Gravity

Well, remind me to never again write about climate change. Or Trump. Cannabis. The stock market. The UN. Bonds. The Fed. Gold or guns.

Dogs seem okay, though. Plus hormones and real estate (sometimes). If I stray into other subjects and I’m sure to be ripped a new one by all the macroeconomists, political scientists and Nobel Laureates who have pilgrimaged to the steerage section of this pathetic blog. We are blessed to have you all in one place. Just like a Texas juvenile detention centre. Fun!

In a moment, some insight from a realtor, of all people. First, this piteous letter just arrived:

The last time I e-mailed you, you posted my e-mail on your website and basically made fun of me for not being financially responsible. I am e-mailing again because my situation has changed and I want some advice.

I’m looking for a plan for a young couple to cruise into retirement. Can you help?

We are currently living in Calgary. I am a teacher (28) making roughly $85,000 a year; take home cheque is roughly $4450/mt. She (27) is a nurse making $65,000 a year; take home cheque is roughly $1600/bi weekly.  We have about $16,500 total in TFSAs and $7,000 in an emergency fund in a savings account.

We own a 1000 square foot bungalow purchased last year for 375,000 ($350k mortgage). Houses around selling for that still. We also own a condo purchased in 2015 for $300,000 ($210k left on mortgage); similar units now listed for $260,000. We currently rent it out for $1400 a month. We are losing $220/mt (Condo fees, cash call, insurance, tax, etc.).

We both have a car payment student loans. I want to sell both places, take the loss and start renting. I am very worried about our future. I do not know what to do about the condo. I cannot see our renter renewing her lease when she could find another place cheaper. We also want to have kids soon.

Help me with my life Garth! Be the good man you know you can be.

Seriously. This dude came here once for advice (‘should I sell my Calgary condo?’), was warned and scorned, slunk off and ignored it. Now he’s back, looking for a path from age 28 to retirement. And he throws his miserable financial carcass upon my goodness. Sheesh.

Obviously this is a nice little example of how the nesting instinct can destroy your finances. Calgary is a rotten real estate market and has been so for most of a decade. These unfortunates not only bought a house with 5% down, which will deliver a loss when sold, but they also hung on to a loser condo. Now they gutted their savings, the unit’s worth way less, plus they’ve been shedding about $750 every month ($220 in cash flow loss and $90,000 in equity making zip). After a sales struggle and commission, the losses will deepen.

All in, real estate will deliver at least $120,000 in net losses, little of it deductible. Once all is sold they’ll clear maybe $5,000 in equity from the two properties after commissions and mortgage break fees. Given their level of savings, this escapade will set them back at least five years. Now they want children and retirement. Thank their lucky stars they’ve snared government DB pensions. But they’re still pooched.

And, finally, I have no idea what he’s asking of me. A blessing for stupidity? If he’d listened to the advice of a year ago, sold the condo, took a small loss, rented and saved, life would be more promising. Calgary ain’t coming back for a long time. More importantly, these kids don’t have the resources or cash flow to be buying properties.

The Big Mistake? Being human. People cannot admit to ever having made an investment mistake, so they hang on. Stocks, condos, MICs. Even when the red ink flows thicker monthly. By refusing to sell, take a loss and get out, they gamble further. It rarely ends well. Especially now. The housing bulls are facing their greatest challenge in a generation. It’s debt.

Instead of using ten years of cheap rates to tackle, eradicate, reduce and crush their indebtedness, Canadians did the opposite. They’ve borrowed their snouts off. Household debt at $2+ trillion is bigger than the entire economy and most of it (67%) is in long-term mortgages – destined to reset at higher costs. Now the era of emergency rates is over. Maybe for good. Meanwhile the asset most of that debt was used for (real estate) is under pressure. It’s a vise. Relentless. Will tighten again in nine days.

Toronto realtor John Pasalis posted a nice chart-based summary of this mess:

Click the chart to enlarge.

Real estate’s historic 3% appreciation rate soared to 7% as the Bank of Canada dropped its key rate to 1%. Then as oil collapsed in 2015 the bankers shocked everyone by crashing the rate 50%, to just half a point. Housing became a speculative mania as debt soared off the charts. After all, if you could borrow at 2% and grab a house that was appreciating at 30%, why not?

“It didn’t matter that any rent that could be gained wasn’t high enough to cover the carrying costs of the home (mortgage, taxes, etc.) because the value of the home was increasing by more than the money they were out of pocket each month.,” Pasalis points out.

The period of loose credit and very low interest rates led to a surge not only in house prices but a surge in debt as many of these investment properties were financed entirely with debt. In many cases, home owners were borrowing $150-$200K against their existing home to use as a down payment on the investment properties they purchased.

But every housing bubble is almost always followed by a tightening of credit. Policy makers typically increase interest rates and/or tighten the qualifying requirements for any new credit in order to cool down the growth in household debt. This is precisely the trend we have seen since the summer of 2017.

The Bank of Canada began to increase their overnight in the summer of 2017, eventually increasing it by a full percentage point in one year. Then, on January 1, 2018 the Office of the Superintendent of Financial Institutions introduced a stress test on mortgages that required all uninsured mortgages to be approved under a new “stress test” interest rate which is roughly 2% higher than the contract rate of the mortgage.

So here we are. Mortgage costs rising in the last few days. The central bank moving next Wednesday. More hikes coming in the first half of 2019. As the Toronto broker points out, a couple earning $125,000 three years ago could afford an $800,000 house. Today they can spend $625,000. In a year that could be $580,000.

There is nothing. Not economic growth. Not Trumpenomics. Not immigration. Not buyer incentives. Nothing that can compete with the lethal combination of debt and rising rates. The letter at the top of this column is the future. Don’t make it yours. Gravity’s back.

150 comments ↓

#1 Victoria Real Estate Update on 10.15.18 at 5:18 pm

TRUE OR FALSE (searching for a grain of truth in the unsubstantiated claims of Victoria real estate “professionals”)

“House prices continue to climb across Greater Victoria. The Victoria R/E board’s realtor benchmark home price index shows that single family home prices in September were 7% higher than a year ago.

I know their price index doesn’t actually use real houses, condos or townhouses, but the imaginary houses, condos and townhouses that the realtors do use for that index must be really cool because the results always make my real estate friends happy.

And that realtor-approved price index shows that those who predicted that prices would fall at some point have been proven wrong.

The problem with waiting for lower prices in Victoria is that it will never happen. All of my R/E colleagues agree with me – it’s different here. Victoria changed forever in 2015 when wealthy buyers from Asia suddenly discovered our city.

Falling prices are for cities like Toronto, San Francisco, Los Angeles, San Diego, Miami and Phoenix. Not Victoria.

And falling demand is no indication that prices will fall. That’s angry doomer BS. They have no proof. Leave it to a knowledgeable and credible real estate professional like me to give you the lowdown on real estate… not them.”

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

The Victoria R/E board’s own single family home price data – the widely-used and reliable median price – fell below year-ago levels in September.

Greater Victoria – single family home median price:

2018:
September: – 1%
August: + 4%
July: + 5%
June: + 1%
May: + 7%
April: + 10%
March: + 7%
February: + 6%
January: + 15%

2017:
December: + 13%
November: + 7%
October: + 12%
September: + 19%
(Source: Victoria’s R/E board)

(continued)

#2 Victoria Real Estate Update on 10.15.18 at 5:21 pm

Unfortunately for far too many Victoria mortgage holders the year-over-year price trend has been changing from positive to negative in recent months (see the year-over-year median price change data in my previous post).

That prices are turning downward shouldn’t be surprising to those who have done even a small amount of research about housing bubbles.

It’s simple – 200 years of housing bubble history has shown that prices in bubble markets always fall back to the long-term mean, and it never happens slowly or in a safe, controlled manner.

First sales fall (already happened), then prices.

The 2006 US housing melt demonstrated what happens with bubble cities. Prices in bubbly San Francisco, for example, had to fall – 45% to get back to the long-term mean. And that mortgage holder nightmare took only 3 years to play out.

In contrast, non bubble cities like Shreveport, Louisiana (-1%), Bismarck, North Dakota (-1%), Texarkana, Arkansas (-2%), Oklahoma City, Oklahoma (-3%), San Antonio, Texas (-4%), Great Falls, Montana (-4%) and Lexington Kentucky (-4%) experienced miniscule price corrections. (Sources: Case-Shiller Index, All-Transactions House Price Index)

#3 Muttley O'Toole on 10.15.18 at 5:28 pm

The letter confirms my prejudice; young people today are not being taught the realities of life, but instead are being told “everything will be O.K.”
There is no option other than to bite the bullet,take the financial hit & delay the family plans; and of course, invest as espoused by Garth & co.

#4 Graeme on 10.15.18 at 5:37 pm

The central bank won’t be raising rates on Wednesday. That’s flat out fear mongering and just plain silly.

That makes justthree horsemen of the apocalypse. Deal with it.

Next Wednesday and yes, after today’s report, it’s a done deal. – Garth

#5 renter in Surrey on 10.15.18 at 5:49 pm

There is nothing. Not economic growth. Not Trumpenomics. Not immigration.

——————————————————————————————–

Yet prices in wetland are not materially going down.
So maybe there is something, we just can’t see it.

#6 Victor V on 10.15.18 at 5:57 pm

#4 Graeme on 10.15.18 at 5:37 pm
The central bank won’t be raising rates on Wednesday. That’s flat out fear mongering and just plain silly.

That makes justthree horsemen of the apocalypse. Deal with it.

=====
=====

https://business.financialpost.com/investing/nafta-update-will-test-polozs-caution-on-canadian-rate-hikes

The new North American trade deal struck on Sunday could allow the Bank of Canada to pick up the pace of interest rates hikes, according to economists at some of the country’s biggest banks.

With the introduction of the United States-Mexico-Canada Agreement, an October rate hike by the central bank now appears to be a lock, analysts say, with more expected to follow in 2019.

Bank of Montreal chief economist Douglas Porter said in a note that the agreement “is a major relief for Canada, lifting a heavy cloud of uncertainty from the outlook.” He added that BMO is now calling for three rate hikes in 2019, in January, April and July.

#7 SteveoIII on 10.15.18 at 5:57 pm

Brilliant analysis and message., Garth.

And not a whiff of the tiresome political rhetoric ;)

#8 crowdedelevatorfartz on 10.15.18 at 6:00 pm

@#176 RabbitOne
“Just to add I support you Crowded. Mid 80s beer price must be cheaper than mid 90s. I suspect 20-30% less than a buck a beer. ”
++++
I admire your obvious good taste and brilliance.
May you go forth and multiply…….

#9 MF on 10.15.18 at 6:02 pm

#3 Muttley O’Toole on 10.15.18 at 5:28 pm

No.

First off, having a positive attitude is important for success and health.

and second, the “realities of life” have been that anyone who purchased real estate in the last 10 years has done well. Meanwhile we renters have seen our rents increase the whole time, which makes it harder to save and invest.

You can blame the Bank of Canada, you can blame the insurance industries and the banks, you can blame realtors, but you cannot blame young people for being attracted to RE.

MF

#10 Andrew on 10.15.18 at 6:05 pm

Not related to today’s post but it was announced today. Just another small step but I know you’re magnanimous enough to admit you were wrong in a couple years when you’re off zero one day.

http://www.bnnbloomberg.ca/fidelity-starts-crypto-unit-to-serve-wall-street-customers-1.1152607

#11 The Wet One on 10.15.18 at 6:06 pm

Woo HOO!!!

And I jumped right in with both feet!

Welp. In for a penny, in for a pound right?

We’ll see how this plays out. Probably not good.

Ah well.

Death comes for us at the end. No one gets out alive and hardly anyone goes out rich, which does you no good as worm food in any event. I’ll rot just as well as Warren Buffett.

So it goes.

#12 Louie McMaster on 10.15.18 at 6:09 pm

A teacher! It would have been smarter to buy Canabis Stock for the past few years than condos. Or Canadian Banks. But it’s so hard to take a loss when you have skin in the game. Good luck!

#13 David Paquette on 10.15.18 at 6:16 pm

I do dumb things yet survive. My wife and I were looking for a home way back when – she was pregnant. I drove into an expensive neighbourhood to scout. It was winter and I got stuck on ice. I carried an axe in the truck for this event. I chipped at the ice but could not make any progress at getting out.
So I thought I am going to need a tow.

This neighbourhood was surrounded by surveillance cameras and the houses too. I went to the nearest house but did not drop the axe. My wife said it was no small wonder that no one answered the door.

So I had to deal with what I had. I hit on the brilliant idea of putting the car rugs under the drive wheels. I still remember them sailing into the wind and playing fetch. It worked. I now buy good tires when there are past their prime.

Just to annoy, I am making a strong recovery from my recent investment losses. It reminds of my father who would call me when the weather was terrible. How do you like them apples? He had great stories and toughened me up. Not to say my mother didn’t instill backbone.

#14 Ellyot Mynahzeeun on 10.15.18 at 6:20 pm

50%+ of Torontonians don’t work for more of 35-40k a year, yet the dating market expects every man to be at least 7 ft tall, athletic, have a Lakeshore condo and have a million in the bank like Garth and Ryan Lewenza.

#15 Dolce Vita on 10.15.18 at 6:21 pm

Everything you say today is SO TRUE (well, except for lightly but firmly lambasting some of us for Climate Change vehemence…guilty as charged and unrepentant).

I like the $580,000 number. Where the average house price will end up as that is, on average, what people can afford.

Just as odd and not by chance, that is what the average price trend for a house in Toronto ought to be right about now (up a bit from the 2017 trend number).

Did an average price chart using TREB numbers (f/Robinsky and 2 other sources), added a spreadsheet calculated trendline and R squared value (73% correlation to the actual data, considered a strong correlation [Nirvana if you are in the Social Sciences]):

https://i.imgur.com/2SYBufT.jpg

The sad thing is though, that number ignores human nature or the Despair Phase of an asset where even with $580,000 to spend, people will be loathe to spend it for whatever reason and that will depress price even more.

Same thing has happened at least 2 times historically as shown in the above chart (3 times after a prior peak in the early 50’s).

The $560K is -32% from the 2017 peak price. Add in the Despair Phase (and more interest rate hikes) and prices will depress further than -32% next year.

As I said about a year or more ago, -25% by the end of this quarter, -50% by mid next year. Does not seem like fantasy anymore to the naysayer Comments back then (BTW, where have all of you disappeared to?).

History repeats, as Pasalis points out and the above chart says that and painfully so.

Very bad for a lot of people like the Realtor you wrote about today.

Having said that, they are bad economic players that took good money and made it bad. They will be taken out of the economy for at least a decade.

I told you Garth, they will not listen to you, EGO and SAVE FACE are more powerful than your reasoned advice (at least, you gave it your best shot just like you did again today for the 2nd time…The Unsinkable Garth).

New economic players will emerge that can put that money to more productive use.

Schumpeter was correct.

#16 MF on 10.15.18 at 6:21 pm

“If I stray into other subjects and I’m sure to be ripped new one by all the macroeconomists, political scientists and Nobel Laureates who have pilgrimaged to the steerage section of this pathetic blog.”

-It comes with the territory.

But like you’ve said many times in your posts, your moderation is what differentiates the comments on this blog from the comments on other sites. For that we are grateful, and for that topics like climate change/stocks/bonds/911 etc. need to still be included. There are some great comments and posters who show up every night to give great input.

I actually prefer the finance talk over real estate.

MF

#17 Smartalox on 10.15.18 at 6:23 pm

On the weekend, I overheard a realtor from the Fraser Valley talking to a Vancouverite about Real Estate.

“well the run up wasn’t as big as it was in the city, until about 2016. Then all of a sudden, something happened, and the market took off!”

Based on the chart in this piece, the catalyst was the BoC cutting interest rates to 0.5%. And it’s true; a little while after that, people in Surrey, Langley and parts East started taking lines of credit against their paid off homes to speculate in Potential Estate (un-built real estate).

The greater fools did the same by re-financing their mortgages to leverage out more equity. That won’t end well, either.

When asked if he was retired, the agent from the valley (probably in his late 60s) sighed, “No, not yet. But things have been slow the last few months, so we’ve been able to spend a lot of time with our grand-kids!”

#18 Brian Ripley on 10.15.18 at 6:33 pm

To state the obvious, bull markets do not last forever, and inevitably are followed by bear markets. Likewise, economic expansions also must end at some point, followed by recessions, and recessions typically are accompanied by bear markets. John Hussman, Oct 15, 2018

I have published links to John Hussman’s full report as well as Jesse Colombo’s video on 20 charts that point to a pending equity market correction and to Jeff Gundlach’s short term view on treasury yields:

http://www.chpc.biz/history-readings/equities-and-bonds

On the same page my fantasy Plunge-O-Meter’s average pending correction for the 6 biggest cities in Canada is 51%. Toronto average SFD prices have already dropped 17%

John Hussman’s observational quote above seems simple enough. Economies are cyclical.

As Garth and others have endlessly pointed out, a balanced portfolio will mitigate extreme market moves.

But how many real estate buyers in the last decade have balanced portfolios, when for most households, real estate purchases require huge leverage to accomplish.

And that’s the rub; if balance sheet revenue is subject to deterioration, mortgage debt, which was a lubricant towards wealth, changes to a drag towards insolvency.

We are losing $220/mt (Condo fees, cash call, insurance, tax, etc… from a piteous letter writer).

Sears filed today.

#19 Dolce Vita on 10.15.18 at 6:39 pm

#5 renter in Surrey

That’s because you’re not looking for that information:

https://i.imgur.com/BLQka0C.jpg

From Steve Saretsky a few days ago (blue line).

“not materially going down”

What words will you use by the end of 1st Qtr 2019 as that price correction line continues on?

PS: A Buyers Market…already taken by REBGV.

#20 HoweStreet.com on 10.15.18 at 6:43 pm

Ross Kay on HoweStreet.com Radio:
Mystery Home Sales Disappear from Canada in September.
Chronology of a Housing Bubble.

https://www.howestreet.com/2018/10/15/mystery-home-sales-disappear-from-canada-in-september/

#21 Oakville Sucks on 10.15.18 at 6:45 pm

I passed by Mattomy Homes Oakville Office this past Saturday (Third Line and Dundas St.) and I couldn’t believe the hundreds of people lined up, cars parked along Dundas St. There was some sort of event with tents and everything.

Was is it some ploy or investor interest???

#22 O Cannabis on 10.15.18 at 6:46 pm

Chill, everyone.

If rates go up after Weednesday, we won’t even notice :)

#23 Dolce Vita on 10.15.18 at 6:57 pm

#14 Ellyot Mynahzeeun

Sour grapes much?

THAT was hilarious. Thanks for making laugh out loud (yes, some of us still prefer to type the words out in full using more than just 2 thumbs).

You poor thing.

Oh, how the times have changed.

Stick with Garth’s advice and you may well end up one of those dream guys. On the 7 ft., you’re on your own (but inside, you’ll feel that tall & women will know it).

#24 common sense on 10.15.18 at 6:59 pm

Debt and Rising rates….LOL

And Garth you really think the USA is going to raise rates as fast as they plan to?

US Spending On Interest Hits All Time High As Budget Deficit In Trump’s First Year Soars To $779 Billion

#25 Alberta Ed on 10.15.18 at 7:04 pm

Don’t forget Mr. Weed’s carbon tax on top of all that.

#26 yvr_lurker on 10.15.18 at 7:10 pm

I do clearly see the need to get rid of the Condo as it is a money-loser. However, with making 150K combined income in jobs that are as stable as they come, and with a 350K mortgage I don’t see any problem keeping the little house. No worry about job loss, and seems like a good little place if they want to start a small family. You need to live somewhere, and if one is locked in for 4 more years at a decent rate one it would be okay. The market this year has gone south, and with rising interest rates it is not likely to give too much of a return over the next few years. Sell the condo for sure, keep the house, and be happy.

#27 renter in Surrey on 10.15.18 at 7:12 pm

RE #19 Dolce Vita

That’s because you’re not looking for that information:

——————————————————————————————
I just looked.

A friend of mine bought nice 2dr condo in Coquitlam for about $270K 5-7 years ago.
Like an idiot I thought it was too high price to pay.
Today this condo is $550K.

So, when do you think similar condos will be on MLS for $270 again?
Never? You bet they won’t.

But rate might go up 0.25% this week (or might not).
So everything is fine.

#28 yvrguy on 10.15.18 at 7:16 pm

#5 renter in Surrey

That’s because you’re not looking for that information:

https://i.imgur.com/BLQka0C.jpg

From Steve Saretsky a few days ago (blue line).

“not materially going down”

What words will you use by the end of 1st Qtr 2019 as that price correction line continues on?

PS: A Buyers Market…already taken by REBGV.

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

just tune him out. every blog post about RE he chimes in with his depressing doom and gloom on sticky prices and yet the correction is evidently underway.

it’s remarkable how people read this blog day in and day out and learn nothing. it may take another 2 years for prices to reach bottom.

get a hobby. go for a walk, catch a movie. RE shouldn’t dictate your happiness.

#29 Chaddywack on 10.15.18 at 7:17 pm

Yet sellers in Vancouver still haven’t reduced their prices……

Houses on the east side are still trying to fetch around $2M and the west side…1.5x that on average from what I see.

(When did East Van become so popular?)

#30 Mikey Y on 10.15.18 at 7:18 pm

This couple is young enough with two pretty good jobs to make up for their mistakes.

Quit buying new cars and pay off the student loans. Get rid of at least one property preferably both. With that type of income, they should have no problem saving 2K per month once all debt is paid off. 2K per month in a balanced portfolio and they will be all set at 55, especially with that teacher’s pension.

#31 arfmoocat on 10.15.18 at 7:37 pm

Oct. 15th
If you haven’t been reading the business pages, you might not know that Canadian ingenuity has developed a stunning new business model: producing expensive oil and giving it away cheap.

The gap between Canadian and U.S. oil is nudging US$50 a barrel. Alberta gets around US$26 a barrel, while West Texas Intermediate is in the neighbourhood of US$72. The discount is so juicy that China has started switching away from Venezuela towards bargain-basement Canada. That tells you something — even claptrap, broken down, corruption-riddled Venezuela can’t undersell Canada’s sad-sack inability to peddle its oil….

https://nationalpost.com/opinion/kelly-mcparland-canadians-are-suckers-just-look-at-our-oil-exports

#32 Yuus bin Haad on 10.15.18 at 7:40 pm

You lost me at “this piteous letter just arrived …”. I prefer the meatier topics like climate change. Or Trump. Cannabis …

#33 Nobel Laureate on 10.15.18 at 7:45 pm

At $150,000 a year split between 2 incomes (so taxes are lower) and DB pensions this couple should be fine, although they are kind of pickled in debt. Let’s hope they don’t get divorced because that would sink them.

It’s a good time to be a government worker. Teachers especially. 10 weeks off every year, short work days, DB pension, and on average they out earn the parents sending the kids to school. Sweet. (Median income in Calgary was $67,700 in 2016, and that would include teachers.) Although I wouldn’t want to do it, kids annoy me.

#34 Gold Digging on 10.15.18 at 7:50 pm

50%+ of Torontonians don’t work for more of 35-40k a year, yet the dating market expects every man to be at least 7 ft tall, athletic, have a Lakeshore condo and have a million in the bank like Garth and Ryan Lewenza.

____________________________________________

99.99% for Vancouver. Plus you need a lambo.

#35 Maggie Davenport on 10.15.18 at 7:51 pm

They lowered interest rates and let people borrow to their eyeballs because they know the regular citizen is an ignorant economic person, IEP.

Much lower interest rates= much higher prices of real estate. Basic economics people. The oldest trick in the book, high debt means lifetime of being poor. It does not matter anymore the interest rate is low, you already locked yourself in a bunch of prepaid interest called inflated housing prices by 2, 3 maybe 4 times in 22 years.

Mortgage rates at 9%to 10% and houses in GTA, cost $200,000 to $300,000 23 to 24 years later 2% to 3% mortgage rates means $700,000 to $1,000,000 cost for houses. The decline in interest rates down 200% to 350% is around the same increase in houses prices. People wake up!

#36 oncebittwiceshy on 10.15.18 at 7:55 pm

Chaddywack: “Yet sellers in Vancouver still haven’t reduced their prices……

Houses on the east side are still trying to fetch around $2M and the west side…1.5x that on average from what I see.

(When did East Van become so popular?)”

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

Maybe you should start looking under a million then, buds

$999,999
MLS® Number: R2312910
$969,000
MLS® Number: R2280119
$949,900
MLS® Number: R2307437
$958,800
MLS® Number: R2313552

#37 East on 10.15.18 at 7:56 pm

#29 Chaddywack
(When did East Van become so popular?)

Working class neighbourhoods transitioning into quarters for the Gentry have always been popular.

Denser, more services, livelier and with more kids than the sleepy West part of town.

Not as crowded as down town, not as desolate as Point Grey. Just right.

Also, the only part of Van that is still affordable for doctors, lawyers and bankers.

#38 Wrk.dover on 10.15.18 at 7:58 pm

1972 Ontario beer $5.50/24 plus 48 cents deposit.

Memory kicked in on that.

#39 Lost...but not leased on 10.15.18 at 7:59 pm

Microsoft billionaire CO- founder Paul Allen passed away at age 65…RIP

(……won’t get into the connections to “Deep State”)

Money won’t buy happiness…. nor long life…make each day count !!!

#40 Wrk.dover on 10.15.18 at 8:00 pm

Edit, including 48 cent deposit !

#41 TheDood on 10.15.18 at 8:02 pm

#5 renter in Surrey on 10.15.18 at 5:49 pm

Yet prices in wetland are not materially going down.
So maybe there is something, we just can’t see it.

__________________________________

Actually, prices in our neck of the woods – Cloverdale – are going down. There are SFDs listed in 750k range – a year ago, nothing under 800k. I don’t think there are many people here in BC who really understand what is going on with the RE market. They’re still confused when industry “insiders” tell them there’s nothing to worry about, its just a small blip, prices will not drop for much longer, its all just a small blip, after all, this is Vancouver / Lower Mainland – Disneyland!

#42 For those about to flop... on 10.15.18 at 8:06 pm

Race to 900k

I’ll do this post for Dolce Vita since he was nice enough to write me the other day and said that he liked how I was tracking the bottom of the market.

I started off doing Race to a million posts and thought there was going to be more resistance at that mental marker but people that bought a long time ago are dropping prices very fast to get as much as they can this year as there are no guarantees of a brighter Spring market as things stand.

When the guys listed in July they were already one of the cheapest options and I featured them in a Race to a million post.

In the last 3 months there has been no sturdy floor set and one even went for 875k

Having said that anything that is livable and reasonably maintained goes in less than two weeks as the younger generation doesn’t have the same desire as previous generations for fixer uppers and developers are sitting on their hands.

Less kids being born will play into all this as well.

An early Vancouver special can be had for around 1.2 at the moment and declining each month.

So now these guys want 938k and for a little bit more you are probably better off going for one of the other cheaper options as it has The Trans Canada Highway running in between the toilet and the sink in the bathroom.

Assessment comes in at 1.17

So the story for detached properties at the moment in these areas, is as follows.

Vancouver Eastside bottom rung 950k

Vancouver Westside bottom rung 1.5m

Burnaby bottom rung 1 million…

M44BC

Oct 15, 2018 $938,000 Price Reduced
Sep 18, 2018 $988,000 Price Reduced
Jul 31, 2018 $1,038,000 Price Reduced
Jul 3, 2018

https://www.zolo.ca/vancouver-real-estate/3360-parker-street $1,099,000

Race to 900k

I’ll do this post for Dolce Vita since he was nice enough to write me the other day and said that he liked how I was tracking the bottom of the market.

I started off doing Race to a million posts and thought there was going to be more resistance at that mental marker but people that bought a long time ago are dropping prices very fast to get as much as they can this year as there are no guarantees of a brighter Spring market as things stand.

When the guys listed in July they were already one of the cheapest options and I featured them in a Race to a million post.

In the last 3 months there has been no sturdy floor set and one even went for 875k

Having said that anything that is livable and reasonably maintained goes in less than two weeks as the younger generation doesn’t have the same desire as previous generations for fixer uppers and developers are sitting on their hands.

Less kids being born will play into all this as well.

An early Vancouver special can be had for around 1.2 at the moment and declining each month.

So now these guys want 938k and for a little bit more you are probably better off going for one of the other cheaper options as it has The Trans Canada Highway running in between the toilet and the sink in the bathroom.

Assessment comes in at 1.17

So the story for detached properties at the moment in these areas, is as follows.

Vancouver Eastside bottom rung 950k

Vancouver Westside bottom rung 1.5m

Burnaby bottom rung 1 million…

M44BC

Oct 15, 2018 $938,000 Price Reduced
Sep 18, 2018 $988,000 Price Reduced
Jul 31, 2018 $1,038,000 Price Reduced
Jul 3, 2018. $1,099,000. Listed

https://www.zolo.ca/vancouver-real-estate/3360-parker-street $1,099,000

#43 Give me a home where the buffallo roam on 10.15.18 at 8:11 pm

“There is nothing. Not economic growth. Not Trumpenomics. Not immigration. Not buyer incentives. Nothing that can compete with the lethal combination of debt and rising rates.” – Garth

————————————————-

Yes. There is something that can. Massive government stimulation programs (like free down payments)!

Who knows what the Feds can come up with.

Also, this upward tick in interest rates is temporary. As soon as the economy is hurt, rates will come back down.

#44 Karl on 10.15.18 at 8:19 pm

I personally prefer the real estate and market talk. Do not care one iota for the straight political diatribes, that’s only 95% of all other conversations anywhere you go. Enough already.

As for RE and rates, gonna be interesting. We’ll all get to find out who went too far.

#45 Frank N Beans on 10.15.18 at 8:29 pm

“I am a teacher (28) making roughly $85,000 a year; take home cheque is roughly $4450/mt. She (27) is a nurse making $65,000 a year; take home cheque is roughly $1600/bi weekly.”

$7650 approx monthly operating income after tax and these young clowns are worried about their future. Being that their professions are easily transferable, They can pick up and leave Cowtown, live in a shithole town where houses cost 1/2 the price, smash down their debt and by the time they’re 40 they may very well have a bit of cash in the bank…
Who in their right mind buys a $300k property on a $65k salary? Move to Thunder Bay or Moncton and live within your means for a decade or four.

#46 ANON on 10.15.18 at 8:31 pm

People cannot admit to ever having made an investment mistake

You forgot to mention they always blame someone else.

Next, a post about cats. :)

#47 crowdedelevatorfartz on 10.15.18 at 8:35 pm

@#27 Realtor in Surrey
“A friend of mine bought nice 2dr condo in Coquitlam for about $270K 5-7 years ago.
Like an idiot I thought it was too high price to pay.
Today this condo is $550K.”
+++++

Evvvvvery day you come here and bitch and moan about what a loser you are for “renting” and then you make case after case as to why you should own…

Has the bailiff seized your Audi yet?

#48 ImGonnaBeSick on 10.15.18 at 8:43 pm

One of my favourite things about the comments section is the Millenials proving again and again that they are the “instant gratification” generation. I want to own a family home now! I want to retire now! I want the housing crash to happen now! Now! Now! Now!! I can’t wait 6 months…

#49 crowdedelevatorfartz on 10.15.18 at 8:45 pm

@#38 wrk.dvr
“1972 Ontario beer $5.50/24……”
+++++
ahhh memories.

I remember as a 10 year old going out on Sundays EARLY in the am with a friend of mine who alway played hookey from church.
We would ruthlessly search the ball feild behind the local school for quart bottles of beer that teenagers had dropped in the dark staggering around high on glue.
We’d also gather up all the bread bags of glue and make a pile and burn them so that no one else could “huff”.
(Nothing like a pile of Ben’s Bread bags burning on a Sunday morning in Nov to warm a young lad’s frozen hands eh?)
Yep.
Our parents would shake their heads in disbelief ( and admiration) when we would show up at home with quarts of Alpine, Ten Penny, Schooner, etc etc etc at 9am for bacon and eggs.
God Bless glue huffers.

#50 Bob Loblaw on 10.15.18 at 8:46 pm

So he didnt listen to the advice a year ago and now he’s back, asking for the same advice? Should have sold last year! There are still plenty of greater folks in Calgary

I should know, I live here. We sold in 2016 at a small loss of $4K, but, hey, I consider that lucky! I’ve looked at the same places that we sold and they’re all selling for at least $30k less that what we sold for (if you know anything about Calgary houses in most neighborhoods, they’re almost identical).

Been renting for two years and you wouldn’t believe the dumbfounded looks and responses I get at work…but you’re paying someone else’s mortgage! Prices may dip but they always go up! If rates are going up, don’t you want to buy and lock in now??

We rent a newer 6 bedroom, 4 bath house on a corner lot, in a quiet cul de sac, 2 car attached garage, with 2 fireplaces in south west calgary for $2,150 a month! Signed a new 2 year lease in August. Waiting until 2020 to see how prices have adjusted before we buy again

#51 bubu on 10.15.18 at 8:47 pm

#44 Frank N Beans.. the bought a property with $150k income not $65k…. On top of that they have also pensions which is equivalent of maybe $180k income without pensions…$300k is very reasonable for that income…

#52 akashic record on 10.15.18 at 8:50 pm

Well, remind me to never again write about climate change. Or Trump. Cannabis. The stock market. The UN. Bonds. The Fed. Gold or guns.

Sounds like Elizabeth Warren, remind me to never again claim Trump’s million dollar for my Cherokee ancestry.

Something else:

Instead of using ten years of cheap rates to tackle, eradicate, reduce and crush their indebtedness, Canadians did the opposite.

Did central banks lowered rates to eradicate, reduce and crush indebtedness? Isn’t spending what was supposed to stimulate the economy (and save the world from something horrible, horrible)?

#53 renter in Surrey on 10.15.18 at 8:52 pm

RE #46 crowdedelevatorfartz

Has the bailiff seized your Audi yet?

————————————————————

I am more Japanese cars type of guy.
German cars are nice to drive but too expensive to maintain.

BTW, my car is 15+ year old and I bought it for about 4K cash.

#54 Millenial Misfits on 10.15.18 at 8:52 pm

The tide is just about to start going out and we’ll soon see who is swimming naked.

Many people brag about the real estate holdings – often, all or most of it mortaged to the hilt, without a penny to spare.

Good luck eating pocket change for dinner.

#55 re., Dolce Vita on 10.15.18 at 8:53 pm

(but inside, you’ll feel that tall & women will know it).

……….

that’s all that matters, one day you’ll learn

#56 crowdedelevatorfartz on 10.15.18 at 8:55 pm

@ Realtor in Surrey

Speaking of seized Audi’s!

I watched an Audi get hooked and winched onto a flatbed tow truck last Sat. night around 10pm at my apartment building ( yes, Realtor, I rent in a falling market, thank God!).
A bailiff was there with a clipboard ‘splainin’ to an obviously distraught “realtor” looking type (late 30’s ,flashy clothes, stylish ‘doo, glittering watch) that the Man was takin’ it…. and the gorrilla’s loading it on the flatbed…..didnt look too surprised.

Anyone else out there seeing late night repo’s yet?
In Surrey………?

#57 Mike on 10.15.18 at 9:08 pm

“Well, remind me to never again write about climate change. Or Trump. Cannabis. The stock market. The UN. Bonds. The Fed. Gold or guns.”

You’re a sharp man Garth! Like the rest of us, we should stick to what we know.

#58 Chaddywack on 10.15.18 at 9:09 pm

@36 oncebittwiceshy:

Are those real prices? I’m thinking they are priced artificially low to spark a bidding war.

@37 east:

It’s encouraging that with a physician salary in the family I might have a hope at owning a detached home on the east side.

#59 arfmoocat on 10.15.18 at 9:09 pm

Squarespace TV Commercial

https://www.youtube.com/watch?v=wWuIFB0HjKQ

#60 yvrmc on 10.15.18 at 9:11 pm

#29 Chaddywack…. patience , I’m in the same area of the country and yes prices are still much too high but they are slipping downward…. When I sold my house in Oct 2016 , it was an entry level home in North Vancouver at 1.4m. Nothing much lower at that time. Now there are numerous homes at 1.2 and two homes under a million. That was unheard of not long ago. The reset is underway because it has to be . Wait , and pay attention to the market….

#61 Gold is Money, and Nothing Else on 10.15.18 at 9:13 pm

“You can’t eat gold”, he says. But some interesting developments in the world of speculation and gold:

https://monetary-metals.com/you-cant-eat-gold-report-14-oct-2018/?utm_source=General+Mailing+List&utm_campaign=a4cc1946ff-Mailchimp+SD+Report&utm_medium=email&utm_term=0_b82d7744ea-a4cc1946ff-130116737

“Gold is in backwardation in Switzerland. What does that really mean in human terms? It means you can give up your 100oz gold bar for 3 months, get free use of about CHF 120,000 in the meantime, and in the end get your gold bar back. Plus about CHF 400 in profit.

No one is taking this deal.

Let that sink in. Lots of people have these gold bars. Which they cannot eat, as we have already proven. But they won’t let them go for even three months. The free use of francs and the profit are not attractive. This either means they don’t trust their counterparty to give the gold back, or else that the francs are even more useless than the gold.”

Makes you go, “hmmmm….”

#62 For those about to flop... on 10.15.18 at 9:23 pm

Well,since I messed up my last post by turning in Dudley Doubletap with my sausage fingers,I will keep things short with the latest howmuch article.

In Wyoming and Georgia the minimum wage is $5.15 an hour.

I started to pull out my photo albums to look back at when I was working on Paul Allen’s mansion on the French Riviera,but stopped because I thought no good would come of it.

Rest in peace,boss…

M44BC

“Visualizing Minimum Wage in the United States.

One of the most hotly contested political debates in the United States is the minimum wage. Pro-business advocates say a high minimum wage hurts business, while pro-labor advocates say the minimum wage should be raised to help the working poor. Have a peak at our chart below to see your state’s minimum wage.”

https://howmuch.net/articles/minimum-wage-rates-2018-by-state

#63 JSS on 10.15.18 at 9:25 pm

Fortis +6% dividend increase announced today.
6% dividend growth target till 2023.

https://www.nasdaq.com/press-release/fortis-inc-provides-new-fiveyear-outlook-and-announces-59quarterly-dividend-increase-20181015-00205

Rub tummy

#64 Asterix1 on 10.15.18 at 9:27 pm

280 Stouffville, Richmond Hill. Not sold yet in 17 months! Relisted 8 times…

Sold in July 2015: 1.295 M$
Listed in May 2017: 3.885 M$
Listed in Jan 2018: 3.680 M$
Listed in July 2018: 2.690 M$
Listed in Oct 2018 : 1.880M$

Ouch! No buyers. Still cant believe the price of homes in far away places such as Richmond Hill, Newmarket/Aurora….Still way too much!

#65 D C on 10.15.18 at 9:49 pm

No comment on today’s topic (or self-aggrandizing humble brag). Just struck by apt title of today’s blog post and want to say how much I appreciate your writing Garth. I can’t believe how you consistently pump out quality material at this pace, regardless of topic.

#66 Million Gheb on 10.15.18 at 10:05 pm

Hi Garth,
Long time reader, over ten years. Hope I used all the advise you offered over the years. May be one day I will confess where I am at financially and my future. For now I send you this link I got from BNN Canada, it enforces the real estate bubble (Vancouver) you were always warning us: here is the link
https://www.bnnbloomberg.ca/vancouver-leads-canada-s-first-home-sales-decline-in-five-months-1.1152497

Thanks,

Million G

#67 Glen on 10.15.18 at 10:14 pm

At least the dog looks happy and is somewhere there are palm trees…
Still renting and putting the USD away for some fun, travels maybe, enjoyment definitely…
Landlord replaced the dishwasher that is nice…
Last year he replaced the roof…
And he loads his truck a couple times a year and we can throw stuff in to go to the dump/recycling centre…
Ahhhh….

#68 Bottoms_Up on 10.15.18 at 10:14 pm

Dude, why are you trying to rush to retirement? Enjoy your life, you only got 1 to live!

The 5 year lesson is just that –a lesson. The years will come and go. Sell the condo, live in the bungalow. If you think you’re broke now, just wait until you start having kids. The good news is as Garth pointed out, your defined pension will take care of you in old age. Quit trying to get there so fast.

#69 Crazyfox on 10.15.18 at 10:25 pm

Well, remind me to never again write about climate change. Or Trump. Cannabis. The stock market. The UN. Bonds. The Fed. Gold or guns. – Garth

Don’t do it Garth. Keep it simple or the Russians will hack us again with nasty death threats all the way from Saint Petersburg (nutless bluffers, how rude. Yeah, me too on Facebook back in the summer of 08′. All it took was an “if I was Putin” comment about recruiting Trump to get rid of NATO, isolate U.S. foreign policy and lead the west into a recession through trade wars and whatever else. Bunch of Nancy’s. I will not forget.) Tis’ true too, that the one thing that will impact the majority of Canadians the most over the next few years will be real estate. It will be the big story Canada faces going forward. Rising rates and the possibility of unexpected .5% hikes having a dramatic negative effect on our economy is very real. We are not an island and U.S. policy, regardless of its makers motives will dictate Canada’s fate through fed rates. All exterior factors aside, no one put a gun to our heads and told us Canadians to borrow our friggin’ brains out and here we are, on the cusp of this nearing karmic moment.

Can’t remember where I read it, but something like 39% of mortgage holders have a LOC on their home. 39%! (Is that true, I think it is) 2 of 5 mortgage holders, possibly more, are about to learn why you should never over extend yourself and leave yourself vulnerable to rising rates. Rising debt costs coupled with shrinking equity = shrinking consumer spending = recession. If its 1 in 10 mortgage holders that can’t handle the shock, Canada will have a housing meltdown like no other and it should come as no surprise to anyone but still will.

My outlook on real estate hasn’t changed. We will be looking at a multi year recession that is real estate led kicked off by rising rates that squeeze the consumer and my very best guess is it begins in the 4th quarter of 2019 through to at least Q2/Q3 of 2021. Hope I’m wrong but logic says otherwise. Oil up the squirrel gun and sharpen up on your pick up lines in these about to be increasingly hard times where body heat could be the only thing we can afford. How’s this one… “We could save a lot of money if we just stopped wearing clothes!”

#70 chart at #19 on 10.15.18 at 10:29 pm

looks like the Toronto curve matches Van city, just delayed a few months… maybe we CAN time the market

https://i.imgur.com/BLQka0C_d.jpg

#71 Frank N Beans on 10.15.18 at 10:43 pm

@51 Bubu,

Their $150,000 salary equates to a present operating income of $7650 per month. The contributions they make to their pensions, while valuable at retirement are not a factor in considering present day debt management.

They don’t have one mortgage with that income, they have two mortgages.

Totaling $560k.

I made the assumption that one of those two salaries qualified for one of those two mortgages. But hey, even if those two salaries are factored in, $560k of debt for $150k of income (and add in car debt and student debt as they note reduces their monthly income to invest and save), is still in my humble opinion above their pay grade.

Never. Ever. Assume your pension is a sure thing. Anything can happen in the grand horizon of the 30+ years it will take those two young Calgarians to reach retirement. While a DB pension is a blessing, I think it is foolish to ever factor it into any consideration of how much debt one can manage. Personally, I have a DB pension and while I know it exists, I certainly do not operate as though I can leverage it to get into more debt.

My partner and I live on one income and bank the other. We have a similar kind of monthly income to the Calgarians above but the big difference is we never incurred huge mortgages. We bought well within our means and our rental property is cash positive. We also don’t live in a major city, which factors into lower housing costs. I just genuinely don’t know why people are willing to put a third, a half or even more of their monthly income (after taxes, and not considering inaccessible pensions) into covering their housing costs. It’s madness.

#72 Sebee on 10.15.18 at 10:52 pm

Garth,

Have you ever given gravity a few minutes of thought? I don’t smoke weed (even when it will be legal as I think it’s a temporary legality for a few years for the government to get the complete database of weed smokers) but gravity is trippy as heck when you really think about it. Absolutely amazing. Everything just sticks to the ground!

So I take issue with your declaration that it is back. It was always here in full amazing glory. For some reason we just try to defy it – maybe a sign of human ambition or maybe stupidity. I know which one we’d both pick.

#73 Mr White on 10.15.18 at 11:01 pm

How can I short housing or mortgages in Canada? What would the best proxie be?

#74 crowdedelevatorfartz on 10.15.18 at 11:08 pm

@#62 Flopster
“Dudley Doubletap”
++++
Hilarious.
Make a good name for a UFC fighter OR…..a hitman.

#75 TS on 10.15.18 at 11:16 pm

#45 Frank

“Who in their right mind buys a $300k property on a $65k salary?”

You do know the median family income in Canada is about $65k and the median Canadian house costs about $500k right? The average house horny Canadian would sell their soul for the chance to owe 300k for the next 30 years.

#76 Linda on 10.15.18 at 11:40 pm

The hapless couple cited in today’s post – oy. Time to put their grown up pants on & sell that money losing condo. Myself, I’d keep the 1000 square foot bungalow if it has a full basement. Because back in the 50’s or 60’s when that place was probably built, a minimum of 4 & more likely 6 people occupied that space (mom, dad, 2-4 children). So suck it up. Bungalows are good space, 1000 square feet more than adequate for a couple, with or without one or two children. Hapless owner doesn’t say whether they scored one of those mega-lots from the same era with the bungalow purchase.

Thing is, those folks have to live somewhere, so why give up a detached house with a mortgage that would likely be not much more than what rent would be? Yes, rents have come down in Cowtown, but a nice 2 bedroom unit still costs around $1,100 per month, though utilities may well be included in that. And if they are serious about babies, they’d be better off keeping the bungalow than selling, losing & then ‘nesting’ right back into a purchase when the offspring come along.

#77 Nobel Laureate on 10.15.18 at 11:50 pm

The Don should make good on his promise and give 1/1024 of a million dollars (so $976.56) to Elizabeth Warren’s selected charity. She did prove that she “might be” 1/1024 native. If I were the Don, I’d give the whole million, it was worth it just to out her, and the charity EW selected isn’t without worthiness. But she’s not native. The Don was right again.

That’s the problem with the Don. He’s an asshole, and he calls it as he sees it in New York slang, but he’s usually got a point. Some how or another, we’ve replaced “truth” with “presentation”. Elizabeth Warren presented herself as a native American, and that turned out to be maybe 1/1024 true and everybody rallied behind her. Trump called her “Pocahontas” and asked her to prove it and he was made a villain. But Trump turned out to be right, EW turned out to be as white as white gets.

#78 Nonplused on 10.16.18 at 12:05 am

“Well, remind me to never again write about climate change. Or Trump. Cannabis. The stock market. The UN. Bonds. The Fed. Gold or guns.” – Garth

Nope. Those are your best topics, real estate is getting boring at this point. We, at least those “we” of your loyal following, understand what is going on in real estate. You could save several years of lifetime earnings by holding off. Point taken.

Investing is getting boring too, “balanced portfolio bla bla bla nothing else has worked but this has” yes we get the point.

But don’t be going off talking the government talking points on things that don’t exist like catastrophic global warming. Ya, the planet is warming due to human activity. No doubt. Nobody can argue that. But it was too cold before anyway and the plants are loving the extra CO2. They were near starving before.

I don’t want to live under 1000 meters of ice. That was Calgary 10,000 years ago. Oh and CO2 emissions didn’t change that. Something else is at play.

#79 fishman on 10.16.18 at 12:22 am

Gold in backwardization in Switzerland,: interesting. Any of you bloggies remember reading Jim Sinclair. He was a pioneer economic blogger, gold bug,started on the Street under the famed trader Jesse Livermore. Was in Zurich when the Hunt brothers tried to corner silver & watched the armoured cars hauling silver bars back & forth, from bank to bank nonstop. Hired by the U.S. govmnt. to clean up the mess after the Feds allowed open shorts on silver futures & killed the Hunt boys.

Anyways , he had this theory that continued backwardation of gold; ( not in a zero interest rate environment like the last few years of course)) was a harbinger of great doom. Short sellers have nowhere near the physical to deliver on their contracts. Backwardization meant future buyers of gold contracts didn’t want paper money to close out their deal: they want the physical. Short sellers would pay more now for the physical than their future contracts because they were afraid that they couldn’t deliver their future short contracts to buyers in physical. Lost faith in the printing press. Collapse of paper money. Wow, And to think it all starts with gold backwardization.

Anyways most likely just another blip, but if there’s still gold backwardization when Christmas Carols come along, well, probably ruin your Christmas.

Make the Ruskies happy. They just sold all their U.S. treasuries, have very low debt to GDP & been backing up their trucks to the gold smelter.

#80 Deplorable Dude on 10.16.18 at 12:32 am

#63 JSS…..’Fortis +6% dividend increase announced today. 6% dividend growth target till 2023.
Rub tummy’

Rub tummy indeed…..that’s now 12 out of my 15 holdings that have increased dividends ytd.

Love those juicy increasing dividends that keep rolling in, regardless of what the market it doing….

#81 DON on 10.16.18 at 12:38 am

Hong Kong housing market in a funk…some owners and developers slashing prices by 30 percent. As per South China Morning Post.

Advice for the letter writer…if you get out now and the market goes down further…with your credit still intact…you may be able to buy in again when the market hits rock bottom. Things usually get worse before they get better.

#82 jane24 on 10.16.18 at 12:45 am

So here we are. Mortgage costs rising in the last few days. The central bank moving next Wednesday. More hikes coming in the first half of 2019. As the Toronto broker points out, a couple earning $125,000 three years ago could afford an $800,000 house. Today they can spend $625,000. In a year that could be $580,000.
_______________________________

So true, been there and got the t-shirt from the last RE market slump. Point is that the buyer will still be able to buy as that house has to adjust from the original $800,000 to the new $580,000 as that is what the buyer can afford to mortgage at the new rates. This is the bit that sellers will find hard to understand but will come to pass. Anyone that was thinking of cashing in, it is now too late. All you can do to sell is try to get ahead of the general price reduction with your own greater reduction. Try to be the falling knife for the buyer.

#83 Smoking Man on 10.16.18 at 1:00 am

Remember this.

Next time MSM says the real estate market is back, or tell you there is a crisis, act now!!!! we must put a price on pollution but they never mention China and India are exempt.

Their latest. Pocahontas did a DNA test. MSM says yes she has Cherokee DNA.

What they won’t tell you. 1/2020 Cherokee.

Bahaha. People are stupid.
Buy the condo kids, take the pill take the ride.

Me. Living the dream…..i got out.

#84 NoName on 10.16.18 at 1:13 am

Well, remind me to never again write about climate change. Or Trump. Cannabis. The stock market. The UN. Bonds. The Fed. Gold or guns. – Garth

we can always talk hot rod and stuff…
https://youtu.be/DnxdB0yAidg

#85 When Will They Raise Rates? on 10.16.18 at 1:55 am

Thanks for this Garth, best read all month thus far… and I read a lot.

#86 NoName on 10.16.18 at 3:38 am

Hey drachma bum here is something you”ll like it, klub med for skeeng.

The Secret to Your Next Great Ski Vacation Might Be … Club Med https://www.bloomberg.com/news/articles/2018-10-16/club-med-ski-resorts-all-inclusive-winter-vacations-alps-japan

#87 Howard on 10.16.18 at 3:56 am

#48 ImGonnaBeSick on 10.15.18 at 8:43 pm

One of my favourite things about the comments section is the Millenials proving again and again that they are the “instant gratification” generation. I want to own a family home now! I want to retire now! I want the housing crash to happen now! Now! Now! Now!! I can’t wait 6 months…

——————————————–

Which makes them not unlike their parents who all bought houses at 24 with the cash they saved working a few summers at a gas station.

#88 When Will They Raise Rates? on 10.16.18 at 6:34 am

#83 Smoking Man on 10.16.18 at 1:00 am

Their latest. Pocahontas did a DNA test. MSM says yes she has Cherokee DNA.

———————-

To be fair, CNN and MSNBC are technically correct, according to the DNA test:

https://i.imgur.com/KvjN9w5.jpg

In related news, CBC, CNN, WAPO, NYT, MSNBC and FiveThirtyEight are reporting that the democrats will definitely take the house…

#89 Hamsterwheelie on 10.16.18 at 6:47 am

#76 Linda – totally agree. Why move out of the bungalow? Lots more competition for rental housing could mean its harder to find a place they like at a reasonable price & buying for less than $300 000 is also unlikely.
Maybe the bungalow has a rental suite option in the basement? Short term rental could also bring in some good money. Pay that mortgage off & hunker down – who knows what the market or your finances will look like once the baby train gets rolling.
And final thought…why does anyone buy condos as ‘investments’ ? Surely this must have worked out for someone? I am no financial genius (mostly blunder my way about, flailing wildly) but when we looked at condos for $400 000 in our town and what we could charge for rent on that vs a 2 or 3 storey Victorian for $230 000 and 2-3 units with bigger per floor plans, even I figured out the return would be better. Even in this market the houses are still selling at double that price while condos seem flat due to a continous stream of new and pre built incentives for these wee boxes of nothing. (no land, garden, garage, greenery or ability to hear birds in the trees)
Someone share their story of investment condo that worked out?

#90 Victor V on 10.16.18 at 7:16 am

Second mortgage brokerage firm tied to real estate developer Fortress Real Developments shuts down

https://www.theglobeandmail.com/business/article-second-mortgage-brokerage-firm-tied-to-real-estate-developer-fortress/

Fortress raised a total of $920-million from investors between 2009 and 2017 to help finance new real estate developments, including many condominium construction projects.

Much of the financing was arranged by mortgage brokers at FDS, FMP Mortgage and FFM Capital. In 2016 alone, FDS raised $67-million from 1,174 syndicated mortgage investors, according to regulatory filings.

FDS reported having 102 brokers and agents as of Dec. 31, 2016, including 23 who worked full-time, according to its filings with FSCO. The firm’s bankruptcy filing lists liabilities of $550,453 and assets of $16,000 as of Sept. 12.

Many of the Fortress development projects financed by syndicated investors have faced long delays and investors have not been repaid their principal or accrued interest payments, spurring many complaints to regulators.

The RCMP searched Fortress’s head office location in April, and also executed search warrants at the offices of FDS, FMP Mortgage and FFM Capital. The search warrant application said the force is investigating alleged syndicated mortgage fraud. No charges have been laid.

#91 Felix on 10.16.18 at 7:47 am

Hmm. Nope. Even if you look at that dog upside down, it still looks dumb.

#92 Ian on 10.16.18 at 7:57 am

My family have had a total freakout about climate change recently. It all started at the Thanksgiving dinner. My aunt, sis, and mom all in synchronisation.

My aunt launches into me about why and how I could like the PC government when they don’t support the carbon tax. Even though my aunt and mom both live in the Etobicoke Blue Zone.

I tried to say that petrol is already exorbitantly taxed, but then gave up and just ate my pumpkin pie.

#93 maxx on 10.16.18 at 8:11 am

“People cannot admit to ever having made an investment mistake, so they hang on.”

False sense of pride, arrogance? – people always pay for their egos. Always. From designer crap to keeping up with the mythical Joneses, they always end up paying. Some can afford it more than most.

It’s easy to cast a sympathetic eye to human error, but not so much towards realtards and the stunned, silly “scenario and pattern-focused” dopes of officialdom.

Consumer debt exceeding the entire economy is beyond alarming. How does that make a nation financially robust, with decent tax inflows?

It doesn’t. Enter austerity. Austerity’s origins are to be found in the very policies that promoted NZIRP.

Now nearly everybody and everything is in debt. Most retail is in absolute agony. The amount of stock that goes in through the back door and out the back door to the skip is mind boggling – as opposed to in the back door and out the front doors by consumers.

People are finding ways to buckle their budgets (well, the smart ones anyway), even the rich and that often means spending in “alternative” shops, such as second-hand. Not good for tax revenues. Check out the luxury cars parked outside the door.

This fiscal wound is not one that can be healed quickly. People’s lives have been materially changed. Sure, there’s lost opportunity cost on down payments, rising mortgage costs as well as maintenance, $hitty tenants, etc. Most importantly, there’s life opportunity cost. So many life experiences now made unavailable with loss of flexibility.

RE mania – what an inescapable mess.

Gimme the cash any day.

#94 akashic record on 10.16.18 at 8:18 am

88 When Will They Raise Rates? on 10.16.18 at 6:34 am

#83 Smoking Man on 10.16.18 at 1:00 am

Their latest. Pocahontas did a DNA test. MSM says yes she has Cherokee DNA.

———————-

To be fair, CNN and MSNBC are technically correct, according to the DNA test

According to CNN and MSNBC technically Hillary won the election.

In reality: Elizabeth Warren is *possibly* 1/1024 (0.09%) Native American.

Scientists say the average European-American is 0.18% Native American. (https://t.co/XU0l1JQO1L)

That’d make Warren even less Native American than the average European-American.

The Cherokee Nation has issued a statement slamming Warren for her “continued claims of tribal heritage.”

“A DNA test is useless to determine tribal citizenship. Current DNA tests do not even distinguish whether a person’s ancestors were indigenous to North or South America. Sovereign tribal nations set their own legal requirements for citizenship, and while DNA tests can be used to determine lineage, such as paternity to an individual, it is not evidence for tribal affiliation. Using a DNA test to lay claim to any connection to the Cherokee Nation or any tribal nation, even vaguely, is inappropriate and wrong. It makes a mockery out of DNA tests and its legitimate uses while also dishonoring legitimate tribal governments and their citizens, who ancestors are well documented and whose heritage is prove. Senator Warren is undermining tribal interests with her continued claims of tribal heritage.”

– Cherokee Nation Secretary of State Chuck Hoskin, Jr.

Stop polluting this blog with such crap. Nobody cares. – Garth

#95 Q2 Class 2-B-C-2 Duplex Drive on 10.16.18 at 8:52 am

Gravity sucks

#96 James on 10.16.18 at 8:56 am

#83 Smoking Man on 10.16.18 at 1:00 am

Remember this.
Next time MSM says the real estate market is back, or tell you there is a crisis, act now!!!! we must put a price on pollution but they never mention China and India are exempt.

Their latest. Pocahontas did a DNA test. MSM says yes she has Cherokee DNA.
What they won’t tell you. 1/2020 Cherokee.
Bahaha. People are stupid.
Buy the condo kids, take the pill take the ride.
Me. Living the dream…..i got out.
_________________________________________
Yes old man Ive been saying exactly that about you!

I wonder what your DNA test would show?
100% megalomaniac

#97 The Real Mark on 10.16.18 at 9:01 am

Today’s chart is very misleading as it fails to take into consideration the differential of housing types in the sales mix. Here is my chart I made in the basement.
___
/ \
_____/ \
\___________________________

2012 2013 2014 2015 2016 2017 2018

#98 James on 10.16.18 at 9:09 am

Seriously. This dude came here once for advice (‘should I sell my Calgary condo?’), was warned and scorned, slunk off and ignored it. Now he’s back, looking for a path from age 28 to retirement. And he throws his miserable financial carcass upon my goodness. Sheesh.
Now, now when they come crawling back for advice don’t say I told you so, just give them a hug and tell them it will be OK.
IMO the condo market is soon to be glutted with NEWBYS calving off their Ill thought investments. This is going to be good news for the low income renters that need a place to stay. No normal person would throw investment liquidity into a condo. That is a gargantuan mistake. A couple that I know had a situation where they bought two condos before they were married and could not manage both. She decided to rent hers out to continue to let someone else pay for it. Mistake number one. The renter appeared to meet all of the proper criteria and then shortly thereafter started defaulting on payments. It took the couple almost two years to get this person evicted, the renter also trashed the condo causing so much damage that the condo below them was damaged as well. Insurance was not paying and they ended up selling at a substantial loss. Oh and the condo below sued them!

#99 Another Deckchair on 10.16.18 at 9:12 am

@89 Hamsterwheelie:

I purchased a condo.

For one of my kids to go to Uni. The kid was on a field trip in a remote place, no internet and phone access only a couple of hours/week and asked us to “find a room”.

Impossible – look on Kijiji, find nice places, drive 6 hours, find they are all gone, then 6 hours back home (or hotel and try again next day)

After a good few weekends of that, decided it was easier to purchase, in a *great* location and *beautiful* building. So we did. One weekend.

To answer the obvious questions:

1) No, no longer own it;

2) Did rent it out after kid #1 graduated, between kids, but it was too small for kid #2 and boyfriend. (was rented out to a husband/wife, so don’t understand that comment) (oh well)

3) Was it worth it? We did ok out of it, but I am NOT going to do the paperwork to see if we were ahead or behind a balanced portfolio.

The idea was for safe, close to school housing for kids, without busting our butts anymore trying to help out. (Weekends are *NOT* for spending ones’ backside glued to a car seat on the 401, just in case anyone was wondering)

#100 IHCTD9 on 10.16.18 at 9:18 am

#92 Ian on 10.16.18 at 7:57 am

I tried to say that petrol is already exorbitantly taxed, but then gave up and just ate my pumpkin pie.
___

I know the feeling :). It doesn’t matter how pristine your logic, how sound your reasoning, or how immaculately delivered you case is – some folks will just not hear a single word you’ve said (or even care to hear it for that matter).

I know a few angry, emotionally driven; hard right and left folks. If politics ever comes up when any of these are in the room – I’m outta there like a bolt of lightning!

#101 Leo Trollstoy on 10.16.18 at 9:23 am

Donald Trump isn’t the troll we want, but he’s the troll we need

Lol #MAGA!

#102 TurnerNation on 10.16.18 at 9:25 am

Here in Ontariowe King Ford’s OCS retail will control the drug trade. All other sellers will get a visit from the boys in blue and maybe a beat down.
That’s their role, one of protection for the elites’ businesses. Arms, Drug and Human traficking.

The spoils of war. Never ever forget the target is our (drug addled) minds.

“The National Post reports in its Tuesday, Oct. 16, edition that Tuesday is the final day for illegal cannabis dispensaries to close, with the Ontario government threatening that if they do not, they will be blocked from the legal retail market when it opens in April, 2019. The Post’s Jake Edmiston writes that the Ontario Attorney-General’s office said in a statement Monday: “Anyone operating a storefront after Oct. 17 is doing so illegally. Failure to comply with the rules, whether provincial or federal, would preclude someone from obtaining a Retail Operator’s Licence.” Dispensary owners across the province appear to be heeding the warning en masse, planning to shutter their stores before legalization comes into force on Wednesday. “

#103 Mattl on 10.16.18 at 9:26 am

The young couple with the two properties is hardly in trouble. Yes, Calgary is in a decade long funk and if history is any guide to the future, that will turn around at some point. It would crazy to sell and lock in losses – why sell low when you need somewhere to live, and you can afford the debt? These two do not need to save like private sector employees – if they stay in their jobs, their DB pension will be the equivalent of 2-3MM in savings by the time they hit their mid 50s. The two properties will be paid and likely worth significantly more.

Buying a condo was a stupid idea, selling and locking in a loss would be even dumber. These two should buckle down, make their payments and ride this out. Retire at 55 with two properties paid (or ideally sell the condo when the market returns, put it into non registered accounts) and 150K a year in DB payments. These two should have a very easy path to retirement. Two DB’s a freakin gold mine.

Negative cash flow, scant savings and a big, ugly whack of debt in a rising rate environment – with the desire to have kids which will dramatically increase costs and impede earning potential? Glad you’re not a financial advisor. – Garth

#104 PastThePeak on 10.16.18 at 9:36 am

#92 Ian on 10.16.18 at 7:57 am
My family have had a total freakout about climate change recently. It all started at the Thanksgiving dinner. My aunt, sis, and mom all in synchronisation.

My aunt launches into me about why and how I could like the PC government when they don’t support the carbon tax. Even though my aunt and mom both live in the Etobicoke Blue Zone.

I tried to say that petrol is already exorbitantly taxed, but then gave up and just ate my pumpkin pie.
++++++++++++++++++++++++++++++++++

I have found the ones that talk the most about the doom of climate change do the least about it. They just…talk. Certainly Al Gore, David Suzuki, Justin Trudeau and his entire cabinet, et al, do not set any good examples. Travel all the time, multiple homes, huge gov’t limos, etc.

My kids (high school age) tell me it is the governments job to fix it – not theirs.

So I do like you – just put your head down and continue on – build your portfolio and minimize taxes.

#105 dharma bum on 10.16.18 at 9:37 am

#18 Brian Ripley

“To state the obvious, bull markets do not last forever, and inevitably are followed by bear markets. Likewise, economic expansions also must end at some point, followed by recessions, and recessions typically are accompanied by bear markets.” ~ John Hussman, Oct 15, 2018
——————————————————————–
Are things in this world moving along a straight line or in a cyclical manner?

Those who are used to linear thinking would see it as a straight line. After a day, it’s a night. After life, it’s death. What else can that be?

It can, therefore, be puzzling when they hear of the Tao of cyclical moments — that everything in the universe moves in a cycle.

A day doesn’t end at a night — a night is the beginning of another day. Life doesn’t end at death. Going by the law of conservation of matter, death is where a new transformation begins.

A day is followed by a night and a night by a day. Life is followed by death and death by life. There is no beginning, neither is there an ending. The beginning is the ending and the ending is the beginning.

Things as contradicting as day and night and birth and death are not opposing one another. They’re ultimately one. They’re simply because different facets of a cycle.

Yin Yang, baby! It applies to financial markets as well.

You see? Wait long enough and the bottom will be the top. (Until it’s the bottom again.)

http://tao-in-you.com/cyclical-movement-of-tao/

#106 When Will They Raise Rates? on 10.16.18 at 9:49 am

#103 Mattl on 10.16.18 at 9:26 am

The young couple with the two properties is hardly in trouble. Yes, Calgary is in a decade long funk and if history is any guide to the future, that will turn around at some point. It would crazy to sell and lock in losses – why sell low when you need somewhere to live, and you can afford the debt? These two do not need to save like private sector employees – if they stay in their jobs, their DB pension will be the equivalent of 2-3MM in savings by the time they hit their mid 50s. The two properties will be paid and likely worth significantly more.

Buying a condo was a stupid idea, selling and locking in a loss would be even dumber. These two should buckle down, make their payments and ride this out. Retire at 55 with two properties paid (or ideally sell the condo when the market returns, put it into non registered accounts) and 150K a year in DB payments. These two should have a very easy path to retirement. Two DB’s a freakin gold mine.

—————————————-

https://www.youtube.com/watch?v=uSudkID3zJM

#107 Remembrancer on 10.16.18 at 9:57 am

We are losing $220/mt (Condo fees, cash call, insurance, tax, etc.).

#71 Frank N Beans on 10.15.18 at 10:43 pm
@51 Bubu,
———————————————————–
Hmm, most of which sounds like straight income tax deductible if properly reported – jeez is there anyone here actually reporting rental income to also report rental expenses? Hell that mortgage is likely ~50% interest (deductible), condo fees (deductible), insurance (deductible), cash call (what’s that?), tax (deductible)…

Sure its not like _not_ owning the condo, which they probably shouldn’t, but every little bit helps kids – decide on the ownership split for claiming and may knock you down a tax bracket – haven’t done the math – leaving that as a homework exercise…

#108 Gen X in Calgary on 10.16.18 at 10:03 am

We saw the market and interest rate situations turning, and listed the suburban particleboard shack in Calgary just after Christmas of this year. Sold in March, out by April.

Sold for $40k more than we paid 5 years ago, so with realtor fees, mortgage payout, etc we cleared about $80K. Paid off LOC (on home improvements, of course) and took a three week trip to EU for our anniversary. The rest is sitting in our savings account.

Now happily renting a much smaller place in the same neighborhood for $1800/month ($1500 less than ‘owning’ was costing us), putting $5k away into TFSA and RRSP monthly.

If we can keep doing this for 15 years (on top of the six figures we have stashed now), we’ll be golden.

And that’s coming back from a bankruptcy 15 years ago, so we lost a few years of savings/opportunity when younger.

The millennial demanding advice needs to realize that 1- it’s free, and 2 – it’s not advice if you just use it to validate your poor choices, it’s reinforcement.

#109 TurnerNation on 10.16.18 at 10:11 am

I see some here have fallen for our elites’ brainwashing efforts. They like actor Musk repeat that humans are “cancer” – lower then animals! Maybe we should be herded into kamps and left to rot. Not the first time our elites have done this.
Of course they will continue to sup as kings, in 6-star resorts and private yatchs replete with servants.

Do as I say not as I do. To ignore humans’ propensity for creation, thereof, is mass blindness and madness. Pass the Ford Joint…

#110 Sonny on 10.16.18 at 10:14 am

52% Of Canadians Less Likely To Buy Homes Where Legal Pot Was Grown: Zoocasa Study

https://www.huffingtonpost.ca/2018/10/15/canadians-cannabis-property-values_a_23561679/

#111 miketheengineer on 10.16.18 at 10:14 am

Garth et al:

Happy Dog Video…..Whoopie! Nothing like watching these dogs….Havanese are incredible dogs.

https://www.youtube.com/watch?v=u0HcdmTlLfQ

#112 Mattl on 10.16.18 at 10:25 am

Negative cash flow, scant savings and a big, ugly whack of debt in a rising rate environment – with the desire to have kids which will dramatically increase costs and impede earning potential? Glad you’re not a financial advisor. – Garth

Your way isn’t the only way. A young couple like this with rock solid jobs and juicy DB pensions can take a 3K per year gamble on Calgary RE. It should, at some point, turn around and these two have a lot of runway.

Nobody has a rock solid job. And they want kids. Everything changes. You are totally wrong. – Garth

#113 In Garth We Trust on 10.16.18 at 10:33 am

“Well, remind me to never again write about climate change. Or Trump. Cannabis. The stock market. The UN. Bonds. The Fed. Gold or guns.”

What else is there???

#114 In Garth We Trust on 10.16.18 at 10:41 am

4 Ellyot Mynahzeeun on 10.15.18 at 6:20 pm

“50%+ of Torontonians don’t work for more of 35-40k a year, yet the dating market expects every man to be at least 7 ft tall, athletic, have a Lakeshore condo and have a million in the bank like Garth and Ryan Lewenza.”

Come, come no. Captain Garth keeps a million around just for spare change. He has much more than a paltry million in the bank….

#115 John Kenneth Galbraith on 10.16.18 at 10:46 am

“If I stray into other subjects and I’m sure to be ripped a new one by all the macroeconomists, political scientists and Nobel Laureates who have pilgrimaged to the steerage section of this pathetic blog. We are blessed to have you all in one place. Just like a Texas juvenile detention centre. Fun!”

Thanks for the compliment Garth. My pleasure adding some insights into your wonderful blog. We could have used the likes of you down in the States when I was trying to solve the problems of the Great Depression…

#116 Honest Ed on 10.16.18 at 10:49 am

#18 Brian Ripley

“Sears filed today.”

Boo hoo, Sears filed for bankruptcy! Waaa, waaa. Good riddance to this old dinosaur.

#117 Shawn Allen on 10.16.18 at 10:49 am

How to Short Houses and Mortgages?

#73 Mr White on 10.15.18 at 11:01 pm asked:

How can I short housing or mortgages in Canada? What would the best proxie be?

******************************************
I would recommend against it but anyhow…

I know of no direct way to short house prices. There is no futures market for an index of home prices in Canada for example.

As for shorting mortgages you could look to find some mortgage investment corporations that trade and see if you can short those. Or maybe short Genwoth MI Canada MIC.TO.

But first take a look at mortgage default levels in Canada which are miniscule.

Many on this blog have talked about shorting houses (especially Vancouver and Toronto) and mortgages going back maybe eight years. Had they done it they would have lost big time shorting houses in Vancouver adn Toronto. There were periods when MIC declined but overall it would have been a losing strategy.

Shorting unlike investing, especially investing in a balanced fashion, is pure gambling. Gambling these days is not considered immoral nor as Buffett says is it likely to be financially fattening. Resist the urge.

Also when short an investment one tends to become obsessed by it. It takes up a lot of mental energy. Resist.

#118 Honest Ed on 10.16.18 at 10:52 am

#21 Oakville Sucks on 10.15.18 at 6:45 pm

“I passed by Mattomy Homes Oakville Office this past Saturday (Third Line and Dundas St.) and I couldn’t believe the hundreds of people lined up, cars parked along Dundas St. There was some sort of event with tents and everything. Was is it some ploy or investor interest??”

Must have been paid actors because Mattamy took these buyers to the cleaners…

https://www.thestar.com/business/2018/04/04/they-bought-their-prebuilt-homes-at-the-markets-peak-now-they-face-financial-ruin.html

#119 Tony on 10.16.18 at 11:00 am

In Calgary today you couldn’t give away a condo for free if it’s tenanted. If he paid 300 grand in 2015 it probably is worth or would sell for about $240,000 with no tenant. Like he said his house will just keep on falling in price. The housing market basically peaked way back in 2008 if you take any inflation into consideration. Any condo bought 2008 or later would have lost a lot of money today in Calgary.

#120 Honest Ed on 10.16.18 at 11:08 am

#96 James

“I wonder what your DNA test would show?
100% megalomaniac.”

In addition to that his DNA test would show 100% BS artist….

#121 IHCTD9 on 10.16.18 at 11:13 am

Regarding the Teacher and Nurse:

Liquidate the condo asap and lick your wounds. Keep the house if you plan on kids. Sell the two new cars and tend to your bruises, then buy a couple decent used ones using cash – who cares what the neighbours or your co-workers think.

Buckle down and nuke whatever remains on the mortgage for the condo after it’s sold ASAP, and make an acute plan to nuke your student debt and house mortgage by 50 years old. Simultaneously, start maxing your TFSA’s , not sure if you need to pump your RRSP’s seeing you both have DBPP’s – probably not have much room to do so anyway.

You’ve easily got the financial horsepower and time horizon to get well sorted out by the time you’re 40, just a matter of getting on it right now.

In fact, you both really have it made in the shade – probably easier life ahead for you two than 90% of Canadians thanks to your government job security and DBPP’s.

BUT… some info for the Teacher:

“Nurses are more likely to have affairs than athletes, musicians and DJs.

Amazingly those in the healthcare profession are third most likely to have an affair, coming after those who work in finance, such as bankers, brokers and analysts, and aviation crew, like pilots and flight attendants.”

https://www.express.co.uk/life-style/life/771327/nurses-more-likely-affairs-cheating

Make damn bloody sure you and wifey are solid before you have kids!! If she is conventionally attractive, and working in a hospital setting – you have reason for concern – no joke. Repeat: NO JOKE!

#122 John Kenneth Galbraith on 10.16.18 at 11:34 am

#100 IHCTD9 on 10.16.18 at 9:18 am

“I know the feeling :). It doesn’t matter how pristine your logic, how sound your reasoning, or how immaculately delivered you case is – some folks will just not hear a single word you’ve said (or even care to hear it for that matter).”

You see this every day on this blog!

#123 MF on 10.16.18 at 11:39 am

#48 ImGonnaBeSick

…are you a boomer looking to retire off the proceeds of your overvalued house?

-witnessed house values triple and quadruple over 10 years.
-witnessed people put 5% down and use extreme leverage to profit handsomely
-can’t understand why young people would want to buy a house

MF

#124 jess on 10.16.18 at 11:40 am

common reporting standard in 2017, designed to reduce tax evasion.

One problem is that not all countries are taking part in the exercise; the US is one of the key players missing. It has committed to sending partial information, but individuals can still hide their identities behind companies.

Austria and Bulgaria do not receive information from the US, the report said, and as of June 2018, at least 43 countries were not committed to implementing the common reporting standard, including Montenegro, Serbia and Ukraine. The report said the easiest way for an EU citizen or company to avoid the automatic exchange of information was to set up bank accounts in one of these countries or in the US using a company name.

Another loophole involved countries that offer so-called golden visas to wealthy investors who commit large sums of money in exchange for citizenship.

In a scenario set out in the report, someone living in Italy could buy citizenship in Cyprus, which has agreements to receive information from only 33 jurisdictions in or related to the EU. Any account the person opened in a country that fell outside that arrangement would in effect remain invisible.” read more on how to

Sven Giegold, a German MEP and member of the European Green party, said: “The automatic exchange of information is great progress against tax evasion. Now Europe has to close these loopholes so that the end of tax havens will not become an empty promise.”

The report called for the European commission to revise the rules so all financial centres and tax havens are forced to share information with member states, with the risk of sanctions if they do not. It also suggested that the EU could ensure that any advice or request to transfer money to the US be considered as an avoidance scheme until it shares as much information as required by the common reporting standard.

https://www.theguardian.com/business/2018/oct/15/offshore-wealth-loopholes-found-eu-anti-tax-evasion-rules

#125 Stan Brook's Psychiatrist on 10.16.18 at 11:40 am

#97 The Real Mark on 10.16.18 at 9:01 am
“Today’s chart is very misleading as it fails to take into consideration the differential of housing types in the sales mix. Here is my chart I made in the basement.
___
/ \
_____/ \
\___________________________

2012 2013 2014 2015 2016 2017 2018”

Mark, we have a few spots available in the mental asylum where the great Stan Brooks resides. We are even offering complimentary lobotomies like the one we gave Stan. You are a prime candidate. Leave that musty basement and head on over to the asylum. We will even give you a straight jacket with “The Real Mark” printed on it…

#126 Sonny on 10.16.18 at 11:43 am

U.S. online giant Zillow launches first Canadian property listings

https://www.thestar.com/business/2018/10/16/us-online-giant-zillow-launches-first-canadian-property-listings.html

#127 jess on 10.16.18 at 11:47 am

“Offshore banker Adrian Baron faces up to five years in prison after becoming the first-ever person to be convicted in the United States under the Foreign Account Tax Compliance Act. ” (offshore alert)

#128 Alistair McLaughlin on 10.16.18 at 11:48 am

Mattl, a willingness to take a loss before it becomes catastrophic is often the only thing that differentiates a survivor from a bankrupt loser.

#129 KLNR on 10.16.18 at 12:42 pm

@#48 ImGonnaBeSick on 10.15.18 at 8:43 pm
One of my favourite things about the comments section is the Millenials proving again and again that they are the “instant gratification” generation. I want to own a family home now! I want to retire now! I want the housing crash to happen now! Now! Now! Now!! I can’t wait 6 months…
_______________________________

Fortunately this comments section isn’t a barometer for your average millennial or boomer for that matter.

#130 Tony on 10.16.18 at 12:44 pm

Just shorted most of the Canadian marijuana stocks. Will be shorting them again around the end of this month.

#131 Steven Rowlandson on 10.16.18 at 1:04 pm

So few safe subjects these days. Gravity? Some thing people and markets tend to defy and deny.

#132 Renter's Revenge! on 10.16.18 at 1:13 pm

#23 Dolce Vita on 10.15.18 at 6:57 pm
#14 Ellyot Mynahzeeun

Sour grapes much?

THAT was hilarious. Thanks for making laugh out loud (yes, some of us still prefer to type the words out in full using more than just 2 thumbs).

You poor thing.

Oh, how the times have changed.

Stick with Garth’s advice and you may well end up one of those dream guys. On the 7 ft., you’re on your own (but inside, you’ll feel that tall & women will know it).

===========

If the women don’t find you handsome, they should at least find you handy.

#133 Marco on 10.16.18 at 1:36 pm

Where is that prole of “Happy housing crash” ?
Gave up?

#134 n1tro on 10.16.18 at 2:07 pm

#133 Marco on 10.16.18 at 1:36 pm
Where is that prole of “Happy housing crash” ?
Gave up?
————————
While we organize a search party for HHC, should we look for Mayor of Milton too?

#135 Asterix1 on 10.16.18 at 2:39 pm

#133 Marco on 10.16.18 at 1:36 pm

Where is that prole of “Happy housing crash” ?

Gave up?
___________________________________________

Gave up! Of course not…

He WON!

#136 Damifino on 10.16.18 at 2:50 pm

#133 Marco

Where is that prole of “Happy housing crash” ?
Gave up?

—————————–

No, just regrouping.

He’ll soon reappear as “Happy Housing Stall”.

#137 Long-Time Lurker on 10.16.18 at 3:06 pm

http://www.cfact.org/2014/03/18/top-scientists-debunk-climate-change-myths/

Green scientists debunk climate change myths
By Larry Bell
March 18th, 2014

Dr. Fritz Vahrenholt, a prominent Socialist and a father of Germany’s environmental movement, has become another strong critic of the IPCC’s alarmist global warming doctrine. His lack of trust began while serving as an expert reviewer for an IPCC renewable energy report as the renewable energy division head of Germany’s second largest utility company.

Upon discovering and pointing out numerous factual inaccuracies to IPCC officials, they simply brushed them aside. Stunned by this, he began to wonder if IPCC reports on climate change were similarly sloppy. After digging into the IPCC’s climate report he was horrified to find similar incompetency and misrepresentations, including climate models that were fudged to produce exaggerated temperature increases.

Dr. Vahrenholt concluded: “The facts need to be discussed sensibly and scientifically, without first deciding on the results.” And although CO2 may have some warming influence, he believes that the sun plays a far greater role in the whole scheme of things.

#138 James on 10.16.18 at 3:07 pm

#127 jess on 10.16.18 at 11:47 am

“Offshore banker Adrian Baron faces up to five years in prison after becoming the first-ever person to be convicted in the United States under the Foreign Account Tax Compliance Act. ” (offshore alert)
__________________________________________
Many more to come! Uncle Sam loves FACTA and hes going to get you and your offshore tax evasion accounts no matter where you try to hide them. The IRS is considering expanding their definitions to ensnare foreign nationals that are under reporting or not reporting to their country of origin. They are now asking for foreign tax reporting data to cross check where the cookie trail leads.
Right now by definition they have a Resident Alien as follows. Apparently uncle SAM is hungry and need to feed the bank.
A resident alien is an individual that is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year.

Generally, the days the alien is in the United States as a teacher, researcher, student, trainee, exchange visitor, or cultural exchange visitor on an “F”, “J”, “M”, or “Q visa are not counted. This exception is for a limited period of time. For more information on resident and nonresident status, the tests for residence, and the exceptions to them, refer to Publication 519, U.S. Tax Guide for Aliens.

#139 jojo on 10.16.18 at 3:12 pm

Reading the comments today it becomes crystal clear how little most understand what is happening to them.

As a fellow who has invested in real estate for 45 years and have been through 3 crashes in various regions of this country I am saddened that few people have learned from the past.

We have been through the zero bound era that has NEVER happened before in recorded history. People grew up in an era of 2-4% mortgage rates and refuse to accept the inevitable.

Rates will rise – STEEPLY!

We will face 10-15% interest rates in within the next 5 years. As someone who was wiped out by real estate 30 years ago and learned his lesson, I offer this advice to you freely.

I learned taht you must exit these markets when the time comes. You cannot hold these real estate assets becuase you can be wiped out…

The affordability index is going to cause a massive crash in real estate. As rates rise people’s ability qualify for their mortgages will cause house to fall as buyers dry up. It;ll be trickle like it is now, then it’ll be flood as no-bids appear everywhere and teh herds run for the exits at any price…..

You saw this in 08 in the US. Why is it alien to you?

It is inevitable and real. At some point you must accept this. If not, your entire wealth tied up in real estate will disappear. Most people have few assets outside of their house.

My family has sold everything but our primary residences and the land we manage for timber.
We now hold mostly cash instruments waiting for what is coming.

You can fool yourselves for only so long.
Ask yourselve this question.

Can you afford 7-10% mortgages (OR HIGHER) within the next 24 months?

Can you afford 10-15% (OR HIGHER) mortgages in the next 5 years?

The central banks must raise rates. Pension funds are becoming drastically underfunded from a decade of nothing interest rates.

If they fail to raise rates pension funds will go bankrupt. The Central Banks know this.

Further, we are also entering an extreme period of inflation from this decaded of low rates. Again, costs will skyrocket (affordabiloty Index again).

You can expect 100 dollar oil very soon… If not 200….

Its all about choice……

Most of you are trapped, but, there is a way out….

#140 PastThePeak on 10.16.18 at 3:17 pm

#121 IHCTD9 on 10.16.18 at 11:13 am
Regarding the Teacher and Nurse:

Liquidate the condo asap and lick your wounds. Keep the house if you plan on kids. Sell the two new cars and tend to your bruises, then buy a couple decent used ones using cash – who cares what the neighbours or your co-workers think.

Buckle down and nuke whatever remains on the mortgage for the condo after it’s sold ASAP, and make an acute plan to nuke your student debt and house mortgage by 50 years old. Simultaneously, start maxing your TFSA’s , not sure if you need to pump your RRSP’s seeing you both have DBPP’s – probably not have much room to do so anyway.

You’ve easily got the financial horsepower and time horizon to get well sorted out by the time you’re 40, just a matter of getting on it right now.

In fact, you both really have it made in the shade – probably easier life ahead for you two than 90% of Canadians thanks to your government job security and DBPP’s.

BUT… some info for the Teacher:

“Nurses are more likely to have affairs than athletes, musicians and DJs.

Amazingly those in the healthcare profession are third most likely to have an affair, coming after those who work in finance, such as bankers, brokers and analysts, and aviation crew, like pilots and flight attendants.”

https://www.express.co.uk/life-style/life/771327/nurses-more-likely-affairs-cheating

Make damn bloody sure you and wifey are solid before you have kids!! If she is conventionally attractive, and working in a hospital setting – you have reason for concern – no joke. Repeat: NO JOKE!
++++++++++++++++++++++++++++++++

Always enjoy your input…classic!

#141 PastThePeak on 10.16.18 at 3:22 pm

#123 MF on 10.16.18 at 11:39 am
#48 ImGonnaBeSick

…are you a boomer looking to retire off the proceeds of your overvalued house?

-witnessed house values triple and quadruple over 10 years.
-witnessed people put 5% down and use extreme leverage to profit handsomely
-can’t understand why young people would want to buy a house

MF
++++++++++++++++++++++++++++++++++

It is fair to say that the housing gains of the last 10 years, in a few select locations, have been huge. And yes the young should not be damned for seeing the riches and thinking that they should join in.

That doesn’t mean it will end well for those jumping into the housing market now looking for the same gains going forward, especially if it means they take on debt up to their eyeballs.

And it doesn’t meant that advice given now should be disqualified due to the last 10 years in the GTA and BC LM markets.

#142 jojo on 10.16.18 at 3:24 pm

Crashes happen over time
A good for any person is the US stock market from 2006-2009

It wasn’t overnight

It’s a process not an event

#143 jojo on 10.16.18 at 3:28 pm

One more

Here is how to tell when to buy and sell

At the bottom of the market – at your local house party you tell people you are buying rental property – They say “ARE YOU NUTS”

At the top of the market – at your local house party you tell people you are selling your rental property – They say “ARE YOU NUTS”

#144 Fish on 10.16.18 at 3:37 pm

Finalizing Provincial Land Tax Reform

https://www.fin.gov.on.ca/en/consultations/landtaxreform/

#145 Brian Ripley on 10.16.18 at 3:47 pm

#137 Long-Time Lurker – please see

German electric utility executive Fritz Vahrenholt is co-author (along with geologist Sebastian Lüning) of a book expressing “skepticism” regarding the human contribution to global warming, which predictably has been trumpeted by the usual climate denial enablers.
Vahrenholt and Lüning both currently work for RWE Innogy, Germany’s second-largest energy company (Vahrenholt as a manager, Lüning as a scientist in its oil and gas division).

Vahrenholt admits he has no expertise in climate science, but apparently his status as “Germany’s Top Environmentalist” (a title which Vahrenholt appears to have been awarded just recently by anti-climate think tanks and denialists) and his climate “skepticism” are sufficient for some people to take his climate claims seriously.

In short, we end the way we began, wondering why anybody takes Vahrenholt’s comments on the climate seriously. Not only does he lack expertise in the subject, but he clearly has not done his research, and misrepresents most of the sources he references. SOURCE https://www.skepticalscience.com/fritz-vahrenholt-duped-on-climate-change.html

The above is a quote snippet from the Skeptical Science site. It’s worth reading the whole piece.

#146 NoName on 10.16.18 at 4:29 pm

is there bloomberg anyone with terminal willing to share whole article or just highlights.

https://www.bloomberg.com/news/articles/2018-10-16/china-may-have-5-8-trillion-in-hidden-debt-with-titanic-risks

#147 jojo on 10.16.18 at 4:57 pm

137

Geologists understand more about weather than any other science..

They pull samples from the Earth from 1000’s and millions of years ago.

Unlike climate sccammers and Liberals who pull their sophistry from their collective asses

#148 no, you're wrong on 10.17.18 at 12:42 am

can take a 3K per year gamble on Calgary RE

$60/week on Lotto Max for how long before you stop?
It’s more fun, and you can let it ride with any small winnings

#149 Bob on 10.17.18 at 10:21 am

You were wrong about Trump getting elected and you are wrong about Calgary. It will turn around. The amount of business diversification out of the oil sector is accelerating. At some point there will be a critical mass that will occur and this, coupled with a conservative AB government, will bring about change. The NDP aberration will be a smudge on the pages of AB history.

#150 jess on 10.17.18 at 10:47 am

7 Long-Time Lurker on 10.16.18 at 3:06 pm

” ………I don’t claim that I know precisely whether the sun is responsible for a 40, 50 or 60 percent share of global warming. But it’s nonsense for the IPCC to claim that the sun has nothing to do with it.

In the same interview Vahrenholt reveals himself to be more lukewarm rather than sceptical

SPIEGEL: If we take your book to its logical conclusion, it will be unnecessary to reduce CO2 emissions at all.

Vahrenholt: No. Even a temperature increase of only one degree would be a noticeable change. But I am indeed saying that climate change is manageable because the cooling effects of the sun and the ocean currents give us enough time to prepare. In any case, it will be easy for us in Germany to adjust.

Vahranholt admits he is doing no original research. His environmental qualifications are also suspect as the quote demonstrates as well as his association with Shell. As for the believer who became a sceptic:- this seems to have derived from his book launch where he is described as being the founder of the German Green movement, a statement that is not true, he was an SPD politician who had the office of environment minster whilst the SPD and Greens were in coalition government. ”

https://denierlist.wordpress.com/2013/02/22/fritz-vahrenholt/

https://en.wikipedia.org/wiki/Green_party#Belgian_and_German_roots