The scent of disaster

News from the Trenches:

It was listed in mid-February of 2017, when all the realtors, house-pumpers and misguided moisters who come to this pathetic blog (for unknown reasons) told us GTA houses were going up forever. Buy Now or Buy Never. Endless FOMO. Get in now before some Iranian dude pulls up in an S-class to outbid you. The new normal was 30% gains year/year, month after month.

So 28 Bobmar sold in five days. The ugly little East End bung with the squalid basement suite went for fifty grand over the asking price of $849,000. With double Toronto land transfer tax and a few closing costs the proud new owner paid about $940,000.

Well, so much for ‘investment’ real estate. Since then – despite what the realtor cartel tells you – housing has deflated faster than FB. The owners tried a flip and failed. After months on the market, with the place finally listed down at $749,900, it sold for $708,500. After commission that amounts to $673,075. The loss: about $266,000. The house went for 21% less than it commanded eighteen months ago, and the hapless investor took a 28% loss.

“These folks bought this place, tried to flip it and got crushed for 200k plus, plus,” says realtor (and blog dog) Dan, who watched the saga unfold.

The big news: this is not an isolated event. Never, ever believe those who tell you that the melt is over, that the market has restored or more losses do not lie ahead.

$   $   $

Everything will be exacerbated, elevated, irritated and exaggerated as mortgage rates rise. Your friends, co-workers and idiot BIL probably have zero idea how the cost of money could surprise. As this blog’s been telling you for a while, the influence of the Inflation President is inescapable. Home loans will cost at least 1% more at this time next year, which is a 30% increase. And if you think the Mills are hurling over the mortgage stress test now, just wait.

So on Friday bond yields jumped with the latest inflation number. At 3%, it’s huge. We’re at the very top end of the 1-3% range which the Bank of Canada has had as its guiding principle since the GFC. It means your HISA is losing money, bigly. Meanwhile the odds of a central bank increase next month have jumped. The betting is two hikes in 2018 and another two in the first half of 2019. It’s even conceivable one of those could be a half point (not the usual quarter) since our bankers are so far behind the curve. Remember – the US Fed has hiked seven times to our bank’s four.

By the way, our dollar surged on the inflation news. It was pushed higher on the near-universal expectation our steamy, expanding mountain of $1.8 trillion in mortgage debt will soon cost more. Higher rates, of course, benefit the wealthy while sucking more disposable income from the middle.

The rich hold assets. The rest hold debt. The sooner you cross that divide, the sweeter your life will become.

$    $    $

Finally, in the trenches, is Adam. We heard from him some months ago when his rented apartment went up for sale, making him wonder about buying it. Naturally, we talked him off the cliff. The tale continues….

Just wanted to give you an update.  Our landlord put up our unit for sale almost 3 months ago, and the place hasn’t sold.  Earlier this year, there were units in this building selling within a week. The owner first listed at $450, relisted at $500, and finally came down to $399k, but still no takers.  Each time, the realtor terminated and relisted the property, generating new interest with each relisting.  I’ve seen this happen for so many units in the buildings throughout our trendy east end hood.  Funny that TREB doesn’t include these terminated listings in their DOM stats.  Some of the realtors didn’t even know themselves (or wouldn’t admit it).

We’ve had to put up with over 100 showings (it’s been hell meeting that many realtors), and the owner only received one serious offer.  Can you imagine that, just one?  After that single offer, we thought it was finally time to begin packing up, but we were wrong – the deal fell through.  CMHC refused to offer mortgage insurance on the loan.  The reason?

Have you heard of the “condo blacklist”?  Apparently, there are properties that CMHC, Genworth, and Canada Guaranty refuse to insure due to any number of concerns, including outstanding construction liens against the building, poor financial management by the condo board, lacklustre reserve funds, or the condo’s involvement in pending lawsuits.  In the case of my condo, each of these issues apply.  There are numerous other examples in Toronto I’ve learned about, but unsavvy buyers wouldn’t know it, and the inaccurate DOM data sure doesn’t help.

To help pay for these financial hardships, the condo board has issued special levies for all owners of a few hundred a month.  Condo fees have also recently gone up 10%, the 5th increase in the 5 year history of the building.  The building is notorious with realtors, who advise their clients to stay away (the good ones at least).  After real estate lawyers read the status certificates, they also advise their clients to stay away.  For those foolish enough to try, CMHC refuses to play game.

It’s still possible somebody comes through with a 20% down payment, avoiding CMHC insurance and thus satisfying their lender.  Until then, I’m going to continue renting, saving money, and waiting these rate increases out.

Smart boy. We have only just begun.

140 comments ↓

#1 Jimmy on 08.17.18 at 3:41 pm

A tad early today.

First!!!!

#2 The Real Mark on 08.17.18 at 3:48 pm

Deflation now that the post-2013 plateau has come to and end.

I’m pondering the endless question; when will house prices come down enough in Brampton for my parents to finally buy a house again? Sharing this bedroom with my siblings since 2013 has been tough.

#3 Duke on 08.17.18 at 3:49 pm

Adam is a smart guy. There will be more of these stories going forward all over Canada. LOL

#4 Lost...but not leased on 08.17.18 at 4:02 pm

#1 ….

Any safe investments anymore?

#5 Quebec Is Great on 08.17.18 at 4:08 pm

Thank you for the updates! I can literally smell the desperation and from what I see in my local area – nobody sees the pain that is yet to come.

#6 BigQ on 08.17.18 at 4:10 pm

HERE WE GO

#7 Shortymac on 08.17.18 at 4:25 pm

Enjoy the flop!

How long will you expect the melt to last? Will it take a full 10 years like last time or would be more like 5 years?

I’m happily renting for the moment, but my husband and I would eventually like to buy in the next 2 years as we start our family.

#8 njc on 08.17.18 at 4:25 pm

So we’re up sh[CENSORED]t creek?

#9 Dave Smith on 08.17.18 at 4:34 pm

Wow that last story about the condo is amazingly eye opening. Why would anyone want to buy a condo, where there is so many negative things that can happen that are mostly out of your control. You’re basically partnering up with a bunch of strangers in a communal housing project with the hopes that no one individual compromises the value of a single unit.

Even if you find a building all on the same page, you must have to fight constantly to ensure there’s a favorable condo board aligned with your interests, that the building was built reputably (no major repairs needed) and dozens of other things that can go wrong.

Honestly, not worth it and that’s before we even get to the fact that your neighbor who shares a wall/roof/floor might enjoy their yodeling-drum practice at 10pm at night…

#10 Karim on 08.17.18 at 4:40 pm

The fact is that the prices are going up in GTA. High demand for pricey detached houses. You are wrong again.

#11 SoggyShorts on 08.17.18 at 4:44 pm

#131 Stan Brooks on 08.17.18 at 11:06 am

official inflation 3 %, soon to be 8 %.
Unofficial 9 %, soon to be 15 %.

************************
I agree that it feels like inflation is more than 3%, but 15%? come on man.
Everything will cost double in 5 years?
How would that work for all those people who “would be hard pressed to come up with $200”
If prices double in the next 5 years, and then double again in 5 more years, I think a solid 50% of Canadians would be homeless/bankrupt, maybe a lot more.

#12 Dave on 08.17.18 at 4:47 pm

Who was the genius that bought hhe place for $708,500. Here lies the problem, if people would stop buying prices would drop by 50% within 2 years.

#13 dakkie on 08.17.18 at 4:48 pm

Just in Time: Use of Home as ATM Surges in Canada

http://www.investmentwatchblog.com/just-in-time-use-of-home-as-atm-surges-in-canada/

#14 Millennial905er on 08.17.18 at 4:48 pm

Garth thoughts about Questrade for RESPs?

#15 Brian Ripley on 08.17.18 at 4:54 pm

“So on Friday bond yields jumped with the latest inflation number. – Garth

My yield curve chart does not have today’s change in rates, but it does demonstrate the ongoing inversion threat on the 10yr less 2yr yields (only 23 beeps from inversion) and I have included an overlay of the Y/Y % change in the TSX real estate index which on the July data has fallen below the zero flat line:
http://www.chpc.biz/yield-curve.html

This is after 9 and half years of ZIRP and NIRP and we are now getting CPI inflation.

But I don’t see this translating into inflation in the commodity sector:
http://www.chpc.biz/tsx-indexes.html

Yet.

I wonder if the real story is the continuing strength in the senior currency, the USD and in Canada the weakening CAD against that USD. What I see is CPI inflation due to currency changes more than in actual commodity increases.

#16 Lost...but not leased on 08.17.18 at 4:54 pm

RE is ripe for plucking….

#17 Building Boom on 08.17.18 at 4:55 pm

You would never guess that anything is wrong in the Vancity Real Estate market. On my drive to work, I can count at least 10 new properties breaking ground to start on condos and another 10 properties completing. Developers are still building.

#18 Marco on 08.17.18 at 4:56 pm

Real estate prices will not go down because more that 15 percent of Canadian economy depends on that.
If prices go down recovery will be swift. Ford nation is in power now, their wealth is in plywood shacks not in pride of well raised children….

#19 Bigrider on 08.17.18 at 4:57 pm

“uppa , Uppa, UPPA isa da way she’sa going to go a da real estata” goes the refrain once again from my nonno yesterday evening after showing him your latest entry Garth.

“Why you paya so mucha attention to disa Garth Turner ” asked my nonno.

I answered that you are informed in your opinion , offer backup where needed in your assertions and have experience in the allocation of assets both in the financial markets and real estate markets. I let my nonno know that you are of a formal educated background which he lacks ,coming with just a bag of old clothing and debt for his boat ride some 60 years ago to this great country.

” I lika disa Garth a Turner but he miss ona very important a point in a da real estata. Have him coma over to nonno’s house , or farm or any ofa da buildings we own and we fixa hima a bella a salad from nonno’s garden. All fresha tomato’s, malanzani,basilico cucumbers anda beans right froma da land I hava” .

Nonno went on “landa hasa many uses, disa garth a turner he no understanda dis or its simply losta on a him”

“And dis isa why da price of a da real estata (wit a da land underneath) she’sa gonna keepa go uppa Uppa UPPA ” !

Hard to argue with Nonno.

#20 Dusty on 08.17.18 at 4:58 pm

I can’t believe this is finally unraveling. I’m conflicted in the sense that I feel bad for the people who are going to loose their shirts but I’m relieved that I’m not crazy because I have been anticipating this since 2015.

#21 Spiacog on 08.17.18 at 5:08 pm

If real-estate is floundering due to the higher cost of debt, paper assets are valued based on lots of money going after fewer opportunities due to expanding global debt levels, currencies are fickle from one news item to the next, how does one “Not Lose Money” in this environment? My mattress can only hold so much. Even gold is getting adjusted. Forget playing in this rigged game, get a small farm, shotgun and guard dogs? Maybe a chicken?

#22 Shawn Allen on 08.17.18 at 5:21 pm

One Man’s Debt…

“The rich hold assets. The rest hold debt.”

***************************************
True. And of course someone has to be owed all that debt. Some of the assets the rich hold are bank deposits and bank common equity and bank preferred shares and bank bonds and bank mortgage backed securities which fund all that debt.

Balance sheets gotta’ balance.

One man’s debt is another (probably rich) man’s wealth.

#23 TurnerNation on 08.17.18 at 5:23 pm

How long until the new owners of Smoking man’s sht Long Branch bung email this weblog over their losses?

#24 Jungle on 08.17.18 at 5:24 pm

Just because you live in a bad building doesn’t mean the entire condo market is dead. Cause according to stats it’s still smoking hot.

#25 Shawn Allen on 08.17.18 at 5:24 pm

3 Percent Inflation?

What about all those who think that the government lies about the true inflation number and that it is way higher?

Do those people think the government just decide to lie a bit less this month or what?

Or could the government (actually, Statistics Canada) be calculating the weighted average inflation rate as honestly as they can in a transparent fashion where they show all the components to those who care to look?

#26 AK on 08.17.18 at 5:26 pm

” After months on the market, with the place finally listed down at $749,900, it sold for $708,500.”
=====================================
Geez. It didn’t even sell “Over Asking”..

#27 Danny on 08.17.18 at 5:30 pm

If one believes the Zolo website…even at 80% accuracy….we are getting closer to a collision of rising condominium prices and dropping single homes with a backyard.
So what’s going to happen?
I can’t image the rising condo price graph slope will intersect with the dropping slope line of single homes and crisscross?

Cost per square foot is way higher for condos and becoming higher as we speak. Does size not matter anymore?

Garth any thoughts on why prices are getting so ridiculously close between houses and condos?
That is what I am seeing in Etobicoke.

Maybe will the Supply and Demand theory wil kick in for condos and make the drop….a sudden dizziness? Few high rise will be completed by mid 2019….and probably increase supply to a new level….around Bloor and Islington….

The new Etobicoke downtown which is at least 6 years of very high density construction is now in full swing…there will be a continuous row of between 40 and 50 floors of condominiums on Dundas Street from Islington to the 427 highway….maybe over 20 new high rise towers plus new Etobicoke City Hall.

#28 AK on 08.17.18 at 5:34 pm

“So on Friday bond yields jumped with the latest inflation number. At 3%, it’s huge.”
=====================================
Does this mean that T2 is the Inflation PM? That Dude can’t even spell Business…

#29 28% loss... on 08.17.18 at 5:40 pm

28% loss is only if they paid cash in full.
Otherwise, it it higher.
Potentially much higher.
The wonders of leverage on the way down…

#30 MSM Free Zone on 08.17.18 at 5:44 pm

“….The owners tried a flip and failed……”
______________________________

Karma. Now go get a real job.

Canadian home ownership should never have been allowed to become a speculative market in the first place.

#31 Smartalox on 08.17.18 at 5:50 pm

Ah, the CMHC Blacklist.

I know it well. My condo was on the CMHC blacklist when I sold out in 2010. Back then, it only seemed to motivate the buyers more! Still it has been so long, and the value of the property has increased so much (especially after all the rainscreen work and renos), that the buyer likely did more than OK in the end.

Certainly, it cost me a bundle, having to settle for a reduced price.

The fun part is that the ‘blacklist’ does not officially exist – or it didn’t at the time. I was expecting a searchable, online database, but what I found was more of a ‘whisper network’ among agents and bankers.

#32 Jacinda is my girl on 08.17.18 at 5:52 pm

In another few years, she will tighten further. Canada will follow. There’s no more room for selling out to foreigners. We are all territorial. Try parking in someone’s spot, moving them from an office desk, or having your dog push one on their front lawn. There’s more Trump in all of us than we think. It’s time to buy less crap from China, quit the re porn, and get out and enjoy life.

#33 Antlers in the Trees on 08.17.18 at 5:54 pm

So how does the “mortgage free” home owner benefit during an inflationary period? Just stay put?

#34 50 on 08.17.18 at 6:00 pm

That’s what you can expect to disappear off the peak Van prices of May 2016. Things are well on their way. Most don’t know it yet.

We sold out at the peak for $2M. Our place resold earlier this year after 2 years on the market for $1.8M. I now see places selling just over $1.6M and they are better homes than we sold. On the other side, there are the delusional thinking that prices have gone up 20% since then. The divide is only getting bigger.

If you haven’t recently, take one of the mortgage affordability calculators for a spin and see what it takes to qualify for a $1M or $2M home with 20% down. It’s simply not doable.

Soon the avalanche of boomers will sell due to the pressure of their kids wanting at their wealth before it disappears. Next year will be golden.

#35 Allison on 08.17.18 at 6:03 pm

Condos are going up in value in Toronto. Women have become more independent, and men have resorted to misogyny, xenophobia and racism in their mother’s basements beyond their 40s.

What does this infer?

Condos are in-demand because of independent lifestyles and less families.

Women in Toronto have more earning power than men, and they have higher educational attainment and degrees than men.

Bungalows were an archaic symbol of the cis-male family, and condos are the new trend. Every city in the world must build more high rise condos because women are empowered and they don’t need a bungalow.

Condos are going like roses at Kennedy and Finch-Steeles Ave East, so condos will NEVER fall in value. Millennial prefer to live in condos than bungalows. Raising children is costly in Toronto.

#36 pay your taxes on 08.17.18 at 6:11 pm

100 showings? Isn’t there some sort of law against that level of instrusiveness?

The owner should be paying them to stay there.

As Mr T used to say “I pity da fool”

#37 Jungle on 08.17.18 at 6:14 pm

Dont expert the market to crash with 3-4 months of inventory. Interest rates are going up but so have wages. Homeowners have more options and tools to navigate increase costs.

I love this blog always looks at April 2017 to make a point, and uses a flipper, in realty about 10k average treb sales per month at that time, so barely anyone affected, especially after stripping out condos which made a fortune.

If ownership rate is about 65% in GTA of 6 million souls, that means a lot of homeowners have made big gravy and very little have lost. The renters lost more than homeowners.

#38 Jungle on 08.17.18 at 6:23 pm

The house price to average family income metric or mortgage affordability to average family income is flawed because there are enough wealthy people to support the market. This won’t change unless supply increases significantly. With a growing population, aggressive immigration policy and dense cities with no land, good luck with that.

#39 Newcomer on 08.17.18 at 6:33 pm

#7 Shortymac on 08.17.18 at 4:25 pm
Enjoy the flop!

How long will you expect the melt to last? Will it take a full 10 years like last time or would be more like 5 years?
———

Timing markets is hard. They are coming up on 30 years of melt in Tokyo.

http://japanpropertycentral.com/wp-content/uploads/2016/02/Tokyo-house-price-index-nov20152-768×493.jpg

#40 Rain on 08.17.18 at 6:34 pm

#17 A builder told me that developments start about 5 years before they even break ground so you’re seeing buildings that were already in the pipeline. He told me that things have changed and developers are getting very nervous.

#41 Frustrated Kiwi on 08.17.18 at 6:36 pm

Rats. Missed commenting on yesterday’s post when it was actually relevant. Going ahead anyway – sorry.

I know Garth doesn’t agree, but I support the ban on foreign investment in existing residential real estate because (a) I see no harm, and (b) it seriously reduces risk. We are a minuscule market so fairly small flows from a world perspective can have an outsize effect. And foreigners can still invest in new developments if they wish to.

On #114 from yesterday “You demean the locals. Are they that dumb?” – hmm, people here are actually pretty deluded when it comes to real estate. Can’t tell you how many people have told me that prices are definitely not going to fall. We had a big crash in our stockmarket in 1987 and people have been scared of stocks ever since. I would guess only 5% of the population knows what an ETF is. We need a local version of Garth.

#42 Reality is stark on 08.17.18 at 6:40 pm

These people fell into a burning ring of fire.
They fell down down down and the flames went higher.
It burns burns burns that ring of fire. That ring of fire.
But the hell is not over.
You still have divorce court.
They don’t stay when you lose big money. That is all on your ass even if it wasn’t your decision to move.
Welcome to North America where only the good die young.

#43 Ronaldo on 08.17.18 at 6:41 pm

#9 Dave Smith

Honestly, not worth it and that’s before we even get to the fact that your neighbor who shares a wall/roof/floor might enjoy their yodeling-drum practice at 10pm at night…
—————————————————————
Some years ago I purchased a townhouse condo to renovate. 2 level 2 b.r. After reno we moved in and soon discovered that the walls between the units was not very sound proof. The master bedroom of the unit next door shared the same wall as ours. The guy next door snored so loud that we finally had to move to the second bedroom. It went up for sale soon after. Never again.

#44 BlogDog123 on 08.17.18 at 6:42 pm

Garth, it’s time once again for your famous blog dogs survey.

You had a survey asking everyone about net worth, debt, investment accounts…

How about a new survey about our how many friends and families who will get hosed because they’re up to their eyeballs in debt… Or how financially illiterate people we know are…

#45 HELOC Growth Capital of Canada Kelowna is Taking a Price Decline Beating on 08.17.18 at 6:43 pm

How does a $350,000 dollar loss sound?

This is what a financial ass whoopin’ looks like right here in the smoke filled Okanagan.

This realtor put it right in the listing sheet.

“Offered $350,000 below what Seller paid! Homeowner wants this beautiful penthouse sold before September 1!” says the Realtor.

https://www.realtor.ca/Residential/Single-Family/19813686/407-580-Sarsons-Road-Kelowna-British-Columbia-V1W5H5-Lower-Mission

#46 Housing downturn to be long and painfull on 08.17.18 at 6:47 pm

This housing downturn is going to be long and drawn out it interest rates slowly continue to tick up.

It will be lethargic. Getting your money back on a real estate buy will be drawn out probably 15-20 years.

Think about it. The boomers are offloading, being financed by new debt that the younger generation are taking on.

Debt crisis in the making. Sorry millennial generation. But you are toast.

#47 Dense Cities? on 08.17.18 at 6:52 pm

More like dense people. The amount of unused land out in Canada is ridiculous.

Supply is rigged. Same with land use restrictions. Always has been, always will be.

Artificial Intelligence and technology is going to decentralize city slum living. Already happening.

The trick is to ditch the city. Already happened in the GTA and Vancouver. This trend will continue with other cities.

#48 crowdedelevatorfartz on 08.17.18 at 7:01 pm

@#17 Building BaDa-BOOM
“On my drive to work, I can count at least 10 new properties breaking ground to start on condos and another 10 properties completing. Developers are still building.”
++++
Most developments are years in the planning, financing, construction, etc.
I would imagine the Developers that are nearing completion are far happier than the ones starting out on a 2-4 year build right now.

I’ve seen many a Highrise build stop half way complete and not start again for years.

#49 John of Grant on 08.17.18 at 7:03 pm

Any blog dogs in the Belfountain area for ice cream tomorrow might want to wash it down with some Badlands Brewery beer at their 1 year anniversary event at Chingaucousy and King St. Belfountain Inn food is available too. Saturday August 18th from 1-7pm
Location: 13926 Chinguacousy Road. Says dog and kid friendly! Looks to be about 13km south and east of the general store.

https://www.facebook.com/Badlandsbrewco/photos/a.1744954845797096/1922777344681511/?type=3&theater

#50 crowdedelevatorfartz on 08.17.18 at 7:05 pm

@#35 Al’s Son
“Women in Toronto have more earning power than men, and they have higher educational attainment and degrees than men.

Bungalows were an archaic symbol of the cis-male family, and condos are the new trend. Every city in the world must build more high rise condos because women are empowered and they don’t need a bungalow.”

++++++

Hitting the bottle a tad early this evening aren’t we Al?

#51 Aging in Vancouver on 08.17.18 at 7:06 pm

I had our little YVR house on the market about 20 years ago for a 3 month period (slow market) and let the listing expire to renovate the kitchen which every one hated and we sold soon after. We had lots of showings in those first three months and I realized that my kids made their beds every day, bathrooms were tidy, dishes and laundry were done. It didn’t take all that much effort after the initial cleaning blitz. Now sometimes when my house is a mess I think maybe I should just list it for a while …

#52 JimBob on 08.17.18 at 7:09 pm

DELETED

#53 Dolce Vita on 08.17.18 at 7:11 pm

#19 Bigrider

Questo Gennaio con le mosche bianche, domanda a Nonno come crescano le melanzane nel suo giardino.

Risposta: Cresce niente, come il prezzo della sua casa.

Ridicolo.

For the Mangia Cakes, use Google Translate.

#54 Troy McClure on 08.17.18 at 7:11 pm

I’m feeling a little snarky today, so rather than just lurking as usual…

#10 Karim on 08.17.18 at 4:40 pm

The fact is that the prices are going up in GTA. High demand for pricey detached houses. You are wrong again.

Dirty lying SHYSTER!

===

#18 Marco on 08.17.18 at 4:56 pm

Real estate prices will not go down because more that 15 percent of Canadian economy depends on that.

Just like interest rates won’t go up because Canadians are carrying too much debt.

===

#21 Spiacog on 08.17.18 at 5:08 pm

how does one “Not Lose Money” in this environment?

Um, balance?

===

#29 28% loss… on 08.17.18 at 5:40 pm

28% loss is only if they paid cash in full.
Otherwise, it it higher.
Potentially much higher.
The wonders of leverage on the way down…

Don’t forget about the opportunity cost…

===

#30 MSM Free Zone on 08.17.18 at 5:44 pm

Canadian home ownership should never have been allowed to become a speculative market in the first place.

Yes, we should have more government regulation.

OK, I’m too snarky today. I now return to my place under a rock.

Oh, and I should also mention, FIRST!

#55 45north on 08.17.18 at 7:18 pm

rom yesterday:

NoName: Niall Ferguson, mentions us too.
https://youtu.be/f3rhUZPNqX0

58 minutes but I missed his mention of Canadians.

I like how he compared the internet with the invention of the printing press.

#56 45north on 08.17.18 at 7:20 pm

So 28 Bobmar sold in five days. The ugly little East End bung with the squalid basement suite went for fifty grand over the asking price of $849,000. With double Toronto land transfer tax and a few closing costs the proud new owner paid about $940,000.

Bobmar is past east end! Google maps says it’s 44 minutes to Huron Street (where I used to work). Monday morning, it’s probably closer to an hour and a half.

“These folks bought this place, tried to flip it and got crushed for 200K

real estate transactions are slow motion flips. People figure they’ll hold the property for a couple of years and then sell. At a profit. A 28% loss takes them out of the real estate market.

and as you point out everything will be exacerbated by the rise in interest rates. That includes real estate.

#57 Gabe on 08.17.18 at 7:20 pm

#17

These developers bought a few years ago so they have to build. RE is not like the stock market which reacts instantaneously to news. I’ve also seen plots of land bought by developers with an application for development sign up for two years. SFHs supposedly most desirable in the best part of Metro Van is dead. The money pouring in is dumb money into condos.

Meanwhile VFV is at all time highs and I’ve hit 3.3 million in net worth in my 30s. Enjoy your condo.

#58 akashic record on 08.17.18 at 7:20 pm

#121 akashic record on 08.17.18 at 9:42 am

#109 Gravy Train on 08.17.18 at 8:03 am

#12 Kelsey on 08.16.18 at 5:33 pm
#18 Mattl on 08.16.18 at 6:13 pm
#57 crowdedelevatorfartz on 08.16.18 at 8:40 pm
#65 Linda on 08.16.18 at 9:11 pm
#79 RTMND on 08.16.18 at 10:03 pm
#80 Willy H on 08.16.18 at 10:07 pm

Help me out here, folks. If every single human being on earth were of the same tribe (say, Christian Caucasian), would immigration still be an issue for you?And would you still want to build walls? Or would you find some other reason to be xenophobic? :)

What do you mean by walls?

You do realize that walls are just the physical or legal representation of laws, rules, etc. that communities created from the beginning of the history, everywhere on the planet, to serve their own best interest?

But let’s assume for a moment that those rules by communities govern themselves are gone, to satisfy some supposed higher moral standard.

How do you imagine the logistics?

Would you eliminate all walls, without cherry-picking for your own virtue-signalling purpose of the day or for your own financial interest?

Like the door on your home, the wall that’s in front of your private properties, money, culture, customs?

But let’s assume, you are serious about eliminating walls.

Do you think that world would be better?
Do you have any proof? Do you have any example in the entire universe about societies without walls?

—-

Nobody seriously argues for the elimination of boundaries, rules or restrictions. That is a false argument proffered by those who need a crutch to support faulty logic. No walls are as bad as arbitrary ones. Reality is gray. – Garth

—-

Some people obviously decide which boundaries, rules, restrictions, walls are to be eliminated (or erected).

When those special people make their own cherry picking choices, those are not arbitrary, at all.

So much so, that no other people should attempt to discuss their validity.

If such unnecessary arbitrary discussion somehow still occurs, there is no point of arguing. Logic dictates that the best result comes from declaring them tribal, racist, xenophobe, whatever unforgivable moral defect trends highest on twitter.

Exercising crutch-free logic shines truth on all shades of grayness.

It shows in full colour that for example, the native men, women, children of this land, who died at Wounded Knee, were the victims of their own mortal sins: defending backward tribalism to cover their xenophobe racism against those other, selfless people, who not only knew better, but took the trouble to take the long, dangerous journey, just to deliver them the superior, more human future, what even they deserved.

G_d save their souls.

#59 Dave on 08.17.18 at 7:23 pm

If the BOC does a 0.5 hike in one shot, that will be all the shock and awe that the market needs for a major correction and then a continued gradual correction.

#60 Blacksheep on 08.17.18 at 7:23 pm

“Our landlord put up our unit for sale almost 3 months ago, and the place hasn’t sold.”

“We’ve had to put up with over 100 showings”

“we thought it was finally time to begin packing up, but we were wrong – the deal fell through”
————————
Less than 90 days and over 100 showings….hmm.

Adams landlord:

This dude is an idiot for not adjusting his price to meet the market. A sampling of only 10 viewings with zero offers, tells you your price is to high for current valuations.

Now Adam’s up.

Does the landlord pay you a fee, when you get a phone call from the reeltor telling you to vacate your premises, for the 28th time, as yet another group of strangers needs to inspect your private residence?

I agree, It’s good you didn’t buy the thing yourself, but do you enjoy uncertainty? Grow a pair and move the hell on before someone else forces you to.

And still some wonder why people bad mouth renting.

#61 MF on 08.17.18 at 7:40 pm

We all know inflation never went anywhere, but now it’s “officially” here. Great…..

However higher inflation also means that those who bought and have debt will see that debt become less and less valuable over time.

I don’t see any melt, unfortunately. Not in Toronto at least. Same old.

MF

#62 Dolce Vita on 08.17.18 at 7:43 pm

A lot of wishful thinkers from 416 land posting about their condo prices today (will only go up).

You should take up fiction writing, reads your strong suit. Yes, fiction as you provide no numbers for your assertions.

Garth has provided numerous facts, numbers, examples, analysis and “lively” written discourse over these past years. Where are yours?

Saying so, does not make it so, nor does wishful thinking unless you are New Age “thoughts create”.

If Trump applies a 25% Auto Tariff as early as September, your 416 condo price fiction writing will give way to Greek tragedy writing.

Trump or not, your time is coming too Millennials, time to experience a RE crash.

Best you prepare.

#63 Damifino on 08.17.18 at 7:50 pm

#17 Building Boom

It is exactly as you say.

#64 paulo on 08.17.18 at 7:50 pm

based on the current level of inflation,along with other factors i think it is not ureasonable to expect that mortgage rates in canada could quite likely be in low “double digits” for first mortgages…. wild call,crazy i dont think so been here and seen this before so time will tell.

#65 arfmoocat on 08.17.18 at 7:59 pm

Toronto has the most cranes in the world

https://indie88.com/toronto-most-cranes-in-the-world/

#66 Linda on 08.17.18 at 8:00 pm

Inflation may be back, but for how long? Trump may be ‘the inflation president’ but the policies that are driving the inflation spike may not be sustainable over the long term. Will not the annual trillion dollar deficit & the aging population eventually have a deflationary effect?

#67 NoName on 08.17.18 at 8:00 pm

#49 45north on 08.17.18 at 7:18 pm

Oh the printing press…

At my last job we made tonner for digital printing press,full color (orange color to) at 100 copies full color a min, belt was transfeing 4 colors from “wires” to paper while it was spinning few thousands of an inch at speed faster than 60 mph.
4 sections on belt for each color, i have some prints somewhere in the basment. Good old days… (No stress at that job)

You didnt paid attention, in talk he mentioned debate against some ultra liberal dude on toronto and how he lost debate 2 yrs, but everything he sad ended up being true. Luckaly i took notes, name of the person that he debated was Fareed Zakaria min 38 arond that marker. I did found this talk interesting but it was water down and that google natsy trying to mellow dowd or redirect some commentary i personaly didt limey it. It was very lame imho.

Last knight i orderd a book on kindle, i hope paper back comes out soon. I alredy have some of his books. So after work i descide not to slep and watched some more of freguson videos on same topic, when he speaks to academic he mentiones fangs alibabuska use of tech to muzle up and predicts that china tech will make better inroads in em markets over na tech…

#68 Dolce Vita on 08.17.18 at 8:02 pm

To the “slow melt” RE price wishful thinkers commenting here today and again for umpteenth time I have posted this HPI 1980-2011 chart:

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

See any slow melt there in La La Land or 416?

Rather 1.5 to 2 years of free fall price drops followed by another 3-5 years of price plateaus. Segway the next price peak.

Note, the larger the price peak, the greater the fall from grace.

Today 1 example of a 20% drop in price by Garth. That price drop is not a slow melt. More, much more of that to come as he implies.

As I have said, 4th Qtr RE price crash begins in earnest. Hand in hand with a recession.

If Trump tariffs Auto, for certain a recession, price crash a given.

BTW, HPI lags average price by a full quarter. All you need do is understand the statistical calculations the HPI makes and you will get it (it also smooths the data out).

#69 Marc Roger on 08.17.18 at 8:03 pm

And the ridiculous vehicle in the car-port.

#70 young & foolish on 08.17.18 at 8:05 pm

“How long will you expect the melt to last? Will it take a full 10 years like last time or would be more like 5 years?
I’m happily renting for the moment, but my husband and I would eventually like to buy in the next 2 years as we start our family.”

This is why housing will always be in demand …

““The rich hold assets. The rest hold debt.”

True, and the rich tend to hold about a third of their wealth in Real Estate (in one form or another).

#71 crowdedelevatorfartz on 08.17.18 at 8:07 pm

@#52 Dolce Vita
“For the Mangia Cakes, use Google Translate.”

+++++

我不能被打扰

#72 crowdedelevatorfartz on 08.17.18 at 8:11 pm

@#57 akashic Record
“Exercising crutch-free logic shines truth on all shades of grayness.’

++++++

Where, exactly, is the logic in THAT statement?

Is there a full Moon tonight?

#73 conan on 08.17.18 at 8:12 pm

Contagion alert for Tesla. Seems the board is concerned about Musk’s use of Ambien and “recreational drugs.” That means Mary Jane for all you dip s4itters.

Probably a market dip on Monday.

#74 crowdedelevatorfartz on 08.17.18 at 8:15 pm

@#62 Damfino and Building BaDa Boom
“It is exactly as you say.”
+++++
Talk to us in 6 months.

https://www.theglobeandmail.com/canada/british-columbia/article-proposal-for-luxury-condo-tower-in-vancouver-pulled-amid-signs-of-weak/

This link was posted here last week.

The first of many cancellations to come……

:)

#75 Asterix1 on 08.17.18 at 8:15 pm

#35 Allison on 08.17.18 at 6:03

“and men have resorted to misogyny, xenophobia and racism in their mother’s basements beyond their 40s.”

“…so condos will NEVER fall in value”
______________________________________

WOW! This post takes the cake! A nut cake.

Your first comment about men shoud have been banned!

Your second is just plain funny and shows you have no idea what is going to happen next.

#76 the Jaguar on 08.17.18 at 8:21 pm

Manga Cake! Love it. I loved being called a manga cake, even though The Jag cooks better, higher quality Italian food than any of her Italian friends. Bologna has great food and is a great Italian city. Don’t tell the tourists. Let’s just keep it our little secret.

There are more ‘lists’ than the ones the insurers keep on properties not to be touched with ten foot poles. And the reasons go beyond the usual leaky membrane ones. Garth is right as always. Terra firma. That’s the way to go if you want to stick your toe in the water.

#77 Dolce Vita on 08.17.18 at 8:22 pm

#56 Gabe

VFV doubled in the last 5 years. That puts you at mid 20’s.

So how does a 25-27 year old come up with $1.65 MM?

Lottery and/or inheritance? Trust fund? Seed Bank/Fortune of Ma and Pa?

#78 akashic record on 08.17.18 at 8:28 pm

#57 akashic record

correction:

G_d save their beautiful souls.

#79 JG on 08.17.18 at 8:31 pm

https://www.mongohouse.com/soldrecords/5b6c454d2fab1e6e044c25e8

Flipper got owned.

#80 WillinSC on 08.17.18 at 8:43 pm

Anyone explain to me, why am I a bad guy Boomer because some financially illiterate millennial is dumb enough to overpay for my house?

#81 Marcus Phillemon on 08.17.18 at 8:50 pm

As long as #justin keeps posting photos of his bum and toenails on instagram canada will be good!!

#82 Gravy Train on 08.17.18 at 8:51 pm

#57 akashic record on 08.17.18 at 7:20 pm
“It shows in full colour that for example, the native men, women, children of this land, who died at Wounded Knee, were the victims of their own mortal sins: defending backward tribalism to cover their xenophobe racism against those other, selfless people, who not only knew better, but took the trouble to take the long, dangerous journey, just to deliver them the superior, more human future, what even they deserved.”

I have no idea what you’re trying to say; to me it looks like a word salad. :)

#83 Bigrider on 08.17.18 at 8:52 pm

#52 Dolce Vita on 08.17.18 at 7:11 pm

#19 Bigrider

Questo Gennaio con le mosche bianche, domanda a Nonno come crescano le melanzane nel suo giardino.

Risposta: Cresce niente, come il prezzo della sua casa.

Ridicolo.

For the Mangia Cakes, use Google Translate.
_——————-

OMG -LMAO killing myself laughing !

White flys not affecting the tomatoes though. They came good this year.

#84 james on 08.17.18 at 8:56 pm

true inflation: just look at the size of foot-long Subway sub

#85 Natalie on 08.17.18 at 8:57 pm

This condo has to be an UrbanCorp building. We went through the same thing and backed away after our lawyer and mortgage broker told us to run. So many liens against the developer. It has been blacklisted for a few years now. It will take many years to settle those liens and the condo corporation is being sued as well which means condo owners could have to cough up money. But on paper the price is right now and you can cash flow on rent..but a reason for the discount. Big headache!

#86 young & foolish on 08.17.18 at 9:20 pm

“Artificial Intelligence and technology is going to decentralize city slum living. Already happening.”

Get out your history book … “decentralisation/re-centralisation” has been happening for centuries.

#87 Stealth on 08.17.18 at 9:22 pm

Evening,

Pardon my tardiness this evening.
Great post, definitely Garth’s handwriting,trust is restored.

Good evening.

#88 crowdedelevatorfartz on 08.17.18 at 9:22 pm

@#79 Bad Boomer
“Anyone explain to me, why am I a bad guy Boomer because some financially illiterate millennial is dumb enough to overpay for my house?”
+++++
Because , silly man.
Millenials can do no wrong….. hence we Eee-ville Boomers must be to blame.
Apparently the term “Caveat Emptor” doesn’t compute when one spends hours playing computer games.

#89 Phylis on 08.17.18 at 9:23 pm

#64 arfmoocat The rig count was much higher too.

#90 mike from mtl on 08.17.18 at 9:23 pm

It means your HISA is losing money, bigly

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

So has my portfolio, between interest rates, currency, trump, NAFTA, choppy 2018 is looking to barely hit 2-3%. Barely meeting inflation.

REITs have been strangely good in the past two years, hmm.

That means the 20% gains of the last two years have been preserved. Better than your house. – Garth

#91 The Real Mark on 08.17.18 at 9:27 pm

“#65 Linda on 08.17.18 at 8:00 pm
Inflation may be back, but for how long? ”

The US T-Bond yield curve is indicating that it won’t be for long. Same deal in Canada. If inflation was legitimately being perceived as a concern, the long end would be blowing out of the curve at this point. Which it clearly is not.

The whole situation is reminiscent of the year 2000, in which interest rates ticked up and inflation was hot, because, as it was claimed, the economy ostensibly was hot. But regrettably they drove the curve into inversion with their short-end hikes, and wham, the deflation that unfolded in late 2001/early 2002 was incredible. And such took years to resolve statistically, especially with respect to the labour market which arguably has still come nowhere near recovery.

I’d suggest Poloz has to take a longer-term point of view. Sure, 3% is a lot of inflation when you’re targeting 2%, but it doesn’t take a rocket scientist to see the deflationary forces on the horizon. Especially with respect to Canada’s housing market and all the consumer spending associated with such. Even oil prices, the key drivers of the higher YoY CPI numbers, have pulled back considerably over the past few weeks.

#92 Steve French on 08.17.18 at 9:27 pm

Update on my Turner Approved (TM) investment portfolio that I cobbled together and organised myself, based upon reading various posts on the Greater Fool over the last 4 years (all figures including dividends, pre-tax)

Dec. 2016- June 2017 returns: 7.3%
June-Dec. 2017 returns: 2.8%
Dec. 2017-June 2018 returns: 3.9%
June 2018 – present: 2.7% (with a bit of hit this week due to Turkey)

Is that good enough to beat Smoking Man’s casino Niagara + CAD: USD currency trading strategy?

Steve.

#93 TurnerNation on 08.17.18 at 9:28 pm

#19 Bigarider the Boomers had Woodstock, now for the Millennials this blog presents:

2018 Blog Dog Meetup At Nonna’s Farm!

Enjoy two days of higher highs and lower lows.
Sponsored by JD.

In-A-Gadda-Da-Vida?

Visit the Garden of Deed-en to learn the sordid pitfalls of signing that contract.

Burn your BRAs!

The interactive Combine (your-debt) exhibit will be there. Bring your ploughshares and sickles. Commemerative flags available for those without

Equipment sponsor: Write a Deere John letter to [email protected]

Ramble on.

(Swear I’m sober .)

#94 Wrk.dover on 08.17.18 at 9:46 pm

Jimmy first! That is some heart warming nostalgia right there.

I expect he will be popping in first the morning after the world comes to an end too. Good trick!

#95 Market Collapse on 08.17.18 at 9:54 pm

Coulda….Woulda…..Shoulda…..

Turn out the lights. The party is over.

#96 renter in Surrey on 08.17.18 at 10:01 pm

RE #58 Dave

If the BOC does a 0.5 hike in one shot, that will be all the shock and awe that the market needs for a major correction and then a continued gradual correction.

———————————————————————-

I thought B20 was the shock for major correction.
However nobody noticed B20.
No one will notice 0.05% rate hike neither.

BTW, according to CBC over 20% of new condos in Vancouver and Richmond owned by non-residents. Not just 5%.

https://www.cbc.ca/news/canada/british-columbia/vancouver-non-residents-statistics-canada-figures-1.4456657

#97 Shawn Allen on 08.17.18 at 10:14 pm

Rich People Love Banks

Banks are so great. They create debt for most people. And those people come in begging for it, so the bank just gives them what they want.

The debt means asset prices rise and wealth is created for the rich.

Banking can turn a $100k 1995 house into $500k of debt for a new buyer in 2018 and add $400k equity to the owner of the house who bought in 1995 for $100k. Wonderful.

#98 crowdedelevatorfartz on 08.17.18 at 10:17 pm

@#72 Conan
“Seems the board is concerned about Musk’s use of Ambien and “recreational drugs.”

+++++

I think it was obvious to most adults that Elon is suffering through his “mid life Geek Crisis” when he started swapping spit with THIS eye candy intellectual midget….

https://www.youtube.com/watch?v=0eI1YxZelAw

#99 akashic record on 08.17.18 at 10:31 pm

#71 crowdedelevatorfartz on 08.17.18 at 8:11 pm

@#57 akashic Record
“Exercising crutch-free logic shines truth on all shades of grayness.’

++++++

Where, exactly, is the logic in THAT statement?

Is there a full Moon tonight?

..

In that one, there was not supposed to be, under any shape of the Moon. That was the logic behind it.

#100 Trev on 08.17.18 at 10:32 pm

I wonder if the condo on the Blacklist is the Printing Factory on Carlaw?

4 years ago, it sounded in rough shape…

https://torontorealtyblog.com/blog/problems-at-the-printing-factory-lofts/

#101 akashic record on 08.17.18 at 10:41 pm

#81 Gravy Train on 08.17.18 at 8:51 pm

I have no idea what you’re trying to say;

From what I have been reading, that happens to you a few times every day.

#102 acdel on 08.17.18 at 10:43 pm

#35 Allison

lol, good luck and I really mean that, be aware!

#103 Lisa on 08.17.18 at 10:49 pm

#35 Allison

I think we have found “Smoking Woman”. That was hilarious.
So larger living spaces (bungalow VS condo) are a sign of oppression. Hmm. Show me your research on that one, please.
Did someone swipe left on you because you seem bitter..?

#104 45north on 08.17.18 at 11:12 pm

NoName: You didn’t pay attention, in his talk he mentioned a debate against some ultra liberal dude in Toronto and how he lost debate 2 yrs, but everything he said ended up being true.

now I remember

At my last job we made tonner for digital printing press

at my last job, when I started, most of the maps were made through photography. The cartographers made four halftone negatives – one for each printing colour. Part of my work was to replace the printing press with large format digital printers. The quality was not as good but the maps could be produced faster and cheaper. Also they could be produced on demand which is quite impractical with traditional printing.

https://en.wikipedia.org/wiki/Halftone

#105 Newcomer on 08.17.18 at 11:42 pm

#46 Dense Cities? on 08.17.18 at 6:52 pm
—–

You make it sound like people live in cities because they have to. Most people live in cities because they want to. My work is in Seattle but I could do it from anywhere on the planet. I do it from Vancouver. Most people find that rural life sucks, which is why the percentage of people living in the countryside has been going down steadily since the dawn of history.

#106 Ace Goodheart on 08.18.18 at 12:03 am

The sky high price on 28 Bobmar appears to have been mostly to do with its proximity to the University of Toronto, Scarborough campus (a few streets over to the west).

Back before the Ontario Govt introduced its ridiculous “foreign buyer tax”, there was a trend whereby foreign students would purchase and live in houses close to campus, with the house owned by the student as a “proxy” to the parents.

They stopped all this with their foreign buyer tax. The houses located near the Universities are getting whalopped as a result with 200-300k price decreases being the norm. The house itself is worthless. It’s the land value, near the university, that was causing the draw.

In other news, it’s an extremely boring day. Toronto had a second “100 year storm”, water gushed through Union Station for the second time in two weeks, roads were swamped, cars made out like power boats, and this time thankfully none of our TTC operators tried to drive a street car through the lake under the Sudbury Street bridge on King West.

The Ex was swamped by flooding and heavy rain on its opening day. Lots of people are really excited about buying beer for a Canadian buck (surprisingly worth more than it was yesterday) and other than that, life here is really hot, boring and we can’t legally buy weed yet.

Back in the 1990s I was a ride mechanic. I was part of a team of six people who took care of a large flume ride that has now been destroyed by the artsy crowd, and my job was to keep it running.

Most of the time it was this giant drunken party. The ride was staffed by undergrads. They liked to “go out”. We did so, pretty much every other night. The reason why I remember it is because no one gave a f*ck about anything. These people wanted to live for the moment. Whether it was a bunch of them jumping into the ride reservoir at 3am after successfully evading park security, or a dance off in some club in the entertainment district, these folks lived for the day.

I keep asking myself, when I think of the people I’ve met since I started my various businesses and began engaging with the more mature crowd of folks in this City, what the h*ll happened? I meet people who seem like they had interesting lives, massively concerned with the colour of quartz (why does no one want granite anymore?) that their kitchen counter tops will be, in their condos.

The floors are the most important thing. People obsess over them. The tiles, the grout, the spacing, the little moronic tiles in between that are just going to be impossible to clean and they look so dumb anyway, but you just have to have them……

Where did these people go wrong? Somewhere between the age of 19-25, and 26-35, they went from being these carefree party souls, who jumped naked with a group of friends into my ride’s large holding pond at 3am drunk out of their minds, into this wrinkled, stressed out, coffee drinking turd whose only soul food is the colour of her ceramic floors and whether or not the little tiles in between the big ones are shiny or opaque.

We have gone wrong somewhere. As of the entry of a person into middle class life, all of the life just goes out of them. They are not fun anymore. They look horrible. It is like the streetcar to the grave (and hopefully they don’t drive it under the Sudbury street underpass during a rainstorm).

At any rate, I am off to drink craft beer, wonder where the Thunder storms went, and perhaps head over to the Toronto Islands for some beach time as it looks like the weekend will be sunny……

#107 Linda on 08.18.18 at 12:15 am

‘Crowded’ – I think ‘Allison’ was joking or being sarcastic. Because if not, eek! Speaking for my own female self, I can categorically state I’d never purchase a condo to live in but definitely would purchase a ‘proper’ bungalow. As in, all on one level, not those so called bungalows that are actually two storied or split level houses masquerading as bungalows. There is what appears to be a Craftsman style bungalow near the downtown core where I live that I’d love to get a tour of. If the inside is half as nice as the outside implies, it would be a visual feast for anyone who admires that style of architecture.

#108 Balraj Dhalandar on 08.18.18 at 12:39 am

9% drop in average prices in Langley, BC.

June 2018 Avg. Detached = $1,142,001
July 2018 Avg. Detached = $1,039,000

It is beyond me how a house that sold for $570k in 2014 is selling for $1,188,000 now.

I am sick and tired of people bragging how rich they have become through real estate.

I heard a white guy bragging how his family’s home went from $1.5 million in White Rock to $3.5 million now. “We thought $1.5 million is too much for this.”

#109 Stan Brooks on 08.18.18 at 1:44 am

No need to disturb the sheeple, it has to be calm before the slaughter.

https://ca.finance.yahoo.com/news/hundreds-ontario-patients-didn-apos-170416272.html


Hundreds of Ontario patients didn’t receive full doses of cancer drug: agency

Informing the patients when the issue was believed to have caused no risk to them, “was going to cause unnecessary anxiety,”

“Effectively this problem has been resolved, going forward, We’re confident that it’s not harmed (the affected patients) in any way.”

So we are confident that providing less than prescribed dose of medication to thousands of cancer patients does not cause any harm.

As we are confident that the most overblown housing market/credit bubble in history will not just crash but deflate.

And we are confident that inflation is not 10 % but 3 %.

The worse people kind in this world are confident, but incompetent.

Brace up.

#110 Stan Brooks on 08.18.18 at 1:50 am

Another WTF moment after Bombardier, the dairy industry,. you name it. It is called ‘free economy’.

https://ca.finance.yahoo.com/news/quebec-announces-plan-compensate-taxi-201335190.html

T2 working hard for us, Canadians, making sure we won’t turn into lazy bums, I am sure these 250 mil will be passed as taxes, Wild Bill will come with the big gloves and strip search all tax evaders (a procedure similar to prostate check, all the way up to the throat to make sure no money is hidden from his greedy fingers).

#111 Stan Brooks on 08.18.18 at 2:21 am

#91 The Real Mark on 08.17.18 at 9:27 pm

Did you forget to take your pills?

Loonie to go sub .70, maybe sub 0.65 according to our own bankers, Loblaw’s boss just told us to expect much higher inflation in groceries (just checked their flyer, horrendous prices like strawberries at 4.99 per pound on ‘deal’), notoriously understating inflation stats Canada just announced 3 % inflation (read 10) and you are talking about deflation.

On second thought – that could be the new normal in a mental institution, brainwashed to the point of living in a parallel reality.

Rents are up 40 % in GTA in the last 3 years alone, electricity bills up 100 %, never to go down and he is talking about deflation…

#112 Smoking Man on 08.18.18 at 2:23 am

Steve French on 08.17.18 at 9:27 pm
Update on my Turner Approved (TM) investment portfolio that I cobbled together and organised myself, based upon reading various posts on the Greater Fool over the last 4 years (all figures including dividends, pre-tax)

Dec. 2016- June 2017 returns: 7.3%
June-Dec. 2017 returns: 2.8%
Dec. 2017-June 2018 returns: 3.9%
June 2018 – present: 2.7% (with a bit of hit this week due to Turkey)

Is that good enough to beat Smoking Man’s casino Niagara + CAD: USD currency trading strategy?

Steve.
…….

Frenchy, my system is automated. It’s hosted in a tax free country, account owner is not me. trades on a four hour renko stratagy. Trend is your friend. I will have a glorious retirement when I’m done doing what I love. Code Smith Supper Star. Gartho knows.

As far as returns are concerned. 200% annually is a bad year.. I was the first AI developer. Herdonomics script. It never losses.

All the ass holes who hate me and capitalism. Well they cant do what I do. They want to steal from me in the name of fairness. Fk em.

But god dam it. They can spell with exwisit grammar.

In Vages again this week end.. Life is short.

Dr Smoking Man
Phd Herdonomics.

Living life to its fullest.

#113 Howard on 08.18.18 at 4:23 am

Can someone help me decipher HISA?

#114 Karl on 08.18.18 at 6:39 am

The stress test, not inflation plays a significantly bigger role in any downward pressure on RE. Of course as rates rise the test gets tougher.

Rates are still very low. If the test was removed, we’d be seeing uppa, uppa, UPPA to the moon, despite inflation/rate hikes as the economy/wages would support mortgage payments.

So really, the test has worked. It’s calmed the market. We’ll see if the intended purpose of steady and realistic gains comes to fruition.

#115 MGTOW Oberon on 08.18.18 at 6:48 am

Canada’s Tax System Is Rigged To Help The Rich, 9 In 10 CRA Professionals Say:

https://www.huffingtonpost.ca/2018/08/17/tax-fairness-poll-cra-professionals_a_23504141/?ncid=webmail

#116 David Paquette on 08.18.18 at 7:24 am

The promise of free money and easy profits will attract people like moths to a light. Thus explains real prices. Turn off the light and the moths disappear then it is feeding time for the bats. Curious, the use of “and/then” reminds me of software programming. Yes, I am a big fighting nerd type B – hide your children and pets (sarc). I appreciate intellect with a view of possibilities. Politics today would eat me alive plus few would like what I cook. Human nature is a difficult ingredient but at least it is consistent (see above average). My experience is that those who say they are below average are a red flag.

I like the comments section of this blog because of GT. I throw my 0.01$ opinion out there now and again. Right or wrong? Time will tell but that doesn’t help at the moment. I think the pursuit of power generates bad karma and that is all you know enough about me. It seems I have a lot for God to grind down – Longfellow. I am in my sunset years and won’t care afterward with death so I am getting embossment while my time runs out. Sad it came so late but maybe others can learn from this life. It is not a cop out as I despise the lack of vision and purpose of many people. It is not about you and my sjw.

Rising inflation is a problem for me. It is going to be tougher to generate enough income from my non real estate investments to cover. I just have a modest detached house in Calgary with a small mortgage due to divorce. With rising interest rates, I am looking at killing it. The market doesn’t care what I think. So, I have always looked first at cash flow when it comes to investing savings. I do take shots at speculation and I can say I only break even at best. My best investments have come from honest management and a will to be better. They are hard to find. I stand to be corrected and will pursue my goals until other word. I do not intent to be a leach and pick my battles.

I see debt defaults down the road. I watch junk bonds for a warning because they are corporate. We will see what that does to pensions and taxes. Since I am not rich, I am lowering my profile. If I am going to be a refugee then Italy ranks high. I don’t need to be thought as a “gringo”. I like animals even though I may eat them later, sad particularly for the guys. I may become vegan yet.

https://rumble.com/v687tc-mother-cow-clearly-asks-man-to-rescue-her-newborn-baby.html

#117 Remembrancer on 08.18.18 at 7:47 am

#82 Gravy Train on 08.17.18 at 8:51 pm

And Wounded Knee is in what is now known as South Dakota, we don’t need to culturally appropriate American examples, we have our own…

#118 Karl on 08.18.18 at 7:48 am

Also, if you’re a housing speculator like the ones mentioned in this blog post, you put yourself at immense risk. You’re better off investing in a balanced portfolio as Garth preaches. Problem is that people are greedy and want everything NOW.

If you’re a long term holder, as in want to actually live and have a life in that home, then don’t fret. Long term looks very good for GTA.

#119 Gravy Train on 08.18.18 at 7:52 am

#113 Howard on 08.18.18 at 4:23 am
“Can someone help me decipher HISA?”

High-interest savings account. Duh! :)

#120 Another Deckchair on 08.18.18 at 8:08 am

#106 Ace Buddy:

“Where did these people go wrong? Somewhere between the age of 19-25, and 26-35, they went from being these carefree party souls,…”

I’m wondering the same thing. Maybe the “System” grinds incessantly and, the lucky few manage to pop back up when they figure it out.

Our possessions seem to silently weigh heavily on us; you and Dharma and others seem to realize that.

Me? Trying to unload as much “stuff” as I can, but unforch, to sail away into the sunset means acquiring more stuff… :-|

(as you’ll know with your cottage)

See you!

#121 Remembrancer on 08.18.18 at 8:22 am

#113 Howard on 08.18.18 at 4:23 am

HISA – High (ahem) Interest Savings Account

#122 dharma bum on 08.18.18 at 9:18 am

#35 Allison

Condos are going like roses at Kennedy and Finch-Steeles Ave East, so condos will NEVER fall in value. Millennial prefer to live in condos than bungalows.
——————————————————————–

Condo Developments = The Tenement Slums of our Future

https://www.google.ca/url?sa=i&source=images&cd=&ved=2ahUKEwiJgZqL2PbcAhVo0oMKHcnXD3cQjRx6BAgBEAU&url=http%3A%2F%2Fwww.shelterscotland.org%2Flifeworthliving%2Fchild-playing-in-tenement-courtyard-maryhill-glasgow-1971&psig=AOvVaw2Nzmx4vBREO1uLiHb5lUVT&ust=1534684657094612

#123 crowdedelevatorfartz on 08.18.18 at 9:50 am

@#110 Stan Brooks

https://ca.finance.yahoo.com/news/quebec-announces-plan-compensate-taxi-201335190.html

++++++

Interesting solution to the Uber vs Taxi “dilemma” .

Vancouver has dreadful taxi service as anyone trying to catch a cab in the Lower mainland knows.
Regional licensing that forbids an empty Vancouver taxi cab that is returning to Vancouver from picking up a fare in any other suburb. ( Standing in the rain and try to hail a Vancouver cab at 2am in Burnaby…..they cannot and most likely will not pick you up).
The result?
If you are a customer in downtown Vancouver after a football, hockey, music concert and ask a Vancouver taxi to take you to the ‘burbs….they will refuse to take you becaus of the lost earnings potential of driving empty 30-60 minutes back to Vancouver where the money is.

Vancouver is the most lucrative taxi license of all the cities.
A Vancouver taxi license will cost $800,000.00
Govt car insurance $5000.00 per month.

So when Uber, with cars that will pick you up anywhere, anytime and have paid nickels on the dollar for a license/ insurance……

We can see whats going to happen to Lowermainland taxis.
And rightfully so.
The Province issues the cab licenses and the cab companies are major political contributors.
Uber has been pushed to the sidelines while the govt spends another year “looking at the issue”.
Another “study” in 30 years of studies to deal with an issue that has gotten worse and worse and worse.

But not to worry. The NDP is temporarily granting 300 more cab licenses spread out over the entire Lowerbrainland to “help”.
300 more cabs in an area with 2.6 million people.

The internet and mobile phones will continue to crush an industry that fights change at every step.
And if you’re returning from a vacation in China….bring cigarettes from the old country to barter for your cab fare home to Burnaby……..

http://www.vancourier.com/news/five-unregulated-uber-like-companies-already-operating-in-richmond-1.23140062

The taxi industry.
Heads in the sand.
Kind of like the Real Estate industry.
Anachronisms that deserve everything that is coming to them.

P.S.
If the BC govt actually discovers its spine and eventually does whats right….. and open up the cab industry to a “free market”.
And they compensate the cab owners with “rebates”. ( Say 250k per Vancouver license from the 800k paid out)

What the hell, it was money raked in from the cab licenses that is only going back to the original payees.

#124 Howard on 08.18.18 at 9:53 am

Duh indeed. Thank you.

I guess the concept of a high interest savings account is just so foreign as to be entirely deleted from memory and consciousness.

#125 MF on 08.18.18 at 10:00 am

120 Another Deckchair on 08.18.18 at 8:08 am

No one went “went wrong”.

We have seen house prices triple and quadruple over the past 15 years. Anyone who didn’t buy is stuck in a precarious position. The idea that house prices will fall going forward is also a guess, and it’s been wrong for decades already (seriously).

If you want to blame someone look in the mirror. All those years of trading up houses and selling for 3x the actual value out of greed is how we got to this place. Ace owns properties in the GTA. He’s part of the problem.

MF

#126 Renter's Revenge! on 08.18.18 at 10:50 am

#112 Smoking Man on 08.18.18 at 2:23 am
They can spell with exwisit grammar.

*exkwisit

#127 Steve French on 08.18.18 at 11:41 am

Smoking Man….

Next chance I’m gonna make a detour to Vegas.

I’ll give you a call. We need to hit the town.

We’ll call it “The lost weekend.”

Other GF blog dawgs also invited!

First round is on me….

Garth O… Influewenza… you in?

I’ll start with a White Russian.

Steve

#128 Stone on 08.18.18 at 12:36 pm

#60 Blacksheep on 08.17.18 at 7:23 pm
“Our landlord put up our unit for sale almost 3 months ago, and the place hasn’t sold.”

“We’ve had to put up with over 100 showings”

“we thought it was finally time to begin packing up, but we were wrong – the deal fell through”
————————
Less than 90 days and over 100 showings….hmm.

Adams landlord:

This dude is an idiot for not adjusting his price to meet the market. A sampling of only 10 viewings with zero offers, tells you your price is to high for current valuations.

Now Adam’s up.

Does the landlord pay you a fee, when you get a phone call from the reeltor telling you to vacate your premises, for the 28th time, as yet another group of strangers needs to inspect your private residence?

I agree, It’s good you didn’t buy the thing yourself, but do you enjoy uncertainty? Grow a pair and move the hell on before someone else forces you to.

And still some wonder why people bad mouth renting.

———

You must be inexperienced.

Vacate when a realtor shows up with a potential buyer? Are you kidding. I don’t need to leave when they visit. That’s not in my rental agreement.

I assume you also assume that Adam needs to keep the place in spic and span condition like as if the place is staged. Also, that isn’t in my rental agreement. LOL

Be there and watch your stuff. These are strangers after all. Live your life the way you normally would. The realtor and the potential buyers are nobodies. You as the renter being there at the same time watching them will have them out in minutes.

Renting is all about having a carefree lifestyle, not pleasing your landlord or some dufus strangers passing through in minutes.

#129 B Wilds on 08.18.18 at 12:37 pm

Here in America the illusion of a robust economy has been propelled forward by the sheer quantity of economic growth rather than its quality. It now seems when Congress passed the Omnibus Spending Bill little thought was given to exactly how the spending would play out.

I’m referring to the fact that over the final seven weeks of fiscal 2018, the government is slated to embark on a spending spree of historic proportions as federal agencies look to spend $140 billion more than they expected to receive prior to the bill being passed. The article below delves into where some of the money may go.

http://brucewilds.blogspot.com/2018/08/how-stupidity-might-delay-our-economic.html

#130 Damifino on 08.18.18 at 12:50 pm

#125 MF

The idea that house prices will fall going forward is also a guess, and it’s been wrong for decades already (seriously).
——————————–

Did you read tonight’s blog post at all? The first part of it details a huge loss on a crappy little SFH in Scarborough. What happened?

#131 Stone on 08.18.18 at 12:54 pm

#35 Allison on 08.17.18 at 6:03 pm
Condos are going up in value in Toronto. Women have become more independent, and men have resorted to misogyny, xenophobia and racism in their mother’s basements beyond their 40s.

What does this infer?

Condos are in-demand because of independent lifestyles and less families.

Women in Toronto have more earning power than men, and they have higher educational attainment and degrees than men.

Bungalows were an archaic symbol of the cis-male family, and condos are the new trend. Every city in the world must build more high rise condos because women are empowered and they don’t need a bungalow.

Condos are going like roses at Kennedy and Finch-Steeles Ave East, so condos will NEVER fall in value. Millennial prefer to live in condos than bungalows. Raising children is costly in Toronto.

———-

And maybe….a bungalow….is just a bungalow….and a condo….is just a condo.

Wow! LOL

#132 EdmontonRenterBuyer on 08.18.18 at 1:06 pm

Hi blog dawgs
Ive been a long term renter in toronto. Saving, saving, saving. The wife and i now have a nice low 6 figure cash and stock portfolio. Now we live and continue to rent in edmonton, which is a buyers market. However prices continue to float slowly downwards.

If im interested in owning, when is the right time to jump into a slowly declining price market as the rates go up?

#133 Midnights on 08.18.18 at 1:22 pm

#68 Dolce Vita on 08.17.18 at 8:02 pm
To the “slow melt” RE price wishful thinkers commenting here today and again for umpteenth time I have posted this HPI 1980-2011 chart

Thanks, very interesting chart.

#134 SoggyShorts on 08.18.18 at 1:51 pm

#112 Smoking Man on 08.18.18 at 2:23 am

As far as returns are concerned. 200% annually is a bad year.. I was the first AI developer. Herdonomics script. It never losses.

*********************
So with a few “good” years, and $100K to start you’ll be a trillionaire in about 10 years? impressive….

#135 DON on 08.18.18 at 3:01 pm

No no no HISA …means ‘Hanging in Saudi Arabia’ Too soon?

#136 Gravy Train on 08.18.18 at 3:42 pm

#134 SoggyShorts on 08.18.18 at 1:51 pm
“So with a few ‘good’ years, and $100K to start you’ll be a trillionaire in about 10 years? impressive….”

I calculate Smokey will be a trillionaire even with 17 straight ‘bad’ years. Has he not been doing this all his life? Why is he not on the Forbes Top 10 Richest Billionaires list for 2018? Do you suppose he’s a lying SOB? :)

#137 The MoneySaver on 08.18.18 at 10:50 pm

#113 Howard on 08.18.18 at 4:23 am

Can someone help me decipher HISA?
—————————————————

High Interest Saving Account

#138 Jerky Perroby on 08.19.18 at 9:38 am

Where are these houses mentioned in the article?

#139 45north on 08.19.18 at 1:55 pm

Wolf Richter:

If a current homeowner is stretching to make payments at the current rate, after six mini-hikes by the BOC to bring its rate to 3.0%, the future payment could be out of reach.

In this case, homeowners, threatened with default, would try to sell the home. But if home prices have been skidding due to the rising interest-rate environment, homeowners might owe more on the mortgage than their home will bring in the sale after fees, and these homeowners cannot afford to sell. And they cannot afford to make the payment either. The inevitable happens: a default.
If a small number of homeowners get wrapped up in this mechanism, it’s no big deal; the banks and mortgage insurers can take the losses. If it is 8% or 10%, it’s a major mortgage crisis.

This is what the Bank of Canada is facing: Trying to tamp down on inflation by raising rates more than a tiny wee-bit could conjure up all kinds of problems. And not doing anything about inflation could too.

https://www.howestreet.com/2018/08/18/toxic-mix-in-canada-spiking-inflation-variable-rate-mortgages-and-a-housing-bubble/

Wolf Richter: paraphrased: The BOC faces a self-inflicted quandary. It kept rates too low for too long. The low rates blew up all kinds of asset bubbles. It is now confronted with those asset bubbles, including one of the world’s biggest housing bubbles that has begun to deflate in some corners.

#140 232 on 08.20.18 at 9:48 am

#35 Allison

———————–
Ohh Allison.. who has hurt you dear?
Do your cats believe the same thing?