Gross

Mama, don’t let your daughter buy a condo. Don’t fork over the downpayment.  You’ll both regret it. In fact nobody, young nor old, should be ‘investing’ in a 600-foot concrete box, especially one that’s not even built. Remember the GreaterFool Pre-Construction Rule #7 – never purchase real estate you can’t actually pee in.

As this pathetic blog has chronicled of late, detacheds are in trouble and condos are hot.  Last month only 14% of available houses with dirt were purchased in Vancouver, while more than 60% of all condos flew off the shelf. As a result, detached prices are plopping in many areas (look at the graph here yesterday) while condo prices are shooting higher in the GTA or the LM by 25% year/year.

Two reasons for this. First, we’re being overrun by moisters in their plaid shirts, beards, tats and stupid, skinny suits. Mills now outnumber Boomers and constitute the largest cohort. They’re entering those nesting years in which everyone craves a couple of screamers, a minivan and financial servitude. So, real estate demand is ramping up.

But, wait. Here comes reality to mess things up.

According to Environics, the moisters may have great potential, but they’re struggling. Only 55% of his group (born 1981-2000) has full-time employment, compared to 74% of GenXers (1966-1980). And when it comes to income, the X-people average $102,000, compared with $71,000 for the kids. Given the fact detached houses in Van and T.O. cost over a million, you can see the problem.

But there’s more. It’s B20. The mortgage stress test, now in effect for just three months, effectively raises the qualifying rate for a more by 2%, which is yuge. It means a moister must be able to hand payments at close to 5.5%, instead of the rate offered by the bank. Do not diminish the impact of this.

Many people thought B20 would result in lower property values overall because of an estimated 20% shrink in credit. So they point to sticky average prices now as evidence it ain’t working. But it is. A new Leger survey confirms it. A third of all buyers have decided to shelve their house plans entirely, while a quarter have compromised on the size of the purchase.

The biggest impact has been to reroute money away from detached homes the Mills can’t afford (especially with the new rule in place) into condos – which are a major compromise, but relatively cheap. The net result: more demand and higher prices for the very worst kind of real estate investment (I told you why last week). Meanwhile in most markets, prices for detacheds haven’t moved much as potential sellers retreat, reducing supply.

Is this a healthy development?

If you think so, then come to the General Store for a triple-scoop serving of salty chocolate peanut butter ice cream, with sprinkles. The girls will dial 9-1-1 for you.

It’s all underscores the obvious: politicians screw things up. In 2017 we already knew housing markets were bubbly, wobbly and unsustainable. We knew average families were being priced out, sellers were afraid to list and interest rates rising. Despite those natural trends, governments in Victoria, Toronto and Ottawa decided to implement a blizzard of changes. Now we have anti-foreigner taxes, empty house taxes, stiffer rent controls, luxury taxes, speculation taxes, the onerous stress test and a BC politburo that can’t leave anything alone. Yes, markets have cooled. But they’ve also distorted, with risk shifting onto the shoulders of those most unable to survive it. The kids.

The average downtown Toronto condo now sells for $690,000. Per-foot resale costs have been pushed up to $876 on average and to a thousand bucks in the core – a 35% year/year gain. In Vancouver the typical condo increased 19% in the last year, to $775,000. And yes, Mills earn less on the left coast than they do in The Big Smoke. No wonder BCers have a negative savings rate and more debt than anyone else in the nation. As a consequence of all this, Bloomberg reported on Wednesday that Toronto rents jumped 10.7% y/y in the first quarter of 2018. When prices rise, so do lease rates – and vice versa.

So, in summary: government intervention and social engineering prevented the housing market from rolling over naturally. It pushed demand in the wrong direction. It’s inflated condos and worsened affordability. An entire generation is being squeezed into shoddy glass boxes with questionable long-term resale creds, escalating costs and zero suitability for growing families.

Did more taxes ever fix anything?

194 comments ↓

#1 Jurp! on 04.11.18 at 5:04 pm

Am I first?

I stopped reading after “salty chocolate peanut butter ice cream”, just couldn’t focus anymore.

#2 Guy in Calgary on 04.11.18 at 5:10 pm

http://www.macleans.ca/economy/the-unexpected-anguish-of-winning-the-prize-every-canadian-wants/

…………. Anguish? Seriously? And they say us millennials are whiners…

#3 crowdedelevatorfartz on 04.11.18 at 5:16 pm

THAT is one damn big kitty.
Maine Coon cat?

#4 Angry Insell Canadian Millennial on 04.11.18 at 5:17 pm

Why is the average salary in Toronto only $48,000/yr gross, but the average studio condo is about $500,000 mid-town and about $+800,000 in the downtown core? Why do I have to pay over $1.9 million for a bungalow in Richmond Hill? Where is the money coming from? Where? How? What? Why?

Obviously average people don’t buy average-priced houses in this big city – as in other big cities. – Garth

#5 D C on 04.11.18 at 5:25 pm

Just a word about the Environics stat: my kid was born in 2000 and I’m glad s/he is not employed full-time… s/he’s in grade 12! Full-time schooling is potentially an issue with a large percentage of those born 1996-1999 as well. So that’s 5 years (25%) of the 55% ‘under-employed’ stat that is not truly relevant (and therefore not a great comparison). Stats can be advertised to say a lot without critical appraisal of the methodology.

Does s/he have a gender yet? – Garth

#6 Dave on 04.11.18 at 5:26 pm

When is BC NDP going to pass legislation for housing? Will the impact be immediate or sloooow process???

#7 Millennial- falcon on 04.11.18 at 5:28 pm

Detached saleswill rebound sharply once the prices of all the millenials condos reaches parity with a house on dirt , sell and move on up ! Get ur sfd now !

#8 Lawnboy on 04.11.18 at 5:37 pm

@#2. Timmy Anguish !!!

How about the anguish of seeing yesterday’s pic with the coffee so close to the edge of the deck….a crime.

Failure to provide the necessaries of a coffee!!!

Just sayin

#9 TheSpangler on 04.11.18 at 5:38 pm

I bet if they taxed principle residences like most other assets, you will see house prices be reasonable again.

#10 Roial1 on 04.11.18 at 5:39 pm

Garth, did that guy in yesterday’s picture finish that cut?????

#11 Lee on 04.11.18 at 5:39 pm

What sucks the Millenials into buying a condo i sthose cool advertisements that show a young person jogging on the Lakeshore. They somehow believe that once they buy the condo their lives will be jogging on the Lakeshore. What it turns out being is monthly payments of $2,400.00 for the mortgage, $300.00 for taxes, $500.00 for maintenance, and about another $300.00 or so for other utilities. And then, all they can afford to do is jog on the Lakeshore. I try to tell everyone I can that buying a condo or Town (unless it is a Town right in the center of the city) is pointless because what does not include land will not go up in value. Regardless of what happens to SFHs in Toronto, I expect the top to bottom drop for condos to eventually come close to 50%.

#12 Bob Dog on 04.11.18 at 5:42 pm

“Two reasons for this. First, we’re being overrun by moisters in their plaid shirts, beards, tats and stupid, skinny suits.”

Apparently you can call them anything but migrants. I thought Canada had a huge shortfall of babies over the last 30 years. Where are all these young trump wannabes coming from? Must be maritime doctors and lawyers singing “Theres a rainbow in Toronto”.

https://www.youtube.com/watch?v=4HbYqMobjic

#13 When Will They Raise Rates? on 04.11.18 at 5:43 pm

If there was ever a prudent time to buy gold, now might be it… These people are insane:

UK Moves Submarines Next To Syria, Strikes May Begin As Soon As Thursday

https://www.zerohedge.com/news/2018-04-11/may-moves-uk-submarines-within-striking-distance-syria

#14 Huh? on 04.11.18 at 5:43 pm

Your argument is just a convoluted mess of a thesis, or lack thereof.

#15 PR on 04.11.18 at 5:43 pm

But it’s government intervention that helped maintain and inflate the bubble….there has been government intervention starting with the 2006 zero down forty year mortgage.

#16 D C on 04.11.18 at 5:44 pm

Does s/he have a gender yet? – Garth
Lol. Yes, but haven’t seen your TOS and privacy is king. Didja hear Zuck testify today ;)

#17 Zapstrap on 04.11.18 at 5:48 pm

I betcha most of these kids don’t know how to fix anything with their own hands either. Kind of a necesity if you own a SFH. Get’s awfull expensive in a hurry if you don’t.

#18 Lost...but not leased on 04.11.18 at 5:49 pm

Opinions are like condos….

(Almost) everyone has one

#19 Brad on 04.11.18 at 5:49 pm

Dude – Been reading your blog…well since forever. The effort you put into this piss-ant blog is very impressive. (I’m complimenting you not crapping on your car) This is what is making me laugh. I live on a boat that is worth at best $30k. I’m so glad I got out of the market years ago I never want to go back. My GF is has been in Real Estate for decades and is gung-ho that things are fine and healthy….Toronto is the NEW N.Y. blaa blaa….if you can’t afford it then leave the city. lol In case she reads this I have to say she is the ONLY real estate professional that I like. NONE of this is sustainable. NONE of it. How can so many moisters live with so much stress and risk…all for what a house? Crazy! There is a huge imbalance…SUM-TING-WONG. It’s all just insane. The good news with all this though….here it comes….my daughter will never ever afford a home in this idiotic province….which means she can stay with me a lot longer. :)

#20 magic mike on 04.11.18 at 5:58 pm

the used house salesmen have played in a huge role in this bubble, “buy now before prices move higher!”

#21 A J on 04.11.18 at 6:02 pm

My Mom practically called me a failure yesterday for not owning real estate. She was crying on the phone, because I told her I might have to move if I ever want to own a home. It’s hard to leave her for many reasons, the main one being that she’s a widow and only getting older. I’ve been told before on this blog, and other places, to suck it up and move. Easier said than done. Life is never that easy. But watching this whole disaster from the sidelines has re-enforced my wanting to one day buy a home with cash instead of credit. Qualifying for a mortgage and all the junk that goes into that feels like a life-long stressor, a ball and chain wrapped around your neck. But getting through to my mother on this subject is futile. “Well how does so and so afford a house then if it’s so hard and expensive? Why not a condo then?” Sigh. The complicated nature of buying a home and the constant stress of looking after it and paying a mortgage feels like a life sentence. I’m officially over it all. No mortgage ever for me. No matter how many tears my Mom cries. I wish I could convince her to read this blog….

#22 I’m stupid on 04.11.18 at 6:04 pm

How long until condo prices implode? I think they’ll begin cratering in July-August. The increases have been slowing down month over month and a hard cap of 1million is in place (no chmc). Condo values are solely based on construction costs since land value is such a small portion of the overall price and an infinite number of units can be built. So there is absolutely no reason why condos should increase in value higher than the rate of inflation. The condo segment is going to be the reason Canada goes into recession.

On another note I spoke with a few builders today and they’re scared. So much so that they’re paying 3-5k extra per home to have it wrapped because of the bricklayer shortage. Wrapping a home let’s them continue working on the home until completion. The home can be delivered without bricks.

#23 FOUR FINGERS WATSON on 04.11.18 at 6:08 pm

Debt will not be a yuge problem. The kids will inherit. Get in now, bite the bullet, inherit and pay later.

#24 MF on 04.11.18 at 6:08 pm

What a hilarious joke this all is eh? Not to gloat but I predicted GTA condos would see price increases like this last year. Too many tail winds, too much demand. And the city is booming.

The good (ish) news: looks like my rent didn’t increase this year. First time in 5 years. Still a mega waste of money though.

MF

#25 Cory in Shangalila on 04.11.18 at 6:13 pm

The corners of my mouth turned up when I saw “GenXers” in this article, being one of this generation muself.

I been wondering how to ask Garth why this age group never factors into the blog.

Always Mils and Boomers.

Your music sucks. – Garth

#26 Debtslavecreator on 04.11.18 at 6:15 pm

Law of unintended consequences
Don’t come begging for a bailout (ie.theft from fellow taxpayers) when u Millie’s are bankrupt with worthless “properties” and extreme condo fees /special assessments in 3-5 years
Idiots
And most of you are cocky and brainwashed left wingers
Maybe you need to get ready to ask for a refund of your tuition money from your smart left wing professors who orchestrated the scam along with your university administrators

#27 Max the Tax on 04.11.18 at 6:22 pm

Garth, I’m not at all convinced that the recent tax changes have had a negative impact because we are not yet far enough removed from their implementation to have an accurate measure of long term implications, unless you are fond of using a crystal ball to draw your conclusions.

Did you not read the source? A Leger survey. Go blame them. – Garth

#28 Jay (not that one) on 04.11.18 at 6:28 pm

What blows me away is that having come of age during 2 recessions and grown up in the ashes of the 1992 housing crash, people would spend so much on a house.

I did buy, but my mortgage is less than 2x annual income. I can afford to lose my job. Can these folks?

#29 Frank on 04.11.18 at 6:33 pm

Did more taxes ever fix anything?

90% highest rates helped pay off national debt after WWII so that it didn’t become a noose around boomer necks later on. But what did the Greatest generation know?

High taxes did nothing to ‘pay off’ the debt since the wealthy constituted less than 0.05% of the population. You socialists are a hoot. – Garth

#30 TheDood on 04.11.18 at 6:34 pm

OMG! LOL! Reading the comments today and I’ve gotta laugh at the country’s pathetic obsession with buying property. Everyone give your heads a collective shake! Stop shopping. Stop buying. You can’t afford it!

Turn your obsession to something useful and rewarding – financial literacy would be a good start – teach yourself some personal finance skills, so you can see what an idiotic decision you’re making investing your money in canadian real estate.

#31 Pete on 04.11.18 at 6:37 pm

So what will happen to GTA RE if Toronto Disneyland goes live as proposed?

#32 Screwed Canadian Millennial on 04.11.18 at 6:37 pm

Wow almost like Canadian millennials are screwed. And there is data and evidence to backup that fact. Someone’s been saying that. I guess Garth thinks they should just pitch a tent and freeze to death. Or commute 2 hours to work everyday.

#33 Shack63 on 04.11.18 at 6:41 pm

I bought a condo in Calgary 10 years ago this upcoming May. Divorce. Moved in May 15, 2008, right before the real estate melt-down so my timing wasn’t great.

It’s in an amazing location just north of downtown so I’m able to walk to work. Great view of the downtown at night with a real fireplace. I paid $325,000. A similar unit across the hall just sold for $305,000. And they had to pay the realtor just a little north of $14,000.

There’s no mortgage on my unit but it still costs me $650/month for condo fees, utilities and property taxes.

So yeah. Condos. Not that great.

#34 Missed Again on 04.11.18 at 6:41 pm

‘Meanwhile in most markets, prices for detacheds haven’t moved much as potential sellers retreat, reducing supply.’

This is all you need to know. Sellers pull back when prices are too high as they cannot find a replacement home – hence the low inventory and skyhigh prices last year. And sellers pull back when prices are not increasing, because they can simply ‘fish’and restrict supply. Up or down – the sellers are controlling the market.

Seems this market is going nowhere anytime soon.

And in those markets where condos have skyrocketed, all those silly millenials can now move up the property ladder and make the jump to single family homes since those prices have moderated and come down. The disconnect between the two markets is melting, which will reignite the single family homes sales again, and keep the market alive.

Alas, no matter what the renters and sideliners speculating on rising interest rates want, the real estate market has 9 lives and once again it robs them of the greatest tax free investment ever.

#35 Newcomer on 04.11.18 at 6:42 pm

It’s a bit like shooting a lion. You want to get it right, or you just end up with an angry lion. That said, a lion has been shot, while dangerous in the short term, is definitely going down sometime soon.

I don’t agree that the short-term danger makes it a bad idea to shoot a lion that is making life hard for the people, but I would agree that it was a bad idea to have fed the lion for so long.

#36 Whatcha Minnie on 04.11.18 at 6:43 pm

Starting week 2 of my japan trip and taking a Shinkansen train from Tokyo to Kyoto. Taking lots and lots of pictures for my work-in-progress photoblog.

#37 A J's mom on 04.11.18 at 6:45 pm

#22 A J on 04.11.18 at 6:02 pm
My Mom practically called me a failure yesterday for not owning real estate. She was crying on the phone, because I told her I might have to move if I ever want to own a home.
////////////////////

Son, how come you can’t by a home like your sister BJ or your brother HJ?

#38 Gigi on 04.11.18 at 6:46 pm

#21 Be Realistic on 04.11.18 at 6:01 pm
These kids should move north – not Barrie north, but like Newmarket north. Decent deals right now if you bargain down. Transit improving by the year. Rumoured future subway line up to Highway 9 (a friend of a friend has seen the plans). Why shack up in a box in the sky where everyone can peek into everyone else’s living room. Just like that Hitchcock movie with the guy and telescope.
######################
C’mon, really? Newmarket? Newmarket, Barrie and Georgina are the armpits of the GTA.

#39 Nik on 04.11.18 at 6:51 pm

Garth, you cant make up “facts” to fit your narrative (you can but no one’s buying it)
1. B20 was not a government decision but created and enforced by OSFI, an independent agency

2. B20 impact will take more time to have an impact, starting with the higher end condos that are currently on the market for $800K+. you have said this numerous times in the past and now you are changing your tune just because of this survey

your point of government policies causing this crisis is simply not supported by data or surveys for that matter. On the other hand markets can never resolve this crisis on its own. Its sad to see your political leanings guide your arguments instead of rational logic.

This blog made both your points months before you thought of them. Stop embarrassing yourself. – Garth

#40 Wallflower on 04.11.18 at 6:51 pm

stupid, skinny suits
===================
Got that right. About 1% of the male population looks acceptable in this fashionistique.
40% look like penguins.
59% look like they just don’t want to be here.
So, for the first, we have a male equivalent to pantyhose.

#41 Reality is stark on 04.11.18 at 7:03 pm

So son, you want to buy a house with your common-law.
Interest rates are rising.
Incomes are stagnant.
Female infidelity is now higher than male infidelity for the first time in history. They also initiate 80% of the divorces.
You have better odds playing Russian roulette.
Here is a better strategy if real estate means so much to you. Buy a delapidated home every couple of years with 2 buddies and renovate it. 50 hours a week at your job and 30 hours a week working on the house. You can party Friday and Saturday nights and have a blast until you are 50. You’ll be worth 5 million by then.
Buy 4 million in rare gold coins and don’t tell anyone where they are buried.
Now you can get married declaring a net worth of a million. Life can be a dream if you play it right.
I should know.

#42 Reynolds531 on 04.11.18 at 7:03 pm

Welcome to the jungle!

Our music does not suck Garth. Neither did my mullet. They both rocked!

#43 Johnny D on 04.11.18 at 7:08 pm

Maine Coons are the coolest breed of cat there is. Chill, lots of personality, smart. Seriously Garth, if you got one of them, it would make you rethink your whole take on felines.

#44 Willy H on 04.11.18 at 7:11 pm

“So, in summary: government intervention and social engineering prevented the housing market from rolling over naturally.”
__ __ __

Nope, almost free-money was shoveled onto the masses by central bankers around the world (we can thank Greenspan!), in theory, to smooth out downturns and prevent a meltdown after the 2008 WFC.

It worked (many economists would argue) but there were unforeseen side-effects as consumers gorged unrestrained on almost-free money for almost two decades.

Governments and central bankers warned consumers about unsustainable debt yet their siren calls went unheeded and bankers coddled morbidly-obese mortgage portfolios as their profits bloated. The good times rolled on and on and on..

The Fed’s B20 bitch-slap was exactly what was needed to wake up Greater Fool zombies (and too big to fail bankers) sleepwalking into a debt chasm . B20 should have been put into place by the Reformicon’s back in 2012/13 along with provincial speculation taxes.

This artificial period of low interest rates was man-made (sorry people-made!), not market-driven*, and it will result in unintended consequences yet to play out in Canada.

You cannot divert hundreds of billions into unproductive over-valued assets year after year without economic fall-out at some point.

*CMHA mortgage insurance, another man-made market distorter benefiting our banking cartel

#45 NOSTRADAMUS on 04.11.18 at 7:18 pm

ON A MORE SINISTER NOTE!

Needing cash for the heavily indebted will become much harder and more complicated for the herd. Just as living in the wild is harder, more complicated than showing up for feeding at the zoo at fixed hours.
Change the word Zoo, for Bank.
The banker zoo , now has new hours, new rules and new regulations for feeding times. A great number of the weaker over indebted members of the herd will fall prey to the big time professional hunters. Trophy head hunters, the Bankers and Revenue Canada hunters. You can run, but you can not hide from these trackers. They never, ever sleep, they are tireless, they are bounty hunters who live only for the hunt.
On a more sinister note. I strongly suspect that shortly a large number of realtors will be found guilty of cannibalism, preying on members of their own profession. As food (commission dollars) become more scarce, a real estate office is the last place a baby realtor would want to take refuge in. BIG CATS GOTTA EAT! and young realtors are MMM! the tastiest. You can trust me, as the teller of truth in the land of gypsies, tramps and thieves.

#46 specuskeptic on 04.11.18 at 7:19 pm

“Did more taxes ever fix anything?”

Reduced tobacco consumption.

Not “fixed” but better than it was.

Now we have weed. Such progress. – Garth

#47 AGuyInVancouver on 04.11.18 at 7:27 pm

..So, in summary: government intervention and social engineering prevented the housing market from rolling over naturally. It pushed demand in the wrong direction. It’s inflated condos and worsened affordability. An entire generation is being squeezed into shoddy glass boxes with questionable long-term resale creds, escalating costs and zero suitability for growing families.
_ _ _
So tell us exactly how the market would have corrected on its own? A rate interest from the BoC? As a creation of the state, it’s not the “free market”.

#48 crossbordershopper on 04.11.18 at 7:30 pm

kids are idiots.
for the millions of people in southern ontario, simply buy a house across the river.
https://buffalo.craigslist.org/reb/d/take-look-3-bed-1-bath/6552480247.html
for $20 grand, actually you can get it for $15K. you get everything, presence in the USA. a pier de terre , and you can start living your life for nothing.
its safe in niagara falls ny, the mob controls lots of things there. hope back whenever you get a cough, and if you want a cheap flight oh my god, go to orlando for 49 bucks from the airport on jet blue, or southwest or spirit.
you can live in canada without really living in canada and getting full benefits.
i see poor people in canada living on the little oas/gis/cpp and paying rent like 40 to 50 percent of their income. for like 20 years or 25 years before they die. man canadians are really stupid. why live in hamilton when you can ‘live’ across the river, but you really live in orlando.
orlando i dont like too much, boyton beach is nice.
just food for thought, you want to work all your life for a box in the sky go ahead,

#49 robert james on 04.11.18 at 7:37 pm

Now this a fine kettle of fish !!! https://www.castanet.net/news/Business/223454/Mortgage-tidal-wave-coming

#50 zee on 04.11.18 at 7:40 pm

Govt did the right thing by trying to slow down the market. Up until then, the market had not slowed down so not sure why you thought it would on its own.

Everyone around was a housing bull!

Trust me, those two rate hikes by Poloz would have not done anything.

Market is better now than before and condo market will gets its taste of this correction soon when the investor group takes off.

#51 Smartalox on 04.11.18 at 7:40 pm

@Fartsy #3:

In the wake of the last major mass shooting in the US, there’s been a trend of people taking pictures of people holding guns, and using photoshop to superimpose a cat in place of the gun. I think that’s what happened here. I think that’s what’s happened here, based on the position of the hands of the dude that’s holding it.

Otherwise, that cat would weigh more than 50 lbs!

#52 24 year old on 04.11.18 at 7:41 pm

The money mismanagement, by my generation especially, is mind boggling. This whole rat race, keep up with the Joneses is so pointless.

After reading some minimalism blogs, it seems that $20000 is all one needs for yearly expenses ( obviously not in Toronto/Vancouver).

The rest can be either saved, or if you are fortunate to work a job where you can take extended leave for long periods, just enjoy life elsewhere.

A friend of mine who is giving me career advice at the moment, works hard during Alberta refinery shut down periods for a few months and then enjoys his life in South America or Asia.

He is trying to hook me up with a job where I can do the same.

#53 randy on 04.11.18 at 7:44 pm

Sorry Garth but your blame the mills doesn’t stand up to the stats in Vancouver. New numbers out show that over 60% of condo buyers last year were over the age of 40. Only 12% were under 30. You don’t have to be young to be stupid.

Link? – Garth

#54 For those about to flop... on 04.11.18 at 7:46 pm

It appears John Denver might have been encouraging Americans where to get a future reduction in taxation when he sang the words…

“Country roads, take me home
To the place I belong
West Virginia
Mountain mamma, take me home
Country roads”…

M43BC

“See which Americans Have the Highest Tax Bills in the Country.

They say only two things in life are absolutely certain: death and taxes. With Tax Day just around the corner, many Americans are gathering paperwork and getting ready to file their 2017 taxes. Federal and state income taxes represent just part of an individual’s total tax burden, however. Our new visualization illustrates how the state you live in determines the relative tax burden between federal, state, gas, sales, and property taxes.

We compiled the data from GoBankingRates, which analyzed a few different sources to figure out the average tax burdens for each state. These included the 2016 Census Bureau American Community Survey for median household income levels, Zillow’s median home value and property tax information, the American Petroleum Institute’s average gas consumption figures, the Tax Foundation’s numbers of state sales tax rates, and Gallup’s estimates for average daily spending. We sliced and diced all this data to represent each state as a pie chart where each piece corresponds to the weight of each category of taxation. We then sized each pie chart based on the total taxes paid.
Top Five States with the Lowest Total Tax Burdens

1. West Virginia: $6,837

2. Montana: $7,035

3. Mississippi: $7,086

4. Kentucky: $7,537

5. Arkansas: $7,858

Top Five States with the Highest Total Tax Burdens

1. New Jersey: $22,829

2. Connecticut: $20,714

3. Massachusetts: $20,115

4. Washington, DC: $20,033

5. Maryland: $19,615

We can learn a lot about the economy and the American political system by analyzing our visualization. First off, the Northeast has several states with tax burdens far higher than those in the rest of the country. People in New Jersey pay more than 3 times as much in total taxes as their counterparts in West Virginia. There are a few different explanations for these enormous differences in tax levels, the most obvious being that some states don’t collect any income tax (like Tennessee and Florida) and a few don’t collect any sales tax (like Montana).

Despite these differences, every state taxes property and this is where the true disparities are found. New Jerseyans fork over an average $7,163 in property taxes each year, representing an incredible 31% of their total tax burden. Compare that to West Virginians, who pay only $544, or 6%, of their total tax burden in property taxes. That means property taxes are 5 times more expensive in relative terms—or 13 times more expensive in absolute terms—in New Jersey than West Virginia!

Another interesting trend in our visualization is how clearly it reflects the partisan nature of different states’ decisions about taxes. President Trump won none of the 15 states with the highest tax burdens, and Hillary Clinton won only one of the 15 with the lowest (New Mexico). Many of the states typically considered political “swing states” come election time are in the middle of the pack; for example, Wisconsin (21st), Iowa (24th), Pennsylvania (26th), Michigan (30th), and Ohio (35th). How Trump’s recent tax cut bill (or even a second one) will affect the political landscape is anyone’s guess, but our graph makes us wonder if political divisions determine tax rates or if tax rates determine political divisions.

So why doesn’t everyone move to low-tax states? To a certain extent, rich people are actually leaving states with high tax burdens for places with friendlier policies. Most people can’t afford to relocate their entire families even if it would mean hundreds of dollars in tax savings, but at the very high end the numbers can really add up and may make a big move worth the cost.”

https://howmuch.net/articles/how-much-americans-pay-in-taxes-in-every-state

#55 X on 04.11.18 at 7:48 pm

If the US doesn’t do another .25 rate increase until June….can we expect one here in July, or might there be an increase here next week?

Can we please just drop all of these BS taxes and go back to 10% down….wow, that would slow the condo market, and increase consumer financial stability. Nope, governments need money now, as they already spent it.

#56 Ex-Cowtown on 04.11.18 at 7:49 pm

Watched dream-boy greenie BC Weaver on BNN this morning. What a maroon! The lights are finally on that Alberta is lining to turn off the taps and crank the price of gas in Unicorn-ville through the roof. Weaver was chattering like a nervous crack addict, blaming everyone from Alberta to Quebec for not giving the greenie weenies EVERYTHING THAT THEY WANT!!!! WAAAHHHH!!!

His voice was up about two octaves, just as one would expect from someone with his carbon-neutral ‘nads welded in a vise while Notley sets the garage on fire.

Weaver just sorted it out that when gas goes to $5/liter the Greens and all their silly dark and sordid pipe dreams will be but a memory. He gets all the blame and deservedly so.

#57 Whiny Millennial on 04.11.18 at 7:50 pm

No, more taxes don’t normally fix things. But we are only in this mess because of governments in the first place. 40 year mortgages, 0% down…not taxes, but still governments.

You give the NDP in BC a hard time. The BC liberals were starting to mess with the market before.

It’s pretty easy to sit here and say the market would roll over on it’s own, but that’s debatable and impossible to actually prove.

#58 Sebee on 04.11.18 at 7:50 pm

If you turn your RRSP into a mortgage, can you early pay it back as you wish?

Why would you want to? You don’t understand how it works. – Garth

#59 KAC on 04.11.18 at 7:51 pm

#11 Lee on 04.11.18 at 5:39 pm

I try to tell everyone I can that buying a condo or Town (unless it is a Town right in the center of the city) is pointless because what does not include land will not go up in value.
———————————————————————————

Newsflash! Look at what’s underneath every condo building. Yes it’s …. wait for it ….. LAND! And that land is owned by the individual condo owners.

In YVR condo prices continue to soar as detached prices tumble. My bet is that eventually condos will experience the same loss of value as detached …. but not just yet.

Meanwhile, people who bought condosin the last decade will make out like bandits if they cash in on today’s over $1K per square foot prices. Tell them condos never go up in value. Lol.

#60 Willy H on 04.11.18 at 7:56 pm

#24 FOUR FINGERS WATSON on 04.11.18 at 6:08 pm
Debt will not be a yuge problem. The kids will inherit. Get in now, bite the bullet, inherit and pay later.

__ __ __ __

You should price out nursing home monthly fees?

#61 Brent on 04.11.18 at 7:56 pm

Did more taxes ever fix anything?

After the Great depression, FDR raised taxes on the the very rich to 90% of their income. He used the money to end the depression. He was one of the most popular US Presidents of all time.

Taxing the rich did not revive the economy. Try again. – Garth

#62 backwardsevolution on 04.11.18 at 7:56 pm

Garth – “So, in summary: government intervention and social engineering prevented the housing market from rolling over naturally. It pushed demand in the wrong direction.”

Government intervention and social engineering created the conditions for the housing bubble in the first place. It pulled forward demand with easy credit and cheap debt.

#63 MSM Free Zone on 04.11.18 at 8:03 pm

Politburo? Comrade? Socialist? Dipper?

All getting very tiresome. It’s an absolute cop-out to continue slamming the younger crowd for events that happened out of their control 10 years ago.

Never forget that it was unbridled, deregulated 2008 capitalism, not government intervention, nor taxes, nor socialism, that blew the world’s financial brains out, and incubated the absurd housing scenario we’re witnessing today.

#64 Honey Dripper on 04.11.18 at 8:06 pm

DELETED

#65 Smoking Man on 04.11.18 at 8:09 pm

Must say I missed the condo boom.
Never saw it coming. Thought they were going to get crushed first.

#66 Mark on 04.11.18 at 8:12 pm

” As a consequence of all this, Bloomberg reported on Wednesday that Toronto rents jumped 10.7% y/y in the first quarter of 2018. When prices rise, so do lease rates – and vice versa.”

Most likely a number that isn’t based in the “on-the-ground” reality, that individual unit rents are only rising minorly. The onslaught of relatively recent build luxury units into the rental market certainly has created a large skew in that number. A similar concept to the well known concept of the sales mix when it comes to RE prices.

Of course, landlords that try and raise their rents 10% are most likely to be sitting on empty units or departing tenants.

#67 Mark on 04.11.18 at 8:13 pm

“If you turn your RRSP into a mortgage, can you early pay it back as you wish?”

As a poster indicated here a month or two back, mortgages held by RRSPs must be subprime mortgage insured (by CMHC or similar), and the CMHC effectively does not provide such insurance as of some recent changes.

The RRSP trustee when dealing with a RRSP mortgage has an obligation to enforce all standard and customary terms of a mortgage including enforcing a payment schedule and foreclosing if there is a default. So no, a RRSP mortgage is not, and never was a ‘free lunch’. The trustee has a fiduciary duty to the RRSP, not to the borrower, even if the ultimate beneficiary might very well be the same individual.

#68 Ralf on 04.11.18 at 8:19 pm

Not to worry kids spend away, we’ll be in low rate (under 5%) for years to come…

#69 Terry on 04.11.18 at 8:19 pm

“So, in summary: government intervention and social engineering prevented the housing market from rolling over naturally.”

That’s a great way to put it Garth. This is another main factor why, over the medium to long term, housing prices in Canada will never be comfortably affordable ever again. As I’ve said before, if you want a house or a condo in this country you are going to have to go into huge debt to buy it. The Boomers won the Real Estate lottery while all the others are buying losing tickets.

#70 Howard on 04.11.18 at 8:21 pm

#31 randy on 04.11.18 at 7:44 pm
Sorry Garth but your blame the mills doesn’t stand up to the stats in Vancouver. New numbers out show that over 60% of condo buyers last year were over the age of 40. Only 12% were under 30. You don’t have to be young to be stupid.

Link? – Garth

——————————————————-

We could ask you the same thing Garth.

Where are the stats showing that condo buyers are overwhelmingly Mills? Are there not a good number of downsizing Boomers, or Boomer investors eager to get rich renting to desperate Mills?

Nothing in the post said condo buyers were ‘overwhelmingly’ Millennials. But thanks for clarifying there is no link to support your view. – Garth

#71 IKnow on 04.11.18 at 8:21 pm

Condos can be wealth generating investments in *some* markets and *some* times. So need to be careful about locations and times.

In Hongkong, many billionaires are made from owning or flipping condos during the last 40 years. Very few own townhouses or detached in big Chinese cities.

I have a friend who bought Vancouver condos when they were around 100k each to rent out, acquired quite a few, now they are 400k a piece, so simple calculation says $300k each times 6 pieces is almost $2M, and the rents cover condo fees and maintenance. The key point of course was getting those condos at 100k each, which is impossible now. Again, it’s timing and location.

#72 jim on 04.11.18 at 8:22 pm

#64

“Never forget that it was unbridled, deregulated 2008 capitalism, not government intervention, nor taxes, nor socialism, that blew the world’s financial brains out, and incubated the absurd housing scenario we’re witnessing today.”

Ummm, no. I don’t think you know what capitalism is.

Fannie Mae and Freddie Mac were government agencies at the time. Clear government intervention. So too were regulations and laws that prohibited mortgage underwriters from taking into account certain features of applicants in an effort to make housing ‘accessible’ to the less privileged. Not to mention that the promise of government bailouts itself created moral hazard.

So no, I don’t agree with you in the least. What’s this nonsense about ‘deregulation’ anyhow? The various banking statutes and regulations in the USA probably run into the thousands of pages. You can make a case that the regulations were faulty, but you cannot claim that they did not exist.

Nevertheless, there was a ton of greed, stupidity and outright mendacity in the financial sector at the time. Certain major players escaped justice, but then again when half the Treasury Dept comes from Wall Street what can you expect.

#73 IKnow on 04.11.18 at 8:25 pm

Obviously average people don’t buy average-priced houses in this big city – as in other big cities. – Garth

But just a short 10-15 years ago an average family can more than afford an average detached house. The question really is: what happened during the past 10-15 years? Intrinsic and Extrinsic factors, please comment.

#74 april on 04.11.18 at 8:26 pm

Only 60% of new mortgages booked at Canadian banks this Feb compared to last Feb. Huge decrease. Ross Kay, at Howestreet.com

#75 Howard on 04.11.18 at 8:29 pm

#38 A J’s mom on 04.11.18 at 6:45 pm
#22 A J on 04.11.18 at 6:02 pm
My Mom practically called me a failure yesterday for not owning real estate. She was crying on the phone, because I told her I might have to move if I ever want to own a home.
////////////////////

Son, how come you can’t by a home like your sister BJ or your brother HJ?

——————————————————

LOL!

#76 Bezengy on 04.11.18 at 8:33 pm

Once the Ontario government has sold off all the entities like Ontario Hydro to subsidize Toronto’s infrastructure, (in exchange for votes of course), Torontonians will eventually have to pay for essential services with their own residential tax money. Expect a 300% percent tax increase when that happens, which puts you on a level playing field with the rest of us. Here is Goldtown a $500K roof over your head will cost you $10K per annum in taxes.

http://www.timmins.ca/city-hall/budget-and-finance/municipal-property-tax-calculator

#77 For those about to flop... on 04.11.18 at 8:39 pm

#42 Whiny Millennial on 04.11.18 at 7:50 pm

“It’s pretty easy to sit here and say the market would roll over on it’s own, but that’s debatable and impossible to actually prove.”

———————————————

#32 AGuyInVancouver on 04.11.18 at 7:27 pm

“So tell us exactly how the market would have corrected on its own? A rate interest from the BoC? As a creation of the state, it’s not the “free market.”

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

On January 8th 2017, Garth Turner decided to write a post called “The predicament.”

I had suspected that the market in Vancouver had started to roll over under it’s own weight in Autumn 2016.

People told me to prove it or shut up.

You will have to probably read over 3000 posts to follow the stealth correction that has been going on for 18 months now.

The documenting continues until this day.

You might need to phone in sick for work tomorrow…

M43BC

http://www.greaterfool.ca/2017/01/08/the-predicament-2/

#78 Stockpickers boyfriend on 04.11.18 at 8:40 pm

#72 I know

Yes timing and location.. but 99% is having the balls to do it! No risk no champagne! Right?!!!!

#79 Long-Time Lurker on 04.11.18 at 8:44 pm

A defense for Garth’s argument regarding the free market correcting housing affordability.

For those who cannot apply reason (who are legion):

Point One.

1. Real estate prices go up. People can’t afford them. People leave.

2. People leave. Real estate prices go down.

2. Example. Emigration drops real estate prices: People leave Detroit (due to industry collapse, see Point Two). Detroit property values plummet.

Point Two.

1. Real estate prices go up. Foreign influence. Locals leave.

2. Businesses have no customers. Businesses leave. Commercial real estate values go down.

3. Residential real estate values go down due to lack of businesses-employment/services.

3a. Conjoiner: (What is the value of a residental property when there are no businesses/services around it? See Point One example.)

I am open to reading your counter-arguments.

#80 Life in the Burbs on 04.11.18 at 9:03 pm

Between the millennials and the boomers emptying all the GTA and Van out of condos I forseee a phenomenon coming abruptly true. When the poop hits the fan on that asset class one thing will happen for sure….family reunification. Boomers had better spruce up those basements cause “mama is coming home” We have the greatest number of graduates with post second degrees in Canadian history how can these people be so rudimentary financially illiterate? The only thing that I can account for this madness is pure un adulterated GREED.

#81 TS on 04.11.18 at 9:06 pm

Want free market housing?

1.) Stop CMHC allowing people to buy houses to 5% down
2.) Stop RRSP loans to buy houses

3.) Private CMHC and let them be like any other Mortgage Insurance company

4.) Make all money to buy housing from Overseas be spend 10 years in Canadian bank account collecting 1% interest before it can be used to purchase housing.

#82 Adrian on 04.11.18 at 9:09 pm

#101 Ian on 04.10.18 at 11:24 pm

#77 Adrian

Steve Keen is interesting, he mentions a guy Richard Vague whose insight is that private debt growth is what causes all the big financial s-storms, not public debt. I’ve been trying to get Vague’s book but no success. Do you know about him?

If so Canada is in for one massive s-storm.

**********

I’ve heard Steve Keen talk about Richard Vague, and I’ve read a few of his writings, but not his book. Canada is in the red zone for an imminent storm – and an even bigger one if we don’t get NAFTA back in a hurry (20% of our GDP is exports to the US!).

Steve Keen’s work is basically a mathematical proof of Irving Fisher & Hyman Minsky’s debt-deflation theory. Richard Vague’s research is historical evidence for for Steve Keen’s model: in the past 150 years there have been ~150 debt crises, globally, and almost every one required a write-down or a new debt-bubble by the inverse sector (e.g. public if private & vice versa). Only in a tiny minority of cases, where there was a massive export surplus, did the debts ever get paid back in full.

Ultimately, this is The Story of Capitalism: banks blow private-debt-based asset bubbles that create wealth on the way up, but inevitably pop when Credit ($/year) turns negative and starts a deflationary recession. When these bubbles pop they cause massive economic dislocation that creates widespread social unrest – & usually a war – that leads to a debt reset. We’ve been at this for a few centuries now, apparently without realizing that we just keep repeating the same pattern over and over again…

There were private debt bubbles before the French Revolution, WW1, & WW2. The American Civil War was also preceded by a large negative Credit event that caused a ten-year long recession. This drove small cotton farms into bankruptcy, led to a consolidation of land, slaves, wealth, & power in the South, and created the Oligarchy that opposed Lincoln’s anti-slavery platform & forced the Secession.

We are playing with fire, but people are too busy blaming Government – or tearing each other to pieces with identity politics (to be fair to both the Left & Right) – to realize the extreme danger everyone is in. Wanna take bets on where WW3 will start? I heard someone up-thread say Syria…

#83 Tactless on 04.11.18 at 9:19 pm

We all at some point forgot that retirement was more important than renovations.

Anyone notice the grandparents quietly cashing out?

#84 A J on 04.11.18 at 9:27 pm

#38 A J’s mom

…..I don’t really know what to say except I’m a woman. That’s all…. I’m outta energy for this comment section and real estate talk in general. Just drained.

#85 Adrian on 04.11.18 at 9:34 pm

#27 Debtslavecreator on 04.11.18 at 6:15 pm

Don’t come begging for a bailout when u Millie’s are bankrupt with worthless “properties”

Maybe you need to get ready to ask for a refund of your tuition money

*********

Silly rabbit, the Millenials with student loans CAN’T GET mortgages. Banks won’t touch us ;)

***************

#54 randy on 04.11.18 at 7:44 pm

Sorry Garth but your blame the mills doesn’t stand up to the stats in Vancouver. New numbers out show that over 60% of condo buyers last year were over the age of 40. Only 12% were under 30. You don’t have to be young to be stupid.

Link? – Garth

******

Makes sense. Those are the investors buying second+ properties:

https://www.blogto.com/city/2018/04/toronto-condos-investors/

https://www.thestar.com/business/real_estate/2018/04/06/who-are-the-foreign-condo-investors-in-toronto-a-new-study-sheds-some-light.html

#86 theoryAndPractice on 04.11.18 at 9:37 pm

“So, in summary: government intervention and social engineering prevented the housing market from rolling over naturally….”
=====================
Garth – I think this is the real reason why all it happened since centuries and it will continue to happen :

https://www.youtube.com/watch?v=HBk5XV1ExoQ

Please tell me if I’m wrong on that.

#87 the Jaguar on 04.11.18 at 9:38 pm

#45 Willy H “You cannot divert hundreds of billions into unproductive over-valued assets year after year without economic fall-out at some point. ”
———————
Agreed, but who brought in 40 year amortizations in the first place (withdrawn 2008) and then 35 year amortizations ( withdrawn 2011)? And if the credit taps were opened up by the likes of Greenspan it was because all the discretionary spending dollars dried up when jobs got shipped overseas…and who sat back and let that happen? And why don’t we have a free and independent media in this country that is not reliant on advertisers who peddle real estate in one form or another? They have played a part in leading the lambs to slaughter.
I would agree that the mountains of debt in Canadian households are mostly self inflicted and symptomatic of a societal focus on acquiring stuff, especially disposable stuff that goes in landfills, which seems to fill up some peoples emotional needs faster than those same landfills. But OSFI has been late to the party on this problem and still hasn’t gotten the wagons completely in a circle. Stress tests are nice, but qualification is a cake walk when income verification standards are lax, especially when we are talking rental income. Stress test my ass when it comes to the fabrication of rental income which, even if it were a reality is hardly ever declared as income to the CRA by a significant number of those who use it to their advantage when they want to beat the stress test. Why both OSFI and CRA turn a blind eye to such an obvious drain on revenues is a mystery wrapped in the enigma of political party support based on community demographic. If reports are true that 50% of mortgages will come due for renewal this year in a ‘brave new world’ interest rate environment while values continue to decline we are all in for the ride of our lives. Still not too late to do the ‘right thing’. OSFI may have to pull on their steel underpants, but at least they will be able to sleep at night.

#88 Dianne Maley on 04.11.18 at 9:42 pm

What is the story behind the giant cat in the photo?

#89 Leo Trollstoy on 04.11.18 at 9:43 pm

Toronto tech booming!

Part of the reason is simple supply and demand: Workers are flowing to Toronto for its booming tech
https://www.bloomberg.com/news/articles/2018-04-11/condo-renters-in-toronto-get-ready-to-write-a-bigger-check

Told ya!

PS my source is Bloomberg. What’s yours?

That’s what I thought

Lol

#90 MaxBerniersShorts on 04.11.18 at 9:46 pm

This is why buying a condo in BC is preferable to renting. How many people have the time and money to fight a Residential Tenancy Branch consistently biased in favour of landlords?
http://vancouversun.com/news/local-news/renoviction-tenant-wins-a-round-in-battle-against-landlord

#91 Newcomer on 04.11.18 at 9:47 pm

#64 MSM Free Zone on 04.11.18 at 8:03 pm

Never forget that it was unbridled, deregulated 2008 capitalism, not government intervention, nor taxes, nor socialism, that blew the world’s financial brains out, and incubated the absurd housing scenario we’re witnessing today.
——–

Far from it. It was government backing for mortgages that created the moral hazard that produced the problem. I don’t agree with Garth’s apparent position that government intervention and taxes are always a bad thing (I don’t think the former head of the CRA actually sees it that way either) but the housing bubbles, both before and after the GFC, were caused by too much, rather than too little, government intervention.

#92 tccontrarian on 04.11.18 at 9:53 pm

Wanted to post something insightful tonight but no idea what…so I’ll do the Watchie Minnie thing:

Had a restless sleep last night as I’m getting used to a different way of eating – Intermittent Fasting, they call it. Probably the ketosis kicking into gear… but who knows. I layed there and listened for my wife’s breathing to see if it was still there – alas, it was!
Kids to school and then the easy drive to work…when I got there I turned on my computer and logged into my trading account, while getting coffee ready.
All green on my screen, well mostly, with my oily stocks up 5%, and precious metals, ohh my precious…., they were nicely up as well.
I think I will sleep better tonight … in a field of green!

TCC

#93 Adrian on 04.11.18 at 9:56 pm

#74 IKnow on 04.11.18 at 8:25 pm

But just a short 10-15 years ago an average family can more than afford an average detached house. The question really is: what happened during the past 10-15 years? Intrinsic and Extrinsic factors, please comment.

**********

ProfSteveKeen:
“Inequality, Debt and Credit Stagnation”
https://youtu.be/iY5rto-ivoA

#94 millmech on 04.11.18 at 10:05 pm

#75 April
A couple of the markets I have been watching are now getting house prices below $300k, they will fall to $200k in the future, that is when you go all in.
I am laughing at people buying dog kennel sized concrete boxes for almost seven figures. In one of the markets I am seeing them for under $90k, but hey pay ten times that for a view of another building!

#95 Raquel on 04.11.18 at 10:13 pm

The average income of 102,000 (genx) and 71,000 (mills)..is that income per individual or household?

Seems high if individual.. or I’m just poor..

#96 salted on 04.11.18 at 10:13 pm

..omg..

I’ve just received a copy of a Light Industrial Lease agreement and am reading through it.

You see Garth, I follow your advise, like.. “buy dirt” and “there’s no profit in SFH.”

I’m in the process of my first commercial property acquisition and have been reading over leases..

IT’S A GOLDMINE AND PAYDAY ALL IN ONE!

Whereas I’m responsible for everything in my residential rental like, new washer/dryer, new stove, window cleaning, insurance, taxes, paint, maintenance, WSG etc, and my in-arrears Tennant can stay for up to a year without paying rent until the bailiffs, whom I’ve hired at great expense, swing by to encourage them to move along and become someone else’s headache.. In commercial, it’s all the responsibility of the tenant! And they pay triple net (NNN) on top of the rent!! And the lease ends at the end of tenancy (which is unconstitutional in residential). Well, holy!

Ok… so thanks for blogging. You’ve changed the way I think.

#97 up or down? on 04.11.18 at 10:17 pm

Commenters, you have 10 hrs to put in your prediction, before the report drops:

https://housepriceindex.ca/#maps=c11

I’m guessing yvr up, for the 13th rise in 15 months.

#98 IKnow on 04.11.18 at 10:18 pm

#80 Stockpickers boyfriend

Yes it takes gut, when at $100k so low risk many people couldn’t care, came up with all kinds of counter arguments, like stock market can have better returns, what happen if tenants dump concrete into toilets, etc.

Way back, when a house in YVR was 300k, a friend said he heard this on radio: the money adviser on radio asked people to think this: how many people do you know got wealthy from owning multiple real estate properties, versus how many you know got wealthy from doing well with stocks and finances? The opinion was that real estates should win on average, due to high leverage allowed. Wish I had more gut back then.

#99 Barbara on 04.11.18 at 10:31 pm

Question – I’m renting an apartment. A nice one in an apartment building. My rental didn’t increase. Do they not always increase rent? Or maybe they are slow?

#100 jefferson on 04.11.18 at 10:53 pm

hey all…well since Newmarket was mentioned….my landlord bought my humble abode pre-build three years ago for 5ook in a neighborhood where they’re now selling (trying?) for just south of a million but recently struggling….I guess you could call that a crash? (cough,cough) I’d call it once in a lifetime sweepstakes …

but anyway for myself I rent a brand new, never lived-in, three bedroom end unit in Queensville for $1700, …you know as poster #39 put it…”the armpit” of the GTA….(I’ve lived a couple places south of HWY 7 that I think would probably cause some disagreement there lol…)

So there’s really no greater fool as far as my landlord or myself are concerned, I don’t know I think we’re both ok…The Newmarket area is a great place to live… and I’ve spent a lot of time in each province, not exaggerating.

I sold my house last year in Uxbridge and haven’t looked back, renter for life now, cheers.

#101 Ex-Cowtown on 04.11.18 at 10:56 pm

Just finished watching Global News where a smarmy young poli-sci researcher from SFU explained why Alberta will never cut off the oil to the Lower Mainland. His point, as he chuckled condescendingly at all of us know nothing grey hairs, was that the companies shipping oil want to keep making money, so they won’t support a stoppage.

Newsflash pinhead! The companies involved are losing $$Million$$$ EVERY DAY because they have to sell their oil at half price to the US BECAUSE THERE ARE NO PIPELINES!!!

In 48 hours the LM will be screaming for the taps to be turned back on and the companies involved will be thrilled to have lost that little bit of revenue to solve a never ending problem.

Good thing the young pup was a poli-sci prof. Math is hard and he couldn’t cut it in the real world anyway.

#102 genbizx on 04.11.18 at 11:09 pm

Millennials care about image over reality…how many followers on Twitter?, “look at all the exciting things I do and all my friends” ala Facebook, wads of interest on slick cars (or the one that looks smartest), nice looking condo or home that mommy n daddy basically buy them so it looks like they have it goin on…

If they’d just refuse to take part in the ridiculousness…prices might more accurately reflect reality ie real wages

Gov always intervenes…they just got the last 10 yrs wrong..right intervention might have saved us the mess that will start in a couple yrs…

#103 Chas on 04.11.18 at 11:12 pm

Talk to some Agents Garth. Please. Freehold Market is hot in TO now . Lots of Det. Semis and Suburban homes selling fast fast fast up to 850k.

#104 arfmoocat on 04.11.18 at 11:15 pm

the X-people average $102,000, compared with $71,000 for the kids
……………………………………………………………………..

Where you coming up with this bullshit?

I sourced it. Read. – Garth

#105 Smoking Man on 04.11.18 at 11:21 pm

Canary in a coal mine.

https://www.zerohedge.com/news/2018-04-11/rbc-warns-cracks-starting-show-canadian-credit

#106 salted on 04.11.18 at 11:24 pm

Commercial leases con’t..

The triple net lease, also called a triple N, places responsibility with the tenant for three payments in addition to the rent.

The tenant pays for building maintenance, insurance and property taxes.

This arrangement may have advantages for both parties, as the rent is lower with this type of lease than with the gross or percentage leases. Lower rent makes it easier to find tenants, so the landlord is less likely to have a vacant building.

I’m blown away..

#107 PastThePeak on 04.11.18 at 11:27 pm

Your music sucks. – Garth

Garth man – the 80’s ruled! You had one of the most diverse decades of music ever (pop, rock, heavy metal, good country, country rock, and the emergence of rap/hip-hop). No autotune! Plus I was early enough in Gen X to appreciate the great folk/country rock of the 70s…

And be a little more generous on the GenX duration – it was from 65-82 (ish). Don’t give us only 14 years when them Boomers and Mills get 20…

Anyways, I digress. What I wanted to comment on was about the Mill gen and their housing lust. It wasn’t that long ago (maybe 5-6 years), when I was reading a lot about the Millennial generation’s great potential – and it was expected that this generation was going to be much more “nomadic” than any generation that came before.

They wanted to see the world, live on experiences, were highly educated in knowledge industries, could apply for jobs in multiple counties, and would not be as tied to home city or country boundaries. What happened?!! At least as the stories go, they are the most house hungry at a young age of all time.

Any of you youngin’s out there want to chime in?

#108 john m on 04.11.18 at 11:29 pm

Now we have weed. Such progress. – Garth”<<<<<<<<hilarious :-)

#109 PastThePeak on 04.11.18 at 11:34 pm

#74 IKnow on 04.11.18 at 8:25 pm
Obviously average people don’t buy average-priced houses in this big city – as in other big cities. – Garth

But just a short 10-15 years ago an average family can more than afford an average detached house. The question really is: what happened during the past 10-15 years? Intrinsic and Extrinsic factors, please comment.
+++++++++++++++++++++++++++++++++++

Hmmm…not in the urban part of any city that I am aware of, going back 30 some years. In the lower priced (less desirable) outer suburbs…yes (if both worked).

People seem to forget the expansion of cities over the decades. What was once an outer suburb in the 1960s, with very small and modest homes, eventually became part of the urban area (not core, but call it an inner ‘burb). That outer burb was affordable for (true) middle class at the time…and many families would hang in there. But over time that property, if it changed hands in 20-30 years, would not be affordable to the middle class of that present.

#110 PastThePeak on 04.11.18 at 11:38 pm

#106 arfmoocat on 04.11.18 at 11:15 pm
the X-people average $102,000, compared with $71,000 for the kids
……………………………………………………………………..

Where you coming up with this bullshit?
+++++++++++++++++++++++++++++

Is it really a surprise that the older generation, in their prime earning years, is making more on average than the up & coming gen where many are just starting out?

#111 arfmoocat on 04.11.18 at 11:38 pm

I sourced it to…

Members of Generation X make a middle-class income, with an average of $50,400. By comparison, Millennials only make $34,430 on average.

https://www.visioncritical.com/gen-x-stats/

The source was Environics, as stated. Your link is American. – Garth

#112 Entrepreneur on 04.11.18 at 11:58 pm

It just seems to me that if it takes OSFI to bring in regulations like a referee in a game one has to look at both team players. OSFI is a referee whistle blower and said this is not how the system/game suppose to work. Oh, I forgot, rules are for us when in school then it is dog-eat-dog when outside the school ground.

Hang in there #86 AJ as many youth have lost faith in our system, many feel the same. I would stick with your mother, stick together, believe me no one loves you more (usually).

To get out of a difficult situation: stroke the ego, make the person feel important.

#113 Balmuto on 04.11.18 at 11:58 pm

Most likely a number that isn’t based in the “on-the-ground” reality, that individual unit rents are only rising minorly

You obviously don’t live in Toronto, what do you know about the “on-the-ground” reality here?

Try limiting your sage advice to topics you actually know something about, you’ll sound more intelligent that way.

#114 Oft deleted much maligned stock.picker on 04.12.18 at 12:02 am

Here in Asia….where income tax maxes out at 15%, every body’s happy and has lots more cash. Professionals only pay 10% because retaning and attracting expertise is important to the economy. There is no sales tax….no hst…no carbon tax….no gas tax…..no plastic bag tax….and no recycling fees…..they don’t encourage waste…..but there’s someone picking bottles and that’s their living…..it’s a job…..that the social safety net.

Condos fly off the shelf….the investment market us immiture and has a heart fh barrier of entry…..and with phsical gold less attractive young people buy multiple condos. Foregners can’t buy land….period. Holiday makers from China….about 11 million a year scoop up condos like popcorn putting a floor under the market.

Did I mention that the evening mies over here are booming. It’s that there’s a lot less gov interferance….and more disposable income. Open a business here in a day
……with no licensing headaches…..just start raking in the cash. Canada is a tough place to work…..you never save anything after tax….business sucks…..and the economy is sucking tailpipe under PM Geraldine Butts and his hand maiden Justine. You guys really need to wake up.

#115 Arto on 04.12.18 at 12:05 am

Hey Garth, your man John Pasalis, just dissed you on Twitter

Comments?

@JohnPasalis
2h2 hours ago

Curious, can the bears out there tell me when exactly they expect to see prices in the GTA fall another 20-40%. By the end of this year? The timing matters. @garthturner has been making this prediction since 2008 and house prices have doubled – even after a 20% correction

He’s a realtor. – Garth

#116 Vanreal on 04.12.18 at 12:35 am

The average annual household income of Gen X is $102,000 compared to $71,000 for millennials and $98,000 for baby boomers, according to data from Environics Analytics.Jun 14, 2016

#117 Fuzzy Camel on 04.12.18 at 12:43 am

Real Estate has a serious flaw going forward. It may be permanently situated next to a smouldering nuclear wasteland known as the US shortly.

#118 Dolce Vita on 04.12.18 at 1:05 am

People posting about Garth’s so called theory on why condo’s so hot.

What theory?

For JC’s Sake, it’s common sense. They want a home, can’t afford one, so they buy what they can.

Real simple.

#119 Myra Andrews on 04.12.18 at 1:09 am

Greater Vancouver Stats from realtor Paul Boenisch

April 11 New 248 Sold 101 TI:9709
April 10 no posting from Paul
April 9 New 382 Sold 117 TI: 9450

April 6 no posting from Paul
April 5 New 268 Sold 164 TI: 9264
April 4 New 324 Sold 154 TI: 9204
April 3 New 538 Sold 131 TI: 9104

Mar 26-29 New 793 Sold 455 TI: 9032
Mar 19-23 New 1041 Sold 617 TI: 8916
Mar 12-16 New 1147 Sold 682 TI: 8743
Mar 5-9 New 1101 Sold 542 TI: 8510

#120 Dave on 04.12.18 at 1:13 am

I always thought the average income family only made $80,000 a year in Canada(2people) 100000 for Gen X and 70,000 for Millennial seems quite High. Double what I’ve always seen reported. If Those numbers are true then we don’t have affordable housing problem.

#121 Dolce Vita on 04.12.18 at 1:23 am

“So they point to sticky average prices now as evidence it ain’t working” [on B20].

A noticeable absence of many B20 bashers and RE Pumper posts in the last month or so in Comments [as in: B20 will not stop the RE market juggernaut in YVR and 416].

Well, it has.

No more SFH paper millionaire posts [they forgot to monetize].

And NOT a surprise that 33% of all buyers have decided to shelve their house plans entirely because of B20.

That’s nearly the same number [a max of about 35% then] when OSFI imposed a Stress Test on the < 20% down crowd in Oct. 2016 [practically speaking, the 5% down crowd].

Good that today you posted some "payback" verbiage to the noticeably absent B20 naysayers Garth.

Funny thing, B20 has only been in effect for 3 months + a couple of weeks, less if you factor in that many got mortgage approvals before B20 kicked in.

The worst is yet to come once the 2017 pre-approved, pre-B20 crowd have made their purchases in 2018 [supposedly from prior Comments, that cohorts purchases should be ending right about now].

From now on in we will witness the true unfettered efficacy of B20 and, right smack dab in the middle of the traditional RE sales peak of the year.

#122 Dolce Vita on 04.12.18 at 1:33 am

“…a quarter have compromised on the size of the purchase.”

No kidding.

Some of us [like me] regularly posted in 2017 that B20 would shrink the number of buyers by a 1/3 and leave the rest with less money to spend [if the OSFI Oct. 2016 Stress Test was any indication…common sense].

Well naysayers, common sense happened.

Entertaining reading the RE Fanatic posts against this over the past few months. You can’t reason with fanatics.

To me, the fun is about to begin in the YVR and 416 RE markets as a result of the “less money to spend” crowd.

They will determine RE prices from here on in – whether it be SFH or Condos.

That can only mean 1 thing, the so-called sticky prices are about to get unstuck [probably sticky due to the pre-B20 mortgage approved cohort buying in the 1st Quarter of this year].

#123 Newcomer on 04.12.18 at 2:00 am

#113 arfmoocat on 04.11.18 at 11:38 pm
I sourced it to…

Members of Generation X make a middle-class income, with an average of $50,400. By comparison, Millennials only make $34,430 on average.

https://www.visioncritical.com/gen-x-stats/

The source was Environics, as stated. Your link is American. – Garth
———-

Also, the US stats here are for individuals but the Environics stats are for households.

#124 Smoking Man on 04.12.18 at 2:17 am

This unappologetic, dingbat lefty loon, SJW feminazi who writes for McClains and the globe and mail puts out a discussing tweet regarding the tragic death of those young hockey players.

Will I mention her name. Tell you what she said. A link that clearly demonstrate that Libralism is a mental disorder.

Nope. Not feeding the troll.

It was pathetic. Go ahead Garth delete this one.

#125 Dan on 04.12.18 at 5:12 am

Ja? government policies are distorting the market? But that was ok for the last 18 years- when real estate was supposed to be in trouble in 2008- how many policies caused prices to double and triple and quadruple ( good call on the troubled housing market).

Now a few measures are enacted and it’s terrible? Love the total 180 on housing. Ja, demand for housing is not going anywhere- problem is now people might actually need money or a richer bank of Mom.

#126 under the radar on 04.12.18 at 5:48 am

108 gross lease is usually cheaper than triple net and more advantageous for a tenant. Gross lease means tenant pays one price, increases are on the landlord. net lease means landlord is usually without any costs , except structural. Industrial and commercial can sit vacant for years, whereas residential rents easily. Not the panacea you think. I assume you are doing a phase 1 environmental and possibly a phase 2 if warranted.

#127 Gravy Train on 04.12.18 at 6:33 am

#125 Newcomer on 04.12.18 at 2:00 am
The source was Environics, as stated. Your link is American. – Garth

“Also, the US stats here are for individuals but the Environics stats are for households.”

Yes, but wasn’t that obvious? How many millennials do you know running around with seventy-thousand-dollar salaries?

#128 Be Realistic on 04.12.18 at 6:40 am

#102 – Jefferson

So there’s really no greater fool as far as my landlord or myself are concerned, I don’t know I think we’re both ok…The Newmarket area is a great place to live… and I’ve spent a lot of time in each province, not exaggerating

——————————————————————

People can be so ignorant, especially in Toronto (and I grew up there). People used to tell me that us Torontonians had a language and annoyance about us to everyone else in the world (especially Canada). I didn’t know what they were talking about until I moved a tad north.

#129 Gravy Train on 04.12.18 at 6:44 am

#126 Smoking Man on 04.12.18 at 2:17 am
“Go ahead Garth delete this one.”

Garth should delete your post, just based on your misspellings alone! (You do know that when you misspell words—especially a lot of them—you come across as a boob, right?)

#130 Victor V on 04.12.18 at 7:25 am

‘Reckless’ Toronto market saw sold homes lose $135M in value in 2017: Report

https://www.bnn.ca/reckless-toronto-market-saw-sold-homes-lose-135m-in-value-in-2017-report-1.1053979

The rapid decline in Toronto housing prices in the second half of 2017 led to nearly 1,000 households losing about $135 million in market value, as some buyers walked away from deals and sellers sold homes at prices lower than what they originally bought for, says a new report released Thursday.

According to real estate brokerage Realosophy Realty, at least 988 households were directly affected by a sudden drop in Greater Toronto Area home prices last year.

The figure includes 866 properties that failed to close after initially being sold, according to the report. The homes were eventually sold to another buyer later in the year, but on average, the houses were sold for $140,200 less than the first price.

#131 Paolo on 04.12.18 at 7:43 am

It’s official as of this morning.

GTA RE Bubble Burst a year ago.

https://www.thestar.com/business/real_estate/2018/04/12/torontos-housing-bubble-cost-sellers-136-million-report.html

LOL!

Now the mainstream media is broadcasting this news.

#132 Andrewt on 04.12.18 at 7:47 am

#39 Gigi on 04.11.18 at 6:46 pm
#21 Be Realistic on 04.11.18 at 6:01 pm
These kids should move north – not Barrie north, but like Newmarket north. Decent deals right now if you bargain down. Transit improving by the year. Rumoured future subway line up to Highway 9 (a friend of a friend has seen the plans). Why shack up in a box in the sky where everyone can peek into everyone else’s living room. Just like that Hitchcock movie with the guy and telescope.
######################
C’mon, really? Newmarket? Newmarket, Barrie and Georgina are the armpits of the GTA.

—-
I was gonna say. If I were starting out or starting over, I’d rent in one of those buildings in the Annex, or by St.clair & Bathurst, or Broadview/Danforth etc. where you can still get a 1 bdrm for 1400-1500. Trendy area next to million dollar homes, with all the convenience and amenities of downtown living. No need for a car and no worrying about parking. 15-20 minute commute if you work where the action is. You could save a ton of cash that way while still being able to go out and enjoy yourself from time to time.

#133 Ezzy on 04.12.18 at 7:56 am

#26 Cory in Shangalila

@Garth

I literally snorted when I read that comment Garth. LOL so true!!

#134 Steven Rowlandson on 04.12.18 at 8:09 am

The excesses of the real estate market have always prompted a serious crack down on landlords and real estate profiteers in the aftermath of reactionary and even revolutionary political revolutions.
These taxes imposed on real estate are nothing compared to what is possible. It is the doom of people that they forget or ignore the lessons of history.

#135 crowdedelevatorfartz on 04.12.18 at 8:24 am

@#101 ex Cowtown
“Just finished watching Global News where a smarmy young poli-sci researcher from SFU …..”
++++++
The Kinder Morgan offices and main pipeline protest squatters site are just down the hill from Simon Fraser University.
I’m thinking the researcher wouldnt be too popular if he voiced anything critical of the ramifications of the “the taps being turned off”.
No, the taps wont be turned off due to signed contracts and legal obligations.
But one wonders when that existing 60 year old aging pipeline (that was designed to deliver, light , sweet crude) will start springing more and more leaks due to the introduction of corrosive( chemicals added to liquify the targoo), sandy, high temp(200 deg c), high pressure( 800 psi) slurry.
Time and leaky old pipes require maintenance.
I dare say when KM shuts the pipeline down for 6 months or so do do “routine inspections and maintennance”…..the price of Lower Mainland gasoline will skyrocket.
And THAT will test the patience of even the most diehard “greenie” filling their car at the pumps.
We currently pay $153.9/liter in the LM.
I expect $1.75/liter “bump ups” by the mid summer, high consumption, tourist season.

The BC NDP (Horgan)will be the first ones to “blink” in this “pipeline war” and , eventually, all the blame will be dumped on “Little Potato” Trudeau who will try and avoid the “tar” sticking to his “Environmental” record .
Not to worry taxpayers, he’ll be busy running around spending billions of your dollars on endless gender equality issues………..

Both will be gone in their next elections

#136 crowdedelevatorfartz on 04.12.18 at 8:40 am

@#92 MaxBerniersUnderwear
“This is why buying a condo in BC is preferable to renting. ”
++++++

Really?
Then I guess the people that bought a brand new leaky condo are happier than a renter in the same condo?
I walked past a “new build” less than a year old yesterday in Burnaby that was encapsulated in scaffolding and Plastic tarps….and in case you dont realize it….it rains a lot in BC.

Warranty repairs you say?
Great.
The condo owners brand new, less than a year old, condo may have long term major roofing, envelope issues and you can be sure the original contractor will be doing as little as possible to fix them until the “warranty” runs out.
Sue you say?
Great.
Now the entire blog-o-sphere will know your building is a leaky condo with possible mould issues.
Good luck selling.
Anyone who buys a condo in the rainy, leaky, mouldy Lower Brainland…..deserves what they get.

#137 Milly on 04.12.18 at 8:52 am

Is there anytime where buying a condo is worth it? Rents are getting crazy high, almost the equivalent of a mortgage+condo fees. There has to be some point where it is better to own a condo than rent. Any advice from the sage comments section here?

#138 dharma bum on 04.12.18 at 8:55 am

It’s all underscores the obvious: politicians screw things up. – Garth
——————————————————————–

True dat!

“When the government is quite unobtrusive, people are indeed pure. When the government is quite prying, people are indeed conniving.”

-Lao Tzu: Tao Te Ching Chapter 58

#139 X on 04.12.18 at 9:11 am

re 32 – Toronto Disneyland

Ummm that rumor was started by an article that was an April Fools Joke…..

#140 [email protected] on 04.12.18 at 9:25 am

#73 jim

Before you lay the financial crisis at the foot of the government and exculpate the private sector consider this analysis by Barry Ritholtz:
http://ritholtz.com/2011/11/charts-facts-economic-crisis/

#141 arfmoocat on 04.12.18 at 9:44 am

#125 Newcomer

Thanks, I knew those numbers were way out of whack.

Half the millennials are still living at home with mom and dad making minimum wage.

#142 crowdedelevatorfartz on 04.12.18 at 9:47 am

@#52 Smartalox
” I think that’s what happened here.”
++++

and I think you’re spending too much time on internet conspiracy sites……

Possibly it’s just a big cat in the arms of a small man?

I’m investing in tinfoil futures…..

#143 Tater on 04.12.18 at 9:48 am

#90 Dianne Maley on 04.11.18 at 9:42 pm
What is the story behind the giant cat in the photo?
——————————————————————

https://www.adobe.com/ca/products/photoshop.html

#144 Moister Miller on 04.12.18 at 9:48 am

Lots and lots of Dereks from the sound of it ?

https://www.thestar.com/business/real_estate/2018/04/12/torontos-housing-bubble-cost-sellers-136-million-report.html

#145 Tater on 04.12.18 at 9:54 am

#97 Raquel on 04.11.18 at 10:13 pm
The average income of 102,000 (genx) and 71,000 (mills)..is that income per individual or household?

Seems high if individual.. or I’m just poor..
—————————————————————–

90th percentile of all incomes is 98k in Toronto. So I have to assume that is household

http://www12.statcan.gc.ca/census-recensement/2016/dp-pd/dv-vd/inc-rev/index-eng.cfm

#146 Smoking Man on 04.12.18 at 9:55 am

131 Gravy Train on 04.12.18 at 6:44 am
#126 Smoking Man on 04.12.18 at 2:17 am
“Go ahead Garth delete this one.”

Garth should delete your post, just based on your misspellings alone! (You do know that when you misspell words—especially a lot of them—you come across as a boob, right?)
…..

Well a boob it is. I would like to see how your thumbs operate after you consumed 4 beers, 3 glasses of wine and a micky of Jack.

#147 Mattl on 04.12.18 at 9:56 am

“Yes, but wasn’t that obvious? How many millennials do you know running around with seventy-thousand-dollar salaries?”

I have a whole team of them, and we can’t find enough good people to make 60-80k.

#148 Blacksheep on 04.12.18 at 10:27 am

Little chuckle.

https://www.zerohedge.com/sites/default/files/inline-images/assad-meme.jpg?itok=_Q0KoOSH

#149 Hpi on 04.12.18 at 10:30 am

Called it!
https://t.co/LjxQkHbN7x

#150 Be Realistc on 04.12.18 at 10:37 am

#134Andrewt

I was gonna say. If I were starting out or starting over, I’d rent in one of those buildings in the Annex, or by St.clair & Bathurst, or Broadview/Danforth etc. where you can still get a 1 bdrm for 1400-1500. Trendy area next to million dollar homes, with all the convenience and amenities of downtown living. No need for a car and no worrying about parking. 15-20 minute commute if you work where the action is. You could save a ton of cash that way while still being able to go out and enjoy yourself from time to time.
——————————————————————

If all I needed was one room and I worked downtown, I would consider that strongly as well.

#151 Proof ? on 04.12.18 at 10:59 am

A sea change has occurred in the past 20 years or so.

People now RENT their money (at interest and leveraged) for major ‘purchases’ such as cars and homes. They can no longer accumulate capital if they want to participate in the consumer economy and low interest rates have distorted the prices that they must pay to play this game.

Simply put, the banks have won and the willing populace of most developed countries have enslaved themselves through their own financial illiteracy and lack of fiscal discipline.

The demand created by such available credit has inflated the costs of major purchases such as houses and vehicles so dramatically and so far from income fundamentals so as to ensure that the enslavement will likely continue throughout their lives.

On this point alone, I have great sympathy for Millennials and their limited futures.

They know that they’ve been had by policy decisions that didn’t even consider their well being and futures when made. That much is self evident.

CONCLUSION :

The Millennials will heavily tax the assets of the generations chronologically ahead of them when they hold the levers of power to address this imbalance.

They will have the demographic majority and their indoctrination into socialism by their fool Boomer parents will ensure that they will have no hesitation to do so.

Count on it.

#152 Smoking Man on 04.12.18 at 11:06 am

Who’s all wearing hockey jerseys today?

#153 Tom from Mississauga on 04.12.18 at 11:16 am

Article by Jill Mahoney in The Globe is required reading this morning.

#154 Josh in Calgary on 04.12.18 at 11:28 am

Further proof that democracy is broken. Just look at the credentials of some of these MLAs and MPs. It use to be that you had to have some sort of “serious” resume before people would vote you in. I won’t be specific, but it had to lend credence to the fact that you were qualified to think and make balanced decisions that you knew would effect both long and short term. Now that somehow is seen as a black mark by large segments of the population. It mean’s you’re “part of the system” and somehow that means you’re “bad”. They’d rather vote in someone who has no clue about how the real world works and has all sorts of good intentions (at least in their flowery speeches) … not to mention good hair.

It ends in policy disaster. Not to mention inter-government lawsuits as the think that just because they’ve been elected they can do whatever they want and make up rules as they go. Of course their base eats this up and so it continues (this can be applied to left or right, I have no bias with these comments).

#155 Tucker on 04.12.18 at 11:29 am

How is it that smoking man can post drunken comments and maybe even get them deleted but anything I post doesn’t even show up?

Maybe I don’t like you. – Garth

#156 Oft deleted much maligned stock.picker on 04.12.18 at 11:35 am

Record number of mortgage renewals due as short termers xpire……should be interesting.

http://calgaryherald.com/pmn/news-pmn/canada-news-pmn/nearly-half-of-existing-mortgages-face-renewal-in-2018-cibc-report/wcm/46dab3b0-bf9b-4871-98f3-37ab5b8ce902

#157 Niagara Region on 04.12.18 at 11:36 am

WHY CANADIANS CAN’T JUST LIVE IN THE U.S.

#49 Cross-border shopper

kids are idiots.
for the millions of people in southern ontario, simply buy a house across the river.
———————————————————-
Cross-border shopper, you don’t seem to have looked into the logistics of what you propose. I’m a dual U.S.-Canadian citizen, with a residence in both countries. Here are some of the problems with your proposal:

-A person would have to pay taxes in both countries.
-Canadian health insurance does not cover most Canadians in the U.S., and so a person would have to pay for expensive American health insurance, which typically has high co-pays.
-Immigration officials often give people a hard time when crossing into the U.S.
-Apart from small items, it’s difficult to get personal belongings (like furniture) across the border without paying taxes on them, even if the items are used.
-Without permanent residency, a Canadian cannot legally work in the U.S.; but getting permanent residency and citizenship in the U.S. is expensive, very time-consuming, and hellish procedurally.

Hence, no, “kids,” don’t bother trying to buy a house in the U.S. It won’t likely work. However, retirees–the healthy ones at least–can live in Florida for a few months a year. (Btw, I lived near Boynton Beach for a year and thought the place sucked.)

#158 Wack on 04.12.18 at 12:15 pm

Just received my “wealth advantage” policy stm, normally up 6-10% a yr, didn’t even make .75% this past yr. We’re in volitile times,not just in RE!

Get a new portfolio. – Garth

#159 Wack on 04.12.18 at 12:16 pm

Volatile

#160 Heloguy on 04.12.18 at 12:36 pm

“Now we have weed. Such progress. – Garth”

Is this disdain for the plant itself, the medical benefits it provides, or for the way the government is rolling out the legislation?

This is one fight that preconceived stereotypes will not win.

cheers

#161 SilverSon on 04.12.18 at 12:40 pm

#143 Niagara Region on 04.12.18 at 11:36 am

x2. I’m dual citizen too and what Niagara Region posted is absolutely accurate. I have read several comments on here where people say “just by a house in Niagara Falls NY and commute” but those people are not as clever as they think.

In addition to all the stuff that Niagara said, Canadians are not even permitted to be in the US for more than 182 days per calendar year. You must have US residency status (citizenship, Visa or Green Card) to be in the US more than 50% of the year. Many seem to think that you can just zip back to Canada for a day or two and the “counter” starts over again, but that’s not true. It’s 182 days per year total and once you hit that number you can’t come back to the US until the following year. They scan your passport every time you go through customs at an airport, and run your license plate (and scan passport often too) when you drive across. They track the time that Canadians spend in the US so they will catch you and turn you around at the border – seen it many times. Kids better like mom’s basement for the other 183 days per year.

Also people need to realize that you have to be an Ontario RESIDENT to be eligible for OHIP. Just because you pay tax in Ontario doesn’t mean you get OHIP – you have to RESIDE in Ontario. So if you reside in NY, you lose OHIP but you still have to pay income tax in Canada. And on top of that you also don’t get the $11.6k “basic personal amount” tax credit on your CRA tax return if you reside in the US – you pay income tax to the CRA on every dollar earned starting at the first dollar. You have to be declared as a “non-resident for tax purposes” by the CRA before they let you off the hook for paying income tax in Canada. If you own any significant assets in Canada (like RE for example) its unlikely that CRA would let you be a non-resident for tax purposes.

Buying a house in the greater Buffalo area, despite their cost being 10% of an equivalent GTA house, is nowhere close to being an option for most Canadians.

#162 Smoking Mans Spell Checker on 04.12.18 at 12:44 pm

#148 Smoking Man on 04.12.18 at 9:55 am

131 Gravy Train on 04.12.18 at 6:44 am
#126 Smoking Man on 04.12.18 at 2:17 am
“Go ahead Garth delete this one.”

Garth should delete your post, just based on your misspellings alone! (You do know that when you misspell words—especially a lot of them—you come across as a boob, right?)
…………………………………………………………..

Well a boob it is. I would like to see how your thumbs operate after you consumed 4 beers, 3 glasses of wine and a micky of Jack.
____________________________________
Try using voice command on your phone you illiterate boob.
BTW It was a 40 ounce r the other day WTF?

#163 Islander on 04.12.18 at 12:48 pm

https://globalnews.ca/news/3854264/boomers-gen-x-millennials-cost-of-living-canada/
Check it out …….not so great afterall…….

#164 PastThePeak on 04.12.18 at 12:57 pm

#152 Proof ? on 04.12.18 at 10:59 am
A sea change has occurred in the past 20 years or so.

On this point alone, I have great sympathy for Millennials and their limited futures.

They know that they’ve been had by policy decisions that didn’t even consider their well being and futures when made. That much is self evident.

CONCLUSION :

The Millennials will heavily tax the assets of the generations chronologically ahead of them when they hold the levers of power to address this imbalance.

They will have the demographic majority and their indoctrination into socialism by their fool Boomer parents will ensure that they will have no hesitation to do so.

Count on it.
++++++++++++++++++++++++++++++++++

Then the march to be a northern Venezuela will advance in earnest…

#165 mitzerboy aka queencity kid on 04.12.18 at 1:08 pm

to smoking man…
i have my winnipeg jets jersey on

#166 SimplyPut7 on 04.12.18 at 1:22 pm

Look at that, 3 articles about housing without blaming China for the housing speculation.

http://www.macleans.ca/economy/realestateeconomy/how-speculators-inflated-the-toronto-housing-bubble/

http://business.financialpost.com/real-estate/what-it-was-like-to-get-caught-in-torontos-record-housing-slump

https://www.thestar.com/business/real_estate/2018/04/12/torontos-housing-bubble-cost-sellers-136-million-report.html

Could Ontario finally be maturing and owning up to the fact locals and not sophisticated foreign investors caused this housing mess?

Nope, realtors (and the media) have joined the banks, private lenders and developers in blaming homeowners for the housing mess. As if they never encouraged or were a part of the frenzy.

#167 Newcomer on 04.12.18 at 1:29 pm

#139 Milly on 04.12.18 at 8:52 am
Is there anytime where buying a condo is worth it? Rents are getting crazy high, almost the equivalent of a mortgage+condo fees. There has to be some point where it is better to own a condo than rent. Any advice from the sage comments section here?
———-
I personally would say that, if your costs (mortgage + maintenance + taxes) are lower than your rent, and the building is neither new nor old, and they let you see the council minutes, and you are sure you won’t be moving in the next five years, and you have enough to cover a bit of a loss if you have to move in the next ten years, why not. I have lots of friends happily living in condos. It’s a bit more risk than renting, but if you are saving money compared to renting, it’s worth the risk.

#168 Goober on 04.12.18 at 1:50 pm

I’ll bet HHCE will have a comment or two for this.
Want to become a Realtor®? Just check under the couch cushions for change and sign up at Groupon.

#169 Gravy Train on 04.12.18 at 2:25 pm

#126 Smoking Man on 04.12.18 at 2:17 am
“… Libralism [sic] is a mental disorder.”

Hey, Smokey. You have John Locke (1632-1704) to thank for liberalism! You’ve never even heard of him, have you? :)

I bet you’d enjoy life if you’d resist all your impulses and inclinations, and do the opposite of every action you think of doing. Did you ever see the Seinfeld episode “The Opposite”? Jerry convinces George that “if every instinct [he has] is wrong, then the opposite would have to be right.” Check it out on Youtube! :)

Smokey, you’re so much fun to play with! :)

#170 Entrepreneur on 04.12.18 at 2:45 pm

But let “honesty” towards the process before it becomes legal “be the ruler” in any legal confrontation #137 crowededelevatorfartz especially at the federal and provincial level. Google David Black, mentions about a $25B (peanuts now but at least in Canada) refinery in Kitimat to refine the diluted bitumen (will sink to the ocean floor in a couple of hours).

Still need to be honest (to be legal) towards the people of the area especially towards the First Nations. I think this is called “homework” but in this case a big F, fail.

I can see T2 only serving one term as he pretends to be so righteous and an environmentalist but has failed. As for John Horgan (joined by the Green Party) his ratings have gone up. On the news Horgan made it easier with workers that suffer from PTSD to apply for access. And most people would not have any dispute with that.

Average “worker” income is what a blogger mentioned lucky to make 50-60 thousand. And the poverty level is about $26,000. now. Less jobs around here for the average person and what do you think happens when children are involved: live poorly, move away to work, single moms on welfare, ect.

And people live on the ground and have feelings. And when we get older we feel for the youth that are struggling. So when it comes to voting who do you think people will vote for, someone that is trying to be honest and good to the people in their communities (within boundaries).

#171 What can I say? on 04.12.18 at 3:33 pm

Listen, all this take about overpriced condos is STUPID! This kind of talk has been going on forever. Note ten years ago, when there was all that doomer talk about Toronto RE. What happened in the interim? Prices shot up! Massively. This pattern will repeat itself. In Toronto, all forms of RE will rise in value in the long term. In ten years time, all RE in the GTA will be worth (cost?) much more than it is today. There may be hiccups along the way, but in ten years, watch out. So, if someone wants to buy RE and can afford it, just do it and don’t look back. You’ll be glad you did in ten years time.

#172 JohnnyBoy on 04.12.18 at 3:54 pm

#167 mitzerboy aka queencity kid on 04.12.18 at 1:08 pm

to smoking man…
i have my winnipeg jets jersey on
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
I have my Leaf Jersey on today, ten bucks says Smoking Man is somewhere in the Greater Los Angles area wearing a Anaheim Ducks, San Jose Sharks or Los Angeles Kings Jersey just to fit in.
Hockey is our life here in Canada and we stand with Humboldt.

#173 I love cats on 04.12.18 at 3:57 pm

I always knew there was something off about Garth.. I can’t trust anyone who has a problem with cats. But Garth your financial advice is sound. I’ll give you that. I also find these pro real estate comments amusing. Real estate has nine lives-please. Sellers ALWAYS control the market-please. Someone never took Econ 101. It makes me laugh tho. Thanks for that.

#174 James on 04.12.18 at 4:03 pm

#171 Gravy Train on 04.12.18 at 2:25 pm

#126 Smoking Man on 04.12.18 at 2:17 am
“… Libralism [sic] is a mental disorder.”

Hey, Smokey. You have John Locke (1632-1704) to thank for liberalism! You’ve never even heard of him, have you? :)

I bet you’d enjoy life if you’d resist all your impulses and inclinations, and do the opposite of every action you think of doing. Did you ever see the Seinfeld episode “The Opposite”? Jerry convinces George that “if every instinct [he has] is wrong, then the opposite would have to be right.” Check it out on Youtube! :)

Smokey, you’re so much fun to play with! :)
………………………………………………………………….
One of the most famous philosophers of all time. Locke’s thoughts were adopted by the United States some many years after his death.
“Government’s duty under a social contract among the sovereign people was to serve the people by protecting their rights. These basic rights were life, liberty and property.”
Sound familiar?

#175 oopswediditagain on 04.12.18 at 4:09 pm

the Jaguar: “Still not too late to do the ‘right thing’. OSFI may have to pull on their steel underpants, but at least they will be able to sleep at night.”

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

The most interesting thing will actually be the interaction of the new accounting rules, that the banks are now adhering to as of January/2018, with the OSFI legislation.

With an unprecedented renewal rate for mortgages this year … there will be blood.

Now, I have a very novice understanding of accounting principles, however I can advise you that the new IFRS 9 has a much more rigorous review of loan default (impairment) than IAS 39. The adoption of IFRS 9 could/should/will result in an increase in the total level of loan impairments in most banks.

I expect that it will result in a much different report of consumer default and could very possibly create a very big problem, in conjunction with the B20 legislation, with simple mortgage renewals.

Just another straw on the camel’s back, my friend.

#176 Duke on 04.12.18 at 4:27 pm

#173 What can I say? on 04.12.18 at 3:33 pm
Listen, all this take about overpriced condos is STUPID! This kind of talk has been going on forever. Note ten years ago, when there was all that doomer talk about Toronto RE. What happened in the interim? Prices shot up! Massively. This pattern will repeat itself. In Toronto, all forms of RE will rise in value in the long term. In ten years time, all RE in the GTA will be worth (cost?) much more than it is today. There may be hiccups along the way, but in ten years, watch out. So, if someone wants to buy RE and can afford it, just do it and don’t look back. You’ll be glad you did in ten years time.

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

When not many people can afford RE in Toronto, what is so good about rising RE prices? There will be bigger affordability issue if the price goes up from current level. Falling RE prices is inevitable and will be a good thing for most.

#177 Proof ? on 04.12.18 at 4:28 pm

to # 166 Past The Peak

I believe that it will take some time to dissipate Canada’s accumulated private wealth to the current impecunious state of Venezuela.

However, for a generation that;

1) plays murderous video games for entertainment and has been exposed to countless violent and abhorrent scenes both virtually and in real news, and;

2) have been shielded by parents / society from ever being in need or to blame, and;

3) have been heavily indoctrinated into socialism throughout their schooling years, and;

4) have a profound sense of entitlement

will have no compunction in enacting the requisite tax / fee structures which will essentially strip the assets from the older generations who, collectively, will hold the vast majority of Canada’s wealth.

This will progressively reduce foreign investment coming into Canada and ensure capital flight from Canada. It becomes a death spiral.

I don’t think that is much of a stretch given what I see in Canadian society today and extrapolating 10 to 20 years hence.

Please note that deterioration will proceed at an exponential pace if it is not arrested very soon.

As in the next federal election and more currently , the election in Ontario this June.

#178 Ace Goodheart on 04.12.18 at 4:31 pm

So just read the proxy materials for my hydro one shares and went online to vote my shares. Last item in the vote was of course do I approve of the executive compensation plan. So as it is a publicly traded company of course I voted on that item, and also voted on whether or not I agree with each officer being reappointed for another term.

Ahhh, public companies. Shareholders have rights, and we exercise them every year.

Then I read this:

https://www.thestar.com/news/queenspark/2018/04/12/doug-ford-says-hell-fire-hydro-ones-ceo-if-he-wins-election.html

So apparently Doug Ford has decided to fire the Director of a company whose shares I own.

No indication as to whether or not he plans to do this by voting his shares (if he has any) or what his method is for doing this. My understanding is you can vote for the Director, or you can abstain. If a majority of shareholders abstain, that Director may be in a bit of trouble.

How does Dougie plan on firing the CEO of a public company?

#179 Proof ? on 04.12.18 at 4:32 pm

to # 173 What can I say ?

Upon what facts do you base this fantasy ?

#180 Russ on 04.12.18 at 4:36 pm

Smoking Man on 04.12.18 at 11:06 am

Who’s all wearing hockey jerseys today?
————————————————–

Long live the Humbolt Broncos.

#181 oopswediditagain on 04.12.18 at 4:43 pm

What can I say?: “So, if someone wants to buy RE and can afford it, just do it and don’t look back. You’ll be glad you did in ten years time.”

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

… well, we know it worked out so well for these people. Lol

https://www.bloomberg.com/news/articles/2018-04-12/what-it-was-like-to-get-caught-in-toronto-s-record-housing-slump

The 18% dive in four months was faster than in U.S. crash
A speculative mood hit Toronto,’ Realosophy president says

“To put that 18 percent four-month decline in perspective, it took major U.S. cities 20 months on average for prices to fall 18 percent from their peaks between 2005 and 2006, with Miami the shortest at 12 months, according to the report.”

#182 Blackdog on 04.12.18 at 4:52 pm

@Heloguy re: #162, You haven’t been paying attention. Garth is anti-cannabis, period. One legal intoxicant is enough, is what I have surmised is his take on the issue. Don’t bother trying to change his mind. Come here for the investment ideas and forget about it.

#183 dutch4505 on 04.12.18 at 4:53 pm

browsing listings around owen sound (north of Toronto) ….interesting. Seems reasonable to me for retirement. any thoughts?

#184 PastThePeak on 04.12.18 at 4:59 pm

#177 oopswediditagain on 04.12.18 at 4:09 pm

The most interesting thing will actually be the interaction of the new accounting rules, that the banks are now adhering to as of January/2018, with the OSFI legislation.

With an unprecedented renewal rate for mortgages this year … there will be blood.

Now, I have a very novice understanding of accounting principles, however I can advise you that the new IFRS 9 has a much more rigorous review of loan default (impairment) than IAS 39. The adoption of IFRS 9 could/should/will result in an increase in the total level of loan impairments in most banks.

I expect that it will result in a much different report of consumer default and could very possibly create a very big problem, in conjunction with the B20 legislation, with simple mortgage renewals.

Just another straw on the camel’s back, my friend.
+++++++++++++++++++++++++++++++++

Very good points. I might add, that if housing starts to cool off more than “the guvmint” likes – or just backlash on home affordability – there may be some pressure to modify B20 – perhaps if interest rates go up more, to make the “2%” be something less (1.5%, maybe 1%). Maybe OFSI would do something about it…or not…but the point is that it is a Canadian decision.

However, IFRS 9 is following “international” accounting standards. The banks can’t just duck that. It is out of Canadian hands. That straw is not going away.

My view is that the RE in the hot places may hold or even rise after this little drop, while the economy is doing OK. It is when the inevitable recession hits (2019…2020…it is going to happen) – with all of the straws that you note – that Canuck RE will have its reckoning.

#185 Sucks to be you.. I know I know on 04.12.18 at 5:08 pm

Nearly half of existing mortgages face renewal in 2018: CIBC report.

New lending guidelines introduced this year stipulate that homeowners looking to renew their uninsured mortgages are subject to a new stress test

https://www.ctvnews.ca/business/nearly-half-of-existing-mortgages-face-renewal-in-2018-cibc-report-1.3880914

#186 jess on 04.12.18 at 5:14 pm

If Trump Fires Rosenstein, This Man Could End Up With Power Over the Russia Investigation
He has virtually no criminal law experience
Why, they wonder, did Benczkowski take on Alfa Bank as a client given his likely nomination to a Justice Department position? This “may not reflect mischief on your part but may well reflect an effort at mischief on Alfa Bank’s part,” Whitehouse observed during Benczkowski’s confirmation hearing.

Pema LevyApr. 11, 2018 6:00 AM
https://www.motherjones.com/politics/2018/04/if-trump-fires-rosenstein-this-man-could-end-up-with-power-over-the-russia-investigation/

#187 moister miller on 04.12.18 at 6:10 pm

@#156 Josh in Calgary on 04.12.18 at 11:28 am

Seems you don’t like the Bullshevicks (sp?) much do you ?

#188 moister miller on 04.12.18 at 6:12 pm

@#156 Josh in Calgary on 04.12.18 at 11:28 am

sorry, I meant the Prolectariats (sp?)

#189 Reximus on 04.12.18 at 6:24 pm

#187 “New lending guidelines introduced this year stipulate that homeowners looking to renew their uninsured mortgages are subject to a new stress test”

Only if you move to a new FI / lender, and it also says that only 20% of renewals will have any additional rate increase

#190 My wife is waiting for me... on 04.12.18 at 6:53 pm

I live near a small town of 3500 folks over 90 minutes from Peterborough or Belleville. No dry cleaners, the 1 carpet and upholstery cleaner isn’t even operating his business currently. Bell doesn’t even offer call answer (voice mail) as their hardware is that antiquated and according to an assistant to Wade Oosterman, they have no plans of upgrades. No good local employers, and very high water rates for those not on well. Mil rates are very high.

Yet, local agents are pricing small 2 bedroom bungalows at $300K and above sitting on tiny lots.

I checked with several mortgage companies who insist with 10-25% you would need a household income of over $100K.

Mr. Trudeau, Ms. Wynne (did I get the genders right) how are folks who on average make $40-60K able to afford to own. Rents are $1400++

This is true everywhere.

http://www.cbc.ca/news/business/canada-real-estate-home-prices-1.4613215

#191 Tony on 04.12.18 at 7:20 pm

Re: #185 dutch4505 on 04.12.18 at 4:53 pm

Long term residential real estate outside of stocks will probably be the worst possible investment. Gold should be the best possible long term investment so maybe buy in Timmins that is synonymous with gold.

#192 Grey Dog on 04.12.18 at 7:36 pm

#90 Diane Maley
Are you Diane Maley Globe and Mail Financial Facelift? If so, I also learn from your column Globe and Mail, Saturday in addition to Garth everyday. Thanks Garth, hopefully see you this summer for a milkshake with Grey Dog later this spring.
Why did I stay in Ontario this winter? Oh yeah OHIP for next hip, plus 8 physio appts. How much does a new hip in US cost? Plus I’d like to say that commercial running in Ontario about someone’s mother waiting 261 days for a new hip is BS.

#193 Felix on 04.13.18 at 7:36 am

Cats are awesome, not “gross”!

Stop the ANTI-FELINE RACISM!!!!

#194 Blake on 04.13.18 at 11:10 am

Cats are great! These are all very good points. Your site has helped me a lot. Thanks Garth!

https://millionairemob.com/2018/02/05/introduction-to-credit-card-manufactured-spending/