How will we be able to tell when to vultch? What are the trigger points? Rules of thumb of when to buy a personal residence or income property?

I’m itching.

#31 Howard on 03.15.18 at 6:26 pm

#11 friend to cats on 03.15.18 at 5:56 pm
Not even Secretary, “Economic Advisor” about as meaningful as Michael Flynn and probably as useless. Good for the occasional comment and then dismissed, or arrested…

—————————————————

Maybe not the case in the current Administration, but traditionally the “titled” advisors are very important (i.e. not just the generic ones like Jared Kushner).

The National Security Advisor is usually one of the most powerful members of a President’s inner circle.

#32 Life in the burbs on 03.15.18 at 6:26 pm

Premier Ford will gladly give up the foreign buyers tax which is totally irrelevant and probably costs more to administer than it collects. The pride of the Libs the Places to Grow Act will be the first to fall under the conservative expansion plan. It’s all about Supply Supply Supply. Give people what the want DFD homes! the 500 sft box in the sky will be left to UofT students exactly what they should have been in the first place.

#33 FOUR FINGERS WATSON on 03.15.18 at 6:28 pm

Remember it will be at least early summer before we know the impact B20 had had on the markets. By that time, astute people buying in the frenzied urban fringe will pay little more than half what greater fools did just twelve months ago. Sometimes it pays not to listen to mom.
…………………………..

So you are saying an approximate 40-50% drop in price by autumn 2018 ? I will bet u a bag of mice that is not gonna happen pilgrim.

#34 Dave on 03.15.18 at 6:28 pm

So hopefully by summer prices do have a dramatic change. Last year during bbq season, I couldn’t engage in any conversations because I was the idiot who didnt buy real estate.

#35 Support the Spec Tax! on 03.15.18 at 6:30 pm

“Those people who voted NDP so they could cause a politically-motivated housing crash are on the path to success.”

Yes we are! And people, please don’t forget to email the NDP and let them know you support the speculation tax!! They are getting heaps of mail right now from the those who oppose the tax and they need to know that they also have supporters!

https://www.bcndp.ca/budget-2018-followup

#36 Dead Cat Bounce on 03.15.18 at 6:31 pm

Delusional Realtors in Okanagan still !!!

Priced 36.5% over Assessment for 1990 built townhome

http://www.soreb.org/mls_detail;jsessionid=6C408EB0A0B115AF5172C7AD4243A9AC.jvm1?mls_number=171221

https://www.bcassessment.ca/Property/Info/QTAwMDA5NFdFRQ==

#37 MF on 03.15.18 at 6:34 pm

#248 Howard on 03.15.18

A very classy post! Apology excepted.

Now that that is out of the way,

We can continue to read your solid posts, which I agree with pretty much 100.00% of the time

MF

#38 Musty Basement Dweller on 03.15.18 at 6:37 pm

“Comrade Premier Horgan’s politburo” and “go home tax” LMFAO priceless.
I just hope comrade Horgan stays the course. Finally someone is taking action on this mess that other politicians have created in The Last 5 Years or more. He seems to have a set I hope he can keep them.

#39 akashic record on 03.15.18 at 6:38 pm

#8 Howard on 03.15.18 at 5:54 pm

The new alpha male, big-dog PC leader says he will eliminate the 15% Chinese dudes tax.

He’s going to have to explain to his lower-income, working class base why it’s wrong to ask foreign zillionaires to pay what, for the latter, is an inconsequential tax to help pay for the upkeep of the city and province in which Ford Nation must live and work.

When “foreign zillionaires” buy a property, of course, they pay “for the upkeep of the city and province”: it’s called the property tax.

By the way, since the end of feudalism nobody “has to” live and work anywhere.

#40 Trumpocalypse2018 on 03.15.18 at 6:39 pm

BEWARE THE IDES OF MARCH !!!!!!!!!!!!!!

IT STARTS TODAY !!!!!!!!!!!

ECONOMIC UNWINDING AND POLITICAL DISASTER !!!!

WAR !!!!!!

TRUMP MELTDOWN !!!!!!!

GLOBAL CHAOS !!!!!!!!!

GARTH, PLEASE CHANGE YOUR FONT SIZE. I NEED BIGGER CAPITALS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

PREPARE.

#41 Camille on 03.15.18 at 6:41 pm

Mr. Trump wants the US economy to rip. This would normally mean more accommodation. Garth implies this means higher rates. I’ll have to consider that. Maybe right.

#42 Mark on 03.15.18 at 6:46 pm

“#6 Mark reminds us of the ol’ sales mix of 2013…
I know it’s getting old that I am reminding everyone that it never gets old hearing Mark claim housing prices peaked in 2013.. ;-)”

Its not just Mark stating the truth. Its also Ross Kay:

https://youtu.be/tmUMTdiWRl4?t=428

#43 earthboundmisfit on 03.15.18 at 6:47 pm

@ jessica r ……. obviously a realtor, with nothing to do but sit at home and split infinitives.

#44 lawnboy on 03.15.18 at 6:50 pm

Garth….

1. Who snapped that picture and how’d they do that.

2. Is it true that in the land of Auz…..fur-inrs may only purchase new homes?

#45 PGer on 03.15.18 at 6:50 pm

Glad that I hold a fair amount of US dollars and stocks, ’cause it looks like Poloz is going to sit on his hands while the Loonie dives into the 60s. The only thing this boy can think of doing it seems, but it will raise inflation in Canaduh and make cauliflowers expensive again.

Going to be a long, slow, sad ride down into the next recession. But weed will be legal – so go celebrate!

#46 Bob Dog on 03.15.18 at 6:51 pm

“Those people who voted NDP so they could cause a politically-motivated housing crash are on the path to success.“

I’ve been feeling quite depressed lately thinking I have made a huge mistake shorting housing by renting for 10 years and investing when I could have speculated on 5 or 6 condos. This whole post makes me feel optimistic.

Democracy in action

#47 akashic record on 03.15.18 at 6:52 pm

I believe there is way more foreign/illegal money in this market that he believes there is.

Do you care how much foreign/illegal money is in the TSX?

In the ETFs, bonds you have in your portfolio?

Should people in developing countries demand that when you invest in their economies, you pay extra, because you are driving up the price and you make it harder for the local population to compete with your “rich Canadian income”?

Maybe…

Should you pay a tax for equalization of the countless poor countries around the world to promote equality on the planet?

Where do you start and where do you draw the line when it comes to a fundamentally unequal world?

#48 Cottingham a bargain on 03.15.18 at 6:55 pm

30 JSS on 03.15.18 at 6:24 pm
Eventually, vultching day will come in real estate.

How will we be able to tell when to vultch? What are the trigger points? Rules of thumb of when to buy a personal residence or income property?

I’m itching
———

The above illustrates precisely why any decline in RE prices in the GTA are temporary and fleeting.

The post above echoes the sentiment of the masses

#49 Smartalox on 03.15.18 at 6:58 pm

@JSS #30:

Remember the old story about how it’s time to sell your stocks when the shoe shine boy is buying on margin?

Well, you’ll know it’s time to vultch real estate when the shoe shine boy tells you how much he regrets his investments in real estate. Especially if your shoe shine boy has previously been a highly leveraged multiple property owner, and/or a formerly successful real estate agent.

#50 Ace Goodheart on 03.15.18 at 6:59 pm

RE: #4 Reality is stark on 03.15.18 at 5:50 pm

“Million dollar losses and ruined lives. Remember in Canada the banks get your first born. You can’t just hand them the keys. They screw you for life unlike the USA.
When our banks lent to the Reichman’s without any due diligence they went and raped the average Canadian for the losses with full government support.
Feminism has guaranteed your divorce.
Real estate agents sold you down the river.”

Hmmm. I’m still married (M44) and I like feminism.

Financially solvent, no debt. Three paid for houses and a mil or so in the markets.

Kids are doing fine.

Not sure what to complain about. The difference between Kathleen and Doug is like the difference between cat woman and the incredible hulk. Not sure who I’d vote for at this point. Maybe I’ll just toss a coin on election night.

Point? None of this stuff matters. You can survive anything if you put together your life properly. Just another day in Ontario, the anti-paradise of the world, where we all have something to complain about and no one has anything to offer.

#51 Whatcha Minnie on 03.15.18 at 7:00 pm

Got to work late. Did about 30 mins of my own work, have been sidelined by emails, phone calls and questions from trainees ever since. I’m looking forward to starting the book I bought yesterday. And after work I get to go look at flooring samples for our whole upper floor.

#52 acdel on 03.15.18 at 7:02 pm

#23 Guy in Calgary

As we are enduring another blizzard today and another one approaching on Saturday. Good work-out!

Happy belated Garth!

#53 Fred I am not on 03.15.18 at 7:02 pm

“By that time, astute people buying in the frenzied urban fringe will pay little more than half what greater fools did just twelve months ago.” – Garth

————————————————————-

Really? Sounds like absolute nonsense.

#54 MF on 03.15.18 at 7:02 pm

#24 Samson Nights on 03.15.18 at 6:16 pm

“How long until DoFo Nation voters put down their Sunshine Girls long enough to realize their fake anti-elitist and fake champion of the middle/working class is playing them like banjos?”

-Do you not comprehend that his support is largely a rejection of the failure Kathlynn Wynne more than anything else?

Sunshine girl..lol what a joke comment.

MF

#55 Zapstrap on 03.15.18 at 7:03 pm

I spy with my little eye … a number of new listings in my burb out here in the Lower Lotus Land … and a few sold signs that were very hard to find for the last few months. These are SFH. There is still some life in it out here … so far … and we are coming up on prime rooting season as the early cherry trees are pink now …

#56 For those about to flop... on 03.15.18 at 7:04 pm

Can I get someone to verify these recent sales.

Do they need a mop and bucket or ice bucket and champagne…

M43BC

3569 KING EDWARD AVE W VANCOUVER paid 2.6 April 2016 ass 2.72 now asking 2.65 sold for?

13697 Malabar Avenue, Surrey paid 1.32 August 2016 ass1.17 asking 1.18 sold for?

6438 Marine Drive, West Vancouver paid 1.28 January 2017 ass 1.26m asking 1.38 sold for?

27 8051 Ash Street, Richmond paid 993k March 2016 asking 969k sold for ?

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

Feel free to make a donation.

Flop For Fox Fund…

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

#57 Musty Basement Dweller on 03.15.18 at 7:08 pm

#35 Support the Spec Tax! on 03.15.18 at 6:30 pm
“Those people who voted NDP so they could cause a politically-motivated housing crash are on the path to success.”

Yes we are! And people, please don’t forget to email the NDP and let them know you support the speculation tax!! They are getting heaps of mail right now from the those who oppose the tax and they need to know that they also have supporters!

https://www.bcndp.ca/budget-2018-followup
=================================
thanks for the reminder just sent in $100 along with a lot of positive feedback

#58 Smartalox on 03.15.18 at 7:11 pm

BC sets up anonymous tip line to report Real Estate agents behaving badly…

http://www.cbc.ca/beta/news/canada/british-columbia/real-estate-agent-tip-line-bc-1.4578301

Remember, douchiness is not a reportable offence!

#59 waiting on the westcoast on 03.15.18 at 7:20 pm

#42 Mark on 03.15.18 at 6:46 pm says… “Its not just Mark stating the truth. Its also Ross Kay: https://youtu.be/tmUMTdiWRl4?t=428

Mark – did you listen to the podcast. He says that the structural price hit its peak in 2013 (ie, what people should pay max for a house) and THAT THE PRICE INCREASES SINCE THEN are due interference from government policy.

So prices haven’t peaked in 2013. They have typically peaked in the past year. But the rise in prices since 2013 is due to government interference in the market.

#60 Reximus on 03.15.18 at 7:22 pm

Properties in the downtown Toronto area will only go down when when rates go over 6%

#61 oncebittwiceshy on 03.15.18 at 7:23 pm

Cottingham A Bargain: “The above illustrates precisely why any decline in RE prices in the GTA are temporary and fleeting.

The post above echoes the sentiment of the masses”
<<<<<<<<<<<<<<<<<<<<<<<<<<<

Except, when it actually happens, very few people actually jump in because the psychology is completely different.

The nesting wife is now saying, "Won't it be cheaper next month?"

Cottingham will be a much bigger bargain than even you bargained for.

#62 Blacksheep on 03.15.18 at 7:27 pm

YYZ # 20,

“Well, it didn’t take long for the new PC leader to proclaim he’s going to kill the foreign buyer tax in GTA if elected.”

BS: What % of the population already owns RE and will not benefit from a housing correction?

Let look at some ballpark stats, often quoted here…

“This is:”

“* GOOD news for realtors, developers and those looking to park foreign / illegal $ in our real estate market.”

BS: The above owner group, is in a strong majority, at approx. 70% of the population.

“* BAD news for local residents struggling to afford housing a bearable commute from work.”

BS: The above renter group, is in a weak minority, at approx. 30% of the population.

Hmm….Dougie F. looks to be ‘In like flynn’.

#63 Guillaume on 03.15.18 at 7:28 pm

Garth, do you think someone subject to the 2% speculator tax in Kelowna could not win a lawsuit against the province of BC, as there is no reason to pay this money grab if people in Invermere or Whistler don’t have to pay it ? Are we not supposed to be equal regarding the law and specially taxation ?

#64 Economystical on 03.15.18 at 7:28 pm

Relax everyone, house prices are not going to collapse! Remember folks that prices are just mathematical expressions, numbers really. And the numbers that are important are the numbers on the mortgage documents. Should house prices in general ever fall below the debt they support, the banks will simply hold the houses instead. Otherwise they would have to declare a loss. You don’t sell an asset at a loss unless you need a tax deduction, you just let it sit on the books like all those oil wells all over Alberta that will never be reclaimed.

Even if we do get a 2006 US style housing correction, look at them! House prices in the US have already fully recovered!

House prices must go up because wages can’t. Therefore we need some sort of asset appreciation in order to be able to raise taxes. How are people going to pay their carbon taxes if they didn’t get a raise? Well, using a HELOC. This way we can create an infinite amount of money without anybody actually earning it.

Remember, the goal of economystics is a free lunch for everyone, and nobody working in the kitchen.

Now I’d like to say a little about Mr. Trudeau’s infrastructure plan. Many have derided the announced spending because there doesn’t seem to be a plan on what to spend the money on. Folks, it doesn’t matter what you spend it on! Bike paths in Nunavut will do! As long as the money is borrowed and spent you can spend it on a manned mission to Mars if you like! The plan is brilliant in it’s simplicity. Just borrow and spend the money. This is how household finance has been run for a long time. Do you really need to put an X-Box One on your credit card when you already have an X-Box 360? Yes, you do. The economy depends on it. Could you imagine not buying a new cell phone every 3 years? Of course not. Could Canada get by without F-35’s now that we know the attack, if it comes from Russia, will be hyper-sonic? Of course not. Even if the F-35’s never fly the money must be borrowed and spent or there won’t be enough of it to pay for the free lunch.

#65 Timmy on 03.15.18 at 7:29 pm

Who cares about people with two properties when many cannot even afford one, even with an above average wage?

If I have two cars and you have none, and need one, should I be taxed additionally? How does that get you a car? – Garth

#66 YVR Renter on 03.15.18 at 7:29 pm

Oh Vancouver real estate and Rennie…this new West Van development was just advertised to us in a solicitous email….
http://liveat.residencesonmarine.com/?utm_source=eblast&utm_medium=rennie_all

Wow! 950 square feet/2 bedrooms starting at $1.795 million…only $1900 sq ft for a concrete box. Who are the idiots lining up for this? Starting at…probably means any kind of upgrade beyond particle board Ikea cabinets will cost ya!
3 bedrooms, 1321 sq ft for $2.38 million. Bit more of a bargain at only $1800/sq ft. That extra foot must be important; prob includes balcony.
It truly disgusts us!

#67 Prairieboy43 on 03.15.18 at 7:31 pm

Used toy market, will result in some buys this year. Harley Fat Boyz, Toy Haulers, Sleds. $0.30/$1.00.

PB43

#68 crowdedelevatorfartz on 03.15.18 at 7:33 pm

@#40 Apocalypto2016, 2017, 2018…..
“GARTH, PLEASE CHANGE YOUR FONT SIZE. I NEED BIGGER CAPITALS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!”

++++++

And that, ladies and gentlemen, sums up the extent of the “looming apocalypse”.
Yeesh.

#69 Pete on 03.15.18 at 7:46 pm

Number of homes sold has indeed dropped, but prices are steady. Don’t expect a price crash any time soon!

#70 crowdedelevatorfartz on 03.15.18 at 7:48 pm

@#3 Fatlady Singing
“I once use to get lost in the shuffle.
Now I just shuffle with the lost.”
+++++

Smoking man’s Motto

I’d prefer a bottle in front of me…
Than a frontal lobotomy.

#71 April 1st on 03.15.18 at 7:49 pm

The real estate party really ends after April 1, that’s when the music stops. That is the last day that people were able to secure under the old mortgage rules. Many people got pre-approved on the very last day of December with a rate and mortgage approval hold avoiding B20 rules. After April 1st the market will crash violently.

#72 Vancouver Brit on 03.15.18 at 7:50 pm

If I have two cars and you have none, and need one, should I be taxed additionally? How does that get you a car? – Garth
____________________________________________

You, and everyone else with two+ cars, would be more inclined to sell it to avoid paying high taxes, especially if you don’t really need the second car but just used it for weekend trips. As such, a flood of second hand cars would enter the market, likely bringing down the price of all second hand cars to a more affordable price that Timmy could afford.

Dipper logic. It’s also called ‘theft’. – Garth

#73 Cheekmonster on 03.15.18 at 7:51 pm

#20 YYZer well said!!!

Wynner or Ford puppets. Kind of seems like a loss/loss situation for Ontarions.

#74 oncebittwiceshy on 03.15.18 at 7:54 pm

Economystical: “Should house prices in general ever fall below the debt they support, the banks will simply hold the houses instead. Otherwise they would have to declare a loss. You don’t sell an asset at a loss unless you need a tax deduction, you just let it sit on the books like all those oil wells all over Alberta that will never be reclaimed.”
<<<<<<<<<<<<<<<<<<<<<<<

Wow, just wow, that kind of naivete is actually breath taking. You have single handedly explained how this bubble actually grew so large in Canada.

#75 Leo Trollstoy on 03.15.18 at 7:55 pm

#21 waiting on the westcoast on 03.15.18 at 6:13 pm

Chris is a funny guy! Lol

As my long deceased grandpa wayne pitzel used to say, “u can’t fix stupid!”

It’s too bad that he died in 2013 and missed the Toronto real estate peak in 2017

#76 Joe on 03.15.18 at 7:55 pm

[i]Who cares about people with two properties when many cannot even afford one, even with an above average wage?

If I have two cars and you have none, and need one, should I be taxed additionally? How does that get you a car? – Garth[/i]

What a ridiculous counter-argument. First of all, there are plenty of cars to go around while space is in chronically short supply. Second, a car is a nice-to-have while shelter is a fundamental human need. Third, taxing additional properties will make them less desirable and therefore decrease both demand and prices.

There is no shortage of space in Canada and transportation is essential to most people’s lives. Taxing anything does not make it cheaper. Stop flailing. Looks pathetic. – Garth

#77 dr. talc on 03.15.18 at 7:57 pm

Ontario’s 15% tax on non residents is not significant, and Doug Ford knows that. He will Never take aim at the real enemies of the people: The UN, Jeremy Rudin, Bill Morneau, T2. Nope, just the straw man.

#78 Howard on 03.15.18 at 8:02 pm

#39 akashic record on 03.15.18 at 6:38 pm
#8 Howard on 03.15.18 at 5:54 pm

The new alpha male, big-dog PC leader says he will eliminate the 15% Chinese dudes tax.

He’s going to have to explain to his lower-income, working class base why it’s wrong to ask foreign zillionaires to pay what, for the latter, is an inconsequential tax to help pay for the upkeep of the city and province in which Ford Nation must live and work.

When “foreign zillionaires” buy a property, of course, they pay “for the upkeep of the city and province”: it’s called the property tax.

By the way, since the end of feudalism nobody “has to” live and work anywhere.

————————————————-

Ah yes, the “move to Moosonee and become an ice fisherman” advice. Oh sorry, fisherPERSON.

In the 416, property tax rates are kept artificially low compared to the rest of the GTA. There are very few good taxes in this world but a surtax on foreign zillionnaires seems like one of those exceptions. They barely notice the expense and the province rakes it in (which it will likely squander, but hey better their money than that of working citizens).

Note that I do not for a second believe that the foreign dudes tax is a deterrent. They are wealthy enough for it not to be. But if foreign buyers help to inflate a bubble that displaces citizens, why not ask for a little more in the way of tax contribution?

#79 Dan.t on 03.15.18 at 8:05 pm

Why is it so hard to find affordable rentals and housing in Canada?

How did a Parts of B.C. end up in full blown housing crisis? Oh right, Christy Clark- how are our elected leaders so self serving that they screw over their oun voters/ residents ?

Go NDP! But they will wimp out to in the end. Just wait. All Canada is is Canadians selling real estate to each other and a real estate foreigner money safe haven and money laundering dream.

Just look the other way. It’s only been going on for 18 years. I guess that is the liberal way- so glad for B.C. people they are out!

#80 Leo Trollstoy on 03.15.18 at 8:05 pm

Any year now, the $C will shoot past parity!

Mark77 Mar 29th, 2014 9:45 pmNot at all. And the fundamentals show the CAD$ is going to shoot past parity and beyond as a reflection of the far higher quality that has been built in Canada
http://forums.redflagdeals.com/canadian-dollar-its-ups-downs-1442859/15/#p18591341

comic gold! The only thing that makes this post sad is that it was the year that grandpa Wayne Pitzel passed… 4 yrs ago RIP :(

#81 YVR Renter on 03.15.18 at 8:09 pm

BTW – HAPPY belated BIRTHDAY Garth!! Hope you had a great one, and many more to come! We need your insights :-)

Musty Basement – thanks for posting the link, I too sent my happy comments to thank them for taking action on the housing insanity in BC.

#82 Blacksheep on 03.15.18 at 8:16 pm

Support # 35,

“Those people who voted NDP so they could cause a politically-motivated housing crash are on the path to success.”

“Yes we are! And people, please don’t forget to email the NDP and let them know you support the speculation tax!! They are getting heaps of mail right now from the those who oppose the tax and they need to know that they also have supporters!

https://www.bcndp.ca/budget-2018-followup
————————————–
Someone put this link up yesterday, so I emailed John and the gang, to straighten em out!

I pointed out: Governments that cause housing crashes, with recessions, don’t get re elected.

He (AI device?) responded and asked for more feedback (data mining) from a working class stiff.

Wait till he (It?) reads, what I really think : )

#83 Reality is stark on 03.15.18 at 8:16 pm

To #50.
Hey Ace.
“Maybe I’ll just toss a coin on election night”.
That is pure genius.
You and your wife are likely public servants or bankers (pseudo government workers in Canada).

#84 YYZer on 03.15.18 at 8:19 pm

#39 akashic record

#8 Howard on 03.15.18 at 5:54 pm -The new alpha male, big-dog PC leader says he will eliminate the 15% Chinese dudes tax.

He’s going to have to explain to his lower-income, working class base why it’s wrong to ask foreign zillionaires to pay what, for the latter, is an inconsequential tax to help pay for the upkeep of the city and province in which Ford Nation must live and work.

————————

When “foreign zillionaires” buy a property, of course, they pay “for the upkeep of the city and province”: it’s called the property tax.

By the way, since the end of feudalism nobody “has to” live and work anywhere.

******************
It takes more than just a property tax to maintain a neighbourhood and city. Provincial tax contributes a great deal as well. There have been numerous articles reporting on studies that show that most of these foreign zillionaires declare minimum incomes and pay nothing or minimum tax. Yet they take full advantage of our education, healthcare, clean environment etc.

Areas with the most expensive real estate in GVA pay LESS tax per household than those in areas where the average home costs far less. Those middle/lower income households are subsidizing all those insanely weathly people.

#85 Fiendish Thingy on 03.15.18 at 8:26 pm

–“Remember it will be at least early summer before we know the impact B20 had had on the markets. By that time, astute people buying in the frenzied urban fringe will pay little more than half what greater fools did just twelve months ago. Sometimes it pays not to listen to mom.”–

Garth, I know GTA detached is already halfway there, but are you predicting that YVR prices will be almost 50% lower than Spring 2017 by this summer?

#86 Raging Ranter on 03.15.18 at 8:29 pm

#27 jessica r writes:

Thank-you Mr. Turner for supporting the real estate industry as you do.

Your graph clearly shows that the past 7 times the home sales have dipped down to/or below the 10 year average that they shoot back up past it – 100% correlation!

This is a great window of opportunity to get into the market and build equity for future security. Thank-you again.

Jessica didn’t get a chance to finish typing her last name because she caught that falling knife she was after.

#87 NVLandlord NO MORE on 03.15.18 at 8:30 pm

6438 Marine Drive, West Vancouver paid 1.28 January 2017 ass 1.26m asking 1.38 sold for?

Sorry, I don’t have the sale price but we traipsed around this property several years ago when it was listed for about $500,000. Total dump, rotten roof, rotten floors, tenant refused to open the garage electric heat. I think it had been built as a summer cabin in the 30’s… We really wanted a garage for my retired mechanic husband… but not that one! Yes, someone bought it, but nothing was done to it – poor tenants!

#88 TurnerNation on 03.15.18 at 8:30 pm

The latest dump from “Q Anon” says to Buy Enbridge, XEG, XRE, and CPD :-) ;-)

#89 RECLAIM WHISTLER - RECLAIM KELOWNA on 03.15.18 at 8:31 pm

Whistler is now the playground of the 1% wealthy rich. Few of these owners up there are actually Canadians but rather foreigners from around the world who add NOTHING to our economy compared to local original BC residents.

NOW PAY ATTENTION MAYOR OF KELOWNA. Kelowna is also now a playground of the 1% or soon will be if we don’t stop the rich invaders.

It’s too damn bad for those who have had holiday homes in the OK for years. It’s a new world now and they are the same ones who rejoice over rising home prices. As far as I’m concerned, I don’t care how rich they are, this is OUR home and we want it back.

RECLAIM WHISTLER – RECLAIM KELOWNA

So buy in either place. Nothing stopping you. – Garth

#90 Common sense on 03.15.18 at 8:33 pm

How can the USA “rip” if 4 interest rates take place this year? How many are priced in? 2 ??

Let’s wait and see how the markets respond.

Canada is pooched and the USA right behind them if the themarket drops huge. After all it’s all about “faith and trust” and if too many pensions/people are loosing their shirts, rates will be dropping like slick Willie’s pants at a cheerleader convention….got to save thr masses because the gov’t has no cash unless you want war.

#91 Raging Ranter on 03.15.18 at 8:35 pm

Really Cottingham? “Eventually vulching day will come” sounds like someone on the edge of his seat waiting to buy? Is that what you got out of that?

Sounds more like he’s prepared to wait years. The word ‘eventually’ doesn’t mean what you seem to think it does.

#92 Samson Nights on 03.15.18 at 8:35 pm

#54 MF on 03.15.18 at 7:02 pm
Do you not comprehend that his support is largely a rejection of the failure Kathlynn Wynne more than anything else?
——————————————-

Can’t argue with that. It was the same line of thinking that turfed the last round of arrogant Federal and Alberta (C)onservatives. Rinse and repeat.

It’s a shame we Canadians are never offered the opportunity to vote for a more competent alternative at the ballot box. Instead, we’re too busy penciling out the last crop of arrogant, over-lobbied, serial-lying, incompetent clowns, regardless of political stripe.

In fact, my pencil is already sharpened to vote out the next incoming government.

#93 EP on 03.15.18 at 8:40 pm

mmy on 03.15.18 at 7:29 pm

Who cares about people with two properties when many cannot even afford one, even with an above average wage?

If I have two cars and you have none, and need one, should I be taxed additionally? How does that get you a car? – Garth

—————

A car is not a roof over your head, not quite the analogy there.
Owning multiple cars will not really affect how many or how much car someone else can afford as is the case of housing. A car is partly, optional, housing is not.
Given how limited the supply of housing and land is (in locations that make sense), collecting houses for sport or speculation just because one can does not make it right either.
In times of crisis, societies have hoarding laws too.

There is no crisis. – Garth

#94 RECLAIM WHISTLER - RECLAIM KELOWNA on 03.15.18 at 8:44 pm

#4 “They screw you for life unlike the USA.”

Excuse me. There are 1.4 million US/Canadian citizens in Canada and every single one of them would gladly ditch their US passport rather than remain a FATCA slave for the rest of their lives

#95 SimplyPut7 on 03.15.18 at 8:50 pm

#19 rental property math on 03.15.18 at 6:08 pm

The foreign tax will stay, once he realizes how much money it is providing to the province and the lack of taxes he will be collecting from land transfer taxes due to rapidly decreasing home sales.

He also won’t be collecting as much income taxes from realtors as they are selling fewer homes. And Doug will have to deal with increased pressure from greater golden horseshoe area mayors, asking for more provincial funding for their projects, as they complain about budget shortfalls due to decreased revenue from property taxes as home values fall.

He will probably tell you it can be something he will fix later and later will never come. At most he may reduce it to 10% but it’s such an easy tax grab, I wouldn’t hold my breath that it would be gone instantly after he is elected.

Though if he does remove it right away, Ontarians may be heartbroken when they find out there are not as many foreign investors in the real estate market as they think. At some point, people are going to have to admit, the crazy price valuations for homes was caused mainly by domestic investors/speculators/flippers and not foreigners.

#96 Smoking Man on 03.15.18 at 8:50 pm

In Ontario, more politics. Pivotal election in June. The new alpha male, big-dog PC leader says he will eliminate the 15% Chinese dudes tax. The wily, progressive, interventionist premier wants more social housing, rent controls and – with the mama of all debts – more taxes. It’s shaping up to be a classic right-left battle and if Big Dog gets nipped, you can imagine the results.
…….

The Big dog gets nipped. By what, a wild eyed rabid cat with ugly glasses..
It’s an impossibility.
She’s desperate. Shut down queens park and is getting ready for a throne speech. She should be getting ready for a thrown out speech.

#97 For those about to flop... on 03.15.18 at 8:51 pm

#79 NVLandlord NO MORE on 03.15.18 at 8:30 pm
6438 Marine Drive, West Vancouver paid 1.28 January 2017 ass 1.26m asking 1.38 sold for?

Sorry, I don’t have the sale price but we traipsed around this property several years ago when it was listed for about $500,000. Total dump, rotten roof, rotten floors, tenant refused to open the garage electric heat. I think it had been built as a summer cabin in the 30’s… We really wanted a garage for my retired mechanic husband… but not that one! Yes, someone bought it, but nothing was done to it – poor tenants!

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

Don’t worry,we will find out tonight or in 3 months,either way it will go into the history books on this blog.

Below is the zolo listing showing how they were marketing it.

I remember the old dumpy photo ,so they probably made the right choice.

I will get you an answer as I am a tenacious Tasmanian Tiger and I haven’t gone extinct yet…

M43BC

https://www.zolo.ca/west-vancouver-real-estate/6438-marine-drive

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

#98 Cottingham a bargain on 03.15.18 at 8:51 pm

61 oncebittwiceshy on 03.15.18 at 7:23 pm
Cottingham A Bargain: “The above illustrates precisely why any decline in RE prices in the GTA are temporary and fleeting.

The post above echoes the sentiment of the masses”
<<<<<<<<<<<<<<<<<<<<<<<<<<<

Except, when it actually happens, very few people actually jump in because the psychology is completely different.

The nesting wife is now saying, "Won't it be cheaper next month?"

Cottingham will be a much bigger bargain than even you bargained for.
—————-

I have been reading comments like yours on this blog for a very , very long time . I am very hopeful for others that they ignored them as I did .

Cottingham property was a bargain when it first went for sale at the time it was profiled on this blog as overpriced

Today it is even more “ overpriced “

#99 gfd on 03.15.18 at 8:52 pm

Guys, you know what to do when paranoia strikes.

http://nationalpost.com/pmn/news-pmn/canada-news-pmn/suspicious-real-estate-practices-can-be-reported-using-anonymous-tipline-in-b-c

#100 Blacksheep on 03.15.18 at 8:55 pm

R. Renter # 85,

“Your graph clearly shows that the past 7 times the home sales have dipped down to/or below the 10 year average that they shoot back up past it – 100% correlation!”
——————————
You may not like the message, but is she, incorrect?

#101 Cottingham a bargain on 03.15.18 at 8:55 pm

#91 Raging Ranter on 03.15.18 at 8:35 pm
Really Cottingham? “Eventually vulching day will come” sounds like someone on the edge of his seat waiting to buy? Is that what you got out of that?

Sounds more like he’s prepared to wait years. The word ‘eventually’ doesn’t mean what you seem to think it does.
————

The GTA is chock full of people absolutely obsessed with RE… literally foaming at the mouth ..more so from specific cultural and racial backgrounds so entrenched in their beliefs that RE is “ best “ investment .

Any price decline will be met with voracious buying such that prices will not drop as much as you seem to think

#102 april on 03.15.18 at 8:56 pm

#69 – and who are you?

#103 Stoph on 03.15.18 at 8:58 pm

One thing I haven’t heard mentioned about BC’s proposed speculation tax is that BC residents who are 1%ers will be least affected by the proposed tax as they will be able to use the entire amount of the non-refundable income tax credit. The same cannot be said for the middle class or pensioners…

#104 windsor guy on 03.15.18 at 9:10 pm

Excuse me. There are 1.4 million US/Canadian citizens in Canada and every single one of them would gladly ditch their US passport rather than remain a FATCA slave for the rest of their lives

Just shows your ignorance about the US

#105 Dog in The Fight on 03.15.18 at 9:11 pm

There is no crisis. – Garth

Actually there is. I have led large groups of (mostly) men for many years. You can do many things to the group and your OK. But you dead if one group feels another group is being favored over another. You’ll get a union in the bat of an eye, because that is what they feed on. The crisis is that right or wrong one group -off shore folks- is perceived as being treated better or special, or having an unjust advantage. Garth you can rage against the machine as much as you want, but this is toxic. That is the mix in BC, and if it isn’t stopped it goes bad places.

#106 akashic record on 03.15.18 at 9:12 pm

#77 Howard
#83 YYZer

I thought the “foreign zillionaires” don’t live in Canada.
Their property tax supports who live here.

I am also certain that when you consume anything from third world countries, people there could make an argument that they are subsidizing you with their hard work for much lower wages.

#107 Mark on 03.15.18 at 9:14 pm

“#80 Leo Trollstoy on 03.15.18 at 8:05 pm
Any year now, the $C will shoot past parity!”

Are you completely and utterly mentally ill? Sounds like its time for Garth to screen out people who belong in the mental ward like you obviously do, adding no value to the conversation here whatsoever.

#108 Pete from St. Cesaire on 03.15.18 at 9:25 pm

Meanwhile the US prez freely admits he made up facts about trade when meeting with Mr. Dressup, which tells you how deeply he values and respects Canada
————————————————————————–
Another way to look at it is that Trudeau knows so little about the country he governs that he didn’t know that The Donald was fibbing.

#109 Howard on 03.15.18 at 9:31 pm

#106 akashic record on 03.15.18 at 9:12 pm
#77 Howard
#83 YYZer

I thought the “foreign zillionaires” don’t live in Canada.
Their property tax supports who live here.

I am also certain that when you consume anything from third world countries, people there could make an argument that they are subsidizing you with their hard work for much lower wages.

——————————————

Yup, getting some street food in Rio is exactly the same as buying out entire floors of condos.

Way to keep things in perspective. You sure showed me!

#110 Impending Doom on 03.15.18 at 9:34 pm

Just got back from renewing my mortgage at the local RBC and the grim picture the banker gave me was frightening. Their mortgage origination’s are way down, he’s saying its due to the new B20 rules having to qualify people at near 6% and they’re unable to approve people for HELOCS either. This is in Alberta, I can only imagine BC/ON.

Maybe it’s time to short the banks?

#111 young & foolish on 03.15.18 at 9:37 pm

“Eventually, vultching day will come in real estate.”

No doubt … and with a feeble Loonie too

#112 Mattl on 03.15.18 at 9:43 pm

Love the “housing crisis” folks. To them a housing crisis is not being able to afford a house in Kits or North Van. Nothing more pathetic than a 40-50 year old adult that missed a great buying opportunities the past decade – free money and easy credit – now claiming a crisis and hoping for a government induced crash.

Sorry but the market passed you by, there is no crash that will get you into a home near Kits beach. Any homes on sale will be picked up by those with significant assets that don’t require bank financing and rentals will continue to go up with inflation. Home prices will for sure soften but we aren’t going back to 400k homes in east van.

#113 one two punch on 03.15.18 at 9:45 pm

First comes the house flop knocked down by insane regulations…then comes the recession…then then comes the dark ages for anyone owning a home.

We are 17 months out from fireworks.

Watch what happens this fall.

#114 Edmonton on 03.15.18 at 9:45 pm

Interesting article!

#115 Edmonton on 03.15.18 at 9:47 pm

Should a guy rent or own his residence?? Asking from Edmonton where an average home is $400 000 and average wage is $65 000???

#116 58,400,000 means what in Kelowna? on 03.15.18 at 9:50 pm

Is this the sales volume number of pre-sale buyers who have reversed and backed out of their Kelowna purchase in the last few weeks???

Things happen fast.

Is this why the Mayors are screaming up there?

#117 Terry on 03.15.18 at 9:54 pm

“Are We There Yet”, we are getting close…..

One year in with the Trump administration and Trump’s learning curve and the lag effect to deal with Canada is now over. It’s not going to go well for Canada for years to come I’m afraid. The Americans don’t like the lefties that this country has too many of. Canadian economic growth is declining, foreign investment is drying up, the TSX is still falling way behind the DOW in value, jobs are vanishing, trade deals face uncertainty, tariffs of all kinds at our doorstep, real estate values are declining, sales disappearing, taxes increasing everywhere and our Prime Minister Mr. Dress-up is a world laughing stock. It’s quite embarrassing and shameful to be Canadian these days.

#118 crossbordershopper on 03.15.18 at 9:55 pm

until the canadian tax rules change and you can deduct morgage interest i have no idea why people pay a third of their income in after tax(like Canadian tax) dollars and cant write off a penny.
In the usa, with the recent changes the tax code is very simple and great.
example.
100K (us dollars) income, net from a business, you pay yourself from an s corporation 30K, which is the minimum so you pay the medicade and social security tax of 15.3% so its 4600 in payroll taxes similar to EI and CPP. which for self employed, is only the CPP(10%), but you get a credit so say 8.5%. in Canada.
of the 70K, only 80% is taxable(thanks trump) so its 56K. now for itemized deductions, 401K, $11K off (5500 each for husband and spouse) brings it down to 45K, now the mortgage interest of 25K, in the usa, lets say you have 2 houses, many do. $750K mortgage at 4% equals the 25K which is a write off, so were down to 20K, then 10K in prop tax which is a write off, in Florida no state tax, so were down to 1.3K for the child so everyone has one, so we are at taxable income of 8.7K and at 10% is 870 bucks, thats right 100K income, 870 in total tax liability. without getting fancy with any real estate losses or other stuff. this is straight, own a house, 401K stuff, run a pizzeria or something and make 100K.
so between payroll tax and income tax were at about 5K in total on 100K income, yes there were prop tax too, but you own those assets. and contrary to most perceptions the principal residence of $250K per person with 2 out of 5 years, so you get a free ride on the upside of your principal residences, plural.
so in the USA, compared to Canada, the bigly tax difference over a lifetime is millions.
easy 20K a year in tax savings same income etc.
Banks in Canada make all the money, employers make money, and you drive up and down the 401 to work for a partical board house.
the more you know the details you will like to live in America

#119 BC Assessment on 03.15.18 at 9:58 pm

Confirmed…we are seeing sales coming in around 15% lower than current assessed values right now in BC and yes people will wake up to this come January, 2019 when they get our nice letter in mail.

#120 Raging Ranter on 03.15.18 at 10:00 pm

@Blacksheep, yes she’s incorrect. This is not a buying opportunity.

#121 Pete on 03.15.18 at 10:03 pm

I can not vote for a doug dealer who wants every drug dealer to be able to sell everywhere. Throw in the Chinese tax removal. He lost my vote. Now I just wont vote. Thanks you stupod doug dealer

https://www.theglobeandmail.com/news/toronto/globe-investigation-the-ford-familys-history-with-drug-dealing/article12153014/

Alberta sells booze through private, licensed operators. What’s the issue? – Garth

#122 IHCTD9 on 03.15.18 at 10:05 pm

#40 Trumpocalypse2018 on 03.15.18 at 6:39 pm
BEWARE THE IDES OF MARCH !!!!!!!!!!!!!!

IT STARTS TODAY !!!!!!!!!!!

ECONOMIC UNWINDING AND POLITICAL DISASTER !!!!

WAR !!!!!!

TRUMP MELTDOWN !!!!!!!

GLOBAL CHAOS !!!!!!!!!

GARTH, PLEASE CHANGE YOUR FONT SIZE. I NEED BIGGER CAPITALS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

PREPARE.
—————

I AM ORDERING CONCRETE FOR MY BUNKER TOMORROW!!!!!

#123 Life in the burbs on 03.15.18 at 10:10 pm

The idea that there is a staggering amount of greater fools waiting on the sidelines for a dip in real estate market is wishful thinking at best. When the Titanic went down in the North Atlantic many of the life boats went un filled. Everyone thought the ship was un-sinkable which it had been advertised and prized to be. The band played on the deck, drinks were still being served and all was calm on the Titanic. This all came to a grinding halt when everyone now believed the ship was going down. The RE market now is much like the time that the passengers are enjoying their drink listening to the band play on. Most people have no idea what is about to happen as the mass media would like to have. By the time corrective measures can be made it will be far too late and this RE ship will come down. If everyone had access to cash in 2008 stocks would have never fallen to what they did. There will be no short of people that will want to buy RE there will just not be the cash around to do so.

#124 concerned1 on 03.15.18 at 10:13 pm

Here is what I know, talking to a real estate agent today and getting actual sales listings once deals closed.

Condos outside Vancouver between Langley and Chilliwack all 1 bedrooms.

List $329K–sold $355k
List $289k–sold $333k
List $269k–sold $293k
List $299k–sold $355k

Do the math. These are actual listings, most under 800 square feet. The realtor said many were multiple offers.

Those praying for a day of reckoning will not see it. The new thinking (believe me I was a real estate bear) is that attached dwellings will slowly rise until they cost almost as much as houses–houses will level off–at that point there will be no inventory left to buy of single family homes or attached residences. The time it takes to get a permit to build anything is 2-3 years, so once it is built it is literally swallowed up with the demand. I know a person who works for a developer in Coquitlam. The only thing people wanted to know when they held a public forum on the condo tower developments was “when are they for sale”.

Read the signs people–there is an insatiable need for housing. People are literally living on the street. It will only get worse as more people move to urban centres where the jobs are–where they want to live.

The pressure is from population. Also, look around, many people are making big money.

But go ahead and keep preaching “the sky is falling” on real estate. Ain’t gonna happen.

#125 akashic record on 03.15.18 at 10:24 pm

#109 Howard

“consume anything from third world countries” (a billions of dollar trade), is indeed not exactly the same as “getting some street food in Rio”.

What are you gonna do about it?

#126 Balmuto on 03.15.18 at 10:28 pm

@107 Mark on 03.15.18 at 9:14 pm
“Sounds like its time for Garth to screen out people who belong in the mental ward like you obviously do, adding no value to the conversation here whatsoever.”

Physician, heal thyself!

#127 IHCTD9 on 03.15.18 at 10:28 pm

#61 oncebittwiceshy on 03.15.18 at 7:23 pm
Cottingham A Bargain: “The above illustrates precisely why any decline in RE prices in the GTA are temporary and fleeting.

The post above echoes the sentiment of the masses”
<<<<<<<<<<<<<<<<<<<<<<<<<<<

Except, when it actually happens, very few people actually jump in because the psychology is completely different.

The nesting wife is now saying, "Won't it be cheaper next month?"

Cottingham will be a much bigger bargain than even you bargained for.
———

Exactly. Garth has mentioned this many times. Same thing at the top, folks won't sell for massive profits either fearing being able to buy back in, or trying to time the top.

On the way down, Speculators go broke, and everyone personally knows at least one guy who is getting financially disembowelled. Everyone is sh!ting bricks in fear. News headlines focus on families getting booted out of their homes by the evil banks. Governments “come to the rescue”. Maybe a big bank hits the dirt.

No one is out shopping in this weather.

#128 Peter on 03.15.18 at 10:28 pm

“Meanwhile the US prez freely admits he made up facts about trade when meeting with Mr. Dressup, which tells you how deeply he values and respects Canada”

Can’t help but state the obvious, but not a single Canadian voted for him so why should he care? :)

#129 young & foolish on 03.15.18 at 10:29 pm

Over time, markets rise … whether housing or stocks … excess is always at the margins.

Keep it real, blog dogs ….

#130 Trumpocalypse2018 on 03.15.18 at 10:39 pm

BEWARE THE IDES OF MARCH !!!!!!!!!!!!!!!

THEY ARE HERE NOW !!!!!!

GLOBAL DISASTER LOOMS AROUND EVERY CORNER !!!!!

THE DAYS AHEAD WILL BLOW YOUR MIND !!!!

GARTH, PLEASE CHANGE YOUR FONT SIZE. I NEED BIGGER CAPITALS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! I AM TRYING TO SAVE LIVES !!!!!!!!!!!

DROP EVERYTHING ELSE – PREPARE.

#131 Leo Trollstoy on 03.15.18 at 10:44 pm

Garth correctly advices not to put all your eggs into a piece of real estate

Don’t pick individual homes or stocks for your investment and retirement portfolio kids!

Mark77 Feb 21st, 2014 5:07 pm Well let’s see. The going rate for a million ounces per year of gold production with reasonable long-term reserves is around $8-$10B. Barrick has 8 million ounces/year. The firm has an enterprise value in the $40B range. So just to return Barrick to “replacement cost” on its assets, you’re looking at still a double from these levels (and that’s assuming no devaluation of long-term debt).

Not to say that Barrick can’t go down, but being able to buy long-term assets which have mostly been de-risked for 50 cents on the dollar is very attractive.
https://forums.redflagdeals.com/barrick-gold-corp-1256989/27/#p18397689

Gold bugs always lose

Poor ppl trying to be wealthy

Silly!

#132 Ben Dover on 03.15.18 at 10:46 pm

Theres more to it.

” Ford, who was selected to lead the Opposition last weekend, has said that if the Tories form government after the spring election, he would freeze the minimum wage at $14 rather than bumping it to $15 next year as the Liberals plan.”

https://globalnews.ca/news/4085362/liberals-minimum-wage-tax-cut/

#133 IHCTD9 on 03.15.18 at 10:47 pm

#117 Terry on 03.15.18 at 9:54 pm
“Are We There Yet”, we are getting close…..

One year in with the Trump administration and Trump’s learning curve and the lag effect to deal with Canada is now over. It’s not going to go well for Canada for years to come I’m afraid. The Americans don’t like the lefties that this country has too many of. Canadian economic growth is declining, foreign investment is drying up, the TSX is still falling way behind the DOW in value, jobs are vanishing, trade deals face uncertainty, tariffs of all kinds at our doorstep, real estate values are declining, sales disappearing, taxes increasing everywhere and our Prime Minister Mr. Dress-up is a world laughing stock. It’s quite embarrassing and shameful to be Canadian these days
————-

Couldn’t have said it better myself. Although I would have slung a few “balloon head”, or “dingbat” references at our blockhead leadership in Ottawa (and a “birdbrain” or “Portland shovelling, dunce cap wearing twit” at our local Ontario disgrace for a premiere).

Just about everyday now, I find myself thinking about what can be done to protect myself from a drowning Loonie.

In the end though, I know it’s us voters that are the real problem. Canadians got ultra-stupid somewhere along the line. For me, the act of voting these days is merely a small interruption in preparing my household for the tax and fee Armageddon that is certain to keep building if we don’t somehow get smart in a hurry. Voting used to be a hope for a better day, now it gets done quick so I can get back home and carry on with more important things…

#134 CharlieDontSurf on 03.15.18 at 10:51 pm

#124 concerned1 on 03.15.18 at 10:13 pm
Here is what I know, talking to a real estate agent today and getting actual sales listings once deals closed.

Condos outside Vancouver between Langley and Chilliwack all 1 bedrooms.
_________________________________________

Wow, just, wow. You have not been paying attention at all have you?

#135 A J on 03.15.18 at 10:53 pm

#117 Terry

Lighten up.

#136 Mattl on 03.15.18 at 10:59 pm

“First comes the house flop knocked down by insane regulations…then comes the recession…then then comes the dark ages for anyone owning a home.

We are 17 months out from fireworks”

Ya ok, anyone that owns a home will get crushed. Even the hundreds of thousands of Canadians that have no mortage, or those of us that have significant equity. Or those that bought properties that will hold value in a correction.

Get of your doomer bubble pal. Sure some folks will be in trouble but don’t believr all the fear mongering, most people own one home, with lots of equity, and can make their payments.

This is where all the “vulchers” will fail. Convinced that a Phoenix / Queen Creek style apocalypse is coming to their preferred neighbourhoods they will miss truly good buying opps looking for the absolute bottom. As if someone that missed the huge run up is going to now be astute enough to find the bottom AND be financially ready when the bottom is here.

Based on the numbers I’d say we are getting close to “good time to buy” in parts of the GTA. Lots of inventory and 30% reductions, should be some deals out there.

#137 Boombust on 03.15.18 at 11:17 pm

#124 concerned 1

Nonsense; those sales are going to locals who have been HELOCing their homes to buy “investment condos” because Global News and all the other MSM shills have pumped it into their heads that RE only goes UP.

You’ll see.

#138 Reynolds531 on 03.15.18 at 11:21 pm

#50

Ace, be real careful about how you take all that for granted. Five years ago I was you. You’d be shocked how fast things can change.

#139 the Jaguar on 03.15.18 at 11:23 pm

So these are some comments noted on the blog tonight..:
” families getting booted out of their homes by the evil banks. ”
and this:
“Maybe a big bank hits the dirt.”
and also this:
” Remember in Canada the banks get your first born. You can’t just hand them the keys. They screw you for life unlike the USA.
When our banks lent to the Reichman’s without any due diligence they went and raped the average Canadian for the losses with full government support.”

Would these be the same institutions who helped millions of RESPONSIBLE canadians buy homes, automobiles, assist with educational expenses, provide financial advice including assistance with estate planning, helping their customers through numerous personal difficulties such as divorce, death, educational assistance, safekeeping of valuables, etc. ? Can they meet every need? Probably not. But they do their level best in a tough industry that requires them to be very nimble on their feet in a highly competitive and regulatory environment. They employ thousands of canadians ( YOUR NEIGHBOURS AND FRIENDS) donate millions of dollars to charities, hospitals, students, a multitude of good causes, and OH BY THE WAY..if you have even half a brain and a few dollars by way of good investments you will need to acknowledge your returns are likely tied in great part to you investing WITH CONFIDENCE to their ability to provide good returns on your investment.
Does it need to be stated that in no way were you shot, drugged, kidnapped and dragged into their clutches to do business with them? You could engage with your local loan shark at heart attack rates, put your money in your mattress for security, or get financial advice from anyone on the street or in your personal circle that you feel has your best interests in mind.
Behind the ‘BLAME GAME’ one always finds the same people who cannot or will not take responsibility for their own actions and results.
I am very grateful for the stability and sound management behind the financial institutions we have in Canada, some of which are more than 200 years old. Throw your insults, but they demonstrate ‘GRACE UNDER PRESSURE’, every day and comments like the above demonstrate the writers know ZERO.

#140 Smartalox on 03.15.18 at 11:25 pm

@BC Assessment #119:

if you’ve been following the posts of ‘those who are about to flop…’ and doing the math, the SFD that linger on the market for months and years are only now (finally) selling at about 20% BELOW their assessed values.

If you are who you say you are, then you’ll know that the assessments mailed in January are based on values measured at July 1st of the previous year, which means that they’re six months behind the market!

If values keep dropping at this rate, one wonders what they’ll be like come July 1st. Of course homeowners won’t find out for another six months, and by the time the mail hits the slot, selling prices will have fallen even further.

Look for 50% off the peak prices, this time next year.

#141 Bring it on baby on 03.15.18 at 11:28 pm

https://www.bloomberg.com/news/features/2018-03-15/this-is-what-record-low-unemployment-looks-like-in-america

#142 Blackdog on 03.15.18 at 11:31 pm

@RECLAIM WHISTLER – RECLAIM KELOWNA re: “Excuse me. There are 1.4 million US/Canadian citizens in Canada and every single one of them would gladly ditch their US passport rather than remain a FATCA slave for the rest of their lives”

You can say that again! Fortunately, Canadian financial institutions are not asking for proof of birthplace. When they ask where I was born I give them the name of the city in Canada where I have my earliest childhood memories. I was too young to remember being born in USA to Canadian parents. So far, my truth twisting has worked out alright. Don’t think any of my financial account details have been sent to what is essentially a foreign country to me, yet. For shame Canadian government for not doing more to protect Canadians cursed with a US birthplace and forcing us to have to keep it quiet. First they came for the US born Canadians. Then they came for the … ?

#143 Blackdog on 03.15.18 at 11:34 pm

Actually, they haven’t asked me that question yet. I should have said, when/if they ask, and I must answer, that is what I plan to say. So far, they only ask for a yes/no answer to the question, ‘were you born in the USA’. I say ‘no’ of course. F-them.

#144 Blackdog on 03.15.18 at 11:50 pm

@WindsorGuy #104 re: “Just shows your ignorance about the US ”

The problem is that many Canadians had no clue throughout their working careers that their US birthplace made them US taxpayers on their Canadian income, nor that they were supposed to be filing tax returns to the IRS and Foreign Bank Account Reports to the Financial Crimes Enforcement Network. Then, out of the red, white and blue came FATCA (F&*K All the Canadian Americans) and scared the hell out of a hundreds of thousands of Canadians. You can’t renounce without Uncle Sam being in the know. And you can’t easily come clean to Uncle Sam in many cases, unless you are just starting out in life. There are amnesty programs to consider, taxation issues that get messy when you try to meld two tax systems especially if you are backtracking and did things you never would have done if you’d known you were a US taxpayer. Much easier and a hell of a lot cheaper just to lie about where you were born. Did you know that USA raised it’s renunciation AFTER FATCA from a couple hundred dollars to $2,350 USD? Did you know that USA is the only country in the world to equate birth on it’s soil with tax payer status regardless all other circumstances? There is only one other country in the entire world that has a form of citizenship based taxation – that country is the dictatorship Eritrea. But even Eritrea requires more than just birth on Eritrean soil to be considered a tax payer and a much simpler and cheaper tax scheme. For shame USA. You don’t own us just because we were born there. We don’t want to be US citizens. Why can’t you just let us go easily?

#145 Blackdog on 03.15.18 at 11:52 pm

ooops…its, not its….I hate that typo.

#146 Chelsea on 03.16.18 at 12:09 am

#35 and #75
Yes, I too agree with the Speculation Tax, and have already emailed the Finance Minister (J.C.) directly. I suppose we all have had enough. Why would anyone want to have 2 homes, twice the worry, property taxes and maintenance. I suppose it is a status thing here …. why not rent a summer place as it would be cheaper, and less work. Go figure …. if the Speculation Tax is watered down, I wonder where the vast revenue they hoped for will come from…

#147 joblo on 03.16.18 at 12:37 am

me thinks Kanada needs new name.
FURBAR

#148 Mac on 03.16.18 at 12:38 am

#72 & #76

The very twisted, filthy, immoral leftist thinking that caused us to leave Canada – it’s everywhere and getting worse. You thieves can’t have our money.

#149 Dolce Vita on 03.16.18 at 1:20 am

#110 Impending Doom

Besides the Bank being frightened about its bottom line (lower mortgage originations due to B20), what is frightening to me is that people are being turned down at a 6% qualifying rate and worse yet, THIS in high avg. salary AB.

In the ’80s and ’90s, 6% a very good, if not excellent mortgage rate. Easy to qualify for.

Fewer buyers. Inventories increasing. Prices drop.

#150 Smoking Man on 03.16.18 at 1:31 am

Sky pilots so under rated.

#151 Dolce Vita on 03.16.18 at 1:37 am

#100 Blacksheep
#27 jessica r

The converse is true, 100% of the time.

Glass half empty. Glass half full.

Also true, there ARE NO SOFT LANDINGS in Cdn. RE. Markets which unravel in the 1st year severely and continue on for another year or so, then taper off to a slow decline. A decade long process.

YET AGAIN, FOR THE RE YVR and 416 PUMPERS out in force today (history will repeat and no, RE does not always go up and wet dream on if you think prices will be “sticky” when the dung hits the fan, as in with B20, tax the foreign or domestic or ET rich, etc. dung hitting the fan – you must be all young or selective RE memory neurons have gone missing in your old age):

https://i.imgur.com/uzinX0L.jpg

And yes, jessica r, each crash after many years had prices recover…as in, after many years. But hey, keep telling yourself the glass half full story whilst riding the price roller coaster that is Cdn. RE.

This historically unprecedented Cdn. RE bubble popping will probably end in recession this year.

Which is bad for almost everyone, save the billionaires.

#152 Beso on 03.16.18 at 1:51 am

“You know, people act like we’re crack dealers. Nobody put a gun to anybody’s head and said, “Hey, nimrod, buy a house you can’t afford, and you know what? While you’re at it, put a line of credit on that baby and buy yourself a boat.””

Too Big to Fail (2011) Movie :-)

#153 Dolce Vita on 03.16.18 at 1:53 am

YVR RE Pumpers & 416 and environs, history NEVER repeats:

http://www.burnabynow.com/real-estate/twas-ever-thus-metro-vancouver-real-estate-headlines-30-years-ago-1.23199143

Posting you own personal beliefs and admonitions about RE not going down or going sideways for awhile are just that, beliefs and admonitions, when confronted with reality.

Kind of like Bill Mahr’s dispatches from the “Bubble”.

#154 Tony on 03.16.18 at 1:58 am

Re: #32 Life in the burbs on 03.15.18 at 6:26 pm

They need to increase the foreign buyers’ tax in the golden horseshoe not eliminate it.

#155 Tony on 03.16.18 at 2:12 am

Re: #115 Edmonton on 03.15.18 at 9:47 pm

At the low end of the market if you’re young it makes sense to own since the rent is about twice what the monthly mortgage payment is. This would be resale apartments and resale townhouses. For any type of detached homes it would make more sense to rent and for any new types of properties it would make sense to rent because of the unbelievable differences in prices new over resale. For some reason the people in Alberta will pay double for new over resale where the rest of the country will only pay about a 15 to 20 percent premium. Like I state Albertans need psychiatric help when it comes to buying new over resale not to mention the shoddy workmanship related to new builds.

#156 SoggyShorts on 03.16.18 at 2:13 am

#89 RECLAIM WHISTLER – RECLAIM KELOWNA on 03.15.18 at 8:31 pm

Whistler is now the playground of the 1% wealthy rich. Few of these owners up there are actually Canadians but rather foreigners from around the world who add NOTHING to our economy compared to local original BC residents.

NOW PAY ATTENTION MAYOR OF KELOWNA. Kelowna is also now a playground of the 1% or soon will be if we don’t stop the rich invaders.

It’s too damn bad for those who have had holiday homes in the OK for years. It’s a new world now and they are the same ones who rejoice over rising home prices. As far as I’m concerned, I don’t care how rich they are, this is OUR home and we want it back.
RECLAIM WHISTLER – RECLAIM KELOWNA

*********************************
I don’t think you’ve thought this through….

If all of the taxes and rate increases drop houses close to where you can afford them, why do you think you’ll suddenly be able to outbid a 1%er?

So a few people dump second properties to avoid the tax, so what? If that drops the price by the same amount as the tax, then won’t the property just get snagged by another person richer than you?

It’s a harsh truth, but if the top 1% of Canadians want to have a property in the top 1% of desirable locations, you aren’t going to beat them with taxes. Join the 1% or accept your fate.

I’m also not a fan of the “Kelowna is our home, foreigners(including fellow Canadians keep out” argument. So what? Just because you were born there gives you more rights than another Canadian? What then when there aren’t enough homes for all of the “locals”? Then we look at how many generations you family has there to determine who has more rights?
Where does that end? Hint: we give everything back to the native

#157 Dolce Vita on 03.16.18 at 2:16 am

#129 young & foolish

“Over time, markets rise … whether housing or stocks…”

True on stocks BUT not true on housing.

Refer to my prior chart post of RE prices since 1980 and what happens after a RE crash or “correction” – 7 to 10 years of price stagnation.

Worst case, if I recall correctly for stocks in a prior Blog, is 17 months.

https://i.imgur.com/uzinX0L.jpg

Real enough?

And the current hyper RE bubble, like all others, will pop. But unlike others, the ride down will be just as historic…as all the other bubbles have been.

Bad for the economy. Bad for almost all Cdns. Unfortunate. The BoC should have known people would gorge themselves on cheap plentiful money and did not put the brakes on quickly enough.

Big G has stepped in to do this and what a mess. None of this bodes well for Cdn. RE prices.

#158 Dolce Vita on 03.16.18 at 2:28 am

Still mulling #110 Impending Doom story of the Bank whining about low mortgage originations due to B20 and a 6% qualifying rate in AB of all places that besides having the highest average salary, has some very cheap home prices relative to beyond ridiculous YVR and 416.

If that is true in AB, what the banker said, imagine what is going on in YVR and 416.

Mortgage originations are the underpinning of the RE market. Take that away and their is diminished upward mobility purchasing.

Also means, the rug has probably been taken out under the feet of new or 1st time prospective Condo buyers (the only active RE sales in 416 & YVR, since that’s all they can afford).

If they are seeing mortgage initiations go down in AB, they will be dropping off a cliff in YVR and 416 with their ridiculously high average home prices and lower average salaries, probably even for Condos.

Fewer buyers. Less money to spend. Higher inventories. Prices drop.

This will be bad for the economy and almost everyone. The size of the bubble and its popping will probably trigger a recession. Even worse yet.

#159 Stock Picker on 03.16.18 at 2:43 am

Why are Whistler, Sunshine Coast and Penticton exempt from the NDP cash grab? A look at property records show a majority of ownership lays in the hands of “second owners”. The vacancy rate in Whistler is sub zero….very fishy?

#160 Nonplused on 03.16.18 at 3:19 am

#72 Vancouver Brit

My second car is a TR6. Don’t see how you can tax it it is simply a collectors item and nobody who needs a car would ever buy one. It’s pretty cool though for the 8 days a year I bring it out of the garage.

I also have a motorcycle (well 2), not a Harley like Garth has had one once but never again but also the same applies. When I ride it I do exactly what the government wants in that I reduce my carbon footprint. (Yes you fools motorcycles are extremely efficient even Harleys.) Should I have to pay a second vehicle tax on my motorcycle because I also have a car? You fools! Well I have 2 motorcycles, one is a V-Star that gets 50 mpg (about what a Harley will) and the other is a KLX 250 which gets about 70 mpg, both way better than a Prius. Should these be taxed as second vehicles or should you be taxed on your car until you buy a motorcycle? PS the TR6 doesn’t use much gas either. It’s a pretty small car and generates about 100 hp which my v-star motorcycle can almost do.

#161 Oft deleted much maligned stock.picker on 03.16.18 at 4:46 am

Kudlow says “Trudeau making concessions ‘hand over fist”.

http://business.financialpost.com/news/economy/trudeau-dodged-steel-tariffs-now-hes-angling-to-save-nafta-1

But Trudeau responds….” I won’t negotiate in public”.

So which is it? Trudeau wants butterflies and ponies tied up in a package for his union and climate buddies. I think Gerald Butts and Trudy are going to be hands off for a while. Trudy won’t sit for a while when Trump gets through with him.

But, Pompeo is on record stating that Obama was corrupt and wreckless by giving away benefits to his green buddies. So Trudeau isn’t getting anywhere with his Trump…..except getting bent over and warbling.

#162 Howard on 03.16.18 at 5:18 am

#125 akashic record on 03.15.18 at 10:24 pm

#109 Howard

“consume anything from third world countries” (a billions of dollar trade), is indeed not exactly the same as “getting some street food in Rio”.

What are you gonna do about it?

—————————————

I haven’t the foggiest idea what on earth you’re on about.

Are you now rolling real estate bubbles fueled by offshore money laundering into the umbrella of international trade?

If you’re a RE owner in GTA/GVR I can understand that you like foreign buying pressure, fellow Canadians be damned. But I do not see the foreign buyer tax as a deterrent. It’s simply a valid way for governments to take in more funds from zillionnaires who currently do not pay their fair share relative to their impact on Canadian communities.

#163 under the radar on 03.16.18 at 5:21 am

I have seen this movie before. Sales volumes down from stupid highs, prices drift lower or show no year over year increases. The market is shedding the insanity . Indeed, higher rates and B20 are working , making the price of admission more expensive .
You would be naive to think that a great reckoning is coming in the 416. its not. If you cannot afford the 416 today , you likely will not be able too tomorrow .

#164 Howard on 03.16.18 at 5:46 am

#112 Mattl on 03.15.18 at 9:43 pm

Sounds like you’re trying to convince yourself of something since you leave essentially the same troll comment here regularly.

And what of the 20- or 30-somethings who had the gall to be born too late to take advantage of the great money-laundering bubble? It doesn’t count as a housing crisis when even doctors and lawyers can’t afford to buy homes in Vancouver?

http://www.metronews.ca/news/vancouver/2017/02/22/professionals-cant-afford-to-buy-a-home-in-vancouver.html

#165 Rossco on 03.16.18 at 6:19 am

Was in Niagara Falls NY on the weekend. As is my habit I picked up a local news paper and skimmed through. To my surprise I found and entire page dedicated to recent real estate transactions. Listed where the sellers name the purchaser name or company name, address and believe it or not selling price. Imagine that, creating the ability for a seller to be informed.

#166 Rossco on 03.16.18 at 6:20 am

And more importantly buyer

#167 Wrk.dover on 03.16.18 at 7:21 am

I pulled up the five year chart for Reynolds Aluminium and gosh golly there are a lot of us crafting tin foil hats!

This stock only goes uppa uppa . Except since tax slash.

#168 LivinLarge on 03.16.18 at 7:28 am

“Should I have to pay a second vehicle tax on my motorcycle because I also have a car?”…in the entire history of the world, when has the purpose of any tax been anything other than to raise government operating revenues?

If some form of social engineering is the intent then surcharges and tariffs are so much easier.

#169 Howard on 03.16.18 at 7:31 am

#144 Blackdog on 03.15.18 at 11:50 pm

Not only that, FATCA now requires Canadians – born in Canada, never held US citizenship, never resident in the US, no ties whatsoever – to sign IRS forms on their investment accounts through Canadian banks, even if they don’t hold US securities. From my understanding it essentially gives the IRS the right to peek into the finances of Canadians. An absolute outrage and one of the worst things the Harper government did. The Conservatives claimed at the time they had no choice, that the repercussions from Washington would have been too significant.

#170 LivinLarge on 03.16.18 at 7:33 am

“Like I state Albertans need psychiatric help when it comes to buying new over resale not to mention the shoddy workmanship related to new builds.”…I’m curious, over say the last 30 years, what proportion of current Albertans are financial refugee ex-pats from the East?

#171 NoName on 03.16.18 at 7:39 am

@James

Hello James, funny thing you mentioned “kirhohova pravila” and my speling, let me inform you I studied this in grade 9, yes that is korekt by the time I reached grade 12 which was iffy, I was being learned how to calculate strass on a grid and model it to season of the year. What I absolutely hated was trying to figure it out stres on insulator cups for hi voltage transmission lines on winter… But all that is boring, let me share something with you, only best and brightest kids went there, and we all know I am not one of those, but did I feel like million bucks when I found my name second to the last at the bottom of the list.

Maybe I can’t spel but at least I can communicate, in some neurotic kind of way…

#172 not so liquid in calgary on 03.16.18 at 7:44 am

looking for an innovative way to market your home? check out what this ON man has done:

http://www.coasttocoastam.com/article/zombie-free-home-for-sale-in-canada

#173 TurnerNation on 03.16.18 at 7:51 am

One could pay and go to Barista School (University) or get a Govt job sucking a the teat of endless salaries, benefits and overtime, shaking down the citizenry simply for living their lives.

The near term goal as I see it is thefting 70% of our NET paycheck in taxation. Including via govt induced oligopolies, like Banking, Telecom, Insurance and Transportation sectors.

http://www.cbc.ca/news/canada/toronto/free-parking-overnight-on-toronto-streets-could-become-thing-of-the-past-1.4578675

#174 crowdedelevatorfartz on 03.16.18 at 7:59 am

@#165, 166 Rossco

The Canadian Real Estate Cartel has read your posts….. and they are not amused.

Expect a “visit” from a Realtor named “Rocco”

#175 Steven Rowlandson on 03.16.18 at 8:05 am

Home sales don’t mean a thing except for a chance of getting paid if you are a real estate agent. For them all sales are good and the more sales and the higher the price the better. They have no incentive to restrain prices.

#176 Pulp Faction on 03.16.18 at 8:23 am

You can’t make this up ?

http://www.princegeorgecitizen.com/news/local-news/prince-george-bests-vancouver-on-burden-of-owning-a-house-1.23201467

#177 Hamsterwheelie on 03.16.18 at 8:45 am

Anyone gloating the real estate drop tried to get financing lately? Bank says no, suspect Meridian will say no and waiting to hear what new level of pain the broker (our usual path to a mortgage) will inflict.
I suppose if you have years of high income, a ‘good job’ (whatever that means since anyone can get fired or go bankrupt) loads of savings for a massive downpayment then great – but if that’s the case you won’t be playing with real estate anyway.
Trying to get financing for half the value of a fully restored home we intend to live in with 3 seperate income units has been punishingly hard – expect many individual tales of woe, expect that renting a decent place will be a lot harder (less small landlords, more stringent regulations, more bedbugs in large shared buildings, less people moving out into hime buying market)
As usual – folks in ivory towers will still see the same lovely landscape, people at the bottom can’t go lower so their view remains unchanged too. Anyone who dared to climb to the middle or a few slippery steps above grade will be dodging a financial meltdown and have a fairly grim view ahead. Dang, I sound like chicken little or the naked guy wearing a sandwich board ‘the end is near’.

#178 Wrk.dover on 03.16.18 at 8:47 am

All passengers entering Puerto Plata DR were electronically all ten finger printed when I arrived there last month.

Mining for the USA?

At least Mo Bay Jamaica still only took my picture this month upon arrival. They issue a grainy copy keeper visa to you. Suppose a detailed image was generated for you know where overseas?

Tight tin foil hats do get hot.

#179 Ret on 03.16.18 at 8:54 am

Shameful treatment of the Belgium Royal family by the PM. They came here to honor Canadians for liberating their country 100 years ago, and again after WW2. They also brought along a contingent of their high ranking officials to discuss trade with Belgium. They wished to meet with PM.

I post this link below as the CBC news account glossed over too many of the important details.

http://torontosun.com/opinion/columnists/malcolm-professional-foreign-service-is-anything-but-professional

Where was the PM? Taking a victory lap of steel mills in Hamilton, no doubt looking for Liberal votes for himself and Wynne in the next elections.

There are days when I am truly embarrassed to be a Canadian and this was certainly one of them.

I hope that when Trump finishes up with the PM he can’t sit down for a week.

#180 Tater on 03.16.18 at 9:05 am

#27 jessica r on 03.15.18 at 6:21 pm
Thank-you Mr. Turner for supporting the real estate industry as you do.

Your graph clearly shows that the past 7 times the home sales have dipped down to/or below the 10 year average that they shoot back up past it – 100% correlation!

This is a great window of opportunity to get into the market and build equity for future security. Thank-you again.
—————————————————————
You have all the sophistication I’d expect from a realtor. May want to look at that chart back to 1988 or so. And look at prices and realtor employment numbers at the same time.

#181 maxx on 03.16.18 at 9:16 am

#30 JSS on 03.15.18 at 6:24 pm

“Eventually, vultching day will come in real estate.

How will we be able to tell when to vultch? What are the trigger points? Rules of thumb of when to buy a personal residence or income property?

I’m itching.”

You’ll be itching for a while.
Ratchet back a few decades (before ZIRP became a twinkle in cb’s eyes), take a sample of selling prices in the market of your choice and use the ROI as the 3rd variable.

Mos

#182 Smoking Man on 03.16.18 at 9:18 am

DELETED

#183 Stan Brooks on 03.16.18 at 9:19 am

Poloz’s ‘currency’ keeps sliding to new lows.

The worst performing ‘major’ currency YTD.

#184 Marc the Litigator on 03.16.18 at 9:38 am

#48 Cottingham a bargain on 03.15.18 at 6:55 pm
30 JSS on 03.15.18 at 6:24 pm
Eventually, vultching day will come in real estate.

How will we be able to tell when to vultch? What are the trigger points? Rules of thumb of when to buy a personal residence or income property?

I’m itching
———

The above illustrates precisely why any decline in RE prices in the GTA are temporary and fleeting.

The post above echoes the sentiment of the masses

—————————————————————-

FYI – I’d hazard a guess that Sentiment ≠ Ability for the “masses” to purchase RE. In particular if credit tightens (as we’re beginning to see now)

#185 Cottingham a bargain on 03.16.18 at 9:55 am

174 crowdedelevatorfartz on 03.16.18 at 7:59 am
@#165, 166 Rossco

The Canadian Real Estate Cartel has read your posts….. and they are not amused.

Expect a “visit” from a Realtor named “Rocco”
.———-
LMAO !

You got that one right crowded other than it may be from Gino, Luigi or worse Nunzio.

The Italians have a lot to lose since they are the most represented in the housing mania in all facets in the GTA

#186 SunShowers on 03.16.18 at 10:05 am

If I have two cars and you have none, and need one, should I be taxed additionally? How does that get you a car? – Garth

———————————–

As somebody already pointed out, many people would sell cars to avoid this new tax. It’s also worth noting that the government could (ostensibly) use the revenue collected from this tax to subsidize used car purchases for low income people who do not have cars yet need one.

Oh, so the government should buy people cars? You would have loved East Germany. – Garth

#187 Oft deleted much maligned stock.picker on 03.16.18 at 10:09 am

Think Canada is going strong ? $C loses 28% against Thai Baht over 5 years. 13% lost just this past year. Traveling snowbirds are getting screwed. $1.32 to the USD…..$1.60 vs EU and $1.75 vs GBP. Forget about retiring to paradise with Canadian dollars. The Loon is not a desired currency…..there is no market for it. As I keep saying….get out of Canada. Your life savings are being vaporized. Imagine your grocery bill in five years if you stay? Hyperdeflation of housing prices keep you fooled……in reality your million is toilet paper and retirement will turn you into a prisoner because the currency won’t let you leave…..you’re trapped.

http://cad.exchangeconversions.com/thb/charts

#188 Ace Goodheart on 03.16.18 at 10:12 am

It’s funny to read the comments section here and read about all the folks who seem to believe that government intervention in free markets will make their lives better. That government taxing people for such monstrosities as owning two houses (ie, a house and a ski condo for example) will cause them to have more money themselves, or be able to afford their own ski condo (or cottage).

What I’ve always found is that the more government intervenes in a market, the less fair the market becomes. Take Toronto’s real estate market for example. We have a “cartel” of folks who control access to information which is crucial to a person who is interested in purchasing a house. Items like previous list prices, previous selling prices, how many times a property has been re-listed, and at what prices, is considered private information that the public cannot know.

This is what government intervention in a market does. It creates monopolies, run by well connected people, raises prices for everyone else, and causes people who have assisted a sitting government in staying in power, become wealthy, at the direct and literal expense of everyone else.

The more government intervention you have, the worse it gets. In the worst case (which is happening in BC right now) you end up with a bureaucracy which becomes very wealthy by taxing everyone, and which will likely eventually set itself up as some sort of “social service” that ensures that everyone gets a house. It will of course be an utter and total flop, will cause houses to be granted to the well connected only, and taken to its extremes, you get the “Cuban” type situation, where residing in a house of your own involves being closely connected to the government.

That is what happens. The more government control you have, the less honest the situation, the more you have to “know somebody” to get in, and the higher the prices, the harder it is to actually get the commodity in question, and the scarcer everything becomes.

So, to fix house prices in Canada, the land where people who have no assets and questionable income can spend millions on a house they cannot afford, what do you do?

The answer is easy, and I have said it here probably hundreds of times.

Get rid of notional amortization periods.

What is a notional amortization period? It is a lie. It is a “trick” that banks use to make borrowing millions of dollars like borrowing tens of thousands of dollars. It is basically a fake repayment term that pretends that something is something else. It is calling a spade a shovel or a rake a hoe.

When you borrow money, usually you get a fixed repayment term, and at the end of the term, the money is repaid and you go your way and the lender goes their way and that is the end of it. This is true for every asset other than a house.

When you buy a house (which are now made out of glue, bits and pieces of scrap sawmill refuse, and carbonized fake brick) you have to borrow money which is paid back over a period of 25 years.

However, the actual full amount of the money borrowed is due and payable, in full, in five years.

So what a bank does is “pretend” that the money is due in 25 years, so the payment plan can be set up to look like it is payable in a 25 year period. But really, it is all due in full with interest in 5 years.

At the end of the 5 year period, you then have to “renegotiate” for another 25 year period, and the faking and pretending starts anew. Mortgages can have no end, ever. You add 5 years, at the end of every five year period. You can actually run a mortgage for far longer than a human life, doing this. There can be situations where a house is passed down through generations, never actually being paid for.

If notional amortization periods were banned tomorrow, house prices would immediately drop by about $600,000 per house in Toronto. That would have to happen, because all of a sudden, you would have to pay the house off in full in five years. No one could afford to make the payments on a million dollar house.

So rather than more government regulation and nonsense, what is needed, is less. Get rid of the government regulation and nonsense, call a spade a spade, and houses become more affordable.

#189 LivinLarge on 03.16.18 at 10:13 am

“There are days when I am truly embarrassed to be a Canadian and this was certainly one of them.”…and there are days, like today when I read this drivel, that I realize we haven’t yet done enough to eliminate the mindless haters in out country.

Canada has a rather wonderfully comprehensive free trade agreement with the EU so worrying about trade with Belgium is at best a simple minded canard dog whilstle.

#190 Torontorocks on 03.16.18 at 10:19 am

Our prime minister is the pied piper of the millenials. They want to be and don’t want to to work for it.
Our housing market according to the real estate gurus on CP 24 is going to be low inventory and high prices. Missed the bargains last year they said. and I’ve seen prices on houses at 120% of list already.

#191 Mattl on 03.16.18 at 10:30 am

Howard – nothing troll about my comment, it is true. The idea that everyone home owner will get crushed – which is what I was responding to – and that the benficiary of the crushing will be middle class canadians is crazy.

The lower middle class that stretched to get into home ownership will be crushed, so that other lower middle class Canadians may be able to get into RE at prices they passed on years ago.

And guys like the guy that owns my moms rental, and had twenty other homes will end up wit fourty homes.

I know this opinion triggers a bunch of you. Fwiw, my family income is such that I should be able to buy a home in Kits, or at least Port Moody but there is no crash that will make those places affordable for me, and definately for those with less. So we moved to a more affordable market in the interior. No one has a right to a home in Kits.

#192 gattaca on 03.16.18 at 10:32 am

How the baby boomers — not millennials — screwed America

Gist of the Atlantic article is that The boomers inherited a rich, dynamic country and have gradually bankrupted it. They habitually cut their own taxes and borrow money without any concern for future burdens. They’ve spent virtually all our money and assets on themselves and in the process have left a financial disaster for their children.

They inherited a country they had no part in building, failed to appreciate it, and seized on all the benefits while leaving nothing behind.

This is a generation that is dominated by feelings, not by facts. The irony is that boomers criticize millennials for being snowflakes, for being too driven by feelings. But the boomers are the first big feelings generation. They’re highly motivated by feelings and not persuaded by facts. And you can see this in their policies.

https://www.vox.com/2017/12/20/16772670/baby-boomers-millennials-congress-debt

Ageism at its finest. – Garth

#193 Alistair McLaughlin on 03.16.18 at 10:36 am

@ #180 Tater,

Don’t be too hard on poor Jessica. She has a lot of time on her hands these days. Just not as busy for some reason.

I won’t make fun of her difficulty in interpreting graphs. Obviously sales vacillate above and below a given moving average. What we are looking at now is at least the potential for that moving average itself to start sloping downward. Young Jessica has likely never seen such a scenario, so every dip below the MA is a buy signal for her.

#194 Whistler woes on 03.16.18 at 10:36 am

The effect extremely high prices has never on a community is usually on seen when you live there. For example, two years ago a respected doctor left because of the housing prices and last year a beloved long time doctor also left – between the rising cost of rents for her practice and the high cost of housing she couldn’t afford to live there any more. A new doctor who has a very lucrative practice in Hong Kong opened up a private clinic last year in whistler and divides her time between both locations. The schools cannot find or keep teachers – you’ll get a young one for a year that likes to ski and party but they leave after getting sick of sharing one room with three other people. The teachers that have been in the community forever (and bought a house when they were affordable) are getting ready to retire. So it’s the kids who suffer. The people who own second homes don’t contribute to education, healthcare and other amenities that make a community a great place to live. Again, I see nothing wrong with anyone living wherever they want (Canadian should be able to live wherever they want in their country even if it is their 60th home without being given an extra tax) but I have an issue with unfair playing field – Canadians who pay taxes cannot compete against foreign money where they pay little of no taxes. Whistler can easily go from being a family friendly town that welcomes visitors with open arms to a resort town with no community, a bunch of multimillion dollar houses owned by foreigners (and a few Canadians), and a twenty something age workforce that are housed in corporate housing. Whistler because it is a world class ski hill will never be affordable to the average joe but there is a problem when the top 25% of i Canadian income earners can’t afford to live there. I don’t believe in kicking people out but open up supply for Canadians – hell, price it at $850,000 for a three bedroom so at least some Canadians can buy (like the two doctors that left) – that is almost 2 Million less then it is now for something new.

You folks are so naive to think that taxing the owners of expensive properties will make them inexpensive. – Garth

#195 Howard on 03.16.18 at 10:38 am

#179 Ret on 03.16.18 at 8:54 am

Shameful treatment of the Belgium Royal family by the PM. They came here to honor Canadians for liberating their country 100 years ago, and again after WW2. They also brought along a contingent of their high ranking officials to discuss trade with Belgium. They wished to meet with PM.

I post this link below as the CBC news account glossed over too many of the important details.

http://torontosun.com/opinion/columnists/malcolm-professional-foreign-service-is-anything-but-professional

Where was the PM? Taking a victory lap of steel mills in Hamilton, no doubt looking for Liberal votes for himself and Wynne in the next elections.

There are days when I am truly embarrassed to be a Canadian and this was certainly one of them.

I hope that when Trump finishes up with the PM he can’t sit down for a week.

———————————

Appalling disrespect towards our Belgian allies.

My revulsion for this man-child grows almost daily.

#196 Kaganovich on 03.16.18 at 10:38 am

It’s just one of the first, albeit clumsy, attempts to tax wealth rather than income. Get used to it, more to come lol.

I doubt it. Guess you’ll just have to earn your own wealth instead of taking that which belongs to others. – Garth

#197 TEMPLE on 03.16.18 at 11:05 am

You folks are so naive to think that taxing the owners of expensive properties will make them inexpensive. – Garth

Which is it, Garth? First you are complaining about the consequences of the speculation tax (i.e., the prospective cratering BC’s economy because it tanks real estate prices and investment) and now you are saying it won’t work?

Why do you think it is OK for a whole province to turn into Banff, anyhow? Regular people can’t live in BC because of out-of-province money flooding in from speculators who are benefiting from unfairly biased monetary policy, corruption, pandering governments, ineffective controls, etc. Sure, maybe a few unlucky innocents of middling wealth are caught up in this tax, too, but…well…who cares? Sometimes being a decent human means a little bit of sacrifice.

#198 Howard on 03.16.18 at 11:14 am

#191 Mattl on 03.16.18 at 10:30 am

You’re moving the goalposts. I was not talking about the “lower middle class”. Highly educated professionals – doctors, among them – cannot afford homes in Vancouver.

Are doctors and lawyers considered lower middle class now? Did Canada’s already crappy banana republic job market become even more lopsided since I left that people in the 95th percentile of income are now just one step up from poverty?

#199 Guy in Calgary on 03.16.18 at 11:30 am

#52 acdel on 03.15.18 at 7:02 pm
#23 Guy in Calgary

As we are enduring another blizzard today and another one approaching on Saturday. Good work-out!

Happy belated Garth!
—————————————————————

I know the recent warm temps were such a damn tease. Oh well a good weekend to hit the slopes and drink some Guinness.

#200 Eks dee Siple on 03.16.18 at 11:46 am

#109 Howard… Yup, getting some street food in Rio is exactly the same as buying out entire floors of condos.

Way to keep things in perspective. You sure showed me!

—– What YYZer showed you was that you either have a reading comprehension disability or you think nobody can detect your logically fallacious strawman tendency. Hint: YYZer wasn’t referring to eating street food in Rio. BTW, how’s Paris this time of year?

#201 SunShowers on 03.16.18 at 11:47 am

Oh, so the government should buy people cars? You would have loved East Germany. – Garth

—————————————–

Governments all over the world routinely use tax revenue to “buy people things” from housing and food to school supplies and pet spaying/neutering through SUBSIDIES (not quite the same as buying it FOR people) for low income earners.

The precedent has been long set, this has been standard, acceptable practice for decades, so you can tone down the red scare, we get enough of that from the USA these days anyhow.

No, really. You believe people should get car subsidies? – Garth

#202 NoName on 03.16.18 at 11:54 am

And today this pops up in my news feed. Unbelievable chart.

https://www.axios.com/americas-oil-export-boom-is-one-for-the-history-books-0bf2a06f-ab5d-4823-b59c-3981a1ef8e15.html

#203 Eks dee Siple on 03.16.18 at 11:59 am

#117 Terry… One year in with the Trump administration and Trump’s learning curve and the lag effect to deal with Canada is now over. It’s not going to go well for Canada for years to come I’m afraid. The Americans don’t like the lefties that this country has too many of. Canadian economic growth is declining, foreign investment is drying up, the TSX is still falling way behind the DOW in value, jobs are vanishing, trade deals face uncertainty, tariffs of all kinds at our doorstep, real estate values are declining, sales disappearing, taxes increasing everywhere and our Prime Minister Mr. Dress-up is a world laughing stock. It’s quite embarrassing and shameful to be Canadian these days.
——-
All of this is the direct and indirect result of the Harper Government’s one-trick pony, banana republic style of leadership over a lost decade of opportunity of which we are now seeing chickens roosting on the fast-fading embers of Oil and Real Estate. Staking your hopes on a damn pipeline FFS, what could go wrong? Everything has. Are there still Cons in Alberta NOT holding their heads in shame for what they’ve wrought on the rest of Canada? Even Garth disowned you, crossed the floor and then just gave up shorty after. The Cons ruined Canada. And now those remaining in hicksville have the gall to blame everyone else? Just shut up already.

#204 Ret on 03.16.18 at 12:00 pm

It seems that certain Blog Dogs feel that anyone who expresses any hopes or dreams for Canada’s future or is the least bit critical of how governments or the country works, is immediately branded as a Canadian hater and told not to let the door hit them in the ass on the way out.

If you want Canada to be a better country for all, it takes work and effort by all the citizens to make personal and political choices that lead to those outcomes.

Canadian thrift, hard work, ingenuity and respectfully listening to the viewpoints of others, even if in disagreement with them, seems to have become irrelevant by too many Canadians.

I personally am concerned that we are becoming more and more a fractured country on many levels, lead by our own personal self serving special interests. We seem to dislike each other in ways that we never have before.

Special interests have a place for sure just as the betterment of all Canadians does. Compromises have to be made between the competing special interests and the improvements needed to secure a long term future for all Canadians.

#205 Ace Goodheart on 03.16.18 at 12:07 pm

RE: “You folks are so naive to think that taxing the owners of expensive properties will make them inexpensive. – Garth”

Tax always makes everything more expensive. The more taxes, the more everything costs. I do not know any situation in history where a tax has brought prices down, or resulted in items being more affordable for the general public. Taxation transfers wealth from the public to the government. Usually that wealth is then transferred into private hands, with those private hands being well connected hands.

The more tax, the richer a small group of society gets, at the expense of everyone else.

If you want to benefit from excessive taxation, then you need to get yourself into the contracting that goes on when governments decide to spend the money they collect. For example, when T2 announces millions for some social justice issue or other, you want to be on the other side of that particular tap (so when it starts flowing, you start collecting).

Governments do not just go out and start handing out $100.00 bills to the needy. Everything is done through organizations and associations, professional lobbyists and the well connected folks who got the government into power in the first place. Each time millions are announced, there are sticky hands on the other side of the pipe waiting to receive.

#206 Deal on 03.16.18 at 12:10 pm

@192 gattaca: this is true. Boomers were utterly dominant for virtually their entire adult lives and now they’re being displaced by a larger generation that they have mocked for 20 years. They should expect to be treated with the same respect they showed to their grandparents back in the 60s when they were dropping out and blowing pot smoke in everyone’s face.

Generalize much? – Garth

#207 Alistair McLaughlin on 03.16.18 at 12:19 pm

@#198 Howard:

You’re moving the goalposts.

That’s what he does here. Every day.

He’s also convinced himself that a severe housing correction will hurt renters more than homeowners, of whom “95% will be just fine.” How far must one move the goalposts to reach that conclusion? (Answer: Very far.)

#208 Marc the Litigator on 03.16.18 at 12:28 pm

#76 Joe on 03.15.18 at 7:55 pm
[i]Who cares about people with two properties when many cannot even afford one, even with an above average wage?

If I have two cars and you have none, and need one, should I be taxed additionally? How does that get you a car? – Garth[/i]

What a ridiculous counter-argument. First of all, there are plenty of cars to go around while space is in chronically short supply. Second, a car is a nice-to-have while shelter is a fundamental human need. Third, taxing additional properties will make them less desirable and therefore decrease both demand and prices.

There is no shortage of space in Canada and transportation is essential to most people’s lives. Taxing anything does not make it cheaper. Stop flailing. Looks pathetic. – Garth

————————————————————–

When people say “they’re not making any more land” i like to point them here… https://geopoliticalfutures.com/population-density-of-canada/

To Garth’s point – if any of that land is to ever be used transportation (high speed *think bullet train or Autobhan*) will be essential

#209 Guy in Burnaby on 03.16.18 at 12:30 pm

How likely do you think it is that fear of missing out will be exploited on the way down, the way it was on the way up?

Yesterday I received two pieces of real estate mail (this used to be a common occurrence when prices were on the rise, but has slowed to a trickle over the past year). One was from REW, a kind of “Neighbourhood report”, informing me that in the last two months, the average list price in my neighbourhood has been 1.7 million dollars, but the average sale price has fallen to 1.47. Next, a local Realtor(tm) flyered us with the listing for a house listed at 1.3 million that just sold for 1.25 million, with CALL ME!!!!! written in all caps in sharpie, followed by his contact information. Together, it almost feels like a “last chance to take your tax-free winnings and run” kind of pitch. Seems like a lot of my older relatives approaching (or having already delayed) retirement, with their houses as their primary investment vehicles, would be especially vulnerable to this.

#210 Tater on 03.16.18 at 12:32 pm

#188 Ace Goodheart on 03.16.18 at 10:12 am
It’s funny to read the comments section here and read about all the folks who seem to believe that government intervention in free markets will make their lives better. That government taxing people for such monstrosities as owning two houses (ie, a house and a ski condo for example) will cause them to have more money themselves, or be able to afford their own ski condo (or cottage).

What I’ve always found is that the more government intervenes in a market, the less fair the market becomes. Take Toronto’s real estate market for example. We have a “cartel” of folks who control access to information which is crucial to a person who is interested in purchasing a house. Items like previous list prices, previous selling prices, how many times a property has been re-listed, and at what prices, is considered private information that the public cannot know.

This is what government intervention in a market does. It creates monopolies, run by well connected people, raises prices for everyone else, and causes people who have assisted a sitting government in staying in power, become wealthy, at the direct and literal expense of everyone else.

The more government intervention you have, the worse it gets. In the worst case (which is happening in BC right now) you end up with a bureaucracy which becomes very wealthy by taxing everyone, and which will likely eventually set itself up as some sort of “social service” that ensures that everyone gets a house. It will of course be an utter and total flop, will cause houses to be granted to the well connected only, and taken to its extremes, you get the “Cuban” type situation, where residing in a house of your own involves being closely connected to the government.

That is what happens. The more government control you have, the less honest the situation, the more you have to “know somebody” to get in, and the higher the prices, the harder it is to actually get the commodity in question, and the scarcer everything becomes.

So, to fix house prices in Canada, the land where people who have no assets and questionable income can spend millions on a house they cannot afford, what do you do?

The answer is easy, and I have said it here probably hundreds of times.

Get rid of notional amortization periods.

What is a notional amortization period? It is a lie. It is a “trick” that banks use to make borrowing millions of dollars like borrowing tens of thousands of dollars. It is basically a fake repayment term that pretends that something is something else. It is calling a spade a shovel or a rake a hoe.

When you borrow money, usually you get a fixed repayment term, and at the end of the term, the money is repaid and you go your way and the lender goes their way and that is the end of it. This is true for every asset other than a house.

When you buy a house (which are now made out of glue, bits and pieces of scrap sawmill refuse, and carbonized fake brick) you have to borrow money which is paid back over a period of 25 years.

However, the actual full amount of the money borrowed is due and payable, in full, in five years.

So what a bank does is “pretend” that the money is due in 25 years, so the payment plan can be set up to look like it is payable in a 25 year period. But really, it is all due in full with interest in 5 years.

At the end of the 5 year period, you then have to “renegotiate” for another 25 year period, and the faking and pretending starts anew. Mortgages can have no end, ever. You add 5 years, at the end of every five year period. You can actually run a mortgage for far longer than a human life, doing this. There can be situations where a house is passed down through generations, never actually being paid for.

If notional amortization periods were banned tomorrow, house prices would immediately drop by about $600,000 per house in Toronto. That would have to happen, because all of a sudden, you would have to pay the house off in full in five years. No one could afford to make the payments on a million dollar house.

So rather than more government regulation and nonsense, what is needed, is less. Get rid of the government regulation and nonsense, call a spade a spade, and houses become more affordable.
—————————————————————–

What are you gibbering about? When you get a 25 year amortization mortgage with a term of 5 years, on renewal the amortization is typically rolled down to 20 years. This continues until the mortgage is paid off.

This basic fact destroys your argument.

Mortgages with terms shorter than their amortization period have nothing to do with the bubble in home prices. They might, in fact, decrease house prices somewhat as interest rate risk on renewal keeps people from borrowing at the absolute limit.

#211 Howard on 03.16.18 at 12:33 pm

#200 Eks dee Siple on 03.16.18 at 11:46 am

It wasn’t YYZer, it was akhashish (or whatever his screen name is, I can’t be bothered to scroll up).

He appears to be lumping a real estate bubble fuelled at least partially by money laundering in with international trade, which I find quite absurd. The manufacture of Western consumables in the Third World has pulled hundreds of millions, even billions, of said Third Worlders out of poverty. We get cheaper goods, they get wages for unskilled labour.

I’m not really sure what Canada get out of its lax approach to offshore RE owners. As stated, they don’t pay much tax. Cities become hollowed out. Young people forced to leave. The obvious benefit is for those lucky enough (mostly Boomers) to have the means and opportunity to buy cheap housing stock and smugly watch the growth in their unearned gains. Given that there is a 70% ownership rate in Canada, maybe that’s an acceptable trade-off? Perhaps, but since virtually none of that trade-off goes to anyone under the age of 35-40, don’t expect them to like it or support policies to keep the party (to which they weren’t invited) going forever.

Paris is lovely today. 14C and mostly sunny. Chilly and rainy this weekend though.

#212 IHCTD9 on 03.16.18 at 12:33 pm

#203 Eks dee Siple on 03.16.18 at 11:59 am

All of this is the direct and indirect result of the Harper Government’s one-trick pony, banana republic style of leadership over a lost decade of opportunity of which we are now seeing chickens roosting on the fast-fading embers of Oil and Real Estate. Staking your hopes on a damn pipeline FFS, what could go wrong? Everything has. Are there still Cons in Alberta NOT holding their heads in shame for what they’ve wrought on the rest of Canada? Even Garth disowned you, crossed the floor and then just gave up shorty after. The Cons ruined Canada. And now those remaining in hicksville have the gall to blame everyone else? Just shut up already.
________________

So you would have us believe that the Liberals want zero pipelines, Politicians control global commodities markets, Trudeau is doing a great job attracting business investment to Canada, and the Libs are working hard to reduce our Federal deficits and debt?

You want us to believe that Trudeau isn’t a total moron, and a colossal embarrassment on the world stage?

I’m trying hard to see what good Trudeau and Co. have done for the average Canadian – I really am…

#213 James on 03.16.18 at 12:38 pm

#171 NoName on 03.16.18 at 7:39 am

@James

Hello James, funny thing you mentioned “kirhohova pravila” and my speling, let me inform you I studied this in grade 9, yes that is korekt by the time I reached grade 12 which was iffy, I was being learned how to calculate strass on a grid and model it to season of the year. What I absolutely hated was trying to figure it out stres on insulator cups for hi voltage transmission lines on winter… But all that is boring, let me share something with you, only best and brightest kids went there, and we all know I am not one of those, but did I feel like million bucks when I found my name second to the last at the bottom of the list.

Maybe I can’t spel but at least I can communicate, in some neurotic kind of way…
_________________________________________
Sed communicare velis nomen acquireret Disce quam ut exponentia

#214 Deal on 03.16.18 at 12:46 pm

Going forward, when boomers accuse Millennials of “ageism” should we just dismiss them as entitled snowflakes?

What goes around comes around.

No excuse. – Garth

#215 Bytor the Snow Dog on 03.16.18 at 12:52 pm

(With apologies to Barry Manilow I Write the Songs)

He’s been alive…forever,
He writes the Greater Fool Blog,
He puts the words on the monitor… together,
He is Turner,
And he writes the blog.

He writes the blog that makes the Realtors® cringe,
He writes the blog that makes a Smoking Man bi-inge,
He writes the blog that makes the Moisters cry,
He writes the blog, he writes the blog…

#216 IHCTD9 on 03.16.18 at 12:54 pm

#204 Ret on 03.16.18 at 12:00 pm
It seems that certain Blog Dogs feel that anyone who expresses any hopes or dreams for Canada’s future or is the least bit critical of how governments or the country works, is immediately branded as a Canadian hater and told not to let the door hit them in the ass on the way out.

If you want Canada to be a better country for all, it takes work and effort by all the citizens to make personal and political choices that lead to those outcomes.

Canadian thrift, hard work, ingenuity and respectfully listening to the viewpoints of others, even if in disagreement with them, seems to have become irrelevant by too many Canadians.

I personally am concerned that we are becoming more and more a fractured country on many levels, lead by our own personal self serving special interests. We seem to dislike each other in ways that we never have before.

Special interests have a place for sure just as the betterment of all Canadians does. Compromises have to be made between the competing special interests and the improvements needed to secure a long term future for all Canadians.
__________________________________________

Yes Sir. Canadians used to be a pretty stalwart bunch. Now we blow away in a stiff breeze.

No one understands what the real priorities are for a society these days. Look at what the Libs did with taxes in NL. This kind of insanity will be coming to the entire country if we keep electing dunce cap sporting politicians like Trudeau and Wynne.

I’m not sure there is a will among Canadians themselves, or any of our political parties to get on the problems that are looming.

I’ll steal a line from Trumpocalypse: “PREPARE”

#217 James on 03.16.18 at 12:54 pm

B-20 may go bye, bye after a Ford nation unleashes open foreign market purchases again and unfettered free market. So long Wynn. It could work if Ford surround himself with tactful skilled politicians. T2 is going down in flames and the whole cycle starts again. We will have to wait until we can stoke the flames on October 21, 2019 though. If we can make it to 2019. I’ll hoist a few tomorrow wishing T2 a not so fond bon voyage in 2019. If it’s drowning you’re after, don’t torment yourself with shallow water.

#218 Ace Goodheart on 03.16.18 at 12:56 pm

RE: #210 Tater on 03.16.18 at 12:32 pm

“What are you gibbering about? When you get a 25 year amortization mortgage with a term of 5 years, on renewal the amortization is typically rolled down to 20 years. This continues until the mortgage is paid off.

This basic fact destroys your argument.”

You can get, and are usually offered, another 25 year term on renewal. The offer usually comes along with a comment from [email protected] that “your monthly payments will be lower, isn’t that nice?” or something to that effect. I don’t know if many people will take higher monthly payments for a 20 year term. Perhaps? Seems unlikely. Most people don’t view a mortgage as debt.

“Mortgages with terms shorter than their amortization period have nothing to do with the bubble in home prices. They might, in fact, decrease house prices somewhat as interest rate risk on renewal keeps people from borrowing at the absolute limit.”

I don’t think you’re seeing the big picture. You do see a bit of it with your comment “interest rate risk on renewal keeps people from borrowing to the absolute limit”. That is true.

However, having people pay off the entire mortgage amount by the end of the mortgage term (ie, after five years) would therefore decrease house prices more? Would it not?

Your argument being, that if there is a risk that a person won’t be able to renew a mortgage, then people will be borrowing less, and house prices will go down?

Then, it would follow logically, that if people COULD NOT borrow more than they could pay off in five years, house prices would go down even more?

We seem to agree that the maximum house price is determined by how much a person can borrow. So we are getting somewhere (although slowly).

I call that price point the “Goldilocks” price point. Beyond that point, no one can afford the house anymore, and prices stagnate at that price point.

#219 Shawn on 03.16.18 at 1:06 pm

Do you still think the S&P500 is overvalued?

#220 Reynolds531 on 03.16.18 at 1:06 pm

Ace, they have 25 year mortgage terms in the USA. And it can reduce interest rate risk. But their housing looks an awful lot like ours.

#221 James on 03.16.18 at 1:13 pm

#233 BillyBob on 03.15.18 at 3:16 pm
#215 James on 03.15.18 at 1:39 pm
#192 Smoking Man on 03.15.18 at 11:14 am
========
Just wanted to say I enjoy your “angry little man” schtick, it amuses me to see you continually owned by Smoking Man.
I assume it’s all an act, no one could be as genuinely angry about nothing as you always seem to be…? If it’s real, then man, SM really IS the king! hahah!
__________________________________________
You are correct he is definitely the king of something! At 1.90 metres in height I don’t feel little but whatever meh. Owned? Nope just big enough to say as I feel fit whenever I want. I just like to point out the truth to balance out the yin yang with regard his brazen disregard for conventional moral thought.
Thanks for your input BillyBob Those who laugh last think slowest!

#222 IHCTD9 on 03.16.18 at 1:14 pm

#202 NoName on 03.16.18 at 11:54 am
And today this pops up in my news feed. Unbelievable chart.

https://www.axios.com/americas-oil-export-boom-is-one-for-the-history-books-0bf2a06f-ab5d-4823-b59c-3981a1ef8e15.html
________________________________________

The USA now has one of the largest proven recoverable Oil reserves in the world. I believe that spike is mainly due to the USA making legal to fully export Oil again. Recent developments.

That chart does not surprise me a bit. They’ve been hammering this drum since fracking was proven out. The USA was once the largest producer and exporter in the world with massive crude deposits over 100 years ago. They are now going back to all of these conventionally drained deposits and fracking the hell out of them. They’ll get all they got in the 19th and 20th century out of them again – and then some.

Don’t forget the implications for Canada. Canada was the single largest supplier of Oil to the USA in the world for years. Now they have as much, if not more than us. They also build pipelines to get it to sea. Their oil is light and sweet, you have to heat ours up to 200 deg F to get it to pour out of a bucket.

This development is not spoken of much in Canadian Media, but the implications are MASSIVE for the Canadian oil industry.

#223 concerned1 on 03.16.18 at 1:15 pm

#134 CharlieDontSurf on 03.15.18 at 10:51 pm

Wow, just, wow. You have not been paying attention at all have you?
___________________________________

Lol. Yes, I have been paying attention and have profited handsomely off the real estate bull market. Sounds like you are sore about losing though.

#224 NoName on 03.16.18 at 1:15 pm

#182 Smoking Man on 03.16.18 at 9:18 am
DELETED

What was that, you are wondering how stupid are those that didn’t make list?

#225 James on 03.16.18 at 1:20 pm

#216 IHCTD9 on 03.16.18 at 12:54 pm

#204 Ret on 03.16.18 at 12:00 pm
It seems that certain Blog Dogs feel that anyone who expresses any hopes or dreams for Canada’s future or is the least bit critical of how governments or the country works, is immediately branded as a Canadian hater and told not to let the door hit them in the ass on the way out.

If you want Canada to be a better country for all, it takes work and effort by all the citizens to make personal and political choices that lead to those outcomes.

Canadian thrift, hard work, ingenuity and respectfully listening to the viewpoints of others, even if in disagreement with them, seems to have become irrelevant by too many Canadians.

I personally am concerned that we are becoming more and more a fractured country on many levels, lead by our own personal self serving special interests. We seem to dislike each other in ways that we never have before.

Special interests have a place for sure just as the betterment of all Canadians does. Compromises have to be made between the competing special interests and the improvements needed to secure a long term future for all Canadians.
__________________________________________

Yes Sir. Canadians used to be a pretty stalwart bunch. Now we blow away in a stiff breeze.

No one understands what the real priorities are for a society these days. Look at what the Libs did with taxes in NL. This kind of insanity will be coming to the entire country if we keep electing dunce cap sporting politicians like Trudeau and Wynne.

I’m not sure there is a will among Canadians themselves, or any of our political parties to get on the problems that are looming.

I’ll steal a line from Trumpocalypse: “PREPARE”
________________________________________
“Prepare” is a prudent piece of advice for everyone in this country during these tumultuous times. Perhaps we are stalwart to the end a Mari usque ad Mare . However in Ontario we are Ut Incepit Fidelis Sic Permanet that could be our undoing!

#226 Ace Goodheart on 03.16.18 at 1:27 pm

#220 Reynolds531 on 03.16.18 at 1:06 pm

“Ace, they have 25 year mortgage terms in the USA. And it can reduce interest rate risk. But their housing looks an awful lot like ours.”

True. The interesting thing about what I am trying to say, is that no one can even fathom or comprehend what I am suggesting.

Everyone on here is like “houses are too expensive, we need to tax the rich…that will bring prices down.”

I am advocating for a much simpler approach.

Ergo, force everyone who owns a house, or is planning to purchase one, to pay down their entire mortgage, in the actual mortgage term (usually five years).

Watch prices crater to depths you have not seen since 1956.

I am illustrating a point. There is a reason why houses cost so much. When you are conducting blind auctions for a house, with the auctions being run by commissioned sales people who earn more if the price goes higher, and you have every possible tool in place to ensure that the people buying the house, can borrow to the stratosphere and never, ever have to worry about actually paying all of the money back again, then you will have very high house prices.

Take away the real estate cartels, and let everyone know everything that is going on when a house is being sold, and take away people’s ability to borrow without consequence, or obligation to pay back what they are borrowing, and voila, you have low house prices.

I am not saying do that. I am saying, if you are not doing that, don’t complain that prices are high. And don’t tax people for stupid reasons. We have enough problem with governments fleecing us and sending our money to special interest groups. Why ask them to tax us more? Dear Government, please take more of my money, you don’t take enough already? Are people absolutely nuts?

#227 Bob in India on 03.16.18 at 1:28 pm

Hmmmmmmm, if there is a 25 percent tariff on Canadian steel by the US, then Hamilton will be nailed. One can only imagine what would happen to the city finances in the short term…and my property value.

Based on what I see here in India every day sure is tempting to stay and start over…

#228 Shawn on 03.16.18 at 1:30 pm

Contrary to popular belief the $US is going to go up with the S&P500. We’re in a secular bull market for $US.

#229 Centurion on 03.16.18 at 1:31 pm

Remember that downtown Toronto craphole that went for $675K? Apparently many people on Reddit believe it’s quite the deal:

https://www.reddit.com/r/toronto/comments/84onw8/rundown_toronto_row_house_mocked_on_social_media/

#230 Guy in Calgary on 03.16.18 at 1:34 pm

#76 Joe on 03.15.18 at 7:55 pm
[i]Who cares about people with two properties when
If I have two cars and you have none, and need one, many cannot even afford one, even with an above average wage?
should I be taxed additionally? How does that get you a car? – Garth[/i]

What a ridiculous counter-argument. First of all, there are plenty of cars to go around while space is in chronically short supply. Third, taxing additional properties will make them less desirable and .Second, a car is a nice-to-have while shelter is a fundamental human therefore decrease both demand and pricesneed.
———————————————————

“space is in chronically short supply” – LOL. Leave your bubble and see how untrue that is.

“Second, a car is a nice-to-have while shelter is a fundamental human need. ” – shelter is indeed a human need. Owning the shelter is not.

“many cannot even afford one, even with an above average wage?” – Well that depends where you live. Same thing in San Francisco, NY, Tokyo, Sydney, London… anywhere desirable. BC is desirable hence the price. Plenty of affordable cities in Canada with good paying jobs.

“therefore decrease both demand and prices” – you think it will be the middle class family with $70k take home vulching properties $1M (post crash) properties? The rich will just be getting bargains while the province goes into recession.

I should have been born a boomer.

#231 Shawn on 03.16.18 at 1:34 pm

A reasonable projection based on historical timelines is S&P500 10 000 by 2030…

#232 IHCTD9 on 03.16.18 at 1:40 pm

#201 SunShowers on 03.16.18 at 11:47 am
Oh, so the government should buy people cars? You would have loved East Germany. – Garth

—————————————–

Governments all over the world routinely use tax revenue to “buy people things” from housing and food to school supplies and pet spaying/neutering through SUBSIDIES (not quite the same as buying it FOR people) for low income earners.

The precedent has been long set, this has been standard, acceptable practice for decades, so you can tone down the red scare, we get enough of that from the USA these days anyhow.

No, really. You believe people should get car subsidies? – Garth
____

If so, I’ll take a $130,000.00 subsidy on a new 2018 Corvette Z06 Carbon 65 Edition, complete with the Z07 upgrade. 7 speed standard transmission please.

#233 Tater on 03.16.18 at 1:45 pm

#218 Ace Goodheart on 03.16.18 at 12:56 pm
RE: #210 Tater on 03.16.18 at 12:32 pm

“What are you gibbering about? When you get a 25 year amortization mortgage with a term of 5 years, on renewal the amortization is typically rolled down to 20 years. This continues until the mortgage is paid off.

This basic fact destroys your argument.”

You can get, and are usually offered, another 25 year term on renewal. The offer usually comes along with a comment from [email protected] that “your monthly payments will be lower, isn’t that nice?” or something to that effect. I don’t know if many people will take higher monthly payments for a 20 year term. Perhaps? Seems unlikely. Most people don’t view a mortgage as debt.

“Mortgages with terms shorter than their amortization period have nothing to do with the bubble in home prices. They might, in fact, decrease house prices somewhat as interest rate risk on renewal keeps people from borrowing at the absolute limit.”

I don’t think you’re seeing the big picture. You do see a bit of it with your comment “interest rate risk on renewal keeps people from borrowing to the absolute limit”. That is true.

However, having people pay off the entire mortgage amount by the end of the mortgage term (ie, after five years) would therefore decrease house prices more? Would it not?

Your argument being, that if there is a risk that a person won’t be able to renew a mortgage, then people will be borrowing less, and house prices will go down?

Then, it would follow logically, that if people COULD NOT borrow more than they could pay off in five years, house prices would go down even more?

We seem to agree that the maximum house price is determined by how much a person can borrow. So we are getting somewhere (although slowly).

I call that price point the “Goldilocks” price point. Beyond that point, no one can afford the house anymore, and prices stagnate at that price point.
————————————————————–

No. Just no. If the rate stays the same, after paying a 25-year mortgage for 5 years, when you roll to a 20-year amortization your payment stays the same.

The bank might offer rolling your loan to another 25y, but almost no-one does this.

#234 Newcomer on 03.16.18 at 1:50 pm

I usually think of the housing problem as a speculative bubble based on greed, but recently I’m kicking around the idea of it also being a type of potlatch spending.

In addition to the social prestige of conspicuous consumption, there is a configuration in the human mind that gets pleasure from spending. You see this when people engage in “retail therapy” and in the odd practice of “findom” (https://en.wikipedia.org/wiki/Financial_domination) in which men give gifts and money to prostitutes, not in exchange for favors, but rather in exchange for more demands for money. It is also said that gambling addictions are driven not so much by the prospect of winning as by the strange satisfaction of losing.

So, when a person agrees to take on a million dollars in debt with payments of 6K/month before taxes and maintenance, for a place that they could rent for 3k all in, or spends 200K on upgrades, rather than just painting the living room, the motivation may not be greedy expectation of future gain alone, but rather the spending of the money and the submission to the bank may also be part of it.

#235 Stan Brooks on 03.16.18 at 2:01 pm

#187 Oft deleted much maligned stock.picker on 03.16.18 at 10:09 am
Think Canada is going strong ? $C loses 28% against Thai Baht over 5 years. 13% lost just this past year. Traveling snowbirds are getting screwed. $1.32 to the USD…..$1.60 vs EU and $1.75 vs GBP. Forget about retiring to paradise with Canadian dollars. The Loon is not a desired currency…..there is no market for it. As I keep saying….get out of Canada. Your life savings are being vaporized. Imagine your grocery bill in five years if you stay? Hyperdeflation of housing prices keep you fooled……in reality your million is toilet paper and retirement will turn you into a prisoner because the currency won’t let you leave…..you’re trapped.

http://cad.exchangeconversions.com/thb/charts

———————————–

You are wasting your words.

It is pointless, nobody will pay any attention to your concern/the destruction of currency which in my mind should be # 1 topic of discussion here.

Explains why half-brained idiots at BOC can state whatever they like and nobody will even question it.

Like ‘raising rates is driving inflation’ idiocy.

It is called stupidly, brainwashing and is also side effect of fluoridation of water.

Once you point that out they jump at you for being anti-patriotic.

#236 SW on 03.16.18 at 2:02 pm

#152 Beso on 03.16.18 at 1:51 am
“You know, people act like we’re crack dealers. Nobody put a gun to anybody’s head and said, “Hey, nimrod, buy a house you can’t afford, and you know what? While you’re at it, put a line of credit on that baby and buy yourself a boat.””

Speaking of boats, new boat registrations are up in the US; about 5% overall. Bigger boats, nearly 8%.
https://marinefabricatormag.com/2017/12/12/new-powerboat-registrations-up-in-october/

They’re back!

#237 MattL on 03.16.18 at 2:12 pm

Howard – I am in that class and have never felt that it is a crisis that I can’t (or won’t) buy a home in Vancouver. Would love to live in Port Moody in a nice SFH, walk to the water, but never felt I was owed one of those homes, We realized 5 years ago that Van home ownership was not in the cards and made other plans. Bought a home we could afford and have made out really well on RE. Those that stuck in Van waiting for a crash, well tough luck, you misred the market.

And sure, lets crater the market, destroy middle class homeowners so guys like me can squeak into a home in a desirable area of Van. That should solve the crisis, by killing homeowners on the margin and the little net worth they have, so injury lawyers and GP’s can buy homes in Kits.

There is no turning back. Those that got in the market early have made insane gains and will be the beneficiaries of these policies and any downturn in house prices. And Doctors and Lawyers should finally be able to own in Kits, that will be a sign the “crisis” is over I guess?

#238 MF on 03.16.18 at 2:27 pm

#187 Oft deleted much maligned stock.picker on 03.16.18 at 10:09 am

Stan Brooks

-No we know, we just don’t care one iota about “snowbirds and expats”.

MF

#239 MattL on 03.16.18 at 2:29 pm

Hey Alistair – I’ve been pretty consistent in my belief that the doomers are way overboard, and that the large majority of homeowners will be able to ride out the correction. Time will tell, maybe it will be a slaughter.

The second thing I’ve been consistent on is IF a slaughter happens, it will impact those on the margins the most. The rich are not going to get crunched and if you couldn’t buy a home in YVR in 2012 or 2014 or 2008 its unlikely you will be able to after big crash, if it occurs.

Not sure why these opinions trigger you so much…you must have a lot vested in a RE crash. I hope for you that a whole bunch of Canadians take it on the chin so you can get that house in that area you dream of. Goverment owes you at least that.

#240 Ace Goodheart on 03.16.18 at 2:32 pm

RE: #233 Tater on 03.16.18 at 1:45 pm

“No. Just no. If the rate stays the same, after paying a 25-year mortgage for 5 years, when you roll to a 20-year amortization your payment stays the same.

The bank might offer rolling your loan to another 25y, but almost no-one does this.”

This is not my experience.

Also, you are not “rolling your loan” you are negotiating a new loan. Your existing mortgage is due and payable on the 5 year return date. You have the option of either paying it in full, or obtaining a new mortgage. Most people obtain a new mortgage. No one even seems to understand this, and most people believe, as you do, that they are just “rolling” a mortgage over for another five years. That is not what happens.

What I am saying, is that a five year mortgage, should be payable in full in five years.

If it is not, and our government wants to permit banks to pretend that a five year term loan is a 25 year term loan, then doing so must be good for the general public, must accomplish a necessary social goal and must be helping people in general.

What we have now is a situation where that is clearly not happening. So instead of the government saying that we need a “truth in mortgages” act of some sort, that rolls back the notional amortization periods, so that people are not able to pay 25 year payments on five year loans, the government says “we can’t change amortization periods so they match the term of the loan, this would be harmful to banks”. Which is true. It would cause large amounts of damage to the banking system here.

So what the government does instead, is tax people for owning real estate.

So, what is happening, is a system which is flawed and does not work, and results in price speculation, housing unaffordability, debt risk, interest rate risk and a host of other evils, must be propped up, for its own good, even though it is demonstrably hurting the general public.

And to keep this system, which is supposed to help us, but is now harming us, in place, and to stop it from harming us more, the government proposes taxing people for doing nothing wrong, with penalty taxes aimed at apparently nothing, for no logical reason.

If government wanted to lower house prices and reduce interest rate risk, they would start on a course of gradually reducing the allowable amortization periods on a mortgage. The idea would be that in ten years time, we would be at a point where everyone would be required to pay back their entire mortgage within the five year term, with no refinancing allowed.

That would be very good for all of us, but it would harm the real estate industry and the banking industry, two industries who apparently exist to help us, but who actually appear to be doing more harm than good.

Of course, the above will never happen. Which is fine. No one expects it to.

What gets me is people saying that people who paid off their houses and cottages, should have that money taxed back by the government, in an effort to force them to sell, therefore lowering house prices by artificially “creating” supply.

Supply, in a country like Canada, is not a problem. The problem is price appreciation caused by out of control borrowing, combined with a blind auction style marketplace run by cartels.

That is the point I am making. The stupid real estate “wealth taxes” are really pissing me off.

#241 Gravy Train on 03.16.18 at 2:35 pm

#182 Smoking Man on 03.16.18 at 9:18 am
DELETED

Hey, Smokey. Let’s play a game of hide-and-go-seek. You go hide, and we’ll seek. Now to win the game you have to keep quiet, so we can’t spot you. Just don’t make a peep—for the rest of your natural life!

#242 X on 03.16.18 at 2:43 pm

Looking forwards to more rate hikes to pull the cost of housing down to reality. Monthly financing returns to ‘normal’, RE valuations will revert to the norm as well.

#243 Doodarg on 03.16.18 at 2:48 pm

#33 FOUR FINGERS WATSON on 03.15.18 at 6:28 pm
Remember it will be at least early summer before we know the impact B20 had had on the markets. By that time, astute people buying in the frenzied urban fringe will pay little more than half what greater fools did just twelve months ago. Sometimes it pays not to listen to mom.
…………………………..

So you are saying an approximate 40-50% drop in price by autumn 2018 ? I will bet u a bag of mice that is not gonna happen pilgrim.
_______________________________________

Maybe not 40-50% by autumn. Maybe 30-40% by autumn, and then 40-50% by this time next year. Prices ARE going down by a lot, Remember 4 Fingers, BC does not have an industry or economy which pays the locals enough to afford local real estate. Until its affordable by locals, the buyer numbers are going down by a lot. Sellers can retreat and pull their listings until they think market is coming back, but that will be years. All the dummies that bought more than they could afford (the vast majority of buyers the last 2-3 years) will be stung by rising rates and will have to lower their price to align with the available buyers. There is no way around this.

#244 jess on 03.16.18 at 2:49 pm

who is Andrey Rozov, IC Expert?

ruined development and letters of intent

Construction at Novokosino-2 continues to lag years behind schedule, with promised schools and other public facilities left undelivered

https://medium.com/@ScottMStedman/exclusive-developer-of-trump-tower-moscow-received-loan-from-sanctioned-sberbank-three-weeks-after-df582c22eb72

https://medium.com/@ScottMStedman/trumps-moscow-developer-owned-by-bank-of-cyprus-lawyer-with-documented-money-laundering-ties-32ca121ff6c4

#245 Overheardyou on 03.16.18 at 2:51 pm

#5 Samson Nights on 03.15.18 at 5:52 pm
Actually, 2018 will be the ‘best’ year for housing markets in a decade, as housing is plucked from the hands of speckers, realtors, and shady mortgage brokers, and placed back in the traditional hands of families.

Housing should never have been allowed to become a ‘market’ for Canadians (nor foreigners) in the first place.

—–

You must be new here.

#246 not so liquid in calgary on 03.16.18 at 2:54 pm

Kaganovich on 03.16.18 at 10:38 am
It’s just one of the first, albeit clumsy, attempts to tax wealth rather than income. Get used to it, more to come lol.

I doubt it. Guess you’ll just have to earn your own wealth instead of taking that which belongs to others. – Garth

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and again i say: tax consumption, not income!

#247 jess on 03.16.18 at 3:11 pm

“they’re not making any more land” but maybe buying up the water rights?

Some of that is related to what we often refer to as “buy and dry”: cities buying up agricultural lands to get their water, and completely retiring the (farm) use on those lands.

http://mead.uslakes.info/level.asp
=========================
bathtub rings

https://www.nbcnews.com/video/lake-mead-reaches-record-low-water-levels-amid-ongoing-drought-320641091566

water rights

https://www.justice.gov/enrd/arizona-v-california

?
Study: 93 Percent of Bottled Water Contains Microplastics
http://buzzflash.com/commentary/study-93-percent-of-bottled-water-contains-microplastics

#248 SunShowers on 03.16.18 at 3:33 pm

#232 IHCTD9 on 03.16.18 at 1:40 pm

If so, I’ll take a $130,000.00 subsidy on a new 2018 Corvette Z06 Carbon 65 Edition, complete with the Z07 upgrade. 7 speed standard transmission please.

———————–

Oh wow, you sure showed me with that well thought out, slam dunk of an argument which was EXACTLY what I was suggesting. You didn’t remove any context or create a ridiculous strawman at all! I mean…if you ignore what I said about USED cars and low income earners who don’t already have one, but that wasn’t really important.

But yea, there is no reason for the government to distinguish between dropping $130k on a 2018 Corvette for a rich smartass and giving a few hundred to a poor family for a 2003 Civic. It’s not like any other taxpayer funded social assistance programs are means tested, so why start with this one, right?

#249 JohnnyBoy on 03.16.18 at 3:51 pm

#241 Gravy Train on 03.16.18 at 2:35 pm

#182 Smoking Man on 03.16.18 at 9:18 am
DELETED

Hey, Smokey. Let’s play a game of hide-and-go-seek. You go hide, and we’ll seek. Now to win the game you have to keep quiet, so we can’t spot you. Just don’t make a peep—for the rest of your natural life!
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Wow deleted at 9:18 AM EST so that’s 6:18 PST, way to wake up Smokey, just full of vim and vigor or was that vile and vulgar?

#250 LivinLarge on 03.16.18 at 3:52 pm

“It could work if Ford surround himself with tactful skilled politicians.”…you were doing soooo well until you wrote that.

Dougie needs a riding and rumour is he’s parachuting into Cambridge.

If I read correctly yesterday, Dougie pulled a page out of Tim’s election playbook and pledged to roll back the 2018 planned minimum wage increase. Yup, that’s the way to make friends and influence voters. Hardly a better scenario than pledging to roll back a minimum wage increase to bring out the vote from the minimum wage cohort. Well, I guess that’s better than pledging to fire 1/2 the provincial civil service after taking office.

Why can’t the Cons just find a nice, sane, fiscally frugal leader to make their leader?

#251 Russ on 03.16.18 at 4:01 pm

SunShowers on 03.16.18 at 3:33 pm

#232 IHCTD9 on 03.16.18 at 1:40 pm

If so, I’ll take a $130,000.00 subsidy on a new 2018 Corvette Z06 Carbon 65 Edition, complete with the Z07 upgrade. 7 speed standard transmission please.

———————–
e..

But yea, there is no reason for the government to distinguish between dropping $130k on a 2018 Corvette for a rich smartass and giving a few hundred to a poor family for a 2003 Civic. It’s not like any other taxpayer funded social assistance programs are means tested, so why start with this one, right?
=======================

Trigger alert!

IH… is gamming, guy talk, B.S., whatever.

Why can’t the poor take transit or get a scooter?

https://mythailand2015.files.wordpress.com/2015/06/scooter-81.jpg

#252 JohnnyBoy on 03.16.18 at 4:05 pm

#247 jess on 03.16.18 at 3:11 pm

“they’re not making any more land” but maybe buying up the water rights?

Some of that is related to what we often refer to as “buy and dry”: cities buying up agricultural lands to get their water, and completely retiring the (farm) use on those lands.

http://mead.uslakes.info/level.asp
=========================
bathtub rings

https://www.nbcnews.com/video/lake-mead-reaches-record-low-water-levels-amid-ongoing-drought-320641091566

water rights

https://www.justice.gov/enrd/arizona-v-california

?
Study: 93 Percent of Bottled Water Contains Microplastics
http://buzzflash.com/commentary/study-93-percent-of-bottled-water-contains-microplastics
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
My wife’s aunt left LA for Bakersfield and is now looking to move to Northern California. She saw the writing on the wall. She has a small plant business for growing almond and apricot trees and she has been slowly getting shut out of the water rationing. Lake Mead is a key reservoir that helps supply water for 25 million people in Nevada, Arizona, and California and has shrunk to its lowest level ever. California takes the largest portion and is soon to get less.

#253 IronMike on 03.16.18 at 4:16 pm

#248 Sunshowers
” a few hundred to a poor family for a 2003 Civic.”
___________

Should the government also provide said family with free oil changes gas? How about the subsidy recipients get all their maintenance done at a government-run autobody shop – all free to the poor? Also how about free insurance – sure why not, they NEED the car, and you have to have insurance to drive a car, right?

#254 Overheardyou on 03.16.18 at 4:18 pm

#27 jessica r on 03.15.18 at 6:21 pm
Thank-you Mr. Turner for supporting the real estate industry as you do.

Your graph clearly shows that the past 7 times the home sales have dipped down to/or below the 10 year average that they shoot back up past it – 100% correlation!

This is a great window of opportunity to get into the market and build equity for future security. Thank-you again.

——

You might want to look at the avg price graph vs the sales graph. Just because sales volumes are up doesn’t mean prices are up.

#255 Alistair McLaughlin on 03.16.18 at 4:28 pm

Actually Mattl, I hope our extend and pretend economy can keep going for another 5 years, or even a decade. Realistically, I just don’t see that happening. I’ve spent too much time looking at debt figures, various ratios regarding home prices vs incomes, vs. rents, incomes vs. debt, debt vs. GDP, credit gaps, etc. Things have never looked uglier. By every measure, we’re in worse condition than the US was circa 2006.

BIS (those silly doomers) have rated Canada as one of the highest risks of a banking crisis in the world.

https://www.bis.org/publ/qtrpdf/r_qt1803.pdf

Our credit-to-GDP gap is in the “red zone”. We were the only country in the world that recently rated red or orange in all four of their early warning indicators (see page 41 of the report). Our inflated housing markets

Far from hoping for a crash, I’m dreading it. But I also believe that it needs to happen. The US hit the reset button a decade ago. Damned near killed them, but they’re stronger for it now. Ireland too is off the mat. (Spain is still down and out.) We skated on 2008. You think we’re going to skate on the next one? BIS doesn’t think so. Neither do I.

And if you think a credit crisis anywhere near the magnitude of what the US and Spain and Ireland went through 2008-11 will only affect people “at the margins”, then you weren’t paying attention. Those at the margins went down first. Millions of theretofore solidly middle class families followed.

#256 Howard on 03.16.18 at 4:36 pm

#250 LivinLarge on 03.16.18 at 3:52 pm
“It could work if Ford surround himself with tactful skilled politicians.”…you were doing soooo well until you wrote that.

Dougie needs a riding and rumour is he’s parachuting into Cambridge.

———————————————-

He’s running in Etobicoke North AFAIK.

I believe Tanya Granic-Allen will contest Cambridge.

#257 Reynolds531 on 03.16.18 at 4:53 pm

Ace….you aren’t thinking the five year thing through.

1. Renewal isn’t a NEW loan. If you’re current the bank must accommodate you with a renewal. If your finances are deteriorated they won’t give you a great renewal rate, but normally they don’t even ask for a paystub.

2. If prices drop 60%…..every homebuilder in the country just went out of business. No more new stock. Lots would be free and you still couldn’t pay for materials and labor.

#258 Stan Brooks on 03.16.18 at 5:08 pm

#255 Alistair McLaughlin on 03.16.18 at 4:28 pm

Nice assessment of the situation.
I expect crash 2 times the one in Ireland accompanied with currency collapse.

Just look at the leadership, just look at the leadership…

I have no words to express what I am feeling.
Outright panic and nightmares.
Scared to death to put it mildly.

#259 Stan Brooks on 03.16.18 at 5:09 pm

#255 Alistair McLaughlin on 03.16.18 at 4:28 pm

And look, these guys are discussing local politics as Rome burns.
Dysfunctional place.

#260 Penny Henny on 03.16.18 at 5:58 pm

WOW!
A recent column looked at how people refinancing their mortgages to add other debts must also pass the stress test now. Refinancing is a popular tactic used by people who are getting overwhelmed by their debts. How popular? Mr. Gaetano said about 80 per cent of his clients who are up for their first mortgage renewal have in the past refinanced as opposed to simply renewing.

https://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/mortgage-renewals-in-2018-prepare-for-nasty-rate-surprises/article38296271/

#261 BillyBob on 03.16.18 at 5:59 pm

#221 James on 03.16.18 at 1:13 pm

You are correct he is definitely the king of something! At 1.90 metres in height I don’t feel little but whatever meh. Owned? Nope just big enough to say as I feel fit whenever I want. I just like to point out the truth to balance out the yin yang with regard his brazen disregard for conventional moral thought.
Thanks for your input BillyBob Those who laugh last think slowest!

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

hahah!

Only a small man has to compensate by trying to tell everyone how tall he is. Or use latin.

Couldn’t be more pretentious if you tried, again, I assume it’s just schtick.

Although if it’s for real it’s even funnier. Either way, a win for the readers! Thanks! lol

#262 Tony on 03.16.18 at 6:23 pm

Re: #219 Shawn on 03.16.18 at 1:06 pm

All the major U.S. stock indexes are about 500 to 600 percent overvalued at the present time.

#263 Kaganovich on 03.16.18 at 6:56 pm

Garth wrote:.

I doubt it. Guess you’ll just have to earn your own wealth instead of taking that which belongs to others. – Garth

Lol, sure thing Garth. I foresee a time when discussion of earned vs unearned incomes and wealth will become a commonplace in politics again. Mill was right. Can one ‘earn’ something while they sleep? You may not see this, and that’s fine. Wealth taxes are premised on this, knowing that income taxes rarely touch the true concentrations of wealth that are inherited. Piketty does a good job of elucidating this in his discussion of merit and inheritance.

#264 Ace Goodheart on 03.16.18 at 7:06 pm

RE: #257 Reynolds531 on 03.16.18 at 4:53 pm
Ace….you aren’t thinking the five year thing through.

“1. Renewal isn’t a NEW loan. If you’re current the bank must accommodate you with a renewal. If your finances are deteriorated they won’t give you a great renewal rate, but normally they don’t even ask for a paystub.”

Pretty sure that is not correct. My understanding is that at the end of the five year term, a borrower has to re-qualify for the mortgage renewal, and if they cannot, they have to sell the house (or the bank will sell it for them).

The bank just checks your credit score prior to meeting you to renew. If you are below what they are looking for, they do not have to renew and can request you repay the outstanding principal. They are also supposed to verify income and assets, though I have seen this become a bit sketchy. Sometimes all they want is a paystub. For the self employed it is a bit harder.

Back when i had my professional corporation I would pay myself. So if I wanted to impress a bank, I’d just write a bigger cheque. Not sure if they let you do that anymore.

#265 Reynolds531 on 03.16.18 at 8:43 pm

Ace, I just did it. They may have pulled a beacon score but never informed me. No income verification. Just a phone call.

#266 Blackdog on 03.16.18 at 10:39 pm

@CalgaryGuy/GuyInCalgary or whoever you are, regarding a past conversation, from somewhere:

“In a time when the overwhelming majority of people accused of sexual crimes go free and false accusations are shown to be exceedingly rare, we need to think about how to create a better system. “

#267 Oft deleted much maligned stock.picker on 03.17.18 at 9:53 am

MF….here’s the way it works…..it costs you more to eat every time the Loon goes down. On the other hand my currency gets more valuable and coming to Canada gets cheaper every year. Those guys pulling rickshaws ate indicitive of your future. I can leave….you’re trapped….whether you care or not isn’t the point. You’re a prisoner in a cage…..I’m drinking cool ones by the pool…who wins…..you….or guys like me who figured it out years ago? Rage amigo…..so Canadian.