The fake news

Yesterday this pathetic blog did an excellent job of lighting afire the underwear of the house horny. As you may recall, the most recent stats from Vancouver, the Fraser Valley, Victoria and Calgary were trotted out, showing buyers are in a bad mood and sellers are shedding equity.

A potent mixture of rising mortgage rates, trade uncertainty, the mortgage stress test, idiotic new anti-house taxes, tighter lending and stupid prices is taking hold. In many markets this negates economic growth, rising inflation, immigration and an army of house-lusty moisters. So the thesis remains. After almost a decade of real estate excess, over-buying and galloping debt, we now face years of declines. Yes, even in the mighty GTA and the Kingdom of 6ix.

So a few listings gathered by one real estate brokerage were published to prove there’s downward momentum gathering. Sale prices vastly less than the asks. Sellers happy to get out. And right on cue, the real estate bulls said the examples were cherry-picked and meaningless. Thursday morning when the local real estate cartel released its monthly report, they were ecstatic. Market, 1. Garth, 0.

Toronto Real Estate Board President Garry Bhaura announced sales and price increases on a year-over-year basis in August.  Greater Toronto Area REALTORS® reported 6,839 sales through TREB’s MLS® System in August 2018 – an 8.5 per cent increase compared to August 2017. Both the average selling price, at $765,270, and the MLS® Home Price Index Composite Benchmark for August 2018 were up compared to the same month in 2017, by 4.7 per cent and 1.5 per cent respectively.

In fact, the head realtor of the largest board in North America stated clearly the market is strong, moving ahead, and my head should be on a stick (in essence).

“It is encouraging to see a continued resurgence in the demand for ownership housing.  Many home buyers who had initially moved to the sidelines due to the Ontario Fair Housing Plan and new mortgage lending guidelines have renewed their search for a home and are getting deals done much more so than last year.  In a region where the economy remains strong and the population continues to grow, ownership housing remains a solid long-term investment,” said Mr. Bhaura.

But wait. Something’s off here.

Catching a whiff of hyperbole, exaggeration and misrepresentation, GreaterFool’s extensive research and canine tracking department sprang into action to see if there really is evidence of “a continued resurgence in the demand for ownership of housing.” After all, when a public official says something like that, most people would think it true. Certainly the easily-confused souls who are attracted to this site.

However, is it?

Turns out this is not the case, and the industry’s own published statistics suggest the market is, at best, flatlining and more likely in a slow melt. As predicted.

Look, for example, at the gold standard – a detached house in the urban 416 area. Last month the average price was $1,244,275. No, it was not up from recent months and shows absolutely no evidence of a ‘resurgence.’ This was a decline of $100,000 from the previous month. In fact, it was a drop of over $180,000, or 12.7%, from May. More significantly, it was the second-lowest value for a detached house in two years. The decline from the spring of 2017 is now 21.2%.

So, if a detached 416 house was a stock, it would officially be in a bear market.

Remember that the average was almost $1.6 million in April of 2017, and since then prices have gone sideways, and now down. Some renaissance.

How about overall GTA sales? This is a massive market of about six million people, with more than 90,000 real estate transactions annually. So is it true that “many home buyers who had initially moved to the sidelines due to the Ontario Fair Housing Plan and new mortgage lending guidelines have renewed their search for a home and are getting deals done much more so than last year?”

Nope. More fake news.

Sales last month were 6,839. In June they were over 8,000. In fact this is the worst sales performance since the depths of winter, last January. The pace of deals has declined 15% since June and has plunged 41% from last spring. In early 2017, in contrast, almost 12,000 sales a month took place.

These numbers, to repeat, are from the realtors themselves – taken from their polished, well-spun, massaged public reports. Go look on your own. They show a massive market losing momentum, deflating slowly, misrepresented to consumers by self-centred salesguys desperate to bring back glory days.

Believe them if you want. But don’t blame me for stating the obvious. They lie.

135 comments ↓

#1 Happy Housing Crash Everyone! on 09.06.18 at 5:19 pm

You dirty SHYSTERS are finished.
Happy Housing Crash Everyone!

#2 Happy Housing Crash Everyone! on 09.06.18 at 5:23 pm

Did I forget to mention I hate you loser SHYSTERS?

Happy Housing Crash Everyone!

Going to be a painful and long crash down in the GTA. Nothing is selling and prices are falling everywhere. The days if SHYSTER lies are over. Many of you are now officially USELESS.

#3 Warren Buffett on 09.06.18 at 5:27 pm

WE WILL ALL FIND OUT WHO’s swimming naked when the tied goes out!!

#4 crossbordershopper on 09.06.18 at 5:28 pm

isnt almost everything in life based on a lie. A lot less stuff would ever get done if we all were upfront and truthful. The cold winds of winter of 18 will bring a turn that most will understand when the economy starts heading south next year. The long in tooth recovery after 2008 has to end and will, but this time with a mountain of more debt.
most people cant pay their bills if they miss a paycheque OMG how do they not pull out their hair every day with that level of stress.

#5 X on 09.06.18 at 5:28 pm

Truly a shame there is no accountability for the press releases they issue.

Given that RE is the largest single asset most Canadians own, you would think the gov’t would have rules and regulations in place to protect individuals from those in the RE industry as they do for the financial industry.

#6 TRUMP on 09.06.18 at 5:31 pm

THE RICH created the bubble

THE RICH created the crash.

THE RICH benefit from the bubble and the crash.

and now all of the sheep are out of cash.

#7 crdt on 09.06.18 at 5:34 pm

I call them hat tricks, three properties for sale in close proximity. There are 2 hat tricks within a few clicks from my house, there are deuces now as well. I just saw a listing side by side. Perhaps they could buy each other’s houses and make moving a breeze.. I’ve been watching with disbelief as for sale signs are going up everywhere. On my commute I see realtor signs going up as if panic is starting to set in, and people are running for the exit, rather then the entrance… We are not millionaires, we cannot afford these house prices, and when speculation is wrung out of the market, there is literally no one left as evidence by the DOM stats…

#8 The Fat Lady on 09.06.18 at 5:36 pm

GARTH – Be careful about uncovering the lies of those official government statistics.

You will be impeached trying to find the truth about all the untruths.

#9 Prairieboy43 on 09.06.18 at 5:36 pm

The Greaterfools need to take TREB board members out to back of the woodshed. Pain is required.
PB43

#10 Stan Brooks on 09.06.18 at 5:39 pm

Of course they lie. They have vested interest to lie.
But when you have a deeply incompetent government that can not provide meaningful statistics on real estate transactions, this is what you get, a made up stuff.

How come I can get the history of every stock out there but can’t get reliable statistics on sales of a house?

And what kind of a ‘public’ official is a spokesperson for the real estate sales mafia?

This is by design, lie to the people, mislead them and then blame them for the problems.

wild bill is very quick to kill the doctors and plumbers when it benefits his company but nowhere to be seen when real work is to be done like with that pipeline or with regulating the real estate cartels.
That is not important or just.

But the bigger the lie, the bigger the coming crash.

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

And for all the deflation dreamers out there:

Deflation will normally be caused by a credit contraction that follows a credit expansion (which itself causes normally inflation) in a closed economy where mass defaults are possible.

In an open world economy if you are overextended, both creditors and investors know that you can not pay back that credit.

They also perfectly know that there are 2 outcomes, 2 ways to default on debt:

1. De-facto default where debt can’t be paid as in Greece, Turkey, Argentina due to the fact that the government does not control the debt currency.

In the case of Greece the unraveling is deflationary but only because it does not control the interest rate of the Euro.

In the case of Turkey and Argentina it is highly inflationary in their own currencies.

2. Inflation default when the debt is in local currency.
you just print money to pay debt.

In both cases investors and creditors run away from the debt crises, no mater the currency.

We are a mixed case with some MBS in Euro (thank you CMHC), some public and private debt in USD, some in Canadian dollars, but as in the cases of point # 1 above the exit from debt is inflationary for the local currency due to the very fact that we control it though interest rates.

In a closed economy where capital can not escape, it will convert to something, like cash, gold, land in order to escape the destruction through default, in the current world such moves does not make much sense as even local players can diversify abroad and the world currently has many more opportunities, we are not one of them though, so we witness the capital flight out of Canada.

To summarize:
If stocking on debt causes inflation and the shrinking it (with no default on debt possible) causes strengthening of the currency then we just invented the perpetuum mobile for getting wealthy forever.

Soon we will witness that this is not the case and the economy does not work that way.

As for Amazon:
It is deflationary for content – books, songs. How much exactly from these do you consume?

It is PRIMARILY retail consolidation that is more efficient.

If it/Amazon is deflationary, tell me where I can buy on Amazon gold, copper, wheat, corn, silver, oil, gas, heck even iPhone at LOWER prices than on their respective markets?

Nowhere, correct.

#11 NoName on 09.06.18 at 5:47 pm

wow, just wow!
you dont need luck when you know math!

https://thehustle.co/the-man-who-won-the-lottery-14-times

“I’m a weekend mathematician, an accountant without too much education,” he later told a Romanian magazine. “But mathematics properly applied can guarantee a fortune.” – Stefan Mandel

#12 Don regan on 09.06.18 at 5:50 pm

Great job on yesterday’s post,
Your numbers are in line with
Reality. Unfortunately, for many
The truth will catch up to them.

#13 Aging in yvr on 09.06.18 at 5:53 pm

More anecdotal info from Vancouver.
Friends who bought condo pre-build in yvr moved in having listed and “sold” their house. Sale fell through as buyers couldn’t finance and now empty house is back on the market.
Two other sets of friends have listed their homes in the past two weeks, one in Vancouver and one in Richmond. Very little interest even though they’re new listings and comparable to other similar properties.

#14 Alessio on 09.06.18 at 5:58 pm

When I started reading today’s blog I for sure thought you were going to show better examples of recently sold listings that aren’t three cherry picked horrible homes. But u didn’t. If you had we’d see many strong solds. Oh well. Btw im a housing bear.

#15 crowdedelevatorfartz on 09.06.18 at 5:59 pm

It’s one thing to spin.

But to constantly fabricate the numbers to always benefit Real Estate agent’s sales fantasy…….. fraudulent comes to mind.

#16 Stan Brooks on 09.06.18 at 5:59 pm


#5 X on 09.06.18 at 5:28 pm
Truly a shame there is no accountability for the press releases they issue.

Given that RE is the largest single asset most Canadians own, you would think the gov’t would have rules and regulations in place to protect individuals from those in the RE industry as they do for the financial industry.

Accountability? Of course there is accountability for you if you a doctor or plumber and deemed by default a tax cheat. T2 said that all private corporations are set in order to avoid taxes.

Accountability for them? Shame? (that was funny) I don’t think so.
If you think shame can disturb their good night sleep you are mistaken.

You can write to wild bill, T2, stats Canada, BoC, CHMC, and propose regulations, you will either hear nothing back (my bet) or an answer that it is not their job and the markets are self-regulating.

By markets they mean the constant state of oligopoly, price fixing, manipulation, complete lack of transparency, fabricated news, community and industry cartels, socialization of risk, privatization of profits etc.

#17 Ali baba on 09.06.18 at 6:00 pm

Garth, What the Toronto Star reporting today. “Home prices rise against tighter supply in August”
https://www.msn.com/en-ca/money/topstories/home-prices-rise-against-tighter-supply-in-august/ar-BBMWwR0?li=AAgh0dA

#18 Brian Ripley on 09.06.18 at 6:03 pm

“…a continued resurgence in the demand for ownership of housing.” Toronto Real Estate Board President Garry Bhaura

I have my Toronto Housing charts up now
http://www.chpc.biz/toronto-housing.html

…and it looks more like:

Selling Desire vs Buying Indifference

…with indifference winning.

#19 tccontrarian on 09.06.18 at 6:04 pm

What amazes me is how people, as Garth does here, can spend a few minutes to uncover lies, lies and more lies from ‘established’ institutions (usually connected to Government), yet totally drop the ball on the BIGGEST lie of all: 9/11.
Here’s a documentary addressing the psychological side of this event:

https://youtu.be/31X_njVb40s

Happy Tower Crash Everyone (all 3 of them!)

TCC

#20 suburban coyote and pup on 09.06.18 at 6:04 pm

Garth is right….
Sold my severed lot jan 2017 for 595k in 905 Burlington. Had a horde of slavering agents telling me what a mistake I made “you have left a lot of money on the table” “you need an agent to represent your interests”.

2 brothers (flippers) saw what I did and bought a nice rancher on my street in Feb 2017 for 950k. They proceeded to tear down the original home, sever into 2 50ft lots and sell using these fine agents and their fantastic advise. Original asking prices 789 and 739k.

These lots finally sold in August 2018 after over 180 DOM. The agents had called me in the spring to find out my sell price (private sale between myself, builder using lawyer). I was quite blunt in stating my opinion that the market had changed and that the asking prices were ludicrous; even for an end user. I recommended the head dogs blog as mandatory reading…

Those lots sold for 562k and 612k . After paying for demolition, land survey, application fees, park dedication x2 and realtor commission they barely broke even. I haven’t even included interest paid or lost opportunity on a cash purchase.

Real estate doesn’t always go uppa uppa uppa….

OnF53

#21 ts on 09.06.18 at 6:10 pm

Shame on the realtors for misleading the public. Karma is a B!!## and they will soon be experiencing the repercussions for their lies. I still don’t understand why the government doesn’t impose rules and regulations that prevent such misrepresentations. They should at the very least be heavily fined.

#22 Penny Henny on 09.06.18 at 6:27 pm

3 Warren Buffett on 09.06.18 at 5:27 pm
WE WILL ALL FIND OUT WHO’s swimming naked when the tied goes out!!

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

You say that a lot Warren. You some kind of a perv?

#23 Nonplused on 09.06.18 at 6:29 pm

Based on the title I initially thought you might be talking about the “anonymous” Op.Ed. piece the NYT’s ran yesterday:

https://www.nytimes.com/2018/09/05/opinion/trump-white-house-anonymous-resistance.html

At least Trump didn’t fall for it fully, questioning the authenticy of the piece and whether the writer in fact existed (although somebody had to write it).

Anyway, this article is the very definition of “fake news”. My guess is that every administration official in every administration is in some way trying to guide that administration towards their own ends, so there could be nothing more fake than making a news story out of it. No wonder the Dumpster doesn’t like the MSM.

And one has to wonder, if there is some sort of secret cabal within the Trump administration working to thwart certain parts of Trump’s agenda but move others forward depending on whether they agree with that particular item, why on earth would they publish word of their existence??? It looks much more like an external hit piece similar to the Steele dossier. A complete fabrication.

Whoever wrote it, assuming it was just one person and not a committee, will eventually be outed and they must have known that when it was written, but for now it’s been fun to read all the speculation. Even the bookies in Vegas are giving odds. And it is so dumb, it won’t cost very much money for the RNC to bribe some intern at the NYT to find out at least who knows who wrote it, and then bribe that person for names.

Once that happens probably 1 of 3 things happens, 1) the person alleged to have written it vehemently denies it and accuses the NYT of fraud and slander and sues the heck out of them, or 2) the person gets fired, or 3) it turns out to have been a fraud from the beginning. I suppose a 4th possibility is that both 1&2 occur.

I personally am of the opinion that it is a fraud from top to bottom just like the Steele dossier was. It just doesn’t make sense for someone to take such personal risk just to tell the world what it already knew. Even crazy Kim Jung-un is aware that there are people in Trump’s organization working against him. This Op.Ed. is news to no one. So it makes no sense for anyone to personally take the risk of hanging from a rope for treason to publish such a thing. Even the NYT is on very sketchy ground here, especially if the piece turns out to have been a fabrication. After all, they published a piece that is tantamount to sedition.

Grab your popcorn, this is going to be interesting to watch. Politics has always been a messy business fraught with lies and defamation, but this is getting out of hand.

———————

Good article about the stupidity of the Canadian milk quota system:

http://www.321gold.com/editorials/guest/pescod090618.pdf

Good to see our dancing prime minister is hard at work protecting 9000 farmers from the evils of the free market, whilst potentially throwing the whole auto industry under the bus. Or I guess that would be the milk truck.

Unfortunately the only solution I see that would be viable is for the government to buy all the quota back like they did with Trans-Mountain to right the wrong they created without bankrupting the farmers.

I’ve said it before, and I’ll say it again, governments can only make things worse. They can’t predict the outcomes of their actions. Neither can anyone else, but in the case of private individuals you have “skin in the game” when it comes to your own decisions, so you act carefully (usually, not everyone does). Governments don’t have any skin in the game so they just pander to votes. Even when they go to war, the “leaders” do not lead the charge. They get your sons to do that and get you to pay for it.

——————–

All I can say about the TREB is that “when things get serious, you have to lie”.

#24 Whocares on 09.06.18 at 6:31 pm

#14 Alessio

Have a look at @k52545265 on Twitter. He has some good comparisons of previously sold properties. MongoHouse and HouseSigma are both online sites and apps you can download – sign up for an account for free.

#25 Doug t on 09.06.18 at 6:46 pm

Just because you say unicorns are real doesn’t make it so

RATM

#26 ts on 09.06.18 at 6:46 pm

#4
isnt almost everything in life based on a lie. A lot less stuff would ever get done if we all were upfront and truthful.

This may be true, however, is this the kind of world you would want your children to inherit or is a life based on integrity, decency and character a little tougher to imagine and too much to ask. Will you still like what you see in the mirror?

#27 Reality is stark on 09.06.18 at 6:54 pm

Never buy the cow when you can milk the cow through the fence.
This applies to everything in life but especially to real estate.
If they are going to let you rent for cheap, rent.
Buying gets you into all kinds of grief and emotional baggage you don’t need. Let someone else buy and do all the heavy lifting. You can slip in later when things calm down and it is less expensive.
They want you to pay through the nose. Wait them out and save a fortune.
Good things come to those who wait.
Let someone else be the greater fool.

#28 Burlington Shyster on 09.06.18 at 6:56 pm

Man, Garth must have one of the cleanest backsides ever with all these lips puckered up against it. Reality is, prices are up across the board YoY….you can spin it in your favor all you like. People might lie but numbers dont

@#20 suburban coyote and pup on 09.06.18 at 6:04 – why anyone would not sell their property on the open market, especially the type of market that existed in 2017 is beyond me. Some people like to give money away I guess

The average detached price is at the lowest point this year. – Garth

#29 crowdedelevatorfartz on 09.06.18 at 7:03 pm

@#21 ts
“I still don’t understand why the government doesn’t impose rules and regulations that prevent such misrepresentations. They should at the very least be heavily fined.”

++++

One only has to look at the millions of $ donated to political parties vs the millions of voters screwed over by real estate “bait and fabricate” tactics.

Political leadership only has allegiance to money and power……not voters.

#30 Cis-Mail on 09.06.18 at 7:05 pm

$1.6 Million for a house in Toronto, but VOLUNTEER/UNPAID/INTERN positions are competitive in this social justice warrior and militant feminist city.
Is God testing us? If I change my gender, colour my hair red, and bash Garth Turner and let my potential employers know, maybe I will be hired and given six-figure salary jobs.

#31 Burlington Shyster on 09.06.18 at 7:08 pm

The average detached price is at the lowest point this year. – Garth

—————–

Yet 8.5% higher than last year….not bad for buying a super overheated top of the once in a lifetime bubble.

Tsx is up what, 5%? CAD down 3% and inflation up 3%? Soooooo, tell me again what was the better investment?

It’s not a contest. Grow up. – Garth

#32 crowdedelevatorfartz on 09.06.18 at 7:08 pm

@#28 Shyster
“prices are up across the board YoY….”

+++
Well either you’re wrong or lying….which is it?

What about “sales”?
Down YoY?

#33 mike on 09.06.18 at 7:13 pm

Why do they keep citing population growth as an elixir against price declines?

Take a look at a long term chart of population growth in Toronto, year over year its always gone up but that hasn’t precluded a couple of serious housing corrections over the last 50 years.

Granted on an absolute basis the yoy increases are larger, but I still wouldn’t rule out a 1989 or worse type correction.

#34 yvrmc on 09.06.18 at 7:18 pm

Welcome back HHCE !!

#35 Happy Housing Crash Everyone! on 09.06.18 at 7:21 pm

Whocares on 09.06.18 at 6:31 pm
#14 Alessio

Have a look at @k52545265 on Twitter. He has some good comparisons of previously sold properties. MongoHouse and HouseSigma are both online sites and apps you can download – sign up for an account for free.

—————————————————————–

Yup ktmoney @kt52545265 gives DAILY examples of housing that sold in the past few years and how much they sold for now. It’s a BLOODBATH in the GTA. SHYSTERS HATE the TRUTH

Happy Housing Crash Everyone! :-)

#36 Christine Everhardt on 09.06.18 at 7:34 pm

I have a serious question about cap rates that I was hoping those in the know could answer for me.

I know that people don’t really look at cap rates for residential properties, but I was considering the following to help me determine whether or not it makes sense to buy right now.

The house that I rent in a nice suburb of Vancouver costs me $3,200 per month. The owner asked me if I wanted to buy it from him, and said that fair market value is $2,888,000 (based on what other houses in the area are selling for, I am inclined to believe him).

Property tax is, like, $9,000 a year.

So, am I nuts in thinking that I am either getting a steal of a deal renting? Or house prices are insane?

If this was an investment property, and someone paid $2,888,000 for it, and then collected my $3,200 in monthly rent ($38,400 per year), less $9,000 for property taxes and, say, $2,000 a year for repairs & maintenance, someone would net $27,400 per year in income.

$27,400 / $2,888,000 = 0.95%.

Why would anyone in his or her right mind pay $2,888,000 for this house? Conversely, why is my rent not getting jacked up 100-200% (I know the answer to that…there is not a lot of folks that can pay more than the $3,200 a month I pay).

Any help understanding this would be much appreciated.

You are being subsidized by a greater fool. Don’t fight it. – Garth

#37 Mattl on 09.06.18 at 7:38 pm

Sold to ask price is a pretty silly way to judge market direction. The realtor that sent the examples had previous sale info and didn’t share it. So much for transparency, guess realtors sharing partial info is only ok if they support the narrative. Assessment, last sold price, asking price, reductions, sell price, DOM. That is the true picture of a home sale.

I can easily find three houses in YVR that sold over ask… would you agree the market is strong? Of course not. Your blog Garth but you are playing the same uppa game realtors do. If you have realtor access lets get the full picture on these home sales.

That is exactly what the blog has been encouraging real estate boards to do. Transparency appears to be closer than ever. Regardless, properties selling seriously below list is news. Deal with it.- Garth

#38 MLS ad on 09.06.18 at 7:41 pm

It must be crashing, because for first time ever, I heard a MLS commercial on Vancouver radio.

“…For luxery living”

B A R F !

Desperate for suckers who think “yeah, I deserve luxury! I deserve home ownership. Let’s go to MLS.”

#39 yvrguy on 09.06.18 at 7:45 pm

Burlington Shyster on 09.06.18 at 7:08 pm
The average detached price is at the lowest point this year. – Garth

—————–

Yet 8.5% higher than last year….not bad for buying a super overheated top of the once in a lifetime bubble.

Tsx is up what, 5%? CAD down 3% and inflation up 3%? Soooooo, tell me again what was the better investment?

It’s not a contest. Grow up. – Garth

———–

hahahahahahahahaha. this delusional clown is precisely why housing is gonna wreck… HARD. houses are to live in, it’s not a penny stock.

you expect equity market beating gains from your roof? good luck with that one. party’s over.

#40 Lawnboy on 09.06.18 at 8:10 pm

Caught the CBC today saying house prices up in the GTHA and thought….O Boy, Gartho is going to have lots to say about this. HHCE is starting to resonate with me.

Smells like Calgary, 81, yeeeehaaaaaw.

#41 Jeremy on 09.06.18 at 8:25 pm

Thank you again for diving into the details once again. It’s a such a valuable service you are providing.

The MSM screaming about the value of their journalism vis a vis paywalls should be ashamed.

#42 Vision on 09.06.18 at 8:42 pm

The reason why many people believe prices are going up and houses can never come down is because they read papers like the Toronto Star and are brainwashed by their Realtor friends.
People do not understand that everything that they read and hear is not always the truth.
I know two people who have listed their houses this week rather than 6 months earlier because they listened to their agents.Both have to sell; one is a divorce and another has bought and has to move in Dec.
I had advised them to sell ASAP but they are convinced that houses always go up. So they have been told Sept is a good time to list. We will see.

#43 SoggyShorts on 09.06.18 at 8:52 pm

#170 Stan Brooks on 09.06.18 at 2:21 pm
#169 SoggyShorts on 09.06.18 at 2:06 pm

You have not noticed the higher grocery prices, higher gas prices, higher electricity prices?

Groceries, yes but not anywhere near 10% per year.
Gas, no actually I just filled up for 118.9 on Wednesday, and I’d have to go waaay back to remember a time under a buck, so no 10% yearly increase there.
Power, not sure, included in rent which went down 10% again this year.
——————————————————
What has gone down and how much of it you consume?
Private schools tuition increased by 50 % in the last 4 years.

Like I said, 1/3 of my expenses is rent, and that went down 10% this year and last year, and a rather large company purchase of a new truck also went down compared to 5 years ago- by about 15%.
Those huge reductions completely cover the small increases at the grocery store. (for us)
No kids, so I can’t speak to the cost of private schools.
——————————————————
The number of people scavenging the garbage bins in GTA has significantly increased, everyone I know is bargain shopping, spending pretty much their weekends and evenings on that, to save a few bucks.
That switch of behavior happened in the last 2-3 years.

Spending the weekendand bargain shopping? For what? Food? Do they not have internet? 10-15 minutes and I’ve got weekly groceries ordered, getting the best price because I swing by one grocery store for half and then the other for the rest. Online ordering is awesome.
If not food, then what? I can’t imagine what your peers are spending so much time shopping for.

#44 Happy Housing Crash Everyone! on 09.06.18 at 8:57 pm

Sorry Garth for the multiple posts but I have a*****SHYSTER Alert*****

This is not a drill this is the real deal. We have a POS lazy SHYSTER demanding money for work that wasnt complete. Feel free to comment . You dirty SHYSTERS ARE FILTH.

https://globalnews.ca/news/4431658/real-estate-broker-demands-commission-gta/

#45 Mattl on 09.06.18 at 9:06 pm

That is exactly what the blog has been encouraging real estate boards to do. Transparency appears to be closer than ever. Regardless, properties selling seriously below list is news. Deal with it.- Garth

Well thats great but you had the opportunity to do same with the three listings from yesterday and played the same treb games. You painted a partial picture, got called out, and treb numbers weren’t a complete disaster.

Properties selling above or below list mean nothing – you have like 25 posts on realtors listing low, getting a high price, and celebrating a strong market. It’sBS, and so is someone asking an insane price and getting a fraction. All that matters is previous sale, dom, asking and sale price. Of these the least important is ask price. You of course know this.

#46 Jungle on 09.06.18 at 9:10 pm

Spin the wheel – my turn

Toronto average detach up 4.9% YOY
Sales up 12.3%……..YOY

Toronto average Condo price +5.9% YOY
Sales down -5.6%

Rents? +20% +????

Mortgage rates were 2.5 % for a five year last year?

BTW most detach buyers @ 1m+ price likely moving up the property ladder and already IN the market before, having made killer gains. Even first time buyers on condos have made a killing.

#47 Burlington Shyster on 09.06.18 at 9:10 pm

@yvrguy

Where in my post did I say buy or treat it like a penny stock? My point is those who purchased last year, give or take a month or two, have fared better than if they were to have invested and rented as this blog not so subtly suggests. Those buyers are being chastised here, called names, calling them idiots etc etc.

Absolutely, houses are for living and that’s what the large majority of people are buying them for. Good, hard working people but they are idiots according to everyone because they didnt rent. Riiiiight, the majority here are geniuses…..you all sold your properties right at the peak correct? And you’ve all invested in positive returning investments while renting the same type of house you sold at a lower monthly carrying cost correct? False. 90% of you still own your homes…why? Because it’s far more desirable than renting

And yes Garth, it obviously is a contest because if it weren’t you wouldn’t be gloating, rightfully(your eyes) or not(mine)

In the interests of transparency, Michael, you should reveal yourself as a realtor in Burlington. It helps put things into context. – Garth

#48 dr talc on 09.06.18 at 9:11 pm

It was up for so long
Today looks like down
Perception vs reality
As per yesterday’s post
August was a good time to buy
Don’t ask strangers on the net when to buy a house
Ask your spouse

#49 John on 09.06.18 at 9:20 pm

Burlington Shyster on 09.06.18 at 7:08 pm
The average detached price is at the lowest point this year. – Garth

—————–

Yet 8.5% higher than last year….not bad for buying a super overheated top of the once in a lifetime bubble.

Tsx is up what, 5%? CAD down 3% and inflation up 3%? Soooooo, tell me again what was the better investment?

It’s not a contest. Grow up. – Garth

———–

hahahahahahahahaha. this delusional clown is precisely why housing is gonna wreck… HARD. houses are to live in, it’s not a penny stock.

you expect equity market beating gains from your roof? good luck with that one. party’s over.

——

Based on one year returns? Canadian equities are the steady eddies. Rising dividends long term is the best investment. If you’re comparing housing with equities How much did the US market go up in one year? Canadian real estate has seen its heyday. Its all over now.

#50 arfmoocat on 09.06.18 at 9:21 pm

My rich friend still has his 1.3M house with a view listed for sale in West Kelowna. Been listed 3 months now.

#51 Jungle on 09.06.18 at 9:26 pm

In the last year ish, the GTA market was whacked hard with Ontario unfair housing plan, and stress test jumping qualify rates 2% almost overnight. And was at the height of speculation , flippers and market euphoria.

The result was last month reported just over 600 detach sold @ 1.2 m with aprox 3.5 months of inventory.

Talk about STRENGTH

And the economy is only getting better, specifically GTA>

Immigration and population is only increasing

Jobs are increasing

Business investment intreasing

Wage growth increasing

GDP surging

Economic growth strong

This is great for housing.

Not including the wealth and high income that support/ afford this market- remember not every one has to afford and they don’t There is enough wealthy to keep this going.

The gap between the rich and poor keeps widening, supply did not keep up to dilute price because wealthy demand is just too strong.

$$$$$

#52 yorkville renter on 09.06.18 at 9:27 pm

We usually compare YoY, so as bearish as I am the price is up on that basis.

What would be interesting is transaction volume vis-a-vis the 10 year average

#53 young & foolish on 09.06.18 at 9:27 pm

“Why would anyone in his or her right mind pay $2,888,000 for this house?” — Christine

Nobody does … they use leverage.

#54 FOUR FINGERS WATSON on 09.06.18 at 9:29 pm

In the interests of transparency, Michael, you should reveal yourself as a realtor in Burlington. It helps put things into context. – Garth
…………………….

OMG ! Garth is Big Brother !

This is news? – Garth

#55 Burlington Shyster on 09.06.18 at 9:34 pm

In the interests of transparency, Michael, you should reveal yourself as a realtor in Burlington. It helps put things into context. – Garth

——————

I thought that was very visibly implied by my screen name.

#56 crdt on 09.06.18 at 9:35 pm

Isn’t the news bonkers? Almost all Global TV type coverage goes like this. Pretty woman explains that prices were dropping, and illustrates it with a few draw dropping sales lately. (takes a short breath) then continues as if what she is about to say goes directly against what she just said and continues “prices are expected to rise 1% next year for detached and blah blah”

WHOT?

These “owners” sold well below assessment because they felt like it, our much better then facts assessment is 1% more.. yeah!! party..

#57 Shawn Allen on 09.06.18 at 9:37 pm

Why No Reliable House Price Index?

#10 Stan Brooks on 09.06.18 at 5:39 pm asks:

How come I can get the history of every stock out there but can’t get reliable statistics on sales of a house?

*************************************
Well, could it be because the stocks of individual companies on an exchange trade very frequently and are considered homogeneous whereas individual houses trade very infrequently and every house is different in terms of location and there are vast differences in quality measures?

A share of CN rail is something we can define and find a price for easily. A typical single family house in Toronto or even a typical three bedroom house in a given area of Toronto is something very hard to define and difficult to get an exact latest traded price on.

So a house price index is something that is inherently hard to calculate and subject to debate.

Partly as a result many housing price indexes or data are published by vested interests and therefore considered unreliable by many.

In the U.S the Case Shiller home price index with prices for 20 cities seems to be trusted?

In Canada we have some realtor indexes which appear not to be trusted.

We have the Teranet Index. It’s independent? It has its critics, but is it not about as good an index as can be compiled given the data difficulties?

Stan may not trust it. But then again Stan totally distrusts even Statistics Canada inflation numbers does he not?

So it’s not clear Stan would find any home price index reliable unless it happened to confirm what he already thought. Like most, Stan perhaps craves confirmation more than independent data.

#58 young & foolish on 09.06.18 at 9:38 pm

Why would anyone in his or her right mind pay $2,888,000 for this house? — Christine

Part 2

Another way to judge RE investing is to consider Return on Cash invested (after expenses, which include carrying costs as well as mortgage payments). Current prices may wobble, and even slide, but like a dividend paying equity, you are collecting positive cash flow. It’s a long term strategy and requires management, however, it’s made many folks wealthy.

Wrong. People increase wealth owning residential, single-unit real estate when its capital value rises, not from collecting rent. – Garth

#59 will on 09.06.18 at 9:44 pm

i gotta get some more popcorn. this show is really getting interesting now…

#60 crowdedelevatorfartz on 09.06.18 at 9:58 pm

@#46 Jungle
“BTW most detach buyers @ 1m+ price likely moving up the property ladder and already IN the market before, having made killer gains. Even first time buyers on condos have made a killing.”
+++++

Talk to us in 6 months Realtor….. Its a jungle out there.

#61 will on 09.06.18 at 10:22 pm

“OMG ! Garth is Big Brother!

This is news? – Garth”

lololololol!

#62 Bernie Allmost Madeitoff on 09.06.18 at 10:31 pm

Hey……. Come INVEST WITH ME.

TORONTO REAL ESTATE WILL MAKE YOU RICH

Your money is in a safe place.

#63 oncebittwiceshy on 09.06.18 at 10:32 pm

Burlington Shyster: “My point is those who purchased last year, give or take a month or two ….”

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

Give or take a month or two. You are too cute. It's kind of funny what a month or two can mean, isn't it?

#64 As expected on 09.06.18 at 10:36 pm

Nice rebound in sales and prices for August . Didn’t expect that

Will see if rates go up in oct .

#65 oh really? on 09.06.18 at 10:40 pm

Wrong. People increase wealth owning residential, single-unit real estate when its capital value rises, not from collecting rent. – Garth

……………….

tell it to the REITs…perhaps they ‘are not people’?

#66 EmmEmm on 09.06.18 at 10:51 pm

this another shyster or just passing along Garth’s message .. lol

https://imgur.com/a/L9yuqKH

#67 izzy hungwell on 09.07.18 at 12:38 am

The reason why many people believe prices are going up and houses can never come down is because they read papers like the Toronto Star and are brainwashed by their Realtor friends.
People do not understand that everything that they read and hear is not always the truth.

********************************************
same BS fed to the herd via BNN, AM680, RFD.com

#68 Myra Andrews on 09.07.18 at 1:13 am

Haven’t posted for a while. It is starting to get more interesting.

Real Estate stats for the Greater Vancouver area from realtor Paul Boenisch

New Sold Inventory
Sept 5/6 609 195 12,653
Sept 4 498 53 12,439

Inventory at the end of August was 12,510

#69 Jimers on 09.07.18 at 1:49 am

Regardless of what the MSM fake news says, Trump clearly stated “fake new is the enemy of the American People”, and he is absolutely correct. Now is his chance to declare State Security and to call their bluff and compel the NY Times to divulge their source or be proven to liars (again). The news is too important to a democratic republic to be continually subverted with lies.

#70 Renter's Revenge! on 09.07.18 at 6:40 am

#36 Christine Everhardt on 09.06.18 at 7:34 pm

If this was an investment property, and someone paid $2,888,000 for it, and then collected my $3,200 in monthly rent ($38,400 per year), less $9,000 for property taxes and, say, $2,000 a year for repairs & maintenance, someone would net $27,400 per year in income.
$27,400 / $2,888,000 = 0.95%.

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

I think you’re off by a factor of 10 in your estimate of maintenance costs. Most sources I could find say to set aside 1% of the house’s value each year to pay for maintenance. So, $9,000 for property tax plus $29,000 equals $38,000 (your entire rent). That house’s cap rate is zero. Probably why the owner wants of offload it on to you.

#71 Karl (Shyster) on 09.07.18 at 6:47 am

There is no arguing fact re: GTA real estate market.

Sales up yoy.

Prices up yoy.

End. Of. Story. Will it last? Will it see torpor? You can argue that until your blue in the face, but it doesn’t change the August stats.

Both sales and prices are lower than every other month in 2018 (save for snowy January). End. Of. Story. – Garth

#72 ww1 on 09.07.18 at 6:51 am

“Yes, even in the mighty GTA and the Kingdom of 6ix.”

I’m confused. I thought 6ix refers to the six cities that were amalgamated into Toronto.

( https://www.urbandictionary.com/define.php?term=the%206ix )

But that’s redundant with the use of GTA.

So should that be 6iv for 604 – the main YVR area code in pseudo roman numerals?

I’m probably over-thinking this.

#73 Stan Brooks on 09.07.18 at 6:59 am

#51 Jungle on 09.06.18 at 9:26 pm

If life was the that great, people rich, wealth everywhere, business great, the mortgage – the bedrock of this economy (don’t forget that from ‘The Big Short’ in order to sound authentic, my friend) you should have been busy selling houses, not posting here and looking for greater fools.

GTA Realtors are soooo stupid and transparent.

#74 Karl (Shyster) on 09.07.18 at 7:20 am

Both sales and prices are lower than every other month in 2018 (save for snowy January). End. Of. Story. – Garth

Lol, really? So August, the slowest month of the year is down? Oh no!

And what if it was reversed? Let’s say yoy was down but August was the hottest month of 2018. You would be highlighting the yoy stat.

End. Of. Story.

New investors need to know the trend. It is down. Realtors like you are trying to obfuscate that. Be honest. – Garth

#75 Tater on 09.07.18 at 7:47 am

And now the old trick of lying about income to get a mortgage will get much more difficult: https://www.vancourier.com/real-estate/fight-against-mortgage-fraud-looks-to-cra-for-help-1.23420994

#76 Renter In Burlington on 09.07.18 at 7:49 am

I’ve been keeping my own spreadsheet of real estate listings for several months now and it clearly shows that prices are being reduced pretty regularly and very little is moving in Burlington.

#77 Spectacle ( ...and I probably need another hobby too) on 09.07.18 at 8:07 am

#72 ww1 on 09.07.18 at 6:51 am
“Yes, even in the mighty GTA and the Kingdom of 6ix.”

I’m confused. I thought 6ix refers to the six cities that were amalgamated into Toronto.

( https://www.urbandictionary.com/define.php?term=the%206ix )

But that’s redundant with the use of GTA.

So should that be 6iv for 604 – the main YVR area code in pseudo roman numerals?

I’m probably over-thinking this.

————————–::::::::———————

But on another note, you sure put in the effort on reading and understanding this blog !

You will do well…..

#78 crowdedelevatorfartz on 09.07.18 at 8:13 am

@# 71 Karl the self described Shyster

“There is no arguing fact re: GTA real estate market.

Sales up yoy.

Prices up yoy.”

+++++

This is what happens when you believe your own TREB, CREA, whatever bull$h!t.

Sad. Delusional.

Denial is not just a river.

#79 Tater on 09.07.18 at 8:13 am

#22 Penny Henny on 09.06.18 at 6:27 pm
3 Warren Buffett on 09.06.18 at 5:27 pm
WE WILL ALL FIND OUT WHO’s swimming naked when the tied goes out!!

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

You say that a lot Warren. You some kind of a perv?
———————————————————–

Warren might not be a perv, but he’s definitely a horn dog. 2 wives and the uncountable number of innuendos in his annual letters are just some of the evidence

#80 Spectacle ( what have I become...) on 09.07.18 at 8:15 am

#67 izzy hungwell on 09.07.18 at 12:38 am
The reason why many people believe prices are going up and houses can never come down is because they read papers like the Toronto Star and are brainwashed by their Realtor friends.
People do not understand that everything that they read and hear is not always the truth.

********************************************
same BS fed to the herd via BNN, AM680, RFD.com

———————***********————–

And, The CBC ! Listening to the total garbage and Fake News ( Lies and 100% incorrect opinion pieces ) .

The Canaidan sovereignty has been Given away, not just sold! CBC shills what some on here might describe as #!!,*{!jid*>|>*shysters. But not me, nope never use such language, however accurate , to describe those lying CBC / News outlet criminals spewing fake news…oh, coffe is ready.

#81 Charlie Munger on 09.07.18 at 8:18 am

#3 Warren Buffett

“WE WILL ALL FIND OUT WHO’s swimming naked when the tied goes out!!”

That would be “when the tide goes out Warren…” Now let’s buy some more Coca Cola stock…

#82 Spectacle on 09.07.18 at 8:20 am

will on 09.06.18 at 10:22 pm
“OMG ! Garth is Big Brother!

This is news? – Garth”

lololololol!

———( )——–

And Abs like an Iron Caldron Him has ! : )

#83 jess on 09.07.18 at 8:25 am

warburg bonds not james

Moneyland is a place where, if you are rich enough, whoever you are, wherever your money comes from, the laws do not apply to you.

https://www.theguardian.com/news/2018/sep/07/the-real-goldfinger-the-london-banker-who-broke-the-world

#84 TurnerNation on 09.07.18 at 8:32 am

They’ll stone you just like they said they would.

Anybody buying houses in Calgary get ready for xx% property tax hikes for a long time.

Regards from Ontariowe.

Expect this cost to double via “over runs” – the polite Kanadian term for graft and extortion.

“Pro-Olympics group calls estimated $5.8B cost for Calgary 2026 ‘acceptable”
https://www.cbc.ca/news/canada/calgary/olympics-bid-council-plebiscite-2026-1.4813831

#85 crowdedelevatorfartz on 09.07.18 at 8:37 am

@#51 Jungle

The list was the same old drivel that every realtor that comes here spews out….

You forgot to mention ‘its different here”.

My List.

The obscene levels of debt Canadians have BURIED themselves in.
Trudeau.
NAFTA.
Inflation.
Rising interest rates.
B20 qualification rules.
Deficit budgets.
The Supreme Court of Canada ruling against TREB’s control of sales info( sorry thats a “positive” for buyers, my bad.).
Global Political instability.
Trump.
Trade wars.
China.
Brexit.
Syria.
On and on and on.
All factors affecting tiny little Canada and your myopic view of the center of your known universe….Toronto Real estate. Yawn.

Who is right? Who is wrong?
Time will tell.
But if I was a betting man I dont think I would be expecting the “uppa uppa uppa it always goes uppa” drivel that sales commission earning Realtors endlessly spew forth as gospel.
You need your commission. Audi Leases are expensive. You have bills to pay. We get it.

Perhaps if you spent less time here spinning REALTOR propaganda….you might sucker another rube (er sorry “lucky buyer”) to hand you over a cheque for 10k? 50k? 100k? for essentially unlocking a door and blithering on about how great a place is.
A carny at a local fair barking out “winna! winna! everyones a winna!” comes to mind.

If the downturn in the economy doesnt crush your industry……….
The “information age” internet will .

Happy Housing Crash Commission Sales Man.

#86 The real Kip on 09.07.18 at 8:51 am

So bottom line, housing remains ridiculously unaffordable, same as it was a year ago. Rising rates are going to negate any price drops.

Not sure renting is the answer either. I just read an article on affordable rents and availability in York Region. No relief there. It’s either sad or funny depending on your point of view. I’m keeping the house, slept like a baby last night thanks.

#87 Jungle on 09.07.18 at 8:55 am

Sorry not a realtor but went from bear to bull on Gta due to strength I’m economy, population growth and a world class mega city that has emerged.

Don’t believe the debt surveys used to sell bankruptcy and credit consolidation – statscan says 30% Canadians are Debt free, homeowners have lots of options, refinance, heloc, rent basement or room on air bnb, people will cut back before the lose their homes.

Delinquency rate is near all time low thanks to economy and loss provisions have lowered at most banks All? In recent earnings.

I can’t speak for the rest of the country I don’t believe it’s anywhere near as strong as Gta

#88 SHYSTER on 09.07.18 at 9:18 am

Those SHYSTER posts by the ‘Happy Housing Crash’ person are awesome! Keep them coming lol

#89 dharma bum on 09.07.18 at 9:26 am

I just listed my old ma’s house for $2.75 M, in the 416.
That was yesterday.
So far, no calls. No showings. No inquiries. No offers.
Crickets.
I’m getting nervous.
It’s been 24 hours, and nuthin’
The last 2 times I listed a detached single family home in the GTA, they sold on the SAME DAY!
First time in 1989.
Second time in 2016.
Oh well, I guess ♬the times they are a ♪ chaaaaaangin’!♫

#90 Lee on 09.07.18 at 9:38 am

Financial Post – Ontario suffers 81,000 (mostly part-time) jobs in August. Likely a result of a $14 minimum wage. Also, to call them “part-time” is ridiculous. I would guess most are restaurant jobs where workers log only half of their hours on the books so it looks like part-time to Revenue Canada. What could be causing such a lack of confidence in employers in Canada?

#91 Oft deleted much maligned stock.picker on 09.07.18 at 9:40 am

This proves what ‘wacky investors’ like myself and every national economist who’s been calling bullshit on Poloz lying for what amounts to criminal fraud.

https://www.bnnbloomberg.ca/wacky-canadian-economy-lost-51-600-jobs-led-by-ontario-plunge-1.1134558

#92 Smoking Man on 09.07.18 at 9:41 am

Trump adds 200k jobs in Aug
Trudeau loses 50k.

CAD unemployment up to 6%
USA is down to 3.5

Free enterprise vs communism.

No wonder Poloz put the brakes on rate hikes. He sees the numbers before we do..

With Nafta about to die on the operating table. Still have time convert CAD to USD.

Bet Accordingly.

#93 The Real Mark on 09.07.18 at 9:58 am

Jobs report a disaster. 51,600 jobs lost nationwide, 80,100 in Ontario. So a few gains elsewhere.

I’ve been shaking my head at the Poloz’s delusion that rate hikes might be required, but this data is so catastrophic that its pretty clear that the Bank of Canada will be cutting going forward.

Professional Services sector was a disaster with 22,100 job losses.

Of course rate cuts won’t help leveraged homeowners — diminishing creditworthiness in an asset class clearly in substantial overcapacity will continue to expand spreads.

#94 OttawaMike on 09.07.18 at 10:01 am

Even Satan is bailing on housing and has placed his house on the market:

https://www.har.com/4006-timber-falls-court/sale_9985417

#95 Dissident on 09.07.18 at 10:30 am

Good morning doggies! Fresh new employment numbers are glowing on the TV screen in my office’s lounge – Canada lost 51,600 jobs in August, and employment is now up to 6%. SO MUCH FOR YOUR JOB CLAIMS, REALTORS! :D HAH! Economists had expected a 5,000 job increase. Take that, ‘shysters’. Lol.

I also saw the “TREB” numbers yesterday and scoffed at their attempt to say that prices rose by some 8% or something like that. Pfft. Sure! I’m sure these are ‘Franken-numbers’ and don’t tell the whole story.

#96 John ex Condo owner on 09.07.18 at 10:30 am

#60 crowdedelevatorfartz on 09.06.18 at 9:58 pm

@#46 Jungle
“BTW most detach buyers @ 1m+ price likely moving up the property ladder and already IN the market before, having made killer gains. Even first time buyers on condos have made a killing.”
+++++

Talk to us in 6 months Realtor….. Its a jungle out there.
_________________________________________
You would have to be insane, stupid or just an ignorant idiot to purchase a condo now. Owners are dumping them as fast as possible and when they don’t sell they simply rent them or AirBNB them. The only reason anyone bought a condo is it was cheaper than a real home with land. As they start to default guess who gets to pay for all of those fees? The dumb ones that didn’t sell. The fees are still spread out to whoever is occupying the building. Ten owners leave and default your fees go up to make it up. Simple math.

#97 Uzurpator on 09.07.18 at 10:31 am

#36 Christine Everhardt on 09.06.18 at 7:34 pm
Let’s say I am the owner of the house you rent and the silly investor you where wondering about in your post #36!
You assumed that 2,888.000 paid, where I had spend only 200k. Plus while 4 tenants paid $137500 for the past 5 years and price went up approximately $250000, my gain is about: 137k+250k=387k -40k if I sell netting 340k.
I will have to pay tax only for the difference: since I moved out and deposition date. If I ended up with +300k after tax what is wrong with that?
Back to you… :-)

#98 Dissident on 09.07.18 at 10:33 am

#94 OttawaMike on 09.07.18 at 10:01 am

Wow, that is truly hideous! Lol.

Even the real estate agent’s jacket matches the interior.

#99 Dissident on 09.07.18 at 10:34 am

Correction – meant to say *UN*employment is up to 6%. But you knew that.

#100 IHCTD9 on 09.07.18 at 10:45 am

#93 The Real Mark on 09.07.18 at 9:58 am
Jobs report a disaster. 51,600 jobs lost nationwide, 80,100 in Ontario. So a few gains elsewhere.

I’ve been shaking my head at the Poloz’s delusion that rate hikes might be required, but this data is so catastrophic that its pretty clear that the Bank of Canada will be cutting going forward.

Professional Services sector was a disaster with 22,100 job losses.
_____

Aye, if you are an unfortunate Ontarian, it might be time to stop reading the news regarding our Provincial economy.

“Do not send to know for whom the bell tolls…

…it tolls for you”

#101 45north on 09.07.18 at 10:45 am

Nonplused: Based on the title I initially thought you might be talking about the “anonymous” Op.Ed. piece the NYT’s ran yesterday:
https://www.nytimes.com/2018/09/05/opinion/trump-white-house-anonymous-resistance.html
At least Trump didn’t fall for it fully, questioning the authenticy of the piece and whether the writer in fact existed (although somebody had to write it).

Jonathan Freedland wrote the book The Plot Against the President.

https://www.goodreads.com/book/show/36628438-the-plot-against-the-president?ac=1&from_search=true

The book basically parallels the story in the New York Times: the President is insane and is stopped from disaster by insiders dedicated to preserving the peace. The book is prefaced “This novel is entirely a work of action. The names, characters and incidents portrayed in it are the work of the author’s imagination. Any resemblance to actual persons, living or dead, events or localities is entirely coincidental.”

And one has to wonder, if there is some sort of secret cabal within the Trump administration working to thwart certain parts of Trump’s agenda but move others forward depending on whether they agree with that particular item, why on earth would they publish word of their existence? It looks much more like an external hit piece similar to the Steele dossier. A complete fabrication.

They would publish word of their existence for recognition and validation. There’s an irony here: the piece in the New York Times says that Trump’s greatest failing is his lack of inward morality but the secret cabal that you mention has the same failing – it’s lack of inward morality. To say it again, this secret cabal needs recognition and validation from an outward source. They need to hear the audience clapping.

#102 Remembrancer on 09.07.18 at 10:53 am

#94 OttawaMike on 09.07.18 at 10:01 am

“Dramatic” 2 story living space, that’s one word for it…

#103 Ponzius Pilatus on 09.07.18 at 10:56 am

Most of the lost jobs were realtors and other jobs tied (not tide) to real estate.
That’s what happens when you build an economy on people selling real estate to each other.
In BC, about 30% of the economy is RE related.
Not good, not good.

#104 Mattl on 09.07.18 at 11:01 am

Uzurpator on 09.07.18 at 10:31 am
#36 Christine Everhardt on 09.06.18 at 7:34 pm
Let’s say I am the owner of the house you rent and the silly investor you where wondering about in your post #36!
You assumed that 2,888.000 paid, where I had spend only 200k. Plus while 4 tenants paid $137500 for the past 5 years and price went up approximately $250000, my gain is about: 137k+250k=387k -40k if I sell netting 340k.
I will have to pay tax only for the difference: since I moved out and deposition date. If I ended up with +300k after tax what is wrong with that?
Back to you… :-)
———————————————————
Exactly. The renters bragging about getting one over on their landlord crack me up. The landmord made a fortune on the house they are paying 40k a year to rent. As if renters have been the big winners the past decade of insane RE growth.

Or the guys that claim 1% a year to maintain a home. As if maintenance costs go up with escalating RE prices. A home that was 500K 12 years ago and is now 2.2M doesn’t require 4x as much maintenance.

#105 IHCTD9 on 09.07.18 at 11:17 am

#70 Renter’s Revenge! on 09.07.18 at 6:40 am
#36 Christine Everhardt on 09.06.18 at 7:34 pm

If this was an investment property, and someone paid $2,888,000 for it, and then collected my $3,200 in monthly rent ($38,400 per year), less $9,000 for property taxes and, say, $2,000 a year for repairs & maintenance, someone would net $27,400 per year in income.
$27,400 / $2,888,000 = 0.95%.

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

I think you’re off by a factor of 10 in your estimate of maintenance costs. Most sources I could find say to set aside 1% of the house’s value each year to pay for maintenance. So, $9,000 for property tax plus $29,000 equals $38,000 (your entire rent). That house’s cap rate is zero. Probably why the owner wants of offload it on to you.
_____

Everyone is doing the math like some dude bought the house for cash – when more likely it would be a mortgage:

Monthly costs:

Mortgage – 13,970.00 (3.2%)
Taxes – 750.00
Maintenance – 400.00
Insurance – 400.00
Total: 15,520.00 month

I don’t think I could burn money as fast with a barrel of Napalm as I could by buying this house as an “investment property”.

#106 Remembrancer on 09.07.18 at 11:38 am

#101 45north on 09.07.18 at 10:45 am
They need to hear the audience clapping.
———————————————————-

I’d settle for the crazy to be dialed back from 11 a bit…

#107 IHCTD9 on 09.07.18 at 11:46 am

#97 Uzurpator on 09.07.18 at 10:31 am
#36 Christine Everhardt on 09.06.18 at 7:34 pm
Let’s say I am the owner of the house you rent and the silly investor you where wondering about in your post #36!
You assumed that 2,888.000 paid, where I had spend only 200k. Plus while 4 tenants paid $137500 for the past 5 years and price went up approximately $250000, my gain is about: 137k+250k=387k -40k if I sell netting 340k.
I will have to pay tax only for the difference: since I moved out and deposition date. If I ended up with +300k after tax what is wrong with that?
Back to you… :-)
_____

You are banking on appreciation, have not accounted for cost of borrowing, or taxation at your marginal rate on the rental income, or insurance, vacancies, realistic maintenance, opportunity loss, time/labour investment and more.

That’s what is wrong with it – it’s total pie in the sky la-la land math.

I know a few landlords – they all have day jobs.

#108 IHCTD9 on 09.07.18 at 11:49 am

#102 Remembrancer on 09.07.18 at 10:53 am
#94 OttawaMike on 09.07.18 at 10:01 am

“Dramatic” 2 story living space, that’s one word for it…
___

That’s code for “needs 100% full gut and reno.”

#109 Stan Brooks on 09.07.18 at 11:56 am

Lie hard when times are difficult.

Canada’s ever-volatile labour report posts ‘messy’ results for August

https://ca.finance.yahoo.com/news/newsalert-statistics-canada-says-economy-123404778.html

The economy lost 51,600 net jobs last month in a decrease that helped drive the national unemployment rate to six per cent, up from 5.8 per cent in July, Statistics Canada reported Friday in its monthly labour force survey.

Now it is a statistical noise when quite a number of jobs are lost. funny.

#110 SilverSon on 09.07.18 at 12:03 pm

“tell it to the REITs…perhaps they ‘are not people’?”

Sure they are people … they just aren’t making money by collecting rent as Garth said. In most cases REITs can’t change rents on the buildings they buy due to rent control guidelines. What they are doing is buying buildings in which they figure they can improve profitability by making investments that drive down operating cost. Since they don’t have to refund rent, the operating cost reductions go directly to the bottom line which drives up the building’s cap rate.

#111 millmech on 09.07.18 at 12:06 pm

#104 Mattl
Check out this listing,Land For Sale | 115 Timberstone Place, Penticton, BC., a 68% price drop.

Seeing houses are starting to go below the $300s now, seeing price drops of 8%+ on condos as well.
When I was up visiting friends in the Okanagan on the long weekend and one acquaintance was looking at listing his 2bdrm 1 bth for $525,000 but declined as a bigger and better house within two blocks is listed for just over $400,000 and no bites.
I believe the decline has just started and when the construction jobs leave so will the people as a lot of the wine industry jobs are paying $12.65/hr, which makes it a tough go of it.

#112 TSLA up in Smoke on 09.07.18 at 12:07 pm

LOL.. he knows his moister followers well……….

https://www.theguardian.com/technology/2018/sep/07/tesla-chief-elon-musk-smokes-marijuana-on-live-web-show

#113 The Real Mark on 09.07.18 at 12:08 pm

” As if maintenance costs go up with escalating RE prices.”

Actually maintenance costs do scale with escalating RE prices as, at the margin, people who maintain RE could be working on delivering new RE to market, rather than just maintaining existing RE.

Perhaps its not a perfect scaling, as there is a land value component (although property taxes often scale with land values), but there is a scaling nonetheless.

Likewise, when property prices go down, there are almost certainly to be many out of work tradespeople who will gladly accomplish maintenance tasks for considerably less money.

#114 Jungle on 09.07.18 at 12:11 pm

# 85 the real kip

Believe it or not buying is still the better option but only in the east Gta, home ownership starter home still reachable for an average family income. If you have money for Toronto who cares ? A lot of people do have big income and equity, they can afford. Who knows you could even move up one day climb the property
Ladder.

You do not want to be renting in the Gta with a rental crises and no solution

The fact is the world has changed and there is now a
Huge inequality in wealth, income, mainly from high re prices causing big social housing issues.

This is not going back to easy days of cheap housing and rents now that Gta is a global, growing and world class city

#115 Jungle on 09.07.18 at 12:19 pm

Poloz seems very nervous to raise rates, “wait and see” while we fall behind the fed.

Today’s job report might put poloz on hold in OCT. So rates won’t be crashing the housing market anytime soon, maybe not at all since yield curve is signalling recession after Next year.

Current odds of an Oct hike are 60%. – Garth

#116 paul on 09.07.18 at 12:23 pm

#103 Ponzius Pilatus on 09.07.18 at 10:56 am

Most of the lost jobs were realtors and other jobs tied (not tide) to real estate.
That’s what happens when you build an economy on people selling real estate to each other.
In BC, about 30% of the economy is RE related.
Not good, not good.
—————————————————————–

#117 Ogopogo on 09.07.18 at 12:27 pm

Bravo, Garth, for hoisting the unethical, dishonest, scummy shills with their own petard. I’m simply disgusted to live in a country where arguably the most important industry remains largely unregulated. How can a scumbucket such as the TREB’s President lie with such impunity?

Where is Cryin’ Justin in all this? The MSM is so corrupt it reports verbatim such vile lies.

#118 paul on 09.07.18 at 12:29 pm

#103 Ponzius Pilatus on 09.07.18 at 10:56 am

Most of the lost jobs were realtors and other jobs tied (not tide) to real estate.
That’s what happens when you build an economy on people selling real estate to each other.
In BC, about 30% of the economy is RE related.
Not good, not good.

—————————————————————–Realtors are not factored in unemployment numbers.
It you are licensed you are considered employed no U I benefits.

#119 Mattl on 09.07.18 at 12:34 pm

#105 – IHCTD9

You really think the owner of that property has the whole value of the home mortgaged at above market mortgage rates? You really think that’s a reasonable assumption?

More likely he has owned the home for 8 or so years (Canadian median) and there is a 40% chance he has no mortgage at all. If he does have a mortgage, odds are it is a fraction of full value of the home. Much more likely is a mortgage in line with when he purchased the home, without knowing anything about him I’m guessing closer to 500K then 1MM much less 2MM.

I find it so strange that everyone assumes that their landlord is drowning in debt. I have a family member that pays under 2K to live in YVR, SFH run down home. Lot value is around 1.4MM. The owner owns 20+ similar properties and have probably realized 10-20MM in capital appreciation on those homes over the past decade. I can assure you, this person is NOT taking advantage of their landlord. The rent just needs to cover the carrying cost for these guys, they have made absolute fortunes on RE and if a downturn occurs they will just buy more properties.

Bizzaro land – rents in GTA and YVR have gone up dramatically, as have property values. You may find this hard to believe but low rates, rent increases and massive uplifts in property values are not bad things for landlords. The renter in the scenario above is getting a great deal, and they would be nuts to buy that house TODAY, but lets not feel too bad for their landlord.

#120 IHCTD9 on 09.07.18 at 12:46 pm

#104 Mattl on 09.07.18 at 11:01 am

The renters bragging about getting one over on their landlord crack me up. The landmord made a fortune on the house they are paying 40k a year to rent. As if renters have been the big winners the past decade of insane RE growth.
______________________________

There’s still plenty to chuckle about – not the least of which is a long time landlord trying to sell an apartment for a market value that thoroughly obliterates any chance of the new owner making a profit on the place.

Trying to sell an apartment that brings in 3.2K/mo but costs 15K/mo means the new owner has to live there to get anything at all out of the deal.

I’d sell the new owner a 205 litre drum of high explosive for his bank account for a lot less.

The minute we need to talk about the landlord having bought 20 years ago at 1/10 the current price so he makes a profit, just reinforces the fact that he will be the only guy to ever make money on the place.

It then follows that the biggest loser on the same building will be the bonehead that paid him asking for it.

#121 Asterix1 on 09.07.18 at 12:50 pm

#115 Jungle on 09.07.18 at 12:19 pm
“So rates won’t be crashing the housing market anytime soon, maybe not at all….
____________________________________________

The housing market in GTA has already fallen greatly. Toronto single detached prices down an average of -21% since the highs. Richmond Hill at -31%! Oh yeah prices never go down!

Rates will go up and keep pushing prices down. Yet, debt levels, tightening of credit and a change in market psychology are the real market killers.

TREB lies will keep getting published, banking economists will follow with their garbage reports hoping to keep FOMO alive. Condos are next on chopping block!

“First comes luxury.
Then comes singles and townhouses.
Then comes condo.
Realtor sucking his thumb,
Wetting his pants”

#122 Stan Brooks on 09.07.18 at 12:51 pm


#114 Jungle on 09.07.18 at 12:11 pm
# 85 the real kip

Believe it or not buying is still the better option but only in the east Gta, home ownership starter home still reachable for an average family income. If you have money for Toronto who cares ? A lot of people do have big income and equity, they can afford. Who knows you could even move up one day climb the property
Ladder.

You do not want to be renting in the Gta with a rental crises and no solution

The fact is the world has changed and there is now a
Huge inequality in wealth, income, mainly from high re prices causing big social housing issues.

This is not going back to easy days of cheap housing and rents now that Gta is a global, growing and world class city

Good, you can stay and pay the premium for that ‘lifestyle’, I am sure it is worth it for you.

My correction for the rest of the readers:
You do not want to be LIVING in the Gta with a HOUSING and rental crises and no solution.

You sound desperate. man up and look for another job (good luck on that in a city you and your colleagues literally ruined to the ground) , those real estate glorious times are not coming back.

#123 X on 09.07.18 at 1:17 pm

31 Burlington Shyster on 09.06.18 at 7:08 pm

The average detached price is at the lowest point this year. – Garth

—————–

Yet 8.5% higher than last year….not bad for buying a super overheated top of the once in a lifetime bubble.

Tsx is up what, 5%? CAD down 3% and inflation up 3%? Soooooo, tell me again what was the better investment?

It’s not a contest. Grow up. – Garth

Yet to realize that 8.5% gain on RE you have to pay 4.5% commission vs 9.99 for an equity transaction. 5% TSX gain may still will out.

#124 Mattl on 09.07.18 at 1:23 pm

#111 – Timberstone is a bare lot for 275K. The reduction is due to unbundling of the home build.

I’m 100% convinced central Okanagan RE is going to get beat up – YVR melt, foreigners tax ,rising rates are a perfect storm. Just haven’t seen any evidence of it in my area.

#125 Shawn Allen on 09.07.18 at 1:29 pm

Unemployment Figures

I trust that these are reported honestly in that no one is attempting to manipulate them. And one can argue about the definition of who is unemployed.

But in ANY CASE the figures are subject to a large error.

First, statistical error. The results are from a survey of households. Even a perfectly random sample has a statistical error. Statistics Canada says:

“Confidence intervals provide another way of looking at the variability inherent in estimates of sample surveys. To illustrate how to calculate the confidence interval, let us say that one month the published estimate for total employment rose by 16,000 to reach 17,800,000. The associated standard error for the movement estimate is 28,800. Using the standard error to build the confidence intervals, we can say that:

“There are approximately nineteen chances in twenty (95%) that the real value of the movement between the two months falls within the range -41,600 to +73,600 (16,000 + or – two standard errors).”

I mean, LOOK at that statistical error rate and that’s just the 19 times out of 20. It’s plus or minus 58,000 19 times out of 20. And that is only the statistical error.

Oh, and it’s not easy to draw a perfectly random sample of households so therefore the actual error rate is larger than a random sample.

Statistics Canada says:

“Errors that are not related to sampling may occur at almost every phase of a survey operation. Interviewers may misunderstand instructions, respondents may make errors in answering questions, the answers may be incorrectly entered, and errors may be introduced in the processing and tabulation of the data. These are all examples of non-sampling errors.”

The result is that monthly job change numbers cannot be relied. You have to at least look at the average over several months to a year. You can interpret trends over time. But to think that the month to month number is reliable is to ignore the error term fully acknowledged by Statistics Canada.

So jobs were way up in July and way down in August? Do you think, maybe, just maybe, that was just statistical and other errors bouncing around?

Sorry, doomers and unemployable types but the economy is doing well and this August report cannot be relied on as any change to that fact.

#126 Smoking Man on 09.07.18 at 1:30 pm

One man’s diversity equals another man’s exclusion.
Privilege is attitude not skin color.
Men and woman are different.

Case closed the science is settled.

#127 Tony on 09.07.18 at 2:11 pm

Re: #115 Jungle on 09.07.18 at 12:19 pm

Australia raised their interest rates in the face of a falling housing market. Poloz is out of touch with the real world that’s why Canadians have the highest debt in the entire world. A trade deal should be sealed before the end of September before going to congress. Not raising interest rates in Canada is a sign of bad faith when negotiating trade deals.

#128 Tony on 09.07.18 at 2:20 pm

Re: #112 TSLA up in Smoke on 09.07.18 at 12:07 pm

My brother just covered his short today. Both of us will be shorting most of the Canadian marijuana stocks. I’ll be posting the day we go short. It’ll be around 3 weeks after the first sale in Canada. A lot of doubled money in the offing… megabucks!!

#129 millmech on 09.07.18 at 2:28 pm

#114 Jungle
Why buy, in the markets I am watching and waiting seeing price drops in the double digits and same units/ houses with 20-30% price differentials.
To think if I had put in an offer on the home I wanted to buy in March for retirement I would be under water by about $200k at this moment and by next year I would be underwater by $300k(one year loss). This reminds me of the Bre-X/Nortel moments.
Keep Pumping It!

#130 AGuyInVancouver on 09.07.18 at 3:09 pm

#87 Jungle on 09.07.18 at 8:55 am
Sorry not a realtor but went from bear to bull on Gta due to strength I’m economy, population growth and a world class mega city that has emerged.

Don’t believe the debt surveys used to sell bankruptcy and credit consolidation – statscan says 30% Canadians are Debt free, homeowners have lots of options, refinance, heloc, rent basement or room on air bnb, people will cut back before the lose their homes.

Delinquency rate is near all time low thanks to economy and loss provisions have lowered at most banks All? In recent earnings.

I can’t speak for the rest of the country I don’t believe it’s anywhere near as strong as Gta
_ _ _
LOL, did you miss the news this morning that the vast majority of Canada’s August job losses were concentrated in Ontario?

As to Vancouver, the houses that I drive by for sale have been on the market for months.

#131 James on 09.07.18 at 3:28 pm

#126 Smoking Man on 09.07.18 at 1:30 pm

One man’s diversity equals another man’s exclusion.
Privilege is attitude not skin color.
Men and woman are different.

Case closed the science is settled.
___________________________________________
Men and woman are different? Did mama hand you back your Jimmy balls? Old man did you just figure that one out?

#132 Jorge on 09.07.18 at 3:32 pm

A friend is trying to buy a house in MTL on island right now and is finding it incredibly difficult. Houses still have multiple bids and they were outbid on the last house because the winner (of the 5 bidders involved) waived the inspection (bad idea in MTL with hard winters wrecking havoc on foundations and roofs etc). Wondering if you are seeing/hearing the same and if Montreal will feel this RE crash at all.

——–

This has been my own -personal- experience too, as we’re in the market as a buyer. House listed, sells on same day with multiple offers and over asking. Areas such as Westmount are over 50% foreign buyers, West island over 20%, and no, it’s not just the Chinese. The lack of a tax while BC and Ontario have one doesn’t help.

Garth, any insights?

Montreal prices are 50% or less of Toronto comparables, and it is the second-biggest Canadian market. Stop whining. – Garth

#133 Stan Brooks on 09.07.18 at 3:49 pm

T2’s carbon tax is working.

Biting cold in Canada this winter.

https://www.farmersalmanac.com/winter-forecast-canada-2019-32458

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

Jobs (lost) report follow up:

The losses were concentrated in areas like construction and professional, scientific and technical services.

Lets see why these sectors were badly hit. The breakdown of major energy projects that have been cancelled since the Liberals took office in 2015:
Energy East: $15.1 billion
– Pacific Northwest LNG: $35 billion
– Northern Gateway: $7.9 billion
– Aurora LNG: $28 billion
– Grassy Point LNG: $15 billion.
Total Projects cancelled = $101 Billion Dollars.

The Canadian Association of Petroleum Producers (CAPP) released figures earlier this year showing total capital spending on Canadian oil and natural gas was $45 billion in 2017, down 19 per cent from 2016 and 46 per cent from 2014.

#134 mike from mtl on 09.07.18 at 4:27 pm

#132 Jorge on 09.07.18 at 3:32 pm

Montreal prices are 50% or less of Toronto comparables, and it is the second-biggest Canadian market. Stop whining. – Garth

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

Not in Westmount.

Plus to generalise the market here is silly – there’s a huge range from 200k welfare crap shacks, 500k condos to eight figure castles on the hill.

#135 Howord Legerre on 09.08.18 at 3:10 pm

The difference between savers and investors. Savers are forced to use a manipulated money system but investors actually think they are getting ahead of a manipulated money system.