The illusionists

Is this news believable?

OTTAWA — The Canadian housing market is finding its footing after a prolonged stumble in the first half of the year, shaking off the impact of stricter mortgage rules and rising interest rates. Home sales increased 1.9% compared with June, according to the Canadian Real Estate Association.
The Greater Toronto Area led the increase in July, while more than half of all local housing markets reported an increase in sales from June to July. Compared with a year ago, sales in July were down 1.3% due to fewer sales in major urban centres in British Columbia.
The actual national average price for homes sold in July was just under $481,500, up one per cent from the same month last year. That marked the first year-over-year increase since January, CREA said.
“Supportive demographics and an undersupply of new homes in the GTA/GVA are underpinning prices, though poor affordability, a tougher borrowing climate and the non-resident buyers’ tax likely rule out a return to the earlier mania in these two regions,” said Sal Guatieri of BMO Capital Markets.

The real estate and financial cabal would have you think so. They want house lust. Need it. Live off it. Profit from it. Since residential real estate accounts for at least 15% of the entire economy, there’s no shortage of important people telling you that after a brief hiccup, she’s good again. Ready to roll. Uppa, uppa.

However at the same time we may know too much. Close to a third of all houses listed for sale in the GTA, for example, are empty. Why would that be? Simple – speculation. Over 7% of all families in the region own multiple properties, a huge number of them bought to play the market. Now that things have turned, many are listed. Empty, unloved and unsold.

We know mortgage rates have risen and the stress test bar is rising. We know the Bank of Canada will run up money costs another full 1% in a year. We know about the Trump tariffs. The 100,000 moisters punted from the market by the new regs. We’re wise to lower sales, motivated sellers, swelling listings and realtors who’ve moved nothing in a year. In fact, it’s estimated as many as 80% of large brokerages are currently losing money. This is a market that’s traveled from FOMO and panic-buying 18 months ago to FOPI now (Fear of being Priced-In – unable to sell or unlock equity).

So let’s ask a reasonable question: why would the housing market fall so slightly then recover so quickly after blowing the momma of all bubbly gasbags? Now that interest rates have risen considerably and a serious trade threat materialized, why would buyers rush back into houses at near-record levels? Household debt is still massive, and rising. Credit has been tightened. Taxes have risen. Why a real estate renaissance?

Or is this an illusion? A trap?

Veteran broker Alex Prikhodko thinks so. Here ‘s his note to me today:

“Let me give you my perspective on what is happening with a real estate market. I’m gonna refer you to THIS infamous graph:

“Indeed the prices have somewhat stabilized in some areas, but with 32,000 active listings and a new interest hike, this is a temporary situation. We’re currently somewhere in between the “bull-trap” and the “return-to-normal” stage, where some optimistic suckers are hoping the market will rebound.

“However, there are no reasons for such optimism. I’ll give you a few very specific cases:
1. The person who bought his property and then extorted $350,000 in cash back last year that you featured on your bog last summer, ended up selling it at a LOSS, is now trying to sell his personal properties, and is about to hit a divorce. He’s also being sued from all angles, including, unpaid contractors, real estate brokerages and just people who he borrowed money from, and that’s besides the CRA, which is questioning him claiming all of those properties as his primary residence and thus avoided paying property gains for years.
2. Another friend of mine bought a detached in Markham for what seemed like a reasonable price of $950,000 last year, even though her husband and I advised her to stay away from real estate for the time being. I advised her to sell that property immediately without proceeding with the renos. After completing the renovations 7 months later, she’s been unable to sell her house after multiple price reductions. She’s unable to carry a mortgage on that fantastic investment, so she will likely incur a significant loss.
3. There are several people I know who bought from the builder with closings coming up. They were all sure they would be able to sell their current residences at a healthy profit but currently unable to sell. These are a particularly disturbing group as they are FORCED to sell for whatever they can get as they borrowed equity from their current residences to pay the deposits to the builder. Some have borrowed so much, that they are unable to sell without going under water. I presume this is the main category of people that will force the market to decline further, since they have no other options.
4. Construction industry. I know a guy who runs a luxury kitchen fabrication factory. The guy used to snub jobs under $50,000 for a custom kitchen. This year he quoted $2m+ worth of work with only $70,000 in actual sales. This guy is not an installer, but owns a factory with over a million dollars in equipment and $5,000 in monthly lease payments. My other friend has asked the guy to provide a quote for a kitchen from this guy and, since he’s short on business, he decided to quote him 50% off, or about $20,000. My friend opted for an Ikea kitchen for $15,000 instead, which was of great personal insult to the kitchen guy, since quality of his products is significantly better than what Ikea has to offer.

“Long story short, here’s my prediction. Detached homes prices will continue to decline at an accelerating pace, as more mortgage holders (especially multiple property mortgage holders) continue to get squeezed.

“Condos are about to get hit hard, expect a typical $600,000 downtown condo lose $100-$125k over the next 12 months. This winter is going to be a nail in the coffin for overpriced downtown condos.

“A lot of brokerages are going to shut down. In the last 3 months we got a major influx of resumes from agents, coming from brokerages that have closed down operations. The latest victim is TheRedPin brokerage, which appeared to be healthy on the surface for a while, even though I seriously doubted their business model.”

Like everyone else with boots on the ground, this realtor knows the facts. They’re brutal. And a large establishment of people is doing all they can to gloss ’em over. The real estate market’s fuel is confidence, emotion and desire. If the propagandists can fool enough people, they can rescue the market. If they fail, the fools buying now may be the greatest.

153 comments ↓

#1 Karl on 08.15.18 at 4:21 pm

Garth, if this indeed all comes to pass, what do you suggest to the person who currently owns, is in it for the long term, has not speculated a dime and would like to “move up” in two or three years?

Asking for a friend.

It depends on her circumstances. – Garth

#2 dakkie on 08.15.18 at 4:23 pm

THESE Are the Cities Most Likely To Face A Housing Collapse! What Goes Up, Must Come Down.

http://www.investmentwatchblog.com/these-are-the-cities-most-likely-to-face-a-housing-collapse-what-goes-up-must-come-down/

#3 come now guys... on 08.15.18 at 4:26 pm

Lewenza? inflation? what inflation. commodity prices are collapsing, copper is down 20% + in the last two to three months. other industrial commodities down 20-25% in the same time frame. price of gold and silver collapsing. soybeans, corn and wheat, collapsing. next the price of oil…

good luck with that call.

Commodity values are notoriously volatile and do not determine retail prices. Inflation is absolutely with us after a decade or torpor. – Garth

#4 The Wet One on 08.15.18 at 4:42 pm

As always, I wonder what the situation is in Edmonton?

I now have a child on the way, and I’m in the market to buy.

I have to sell a cheap condo to fund the down payment too. However, I’ll have cash left over from the sale of the condo. Yay me!

I don’t think what you’re talking about applies that much to Edmonton, as so much of this is market specific, and you don’t really talk about Edmonton or real estate outside of Vancouver or Toronto. Granted, Edmonton is a much smaller market and median prices are only 3.7 or so times median household incomes, so not as exciting.

So what’s the deal with E-Town Garth? Should I ditch the wife and kid and say “NO WAY!!!” or am I OK to buy because I’m going to be there for the next 20 years or so (that’s the plan anyways).

Help a new moister out.

Thanks!

#5 Karl on 08.15.18 at 4:48 pm

It depends on her circumstances. – Garth

I have to come clean, I wasn’t asking for a friend. It’s me.

I’m looking to move up and not quite sure what a possible declining market means for people who already own and want to move up – long term.

Finances aside, as we can all agree that is the most important, I wonder if this situation is good or bad for me. I have no idea.

Without knowing your circumstances, neither do I. – Garth

#6 islandgirl on 08.15.18 at 5:06 pm

Neighbour has finally decided to put their house up for sale again (they had it listed when we bought ours), I know that they were fairly mortgage free when they first tried to sell it, but between then and now (3 years) money suddenly appeared to buy a boat, a BMW and a mustang (which eventually got sold). We will see if it sells, especially since we now have 3 houses on our street asking much more than we ever paid. I think we were lucky and snapped up a good deal when we did. We could lose 25% of the value and still come out ahead.

#7 MF on 08.15.18 at 5:08 pm

83 Braj on 08.15.18 at 10:46 am

“Balkanization” of the GTA?

No.

The GTA functions unlike anywhere else, in that you have lots of different people working together fairly well.

The crime is the same it’s always been. Lots of media sensationalism though.

People are willing to pay more for life in the city because they enjoy it. Not hard to understand. I don’t get why people cannot see this. Just because you like some small town does not mean everyone does.

MF

#8 HoweStreet.com on 08.15.18 at 5:09 pm

Ross Kay on HoweStreet.com Radio:
Ontario Housing Market Gets It’s False Second Wind.
Organized Real Estate turns it’s back on home buyers.

https://www.howestreet.com/2018/08/13/ontario-housing-market-gets-its-false-second-wind/

#9 renter in Surrey on 08.15.18 at 5:11 pm

no material price reductions in smoky Fraser Valley yet

decent SFH are still $1mil+
gas masks are extra

#10 MF on 08.15.18 at 5:11 pm

Of course GTA re is up again. It was never down. Sorry to say but this blog is the only group of people who seem to believe re has gone down at all in the GTA.

I mean sure, we saw 1.3 million dollar houses go to 1.2 but that change impacts no one and was worthless.

The city is booming and prices are not going down, whether we like it or not. The 80’s are gone. I’ve accepted it and so should everyone else.

MF

#11 Karl on 08.15.18 at 5:13 pm

Without knowing your circumstances, neither do I. – Garth

Well played. Perhaps I will be in touch. Can a down RE market EVER be good for a current owner looking to upgrade?

#12 Eco Capitalist on 08.15.18 at 5:13 pm

Currently shopping Kitchener, new job in the new year. Aside from Trump’s pronouncement on auto tariffs, how much longer should I hold out? Have a budget but would love to spend less if the market is going to wilt. Financing is a non-issue.

#13 Karl on 08.15.18 at 5:17 pm

People are willing to pay more for life in the city because they enjoy it. Not hard to understand. I don’t get why people cannot see this. Just because you like some small town does not mean everyone does.

That is very true as well. I think the Toronto (or GTA) badgers are just as annoying as the Torontonians who think zero life exists, or at least good life, outside the city.

#14 Brian Ripley on 08.15.18 at 5:19 pm

A lot of brokerages are going to shut down. In the last 3 months we got a major influx of resumes from agents, coming from brokerages that have closed down operations. – Veteran broker Alex Prikhodko

And when the employed become unemployed, downward pressure occurs on earnings.

My example is Alberta where the flight of capital is having a profound affect on employee earnings.

My updated Employment chart features this bit of data (from CBC news):

1.8% of Alberta employees earned minimum wage in 2013.
Now, 7% of Alberta employees earn minimum wage in 2018.

http://www.chpc.biz/earnings-employment.html#Rate

If you are contemplating getting a large mortgage today, try to figure out if your income stream will be secure over the same period as the loan.

Wage deflation is in part a product of asset deflation.

#15 anonymous on 08.15.18 at 5:22 pm

Well, let’s see what premier Ford will bring in September. He has some friends who stand to lose a lot of money if RE collapses. The governments in all levels enacted policies in the past to either prop up or slow down RE. He can easily reverse some of the local taxes on RE and introduce measures to ‘”help the people” afford RE.

#16 Stan Brooks on 08.15.18 at 5:27 pm

I am very confused.

We censor the people who call out the truth and really want things to change for good, calling them names and then we protest (‘sophisticated protest, in a civilized, controlled manner’) against lairs who continue to manipulate us, both from the real estate cartel and financial sector with protection of crocked politicians?

We can’t suck and blow and at the same time. Make a choice and stick to it.

For how much more we think this can go on?

It really surprises me, the gullibility of this sheeple conditioned to the inability to think independently but also the conformity of the intelligent who see what is going on and choose not to act or say on word on it.

#17 Renter's Revenge! on 08.15.18 at 5:28 pm

#11 Karl on 08.15.18 at 5:13 pm
Can a down RE market EVER be good for a current owner looking to upgrade?

Down markets are far better for mover-uppers than up markets, because the difference in price between your house and the house you want decreases, assuming everything goes down by the same percentage.

E.g. you own a $500k house and you want a $1M house, you need to borrow $500k to buy it. If prices collapse 50%, your house is now $250k and the house you want is $500k, you only need to borrow $250k. Bingo, bango, bongo, you get the same house with half the debt.

#18 Linda on 08.15.18 at 5:35 pm

I don’t think the market is going to be rescued by RE propaganda. Too much information out there about what is going on to fool people. Now, I totally get that those who are caught in a slowing/depreciating market want those RE reports to be true, but reality doesn’t care what anyone says.

I have to laugh at the Ikea kitchen scenario. Yes, the quality of product is better at high end shops – or it should be for the prices quoted. Problem is that those lovely high end kitchens get renovated about as often as the Ikea kitchens are. From a practical point of view, which would you prefer? Tearing out a kitchen that cost $100,000 or one that cost $15,000? Who are you trying to impress with your state of the art, high end kitchen? Will you even use it to its full capacity, or are you just going to use the fridge, microwave & dishwasher?

#19 Burlington Shyster on 08.15.18 at 5:37 pm

I tried posting stats from Burlingron, Hamilton and Kitchener the other day, multiple times, but to no avail my posts were not published. Probably because it goes against the narrative

You can’t have it both ways Garth. You can’t believe the numbers when they show negative, but dismiss the positive

Reality is sales and prices are up YoY(significantly) and MoM, and inventory down significantly

The investment world is crumbling very quickly due to the Fed QT, and they will be reversing course by end of year….as will BOC. QE will be back with a vengeance next year, and up up up we go

Nothing was deleted because of factual content. – Garth

#20 Buy? Curious? on 08.15.18 at 5:47 pm

Karl, you’re a weasel. Bad times will befall you in the next 18 months.

#21 crowdedelevatorfartz on 08.15.18 at 5:56 pm

@#123 Shushhhh
” too many neanderthals who rely on stereotypes and insults in this blog.”

++++
You do realize the irony of that statement yes?

#22 Shane Gallant on 08.15.18 at 5:56 pm

what about the cottage market. How is that market doing?

#23 Penny Henny on 08.15.18 at 6:07 pm

Uppa, uppa.-Garth

I’m glad you stopped at two uppa’s. You wouldn’t want to get in trouble with Big Rider’s legal team.

#24 S.Bby on 08.15.18 at 6:10 pm

There are several houses in my Burnaby area that are both for sale on MLS and for rent on craigslist at the same time. My take is desperate speculators trying to get some cash one way or the other.

#25 Ronaldo on 08.15.18 at 6:17 pm

#3 come now guys……..Lewenza? inflation? what inflation. commodity prices are collapsing, copper is down 20% + in the last two to three months. other industrial commodities down 20-25% in the same time frame. price of gold and silver collapsing. soybeans, corn and wheat, collapsing. next the price of oil…

good luck with that call.

Commodity values are notoriously volatile and do not determine retail prices. Inflation is absolutely with us after a decade or torpor. – Garth
—————————————————————
Time to back up the truck.

#26 Penny Henny on 08.15.18 at 6:19 pm

I’m very happy to say that in regards to todays graph I got into the GTA housing market at just before take off ‘1995’ and got out in denial ‘June 2017’. Had I been out in March 2017 it would have been ‘New Paradigm’.

Poor Mark, or The Real Mark he thinks peak was at ‘Media attention’. But that is so 2013, if you know what I mean.

#27 Mike in Smokey Calgary on 08.15.18 at 6:21 pm

What a shame the title of day’s blog wasn’t “Dead cat bounce”. I would have enjoyed the accompanying photo. :)

#28 Penny Henny on 08.15.18 at 6:22 pm

P.S.- retirement is nice in Welland

#29 Topo the Clown on 08.15.18 at 6:23 pm

#14 Brian Ripley on 08.15.18 at 5:19 pm

You ignore what the minimum wage was in 2013 as opposed to today. $9.05 to $15 now.

Wage deflation, what a laugh

#30 Reximus on 08.15.18 at 6:23 pm

Currently shopping Kitchener, new job in the new year. Aside from Trump’s pronouncement on auto tariffs, how much longer should I hold out?

++++

Trump’s ‘devastation of the auto sector’ story is BS. Americans want to keep easy trade with Canada, and only perpetual RE doomers, who really are mkt-timers at heart and always wrong, throw that fear-mongering nonsense out…if a desirable house for you is affordable and your timeframe is years, not months, buy it. Real estate is not for short-term gain

#31 CA-Tax on 08.15.18 at 6:29 pm

“and that’s besides the CRA, which is questioning him claiming all of those properties as his primary residence and thus avoided paying property gains for years.”

I know from my firm in Toronto and through my contacts and networks that the CRA is on a serious rampage in real estate.
I am convinced that they are allocating 90%+ of their audit resources.
This all makes sense since most gains were made in 2015, 2016. Anyone in the industry knows that they are always 2-3 years after filing to maximize interest and penalties.
I know of over a 50 people that will have to claim bankruptcy over tax reassessments.
This will get ugly…..as they are just getting started.
CRA will be the nail in the coffin.

#32 the ryguy on 08.15.18 at 6:30 pm

#4 The Wet One on 08.15.18 at 4:42 pm
————————————————-

Im in Edmonton too.

Sell the condo regardless.

For the 5 years prior to this one I had an artificial turf company, which Ive since sold. With that job I found myself in every new housing development in and around the city multiple times. I also ended up at just about every single golf course from Red Deer and north.

I was consistently blown away by the incredible amount of building going on around the golf courses. The houses were not only plentiful, but they were all MASSIVE. Take a look around Jager ridge, 100’s of houses (with room for 1000’s more) and Id bet you werent getting in there for under 750k. That same thing was happening at most golf courses, unless they were landlocked in the city.

There are humongous developments in every town around and including Edmonton, Sherwood Park, St Albert, Devon, Leduc, Spruce Grove, Ft Saskatchewan etc etc. There is no way there are enough people to fill these houses. Like Garths friend said above, Id bet the majority of these new homes were built on speculation from Helocs. I really think in the next 2 years a qualified buyer is going to have their absolute pick of the litter with either a new build that didn’t close, or by going to the building companies once it slows down and making offers.

I would wait if you’re comfortable, just my $.02.

#33 Reximus on 08.15.18 at 6:36 pm

Nice to hear from Alex the broker who so beautifully called the GTA RE crashes of 2012, 2014 and 2016. Keep on keepin’ on Al

#34 NOSTRADAMUS on 08.15.18 at 6:36 pm

PARTY ON DUDES !
A financial crisis can take much longer to hit than you think, but then unfold much faster than you ever thought possible. Fact of life. Every bank in Canada knows exactly who is an accident waiting to happen. They are always the first responders , first to take you off life support , do not resuscitate. With the Federal Reserve raising interest rates and draining the pool of global dollar liquidity there are going to be a lot of pile ups on the debt highway.
The number of debt slaves rises each and every month. Party on dudes, your house, your education, and your stocks will surely bail you out. Right?
You can trust me as the truth teller, in the land of gypsies, tramps and thieves.

#35 Stan Brooks on 08.15.18 at 6:39 pm

#19 Burlington Shyster on 08.15.18 at 5:37 pm
I tried posting stats from Burlingron, Hamilton and Kitchener the other day, multiple times, but to no avail my posts were not published. Probably because it goes against the narrative

You can’t have it both ways Garth.

——————————

Of course you can. Suck it up and move on.

#36 Bigrider on 08.15.18 at 6:49 pm

Garth, if you are going to continue to use my trademarked and copyrighted “Uppa Uppa ” slogan then do it correctly please.

It’s ‘uppa Uppa UPPA” the emphasis always continuing to rise (not fall as you have written it) as my nonno , the originator of the phrase ,continues to argue for increased RE prices .

You have permission to use the ” she’sa only gonna go a one a way, she’sa only gonna go uppa Uppa UPPA ! if you see fit.

#37 Brian Ripley on 08.15.18 at 6:55 pm

#29 Topo the Clown on 08.15.18 at 6:23 pm
#14 Brian Ripley on 08.15.18 at 5:19 pm. You ignore what the minimum wage was in 2013 as opposed to today. $9.05 to $15 now. Wage deflation, what a laugh

Alberta minimum wage does not increase to $15/hr until Oct 1, 2018.

IF 1.8% of Alberta employees earned minimum wage in 2013, and Now, 7% of Alberta employees earn minimum wage in 2018 – that’s 4 times greater in 5 years. I bet some of those part timers also work full time as well and do so to make ends meet.

http://www.chpc.biz/earnings-employment.html#Rate

When businesses close (real estate broker offices etal) earnings drop and so do tax revenue. That’s deflation at a personal and state level.

#38 MSM-Free Zone on 08.15.18 at 6:55 pm

“…..The government of New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices.

Previously the housing market was open to investors worldwide, but the government on Wednesday passed legislation that allows only New Zealand residents to buy homes……”
_________________________

Should be interesting to see how this experiment plays out.

#39 Smartalox on 08.15.18 at 6:56 pm

I read that blurb at the top of the post, and thought: ‘this is how dead cats bounce’. Still, agents make money by selling properties, and they still get paid, even as property values fall. They just don’t make as much per sale – though the pros make that up in volume.

The amateurs not only stop selling, they also obsess about the properties that they’ve speculated on, the rising carrying costs, and the falling value of the properties that they’ve been hoarding.

All those non-agents that pulled their listings from the market in June, will now rush to list them again – at higher prices! Only now there will be more competition to sell, and, as described by Alex P., people are getting more desperate by the month.

When sellers finally start cutting prices, they’ll soon find themselves undercut by competitors very quickly.

Remember kids: it’s better to be the first to sell at a 15% discount, than be left holding your failed investment, despite a 25% discount!

And if you’re a seller, looking for an agent, better do your due diligence, and ask that agent if they have properties that they’re trying to unload as well. If you check out their website, and see a lot of EMPTY homes listed that are similar to yours, RUN!

The last thing that you want is to be in competition with your agent, or worse, have them sandbag your property to a prospective buyer, in favour of one of theirs!

#40 Bigrider on 08.15.18 at 6:56 pm

#23 .Penny Henny on 08.15.18 at 6:07 pm

Uppa, uppa.-Garth

I’m glad you stopped at two uppa’s. You wouldn’t want to get in trouble with Big Rider’s legal team.
——

No trouble from the legal team will come to Garth and no visits from Louie the bull either. Everyone “liksa “Garth at the espresso bar

#41 Lower than Low - Kelowna Downtown Dangerous on 08.15.18 at 6:59 pm

Pregnant mom attacked downtown Kelowna.

What started out as a fun, family evening in downtown Kelowna turned ugly for a local woman, who says she won’t be going downtown anytime soon.

Ashley, who’s six months pregnant, says a man she believes to be homeless, took a swing at her outside a Bernard Avenue coffee shop.

It’s just the latest in a string of incidents involving the downtrodden in the city’s downtown core.

https://www.castanet.net/edition/news-story-233890-1-.htm#233890

That town is out of control

#42 FOUR FINGERS WATSON on 08.15.18 at 7:04 pm

Re: Okanagan Valley

For those waiting for the smoke in the Valley to clear, don’t get your hopes up.

Smoke has hung across the majority of the province for more than a week. As of Wednesday, there were 43 air quality alerts across the province and the air quality reading in the Okanagan is currently in the “high-risk zone,” at a 9 out of 10.

Unfortunately, the future doesn’t look bright.

“As long as those fires continue to burn and this weather pattern refuses to change, that smoke isn’t going anywhere,” said Matt MacDonald, meteorologist with Environment Canada.
https://www.castanet.net/edition/news-story-233972-1-.htm#233972

#43 Smartalox on 08.15.18 at 7:05 pm

I think the bit about the Ikea kitchen was telling, in more ways than one. Yes it’s an insult to the guy quoting $20k for work that could have been valued at $50k, but two other things came to mind:

1) $5000 is apparently a big deal, especially if you’ve got a spec house to unload, and your margins are getting leaner by the minute, and

2) Ikea accepts Visa and MasterCard (in fact, multiple cards of each type) for a transaction. The kitchen guy probably only takes cheques, with a significant portion payable up-front.

It’s also possible that ‘Ikea Kitchen’ has better brand recognition (and is advertised on TV every night) for someone looking to unload a property quickly, than a quality installation from a lesser-known provider.

#44 AK on 08.15.18 at 7:09 pm

“Close to a third of all houses listed for sale in the GTA”
=====================================
And there are quite a few sitting empty that are not for sale.

#45 The Real Mark on 08.15.18 at 7:11 pm

Garth, what your readers need to know is this.

Prices peaked in 2013. All metrics I have heard prove this. Ross Kay is legendary.

#46 Kelowna Realtors Starting Kraft Dinner Diet on 08.15.18 at 7:12 pm

They (your local realtor and media) just won’t tell you that. They go silent instead.

So, this 788,888.88 price never worked.

Oh well. Let’s see if this latest Dilworth Mountain price cut of over 100k now works?

https://www.realtor.ca/Residential/Single-Family/19607762/907-Purcell-Drive-Kelowna-British-Columbia-V1V1N6-Dilworth-Mountain

Still an absolute rip off at over 700K given that these places were selling in the 400ks just 5 years ago before Christy put the dirty money game into overdrive and flooded the Lower Mainland with cash to unlock boomer wealth and start the great migration out along with young people who got priced out. A structured plan that worked. Volatility. Who wants boring, right?

Might need a 200K air scrubber though to breath in the region given the thick smoke that blankets every Summer. Interesting how so many people are unaware of their new “at one time affordable before Christy” climate that they have moved into throughout BC.

#47 Boomers are looked after on 08.15.18 at 7:15 pm

A million dollar shack is nothing to a boomer who has unlocked Vancouver wealth. Too bad the party is stopped in Vancouver. Can’t sell? Time for the reverse mortgage program. The government has your back. And your house when they take it away.

Don’t trust anyone over 55. And you can’t take it to your grave. Might as well spend it on that over priced Victoria house.

#48 Vincent on 08.15.18 at 7:16 pm

Would also like to know how the cottage market (specifically south ontario) is doing……

#49 Stan Brooks on 08.15.18 at 7:18 pm

Gender based taxation in the brain frozen land, anyone?

https://ca.finance.yahoo.com/news/women-owned-businesses-generate-68-080004946.html

cuckoo, cuckoo.

#50 Wait There on 08.15.18 at 7:18 pm

A bit of Bitcoin anyone?

#51 Comox BC Enjoying New House Price Wealth - 550K for your average box on 08.15.18 at 7:20 pm

Let’s say that again. 550K for your average 20+ year old house in Comox BC.

A town of 14,000 people who need to take a ferry to get to the mainland.

2 hours and 58 minutes north, driving from Victoria, BC.

Unreal.

#52 The Real Mark on 08.15.18 at 7:21 pm

“Poor Mark, or The Real Mark he thinks peak was at ‘Media attention’. But that is so 2013, if you know what I mean.”

I’ll just clarify, the data, adjusted for the sales mix, shows more of a plateau, which continues even to this day in the post-2013 era. So one could have sold in, say, 2014, 2015, 2016, 2017, or even in the present, and still, on an individual identical property, captured peak (2013) pricing in the major cities. Calgary, a bit earlier, in 2011. Edmonton, 2007. Etc.

Given the relatively poor returns on stocks in the post-2013 era, as well as minimal returns in fixed income, there hasn’t been a lot of opportunity costs compared to owning housing at peak prices and collecting imputed rent. However, as time goes on, the stock market should start to perform much better on a relative basis.

#53 WUL on 08.15.18 at 7:22 pm

Garth,
Do you take requests? I suppose it depends on the reserves in the deep personal well of energy you draw on every day here for our benefit.

How about a sequel on the troubled future of Canadian real estate with a horizon out to say 2030 – 2015?

I will either not be on the green side of the grass at that time or my early onset will have me in a home for the bewildered. I ask on behalf of the kids. You on the other hand will still maintain a sharp mind and stirling abs and pecs.

I am told that I am an early adopter and try, usually unsuccessfully, to be ahead of the curve. In thought if not in actions.

I am not a world class climatologist or geoscientist like my fellow commenters here. I do not have time to read peer reviewed IPCC papers. So, I have to decide what is authoritative on the anticipated harms of climate change. I go with the Exxon scientists of circa 1979 to 1985 whose memoranda stated along the lines of “Yup. It’s real. We’re causing it. By the time it is detected and measurable, it will be irreversible. We’re hooped”. Hence the lawsuits and prosecutions of Exxon for its deceit. I also note the fact that Chevron instructed its legal counsel to admit in a US District Court in California a couple of months ago that “Yup. The science is clear. We’re causing it.”

Can you picture insurance premiums? On the other hand, might the thousands of refugees arriving on Canada’s shores in the refitted holds of rusted and decrepit VMAX oil tankers save our real estate markets?

Thanks in advance,

WUL

#54 jess on 08.15.18 at 7:23 pm

forget ancient peoples from the past look to these present types :

https://www.splcenter.org/fighting-hate/extremist-files/group/proud-boys

GOP Candidates Are Paying Firms Affiliated With Infowars Contributor
Jacob Engels appears on Alex Jones’ conspiracy network. He also has ties to the Proud Boys.
Kara VoghtAug. 15, 2018 5:34 PM

https://www.motherjones.com/politics/2018/08/gop-candidates-are-paying-firms-affiliated-with-infowars-contributor/

#55 Bezengy on 08.15.18 at 7:27 pm

#31 CA-Tax Right you are. Where can we get stats on these CRA guys and their progress on collections? Are they fining?, confiscating?, jailing?, or just getting paid off with cash in brown paper bags?

#56 TheDood on 08.15.18 at 7:36 pm

#9 renter in Surrey on 08.15.18 at 5:11 pm

no material price reductions in smoky Fraser Valley yet

decent SFH are still $1mil+
gas masks are extra

__________________________

Really?

Detached are now appearing for less than 800K one neighborhood over from ours, in Cloverdale. A year ago these 20 year old sh!tboxes were all in the high 800’s. It’s happening……..

#57 Capt. Serious on 08.15.18 at 7:37 pm

If the propagandists can fool enough people, they can rescue the market. If they fail, the fools buying now may be the greatest.

Reaches for popcorn. Prepares to be entertained.

#58 TheDood on 08.15.18 at 7:38 pm

The city is booming and prices are not going down, whether we like it or not. The 80’s are gone. I’ve accepted it and so should everyone else.

MF
___________________

Thank you for your sound advice Mr. Realtor.

#59 IHCTD9 on 08.15.18 at 7:40 pm

#7 MF on 08.15.18 at 5:08 pm
83 Braj on 08.15.18 at 10:46 am

“Balkanization” of the GTA?

No.

The GTA functions unlike anywhere else, in that you have lots of different people working together fairly well.

The crime is the same it’s always been. Lots of media sensationalism though.

People are willing to pay more for life in the city because they enjoy it. Not hard to understand. I don’t get why people cannot see this. Just because you like some small town does not mean everyone does.

MF

————

That’s thing I’ll give the GTA. It is undeniable that all these different walks of life do indeed co-exist in relative peace there, and that it is rare to see this level of harmony on a global scale.

I was actually tickled pink to see East Asian Christians, Muslim South Asians and Middle Easterners, European and Canadian born Caucasian Christians and Jews standing shoulder to shoulder in opposition to Wynne’s new Sex Ed curriculum.

I have even harboured hopes of a general solidarity among the various ethnicities of the GTA via the predominate Abrahamic religions that populate the region. It is likely that the GTA holds some of the most devoutly religious folks in the entire country, and to see them come together over a common adversary (that’d be Wynne) was pretty cool, validated my thoughts, and frankly – gave me a warm fuzzy feeling (IHCTD9 is not prone to feeling warm and fuzzy too often).

The GTA could be the only place on the entire planet where the various front line religions and their respective ethnicities and nationalities all come together and work for a common goal without bickering.

That said, fact is crime is higher than ever and murders are on track to break the record.

Also, it’s pretty obvious that the majority of folks are moving into the gta for the job potential, and the well defined enclaves that are located there – not because they just love the big city.

If you were an Indian, Greek, Italian, Chinese, Slavic, Middle Eastener etc.. Immigrant that was moving in – would you move in with us rural rednecks where English is spoken, bagpipes are played, beer is swilled, jobs are scarce, and 2nd-4th generation Western/Eastern European, and Scandinavian blood dominates like 95%?

Or would you move in with folks where you blend in, could easily communicate in your first language, and have much better chances of employment thereof?

How about finding a mate? Indian, Chinese and M.E. guys right off the boat would have almost zero chance out here. In the GTA they’d have no problems at all.

Let’s keep it real. My comments on the small town advantages of Ontario are essentially for first generation Canadians and up. I’ve never denied the value of the GTA for newcomers coming from outside the English speaking world, that’s because the statements above are the truth.

Its got squat to do with how great the GTA is, if the non Westernized immigrants could get all the same benefits of the GTA enclaves in a smaller, cheaper city – you can bet your @ss they’d be outta there like greased lightning.

#60 Newcomer on 08.15.18 at 7:45 pm

#17 Renter’s Revenge! on 08.15.18 at 5:28 pm

E.g. you own a $500k house and you want a $1M house, you need to borrow $500k to buy it. If prices collapse 50%, your house is now $250k and the house you want is $500k, you only need to borrow $250k. Bingo, bango, bongo, you get the same house with half the debt.
—–

Garth is right to ask for context. Let’s take the same numbers but assume Karl has only 50% equity. Today, he can sell and come out with a 25% DP on the 1M house but, after the crash, he wouldn’t have a penny to his name. I’m not saying it would be a smart move to both buy and sell today, just that there are multiple possible scenarios.

#61 Danny on 08.15.18 at 7:49 pm

Garth yes as you have said many times “Simple – speculation”….drove prices up.
I know many who took money out of bank…practically received “0” interest from banks…..and bought condos…..from a builder..during the last 3 years…

Hoping for tenants rent to pay off their future mortgage.
Very upset that Ontario Liberals put rent control on new condos as well.

Then voted for Ford…the greedy seek the greedy.

Remember when the banks make statements they are getting you,the public….. ready for a future government policy…..BMO….must of had a great lunch with Ford’s people to make the following statement:

“an undersupply of new homes in the GTA/GVA are underpinning prices, though poor affordability, a tougher borrowing climate and the non-resident buyers’ tax likely rule out a return to the earlier mania in these two regions,” said Sal Guatieri of BMO Capital Markets”

Can’t you hear Ford saying to their bank friends:

” hey you keep giving out the bad news for real estate market investors “…and then we will react to it…You know it will be about the little guy…..and….. Guido …..Don’t worry I’ll get you more dirt for those houses you love to build ”

“It’s the banks they say we need to save the housing market …..yes?”

Howdy Doody Ford….will be at the lectern…very soon about…..”housing for the people”…..BS…when it is all really about Ford’s real estate cartel supporters, having to return their expensive cars.

I say Ford will be squealing ……by early October.

#62 TheDood on 08.15.18 at 7:53 pm

#50 The Real Mark on 08.15.18 at 7:21 pm

….Given the relatively poor returns on stocks in the post-2013 era, as well as minimal returns in fixed income, there hasn’t been a lot of opportunity costs compared to owning housing at peak prices and collecting imputed rent…..

__________________________

Poor returns on stocks? Minimal returns on fixed income?

What stocks and fixed income assets do you own?

#63 Long-Time Lurker on 08.15.18 at 7:53 pm

#52 Contrary Canadian on 08.14.18 at 9:12 pm
Hey Flop, where you hiding? Did I miss the vacation notice maybe? Haven’t seen you post in a while, hope everything is okay.

>Flop’s got his own blog now. It’s called Pink Snow. Look it up.

#64 Long-Time Lurker on 08.15.18 at 7:57 pm

#62 Helpful Suggestions Please on 08.14.18 at 11:49 pm
What would u do with $17K sitting in a HISA marooned. I see two options: some ETFs and some stocks. Would be grateful for ETF and stock suggestions.

>Figure out the Canadian equivalents, stick it in here then keep reading Garth’s Greater Fool.

http://www.mymoneyblog.com/model-portfolio-1-couch-potato-portfolio.html

https://www.investopedia.com/ask/answers/08/couch-potato-portfolio.asp

#4 The Wet One on 08.15.18 at 4:42 pm
As always, I wonder what the situation is in Edmonton?

I now have a child on the way, and I’m in the market to buy.

>Go back and read more Greater Fool posts.

#11 Karl on 08.15.18 at 5:13 pm
Without knowing your circumstances, neither do I. – Garth

Well played. Perhaps I will be in touch. Can a down RE market EVER be good for a current owner looking to upgrade?

>Did you look at today’s chart? Figure it out.

I hope you sold last year Anna.

Roadkill day.

#65 MF on 08.15.18 at 8:15 pm

56 TheDood on 08.15.18 at 7:38

I’m no realtor and I think prices are here are a joke. I am like everyone else here: waiting for a crash that I now realize will probably never happen.

The problem is that are too many things going for the housing market here in the GTA compared to potential risks. We like to cite the risks (rising rates, debt levels etc.), but there are many strengths that overpower these risks (economy, demand, livability).

Wynne’s intervention made everything worse btw. There probably would have been a pullback until she fiddled with the market.

MF

#66 Ace Goodheart on 08.15.18 at 8:18 pm

Inflation is really just governments re setting currency values to avoid paying down debt.

They can do this two ways:

1. Print money

2. Taxation.

Right now we are working with number two.

The back end of inflation.

Neighbours are kinda screwed. Bought a house in Hurricane Hazelville for a mil two hunnies.

Reno’d another 350k on a Heloc.

Plan was house prices were going up 30% year over year. So reno, hold and sell for a 30% profit.

Yeah that kinda bombed. Sold for 950k and took out a second mortgage on their own house to pay the difference (they had a lot of equity).

They look shattered. Not a good scene.

Oh well. It’s only money, right ?

#67 AGuyInVancouver on 08.15.18 at 8:19 pm

#45 Boomers are looked after on 08.15.18 at 7:15 pm
A million dollar shack is nothing to a boomer who has unlocked Vancouver wealth. Too bad the party is stopped in Vancouver. Can’t sell? Time for the reverse mortgage program. The government has your back. And your house when they take it away.

Don’t trust anyone over 55. And you can’t take it to your grave. Might as well spend it on that over priced Victoria house.
_ _ _
Why do a reverse mortgage, just lower the price. Everyone here , from Garth on down, seems to forget that all the housing market measures introduced by governments were to slow house inflation or even reduce home prices. When you have a product that is not moving, you cut the price. Simple Econ 101.

#68 MF on 08.15.18 at 8:28 pm

57 IHCTD9 on 08.15.18 at 7:40 pm

Exactly and well put.

I would add that there are communities of none-first generation Canadians outside of the GTA popping up all around. Often it’s an immigrant couple who first met in the gta then moved to a smaller town to start a family, but it can be the reverse (an immigrant couple that first move to a small town then migrate to the GTA).

One thing seems to ring true: for younger singles, or older manboys/cougars, the bigger city looks to be the place to be. Maybe that’s why condos are so hot here?

MF

#69 Show me the money on 08.15.18 at 8:29 pm

What about cow town? time to buy or wait? My landlord wanted to sell to us, I’m thinking I can get a descent discount.

#70 Yanniel on 08.15.18 at 8:31 pm

Why is the broker’s name linking to https://listing.ca/?

#71 Karl on 08.15.18 at 8:38 pm

Down markets are far better for mover-uppers than up markets, because the difference in price between your house and the house you want decreases, assuming everything goes down by the same percentage.

E.g. you own a $500k house and you want a $1M house, you need to borrow $500k to buy it. If prices collapse 50%, your house is now $250k and the house you want is $500k, you only need to borrow $250k. Bingo, bango, bongo, you get the same house with half the debt.

——————-

Thanks for the post, Mr. Revenge.

#72 ImGonnaBeSick on 08.15.18 at 9:07 pm

Ugh.. Danny. Don’t you have some statues to protest?

#73 The Real Mark on 08.15.18 at 9:08 pm

“Poor returns on stocks? Minimal returns on fixed income?
What stocks and fixed income assets do you own?”

Well I stand corrected, 5-year returns on XIU (ie: the TSX60 index) have been on the order of 9.52%/annum per the sponsor’s website.

I retract my comments. The stock market has clearly smoked RE in the post-2013 era.

#74 Macduff on 08.15.18 at 9:09 pm

Just finished watching “The Ascent of Money; Safe as Houses” by Niall Ferguson. How can we in this country believe that a housing crash can’t happen here? We are collectively so naive. Notable fact: in the early 1990’s Japanese real estate dropped 75%.

#75 Steve French on 08.15.18 at 9:10 pm

Im feeling my oats and ready for a drunken political debate with the Great Deplorable, the Smoking Man.

Name the time, name the place.

Casino Niagara works for me.

Argy-bargy and fisticuffs may result.

Next time I am in Canada that is….– SM had better watch out.

I’ll go Jim “The Anvil” Niedhart on SM.

SteveO.

#76 SoggyShorts on 08.15.18 at 9:13 pm

#37 Brian Ripley on 08.15.18 at 6:55 pm
#29 Topo the Clown on 08.15.18 at 6:23 pm
#14 Brian Ripley on 08.15.18 at 5:19 pm.
IF 1.8% of Alberta employees earned minimum wage in 2013, and Now, 7% of Alberta employees earn minimum wage in 2018 – that’s 4 times greater in 5 years.

**************************
Not enough information. It could be that a bunch of Albertans were making $10 or even just a penny above min wage in 2013, and now those same people are making 14 or whatever the min is today. That is a huge boost in income, not a huge drop.

#77 empty houses on 08.15.18 at 9:16 pm

The reason why the houses are empty is because not everyone wants to be a landlord.

Landlords can’t do anything when a tenant brings in a pet. Why rent the place to someone and their german sheppards who’ll damage everything from the waist down? Better off keeping the place empty.

You have to pay a tenant to leave and then live in the house for a full year if you want to sell. Better off keeping the place empty.

Tenants get to stay as long as they want after their lease expires. How the hell do they get the upper hand after a lease term is up? Better off keeping the place empty.

Eviction processess are long and slow. Better off keeping the place empty.

#78 Higher Mathematics on 08.15.18 at 9:20 pm

Take a GTA condo 675 sf woth 400k
400k divided by 675=592
592 is is the price per sq ft
use that number x 850
a typical etobicoke or east york bungalow
you get 503k, but thats just one floor
so double it for the basement
the bungalows are worth a million
today you can pick them up for less
that wont last
in the million dollar value comparison I dont add anymoney for stuff like freehold, lot value, garage private drive etc

#79 reynolds531 on 08.15.18 at 9:21 pm

Custom kitchens…it isn’t real wood unless each piece is spelled out in the contract. Quality my butt.

#80 rental property math on 08.15.18 at 9:29 pm

To be honest.. things are fine in Hamilton. Rents have gone up so much in just the last year alone that the absolute worst case scenario for me is to play musical chairs with my rentals living in each one of them for a year and then renting them back out at market rent. Easily done for a minimalist like myself and the mrs. I’m getting $1850 in rent for a free hold townhouse purchased back in 2015. Paid 360K could probably sell for $575K today, would have sold for $600K last april.
Going rent rates today are $2200-2400. My costs will still be covered even if I’m paying a 5% mortgage rate on a 25 year term with $4000/year property tax $1100/year insurance and still have a bit left over to establish a maintenance budget.

Put the right tenants in there.. like a retired boomer with a kick ass set of Dewalt cordless tools. He’s just itching for something to break so he can fix it and I can bank that little extra monies every month for a new roof in 15 years or so.

And yeah the less desirables are now living in tents off the wentworth escarpment.

Ford is going to make some changes to the residential tenancy act. It won’t be as risky to be a landlord and that’ll spur investment. I just want to hit my magic number and GTFO. 80/20 or 70/30 for a guy my age sounds about right. Landlording is a great career if you like putting up with stupidity and people’s personal problems.

#81 Steve on 08.15.18 at 9:38 pm

Why would one invest in real estate?
Asking 1.1m with a NOI of 46k see
https://buildout-production.s3.amazonaws.com/documents/911788/1b711b67a43169ad75a5a15aeff1b90925029035/upload.pdf?response-content-disposition=inline%3B%20filename%3D211_Ivy_Crescent_Flyer_%28High_Res%29.pdf&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=ASIAUY3P3SALWRG3Z3HD%2F20180816%2Fus-east-1%2Fs3%2Faws4_request&X-Amz-Date=20180816T013423Z&X-Amz-Expires=300&X-Amz-Security-Token=FQoGZXIvYXdzEHcaDL3JcMul9csFuPDRvyK3AxwofhMfldstYUcP%2F%2F3ZtkvW4wt3vPhfhcGg%2BNL2X0%2FgKcCsBxLD2Ym5OkZMl8mE0VtZ96qeqhytPKESdVN%2FwUEI8PfDhmiWMBEpjfgqDNwT45%2Ba%2Bjmj9NEderVVGCjcq%2BEUYZVeiTJUwLjRTZ5EdMr22AJUrt0mwVXonxXySQBdxREd7Ui3aYI5KDrJIHJgwyhBkOXjKqH0%2BN19dlra8L0NXiyoNBWd7y3TZlI4AcxY487VZV9CY2XawLJRn898uEPAy3eWntn0qfT1zKdDVGRYu3C%2FJjl1EZdKHqYemyRLt2npqAUUZzbLQJuUwMfu4OWka9WGKI%2FyZcU8R0aWM9o48zLixJuXjLQcJrtjsNy6M%2BKScj5txbHcJE0KRwugtiBivIo7yis55B8hhTj4iL9XZ%2FQLQzbO72%2F8nNGFU%2BvV3jZ8OBKtBAcH%2BTEX5C1tW%2FKKI6mC6xqKPxzhOlCfykaN2M50sa57rIwEBfzNoz6mpgzPuxWEYnQF8A%2FbZCT5kk0b0qbBFs4pdcvCl3eHIbTeQGpGnxmogNK1VynOS75%2BSstUD%2FelTwYI4%2BbtCQeW13nKTNuU7vgomq7S2wU%3D&X-Amz-SignedHeaders=host&X-Amz-Signature=1f966a367d68fc4afdafd3a6035e5c255489b49cc6f4c2f3f65d37aae354863d

That’s 4%, you get same return of dividends and better tax rate.

#82 Smoking Man on 08.15.18 at 9:43 pm

Steve French on 08.15.18 at 9:10 pm
Im feeling my oats and ready for a drunken political debate with the Great Deplorable, the Smoking Man.

Name the time, name the place.

Casino Niagara works for me.

Argy-bargy and fisticuffs may result.

Next time I am in Canada that is….– SM had better watch out.

I’ll go Jim “The Anvil” Niedhart on SM
SteveO.
……
Soory dude, I’ve left communism for a better life. Next time you’re near LA. Lets do it.

#83 Tony on 08.15.18 at 9:43 pm

Re: #4 The Wet One on 08.15.18 at 4:42 pm

Townhouses seem to be the most undervalued. Resale townhouses cost about one third what a house costs. The replacement costs are double or triple what they sell for. In the rest of Canada they cost two thirds or more what a house sells for. Owning will always be cheaper than renting in Edmonton even if rents keep falling.

#84 TheDood on 08.15.18 at 9:48 pm

#63 MF on 08.15.18 at 8:15 pm

The problem is that are too many things going for the housing market here in the GTA compared to potential risks. We like to cite the risks (rising rates, debt levels etc.), but there are many strengths that overpower these risks (economy, demand, livability).

Wynne’s intervention made everything worse btw. There probably would have been a pullback until she fiddled with the market.

__________________________

The GTA is no different than YVR. You’re saying livability and demand overpower rising rates, debt levels, and bonehead government intervention? At the end of the day, the math doesn’t work – there is simply NO industry (in GTA, YVR, or anywhere in this country) that support the income required to buy RE. I would bet you a shiny new dime that GTA RE prices will be heading south in a big way, but am too busy choking on BC wildfire smoke in lovely YVR.

#85 45north on 08.15.18 at 9:55 pm

Alex Prikhodko: However, there are no reasons for such optimism. I’ll give you a few very specific cases:

Garth: Like everyone else with boots on the ground, this realtor knows the facts. They’re brutal.

I read the specific cases. They will force the market to decline further and nobody knows this better than the banks.

#86 Long-Time Lurker on 08.15.18 at 10:07 pm

I heard that interest rates in Argentina are at 45%.

#87 45north on 08.15.18 at 10:12 pm

Alex Prikhodko: Long story short, here’s my prediction. Detached homes prices will continue to decline at an accelerating pace, as more mortgage holders (especially multiple property mortgage holders) continue to get squeezed.

Linda: I don’t think the market is going to be rescued by real estate propaganda. Too much information out there about what is going on to fool people. Now, I totally get that those who are caught in a slowing/depreciating market want those real estate reports to be true, but reality doesn’t care what anyone says.

I don’t think so either.

#88 akashic record on 08.15.18 at 10:15 pm

“The real estate and financial cabal would have you think so. They want house lust. Need it. Live off it. Profit from it.”

I am surprised Garth, that you don’t take that as a given.

People are people, they have to pay rent or mortgage, pay for groceries and school. Whichever industry they find themselves in the course of their life. Even if that’s “the real estate and financial cabal” (whatever that is supposed to mean).

Which strangely, really made me think about this news that hit the wire today:

“Historically, former heads of intelligence and law enforcement agencies have been allowed to retain access to classified information after their government service so that they can consult with their successors regarding matters about which they may have special insights and as a professional courtesy”.

Whatever people may think, former heads of intelligence and law enforcement agencies are just people, like “the real estate and financial cabal.”

So this whole “they can consult with their successors regarding matters about which they may have special insights and as a professional courtesy” thing is a complete nonsense, when it comes to the consideration of the importance of keeping security holes closed – at least, at the intelligence business of the most powerful state of the planet.

The only way this arrangement can exist, if the supposed competing 2 party political system is a kabuki theater.

This gaping security threat of the state is risk free only, if these players serve the same masters, regardless of the governing party and that’s what keeps them on short leash.

This line was clearly crossed after Trump was elected, which leaves no other choice, but revoking security clearances to close the security hole that off-leash actors, barking in public, losing their cool present for the state.

Even if they are not outright played to do a role in getting rid of the sitting president.

Because what’s been happening also indicates that the genie is really out of the bottle, Trump is probably not owned by the same masters, or the same way as the previous presidents were.

Funny what can you learn from an innocent post about “the real estate and financial cabal”.

#89 AR on 08.15.18 at 10:26 pm

Can you comment on how climate change factors into markets? Cause it’s real, expensive and not going away. Only going to escalate. B.C. can attest. Also, have you read ‘capitalism Without capital’? Can you comment on tangible and notable assess and how that can affect investment strategies? Thanks.

#90 Time between Bull Trap to Fear on 08.15.18 at 10:32 pm

would someone care to predict the time between bull trap and fear in GTA please?

#91 MF on 08.15.18 at 10:43 pm

77 rental property math on 08.15.18 at 9:29 pm

This guy’s comments have to be among the most hilarious and telling we come across on the blog.

He brags about Hamilton re. Unbelievable.

I’ve said it before, this is the type of person who should be obliterated financially for investing in that city’s RE. But alas, artificially propped up by bad policy, poor regulation, and rates too low for too long..we are here.

What’s really interesting is these people think they are “smart”.

Simply unbelievable. Hamilton RE should be worth 20 cents on the dollar.

MF

#92 Linda on 08.15.18 at 10:44 pm

Smartalox: about that custom kitchen quote of $20,000 that was normally priced at $50,000. Think about that for a moment. If the custom guy is quoting $20,000 presumably he is still at least breaking even & maybe even still making a profit. That sounds like his normal practice was charge all the market will bear & now the market is soft, his prices are reflecting the new reality. So it boils down to whether that extra $5,000 for the custom kitchen is enough of a value over the Ikea kitchen. I guess it would depend on whether the custom kitchen was for personal long term use or whether the property owner was just wanting to sink the minimum into a property so they could unload it asap. Kitchen renos usually have a good ROI, but obviously there is a tipping point where the amount put in is more than what you will get back upon selling.

#93 MF on 08.15.18 at 10:50 pm

#84 TheDood on 08.15.18 at 9:48 pm

No industry to support prices?

I don’t know about Vancouver since I’ve never been there and don’t care but you are wrong about the GTA.

There is lots of industry here. Lots of it involving finance and RE, of course. But there are also lots of other corporate headquarters.

The proof is in the pudding. All of my friends have decent jobs and the most successful are earning 6 figures. The idea that everyone is broke and in debt is overblown on this blog IMO. Debt servicing costs are low and rates are not going anywhere meaningful. Central banks are bluffing and everyone knows it. Rates will rise but nothing compare to historical norms.

MF

#94 crossbordershopper on 08.15.18 at 10:53 pm

you can buy a nice kitchen pick up in your big van and drive from detroit, i stayed two days and didnt even pay duty or anything. the moen faucet as well,
you can get nice kitchen in the usa, real doors, nice handles, the backsplash, the appliances and the countertop due to logistics you have to source locally.
all for a fraction of the price.
$30K for a kitchen, omg $2500 should do it, 10×10 with all the fixings, $5000 for the backsplash, the faucet, the countertop.
can even get easy close glide doors, etched window glass in the corners as well. quite nice
i understand land is expensive here, but why are the materials so expensive too?

#95 MaxtheTax on 08.15.18 at 10:57 pm

Hot off the press folks:
this is the solution right here to the housing affordability crisis wherein CA RE is out of reach for CA citizens:

https://www.bbc.com/news/world-asia-45199034

New Zea brought down the hammer on foreign money launderers,
Hooray for awesome Gov decisions.

#96 IHCTD9 on 08.15.18 at 10:57 pm

#66 MF on 08.15.18 at 8:28 pm
57 IHCTD9 on 08.15.18 at 7:40 pm

Exactly and well put.

I would add that there are communities of none-first generation Canadians outside of the GTA popping up all around. Often it’s an immigrant couple who first met in the gta then moved to a smaller town to start a family, but it can be the reverse (an immigrant couple that first move to a small town then migrate to the GTA).

One thing seems to ring true: for younger singles, or older manboys/cougars, the bigger city looks to be the place to be. Maybe that’s why condos are so hot here?

MF
———

Out here in the sticks, outside of immigrant families or couples moving in and buying a gas station or motel, the only immigrants we get are single females moving in to take a job offer. Mostly East Asians, Latinas, Philipinas etc. They move in, hook up with a local guy, get married; and instantly live as well as anyone else who’s family has been here 100 years. It’s a great game plan IMHO. Unfortunately, the Asian etc guys will have MUCH greater difficulty doing the same thing. That’s why we basically get ZERO single immigrant Men moving in.

The newly landed Women have it made in the shade. I know one lady who came here, got educated and married to a local dude, had a couple kids all in 10 years or so. Hubby’s a business owner, she’s an RN, they’re loaded, real nice house is paid for, kids go to the same private school mine go to (that’s like paying another mortgage).

She skipped all the hardship faced by most newcomers just by hanging with the right crowd – I wonder if that was her plan, or did it just happen to work out that way? She grew up dirt poor in the Philippines. Frankly, she was a catch for most any guy either way. Cute, traditional, educated, gainfully employed, and a great Mom.

At any rate – ethnic enclaves are a long ways off in IHCTD9ville. Many immigrant families will run a corner store out here for decades, and when retirement comes; they move to the… GTA! They don’t hang around (their kids sometimes do though).

I’d agree 100% life might be better for those living the single player lifestyle to be where all the action is.

#97 Madcat on 08.15.18 at 11:07 pm

True story… My main competitor has wound down his company (which wasn’t doing very well anyways) to renovate and flip condos. Jeez! He was already having a rough go of it and now he’s going to ruin his personal finances too.

#98 Richard on 08.15.18 at 11:23 pm

Today I had an appointment with my bank account manager.
In our meeting we come across how much can a family having an annual income of $100,000 can borrow?
She told me that now banks are very cautious and is reducing the loanable amount from $600,000 to less that $500,000.
She had seen quite a few families running into trouble and was unable to close.
On top of that it had also caused family problems between husband and wife due to financing!

If this kind of problems grow! I would expect the housing market to experience a significant down turn sooner than what most people would expect!

#99 GoldnSilver on 08.15.18 at 11:28 pm

We may have seen the last rate hike by the Feds in the U.S. for a while. There is noise all around us folks. Listen to the whispers of the market. When the news media trot out the well known names to make certain statements, provide their views and opinions it can generally be a front runner of whats to come.

https://www.cnbc.com/2018/08/15/trump-might-get-his-slowdown-in-rate-hikes-but-for-the-wrong-reason.html

Come September the Fed statement will be something like this:
“Due to uncertainty of future financial conditions with regard to employment data, GDP and the rate of inflation the Board of Governors have voted at this time, to hold the Federal Reserve at the present bank rate. The Board members feel that the present fragile condition in some financial markets, both here and abroad could serve to somewhat destabilize the gradual recovering economies both of the U.S and others since the Financial Crisis of 2008.”

Something to that effect. This will put a hold on rates in Canada as well. Time will tell, but it’s not just politics playing out here, but something is up and brewing around the financial world. I’m no financial wizard but the Treasury Bond market is telling me something. Yields are falling which means Bonds are rising. If Bonds are rising that doesn’t sound like higher interest rates to me. But I’m no expert.
This is just IMHO.

#100 The Real Mark on 08.15.18 at 11:31 pm

Alex, what are your thoughts about basements

I live in my mom’s

#101 Leo Trollstoy on 08.15.18 at 11:37 pm

U can tell that crissy feels bad at getting the RE peak wrong because he keeps repeating the info trying to convince ppl

Textbook psychology

#102 RW_Z on 08.15.18 at 11:44 pm

“Typical $600,000 condo”

My fatal error was believing that the people around me wouldn’t pay $600K for a Soviet prison cell.

#103 Smoking Man on 08.16.18 at 12:07 am

Whoa, talk about illusion.
Great clip. Dude points out that if banks thought that global warming was real and sea levels would rise. No damn way projects would be funded in Florida.

https://youtu.be/NjlC02NsIt0

#104 Entrepreneur on 08.16.18 at 12:33 am

The Bull Trap and Return To Normal Stages in the above graph can be looked at a different angle: The system allowed The Bull Trap and the greedy played along until, wait, going back to Return To Normal Stage, because The Bull Trap has created a mess and various issues.

Also, this thinking that The Bull Trap allowed to fester has created a situation that people will take jobs that are not acceptable to our values. And bring out the worst in people to buy and sell thinking with a narrow-mind outlook.

And what happened to the middle class that supports the community/province/country? Our base line, our foundation. Why create, start a business when one can get rich buying a house.

And what is happening to our Climate Change? Is it getting better or worse? Record breaking temperatures again! Would this Bull Trap have anything to do with orchestrating minds to take jobs that are unacceptable/damaging to Mother Earth.

I think there is a correlation between Climate Change and the real estate market, #89 AR. Or should I say that is one graph of many graphs of groups that rule and direct the route. It is that overall influence.

#105 Home Slice on 08.16.18 at 12:35 am

#53 WUL

I am not a world class climatologist or geoscientist like my fellow commenters here. I do not have time to read peer reviewed IPCC papers. So, I have to decide what is authoritative on the anticipated harms of climate change. I go with the Exxon scientists of circa 1979 to 1985 whose memoranda stated along the lines of “Yup. It’s real. We’re causing it. By the time it is detected and measurable, it will be irreversible. We’re hooped”. Hence the lawsuits and prosecutions of Exxon for its deceit. I also note the fact that Chevron instructed its legal counsel to admit in a US District Court in California a couple of months ago that “Yup. The science is clear. We’re causing it.”

=========

Don’t tell Smoking Man this he’s been searching for the truth at the bottom of an empty JD bottle of all places and all he has found is an ugly red baseball cap claiming to make America great again. Hook line and sinker, he along with all Trump’s other followers have bought what no one with any decency would be selling.

Anyways, my boots on the ground from the smoked out west coast tell me that people are already talking about these types of conditions in the summer are likely to be the new normal. I hope not, but my simple observations of humanity tell me otherwise and best get used to it. On the bright side there is so much smoke in the air we won’t be able to see any new fires burning.

Ignorance really is bliss, but it’s still ignorant

#106 Sydneysider on 08.16.18 at 1:30 am

#4 The Wet One

You can learn a lot about the Edmonton market by following this blog:

https://www.livrealestate.ca/blog/

Curently SFH inventory is off the charts, higher than in 2008. More than 7000 active listings (all types) and only 250 sales each week. Next spring will be a good time to make hardball offers.

#107 Flat Earth Society on 08.16.18 at 2:07 am

Hack, hack. Cough cough. Second hand smoking laws are stupid all of Calgary is worse than an old pub at this point. Can’t even see 200 meters.

#108 The Real Mark on 08.16.18 at 2:45 am

“#90 Time between Bull Trap to Fear on 08.15.18 at 10:32 pm
would someone care to predict the time between bull trap and fear in GTA please?”

The GTA peaked in 2013 on an individual identical unit basis, so we’re 5 years into the bull trap phase. Where a slick talking RE seller might be able to convince a naïve buyer to pay a higher price due to a lack of understanding of the influence of the sales mix on the reported numbers.

I believe we’re now starting to enter the fear phase, where the first wave of 5-year term loans that were issued at the peak are coming up for renewal, and the renewers are increasingly trapped in an equity position that doesn’t facilitate much if any cash-out refinancing.

This could be contributing to the up-tick in empty but unsold units that we see flooding into the market. I’m personally not convinced that Toronto RE prices have fallen significantly from the peak/plateau levels, but the normalization of the sales mix, and even a countercyclical presentation of the sales mix (where low-end units transact far more frequently than higher-end units, thus artificially dragging down the headline average sales price) could exaggerate the downside.

Interesting times ahead. Bank loan loss reserves are now increasing, and it will be interesting to follow bank earnings and conference calls in 2 weeks to see what the deal is, at least on the financing side of things.

#109 Balraj Dhalandar on 08.16.18 at 3:45 am

Houses are booming in Brampton Garth.

A detached sold in 2012 for $440k just sold for $820k.

Nope, no renovations. Wouldn’t it be nice if that house was 450k again??

— Bal

#110 MikeS on 08.16.18 at 5:04 am

90 Time between Bull Trap to Fear on 08.15.18 at 10:32 pm
would someone care to predict the time between bull trap and fear in GTA please?
————————————-

3-4 years

#111 dharma bum on 08.16.18 at 7:37 am

My friend opted for an Ikea kitchen for $15,000 instead, which was of great personal insult to the kitchen guy, since quality of his products is significantly better than what Ikea has to offer.
——————————————————————–

This is not necessarily so.

I spent about 15 years of my pre Dharma Bum life as a supplier to kitchen manufacturers.

The kitchen business is a huge scam. The more money someone spends on a kitchen, the bigger suckers they are.

90% of the materials that go into the fabrication of a “high end” kitchen is cheap crap. it is particleboard based, laminated with a melamine decorative print or solid colour. For the most part, the same crap is used by the high end and low end kitchen fabricators.

The only things that differentiate one set of particleboard boxes apart from another are:

The DOORS and DRAWERS.

The HARDWARE (hinges and drawer slides and other mechanisms).

The COUNTERTOP.

Kitchens are the easiest thing to build, as far as the cabinetmaking world is concerned, and also the easiest business to con deluded homeowners into thinking they’re getting something “special” or “exclusive”.

It’s a con.

Those that have discovered IKEA are actually getting the biggest bang for their buck. (Ikea’s licensed manufacturers’ buying power for the same crapola materials that ever other rinky dink kitchen fabricator uses is so much greater, that they pay about 60% of the cost that the average independent shop does.)

If you’re in the market for a kitche, Ikea is a great option. Just make sure you choose high quality hardware and drawer boxes.

#112 TurnerNation on 08.16.18 at 7:55 am

‘Uppa uppa’ always turns blog dogs into a howling frenzy.

Say how’s gold..metal of gods store of value etc etc etc.

https://finviz.com/futures_charts.ashx?t=GC&p=d1

#113 IHCTD9 on 08.16.18 at 8:04 am

#109 Balraj Dhalandar on 08.16.18 at 3:45 am
Houses are booming in Brampton Garth.

A detached sold in 2012 for $440k just sold for $820k.

Nope, no renovations. Wouldn’t it be nice if that house was 450k again??

— Bal
_________________

820 for an SFD in Toronto – isn’t that cheap?

If I look at the typical historical spread between houses in my area and Toronto houses (2-3X more), then 820K is at the bottom end of the price spectrum.

#114 Stone walker on 08.16.18 at 8:05 am

What model Harley do you have Garth? I picked up a softail for an unbelievable deal a couple years ago. With equity drying up and home prices down, we’re going to see some amazing deals on toys here this year. I snowmobile and watch that market closely, sales shrinking for 20 years and an oversupply every year, definitely a sign of what’s happening with credit markets

#115 TurnerNation on 08.16.18 at 8:07 am

#53 WUL thank goodness you are paying your carbon taxes and into general revenue too. You be doing us a proud one mate.
P.s . I’ll take any other monies you no longer need off your hands, for the fight of course.

#116 maxx on 08.16.18 at 8:11 am

Buyer……..buyer……..where are you buyer?

#117 David Paquette on 08.16.18 at 8:12 am

Commodities and crypto’s are being hit hard recently that I attribute to a strong US$ and The Don’s style of “negotiating”. I was tempted to compare The Don to Al Capone (stable geniuses) but it is not worth the effort today. World power and wealth are being concentrated in fewer and fewer hands. It makes sense. If you are a banker/wealth manager, life is easier if your clients own the economy. Why deal with billions of deplorables if you just make the 0.01 % happy and let them deal with controlling and fleecing the plebs while turning a blind eye. Power does corrupt absolutely. Sheepeople (aka peoplekind) just want a shepherd to give them what they want. Well, wants have no limit and sheepeople (peoplekind) are wanting.

Democracy is dying due to corruption of government and a lack of critical thinkers. Those in power will do what is ever necessary to maintain the status quo. The recent election of “disruptors” is a sign of dissatisfaction among the plebs. It’s time to take back command from stupid. The smartest person in the room is small compared to the cooperative group (divide and conquer). I am tired of being lied to by every level, particularly by those on commission or pension for a buck. I am disappointed by American partisan politics as well as Canadian sjw. It seems to be “my way or the highway”.

I finally stepped into buying some precious metals. Why? Real estate, bonds and emerging markets look like dead money to me and I want alternatives other than crypto’s. I had to sell something to get something and time will tell. I see demand for CDN bitumen and LNG in Asia. I like Prince Rupert as a port gateway so… A First Nation federal holiday doesn’t cut it with me. I would rather give royalties and a pollution bond to be responsible before expropriation or a useless holiday. Christ, I would settle for mother and father days first.

The west Canadian select crude discount is killing the Alberta NDP. The chances of The Don ordering American shale production cut to support oil prices is less than a snowball’s chance in hell. Canada is facing some powerful economic headwinds right now but I believe that shall pass. Expect a lower standard of living in your future if you are average which I am.

IoI
vvvvv
vvvvv

#118 Oft deleted much maligned stock.picker on 08.16.18 at 8:22 am

DELETED

#119 Not buying it on 08.16.18 at 8:23 am

I’ve been reading on this blog and other sources for years about an imminent price collapse in GTA and Hongcouver. Doesn’t seem to be happening….aside from $3 million + homes in Vancouver.

Glad I bought in Toronto years ago, and have since bought additional properties.

I like reading both sides of the argument re: home prices – it’s just surprising to see so many people on the comments here continuing to believe that prices are due to collapse at any moment.

Hope you all aren’t holding you breath….

Collapse is not likely, nor has this blog forecast that. We’ve also said the GTA, because of population growth, will be less impacted than the burbs around it, plus other markets (much more at risk). However, prices have declined and continue to do so in exactly the fashion forecast – a melt. – Garth

#120 Wrk.dover on 08.16.18 at 8:25 am

20 degrees or more in Halifax. year, record # most consecutive days , until date

1999 61 A18
1885 52 A24
2018 50 A15 and still counting
2012 47 A28
2013 45 A28
2016 43 A13

deniers wonder what happened prior to 1885?

shoot the weather man, not me.

#121 Renter's Revenge! on 08.16.18 at 8:25 am

#60 Newcomer on 08.15.18 at 7:45 pm
I actually thought about that exact scenario right after I posted! i.e. “What if he gets wiped out?” At first I thought, well, he still only has to borrow $500k after the collapse, versus $750k before, assuming he can get 100% financing (which I’ve heard is possible, if you know the right people, *wink, wink, nudge, nudge*). Then I thought, what the heck is he doing borrowing $750k, or moving up before paying off the first house? Then I figured anyone smart enough to read this blog is probably smart enough to figure it out on their own, eventually.

#71 Karl on 08.15.18 at 8:38 pm
You’re welcome.

#122 rental property math on 08.16.18 at 8:37 am

#91 MF on 08.15.18 at 10:43 pm
77 rental property math on 08.15.18 at 9:29 pm

This guy’s comments have to be among the most hilarious and telling we come across on the blog.

He brags about Hamilton re. Unbelievable.

I’ve said it before, this is the type of person who should be obliterated financially for investing in that city’s RE. But alas, artificially propped up by bad policy, poor regulation, and rates too low for too long..we are here.

What’s really interesting is these people think they are “smart”.

Simply unbelievable. Hamilton RE should be worth 20 cents on the dollar.

MF

———————
Real estate should always cost significantly less according to the priced out renter. I’ve put up with a lot of crap along the way and I’ve been handsomely rewarded for it. I owe roughly 210K on that property in question. How exactly am I going to get obliterated? You should probably be asking yourself what risk and sacrifice have you made? All I see is crying. So cry harder see if that works.

#123 ShawnG in TO on 08.16.18 at 9:36 am

i was reading some economical discussions where Minsky Moment was mentioned. that leads me to think about Canadian housing market

fyi, Minsky Moment is point in time where credit expansion ends, and asset values suddenly falls. it comes at the end of a Ponzi phase of the economic cycle where people are so indebted that profits from assets can’t even cover the interest payments. so loans are called, assets are forcibly sold.

like i said, Canadian housing market

#124 Remembrancer on 08.16.18 at 9:39 am

#4 The Wet One on 08.15.18 at 4:42 pm

I have to sell a cheap condo to fund the down payment too. However, I’ll have cash left over from the sale of the condo. Yay me!
—————————————————————

I’m no Garth, but I’d still recommend not buying based on what you THINK you’ll get but what you KNOW you have…

#125 Remembrancer on 08.16.18 at 9:41 am

#5 Karl on 08.15.18 at 4:48 pm

What question to ask yourself Karl is why do you want to / need to move up?

#126 232 on 08.16.18 at 9:42 am

Many ways to measure the market slowdown (crash?). One of my favourite: selling your toys.

I’m looking to get a 1989-2005 Miata (cheap, fun, summer car) in a year or two (turning my daily driver into a winter beater), so I’ve been following the Miata market for 2-3 years already. Kijiji always had lots of Miatas listed, but AutoTrader had very few.
However, now if you check out AutoTrader, there are so many listings! And don’t get me started with the number of listings on Kijiji. It’s the middle of summer! People should be enjoying these things!

You know people are getting squeezed when they’re selling their summer car. And I’m not even talking about a fancy convertible, but the cheapest summer car one can buy. What difference can $5,000-$10,000 make? Apparently, to lots of people, a significant one. Proof no one has any emergency cash…

Looks like I’ll have lots of car options in a few months :)

#127 Karl on 08.16.18 at 9:44 am

Collapse is not likely, nor has this blog forecast that. We’ve also said the GTA, because of population growth, will be less impacted than the burbs around it, plus other markets (much more at risk). However, prices have declined and continue to do so in exactly the fashion forecast – a melt. – Garth

Garth, a while back you mentioned the opportunities in York Region should one be so inclined and can afford as it seems York has hit its floor and bargains much easier to attain. Do you feel Toronto (proper) is now due to hit a floor, or is it only uppa uppa UPPA in that area?

No. – Garth

#128 crowdedelevatorfartz on 08.16.18 at 10:02 am

@#114 Stonewalker
“With equity drying up and home prices down, we’re going to see some amazing deals on toys here this year.”

Yep.
I’m seeing more and more newer model cars with “For Sale” signs parked in residential driveways, boats, motorcycles, etc.
Toys and or second cars that are now unaffordable.
Gonna get ugly with a few more rate increases and Trumpian Trade talks going sideways…..

2019 ……. The Year of Less Fat

#129 robert james on 08.16.18 at 10:02 am

For the people that are thinking about moving to beautiful Okanagan to retire.. ………….https://www.castanet.net/edition/news-story-234018-1-.htm#234018

#130 rental property math on 08.16.18 at 10:09 am

#126 232 on 08.16.18 at 9:42 am
Many ways to measure the market slowdown (crash?). One of my favourite: selling your toys.

I’m looking to get a 1989-2005 Miata (cheap, fun, summer car) in a year or two (turning my daily driver into a winter beater), so I’ve been following the Miata market for 2-3 years already. Kijiji always had lots of Miatas listed, but AutoTrader had very few.
However, now if you check out AutoTrader, there are so many listings! And don’t get me started with the number of listings on Kijiji. It’s the middle of summer! People should be enjoying these things!

You know people are getting squeezed when they’re selling their summer car. And I’m not even talking about a fancy convertible, but the cheapest summer car one can buy. What difference can $5,000-$10,000 make? Apparently, to lots of people, a significant one. Proof no one has any emergency cash…

Looks like I’ll have lots of car options in a few months :)

——————-
Or maybe their looking to sell their old piece of junk and get a 2018 mustang? You’re not exactly looking at luxury yachts.

#131 Smoking Man on 08.16.18 at 10:16 am

I’m with Q

Call me a nut. Badge of hounor.

https://youtu.be/y8cp1KvZKPo

#132 Karl on 08.16.18 at 10:20 am

#5 Karl on 08.15.18 at 4:48 pm

What question to ask yourself Karl is why do you want to / need to move up?

—–

Location (school district) and family expansion being the main points.

Keep your pants on. Issue solved. – Garth

#133 Ben on 08.16.18 at 10:38 am

all real estate is local.

Here in west side Vancouver, ground zero of the housing boom and now bust, things are down. It seems the dumb money kept pouring into condos when you can get a single family home now for cheaper than assessment.

Case in point 2519 W 45th ave, kerrisdale home. Assessment is 3.249m, now going for 2.58m. Well, nobody can afford that anyway. True, but we also have east side smelly river district new 2 bedrooms asking for 2.1-2.2m. If any sucker bites for that, they are stupid for paying that much facing an ugly Fraser river that smells and has factories across the river running all night with mosquitos biting you all night.

West side owners know it. The market is only going down from here. Unfortunately it takes time for the news to filter out to the dumb money beyond here.

#134 45north on 08.16.18 at 10:41 am

Aretha Franklin 1942-2018

https://www.youtube.com/watch?v=6FOUqQt3Kg0

1967 – the top of my tennis game

#135 Asterix1 on 08.16.18 at 11:06 am

#65 MF on 08.15.18 at 8:15 pm

I’m no realtor and I think prices are here are a joke. I am like everyone else here: waiting for a crash that I now realize will probably never happen.

The problem is that are too many things going for the housing market here in the GTA compared to potential risks. We like to cite the risks (rising rates, debt levels etc.), but there are many strengths that overpower these risks (economy, demand, livability).
___________________________________________

You might not be a realtor, but you sure speak and analyse like one!

Prices are already down across GTA and in some areas, we could already call that a crash in prices!

Not sure in which World, “demand and livability” trumps “rising rates, debt levels” + B20 + drop in sales +rising inventory + massive speculation + stagnation of wages etc.

The shift is already in progress. Direction is south!

#136 Karl on 08.16.18 at 11:07 am

Keep your pants on. Issue solved. – Garth

Too hot for that.

#137 Stan Brooks on 08.16.18 at 11:16 am

Population growth has nothing to do with house prices,
prices depend on real and disposable income.

Current levels are driven by rampant speculation, really bad temporary policies that are not sustainable and will prove catastrophic to the ‘economy’.

– our economy is basically housing + some services + some commodities (suppressed lately), our oil sands are not competitive in short to mid term.
– the credit bubble will burst taking the loonie with it.

The premium to pay to live in overcrowded places like GTA are not justified by income. 15 times average before tax income (22 times after tax) for a house in Vaughan/Brampton, 12 times average income before taxes (17 times after taxes) for a condo in GTA?
Really?

For what, to enjoy 2 hours daily commute one way, 4 in total, the overcrowded malls, expensive and crappy services, long doctor waiting times, and pretty much nothing to do?

The current mass hysteria turned into RE cult/religion will fail like every mania or true Ponzi scheme and a decline of 80 % in real terms is not impossible (see Japan).

The worse thing is the leadership, which considering the stupidity of the shepple has to be pretty solid but instead turned out weak, gutless and incompetent.

Economic inflationary depression for two or 3 decades that will ruing the life of 3-4 generations is in place.

It really bugs me who in their right mind will live in such expensive and boring place (except the traffic) like GTA, everywhere I look I see poor people living in ‘million dollar homes) who can not afford to take 2 months off work.

Every sane person would declare GTA completely unlivable.

#138 Penny Henny on 08.16.18 at 11:37 am

#130 rental property math on 08.16.18 at 10:09 am
#126 232 on 08.16.18 at 9:42 am

You know people are getting squeezed when they’re selling their summer car. And I’m not even talking about a fancy convertible, but the cheapest summer car one can buy. What difference can $5,000-$10,000 make? Apparently, to lots of people, a significant one. Proof no one has any emergency cash…

Looks like I’ll have lots of car options in a few months :)

——————-
Or maybe their looking to sell their old piece of junk and get a 2018 mustang? You’re not exactly looking at luxury yachts.
////////////

For me the Miata went and in return I got a 2017 Stang.
The sale of GTA property ‘The gift that keeps on giving.

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

And to MF. Normally I like to read your comments they usually make great sense. But your rant on ‘Rental property math’ and Hamilton is just childish.
No need to put others down just cause you missed the boat.

#139 KLNR on 08.16.18 at 11:55 am

@#18 Linda on 08.15.18 at 5:35 pm
I don’t think the market is going to be rescued by RE propaganda. Too much information out there about what is going on to fool people. Now, I totally get that those who are caught in a slowing/depreciating market want those RE reports to be true, but reality doesn’t care what anyone says.

I have to laugh at the Ikea kitchen scenario. Yes, the quality of product is better at high end shops – or it should be for the prices quoted. Problem is that those lovely high end kitchens get renovated about as often as the Ikea kitchens are. From a practical point of view, which would you prefer? Tearing out a kitchen that cost $100,000 or one that cost $15,000? Who are you trying to impress with your state of the art, high end kitchen? Will you even use it to its full capacity, or are you just going to use the fridge, microwave & dishwasher?
_______________

Having installed many a kitchen, the IKEA ones are just as good as the factory ones. they all use laminated particle board and the same BLUMM hardware. Only dif would be that factory will custom fit.

KARL
market doesn’t matter, buy only what you can afford. As for school district, they all teach from the same curriculum. at least in ontario they do

#140 Not buying it on 08.16.18 at 12:24 pm

#119 Not buying it on 08.16.18 at 8:23 am
I’ve been reading on this blog and other sources for years about an imminent price collapse in GTA and Hongcouver. Doesn’t seem to be happening….aside from $3 million + homes in Vancouver.

Glad I bought in Toronto years ago, and have since bought additional properties.

I like reading both sides of the argument re: home prices – it’s just surprising to see so many people on the comments here continuing to believe that prices are due to collapse at any moment.

Hope you all aren’t holding you breath….

Collapse is not likely, nor has this blog forecast that. We’ve also said the GTA, because of population growth, will be less impacted than the burbs around it, plus other markets (much more at risk). However, prices have declined and continue to do so in exactly the fashion forecast – a melt. – Garth

—————————————————————–

I will give credit when credit is due, you did forecast the melt. Good call on that.

#141 Sceptic on 08.16.18 at 1:02 pm

Garth,

Your post mentions that 80 percent of brokerages are more losing money. Sounds like a pretty significant statement to make without providing more information. Can you share a source, or additional insight?

#142 IHCTD9 on 08.16.18 at 1:05 pm

#126 232 on 08.16.18 at 9:42 am

Looks like I’ll have lots of car options in a few months :)
______

~1000 lease takeover ads on Kijiji Ontario right now.

~700 of them are in the GTA.

#143 Ex PIMCO man on 08.16.18 at 1:54 pm

#82 Smoking Man on 08.15.18 at 9:43 pm

Steve French on 08.15.18 at 9:10 pm
Im feeling my oats and ready for a drunken political debate with the Great Deplorable, the Smoking Man.
Name the time, name the place.
Casino Niagara works for me.
Argy-bargy and fisticuffs may result.
Next time I am in Canada that is….– SM had better watch out.
I’ll go Jim “The Anvil” Niedhart on SM
SteveO.
…………………………………
Soory dude, I’ve left communism for a better life. Next time you’re near LA. Lets do it.
……………………………………….
Hey Smokie had to have a look at your new alter ego on Twitter. Jesus man your working in the PIMCO building at 650 Newport Ctr Dr! Saw your picture of the fires east of Newport. Recognized the view immediately. I worked there for a very short time in 2014- 2015. Do they still have the large digital stock display board at the elevators? I still have my elevator security pass at he swipe stations. Used to go to lunch at Red O near there. Franko was the best server there. Great Mex food place. Try it out.

#144 Stan Brooks on 08.16.18 at 2:20 pm

Loonie on it’s way to the .70 handle (read 0.60), there goes Mark’s deflation.

https://ca.finance.yahoo.com/news/nafta-2-0-wont-stop-loonie-falling-70-cents-us-2019-164335275.html

#145 jess on 08.16.18 at 2:23 pm

wealthy tax evaders and their enablers
“A misdemeanor offense was appropriate for the conduct of both individuals.” …In a 2012 indictment, prosecutors said that from 2003 to 2009, more than 190 U.S. taxpayer clients of ZKB conspired to conceal accounts at the bank from the U.S. Internal Revenue Service to evade taxes.
=======

Prosecutors said that both men helped clients open and maintain undeclared accounts using codenames or in the names of sham entities and ensured that mail relating to the accounts was not sent to their American clients in the United States. ”

https://uk.reuters.com/article/us-zkb-usa/switzerlands-zkb-to-pay-98-million-to-end-us-probe-of-tax-evasion-idUKKBN1KY26W

===

Keep bribes quiet for 10 years, FIFA won’t punish you –
run out the clock…like the catholic church did to “protect the institution”

https://www.thespec.com/sports-story/8818810-fifa-defends-bans-for-false-info-tarnishing-reputations/

monsanto will appeal but what does mr. johnson end up with?
https://www.forbes.com/sites/robertwood/2018/08/13/how-irs-taxes-kill-plaintiffs-289m-monsanto-weedkiller-verdict/#6f82b5e9402e

#146 Old gringo on 08.16.18 at 2:49 pm

So, is this the famous “ dead cat bounce “?

#147 Shawn Allen on 08.16.18 at 2:52 pm

The Graph Above…

So approximately when was the bear trap before houses tripled? Who got hit selling and renting there or soon afterwards, or advising others to do so, and will they admit it?

And does anyone seriously think house prices are going to decline back below the bear trap level?

#148 Ace Goodheart on 08.16.18 at 3:04 pm

The insanity continues:

https://www.thestar.com/life/homes/2018/08/16/11-million-in-roncesvalles-378000-in-oshawa-what-these-houses-got.html

Bidding wars on Ritson Road North In Oshawa?

That is like people fighting over a t-shirt at Goodwill.

Oh well…..

#149 Souvereigninternational on 08.16.18 at 3:56 pm

Dead Cat Bounce. Everything is on schedule to fall apart and hit the bottom by 2021. I Have predicted a lot of the timeline here back in 2013-4. It is going to be an epic show.

#150 Entrepreneur on 08.16.18 at 4:10 pm

I like politicians that speak up and tell it like it is. I am talking about MP Maxime Bernier speaking up about “identity politics” and our “western values.”

He goes on about identity politics is used by all political parties to buy votes. And it is dividing our country, making it weaker. Too much of it and what about Canadian interests.

Political parties do like to buy votes.

I say Maxime Bernier should start his own party and see how he makes it. I wanted him to win the Conservative leadership.

Controversy leads to a healthy discussion.

#151 IHCTD9 on 08.16.18 at 4:17 pm

#148 Ace Goodheart on 08.16.18 at 3:04 pm

That is like people fighting over a t-shirt at Goodwill.
______

LOL!

#152 X on 08.16.18 at 4:27 pm

I continue to see price declines in the 1.5-2.5M range in North York. Slow. Gradual. If you want to sell you reduce price.

#153 Blackdog on 08.16.18 at 7:00 pm

This unfortunate first time homeowner must wish she had stayed a renter. https://www.cbc.ca/news/canada/edmonton/ant-infestation-edmonton-1.4786153