Adam gave up. “We recently made the decision to purchase a house after multiple bad rental situations,” he admits. But he & his squeeze were smart buyers. No GTA. No epic debt. “We moved to London, a much more affordable city where prices weren’t insane. We bought much lower than what we could have been approved for, and didn’t wipe out all of our savings by following your rule of 90.”
Good blog dogs. But there’s a question here: “When we signed up for the mortgage in late spring we were able to get a 5 year variable rate for 1% less than a fixed rate. I had seen a few posts on your blog that variable was still a good option if you could handle the possibility of an increase. Since we started we ‘ve had 2 quarter point increases and our 1% advantage is quickly dwindling with another expected 3 increases by next spring. Do you think it would be advisable to try and lock in a fixed rate (at probably 1% higher) with an expected at least 1% increase by next summer with the possibility for more to come? Or would variable still be the better option? Handling the monthly payments won’t be an issue either way, I just don’t want to hand any more hard earned money over to the banks than I have to.”
Well, Adam, rising rates are definitely a problem for tons of people. The pointy-heads at TD Economics amped that this week with a report saying the debt burden will become more and more onerous over the next couple of years, with interest and principal payments surpassing 15% of disposable income – the highest level on record. “No matter which scenario you look at, one thing remains in common: debt service costs will likely outpace income growth over the next couple of years, squeezing consumer spending.”
The bank figures the effective rate on family debt will rise about 1% – huge, given that we now have 3% mortgages. And wages are expected to ride below inflation, which is not cool. The only good news is a family debt crunch might force the central bank to slow its pace of rate hikes. And what did The Ploz say about that, specifically?
“It shouldn’t be a hard thing for people to service their debt at those kinds of interest rates,” he ventured. “But if people have overextended themselves, given the low interest rates, then we’ve got a transition issue.”
Hmm. A transition issue. Aren’t we already there, given the report highlighted here yesterday? When big numbers of minivan-driving, soccer-moming, homeowning families borrow from private lenders at rates of 7-20% because they can’t pass the bank stress test, isn’t this already an “issue”?
To recap where we’re going, Adam, the trip from a 1.75% central bank rate now to 3% (Stephen Poloz’s destination) will jack the prime to 5.2% at the chartered banks. HELOCs will clock in at an average of 6%. Fixed mortgages will sit at close to 4.5% and the stress test will zip over 6%. With about a quarter of all mortgages renewing each year, the hardest hit will be all those people in Van and 416 who have $1 million properties and a debt-to-income level of 450% or greater. There are scads of them – folks who really can’t easily afford any increase in their monthly, whose properties may well be losing value at the same time. Wham.
Already happening. Look at YVR, where top-end prices have tumbled 11% in a year. Vancouver has gone from No. 1 in terms of rising luxury home prices global to the bottom of the list – No. 43.
Sales dropped in September by 40% (last month’s grisly stats are not yet available). Says the head of Sotheby’s Canadian real estate ops, “Right now, it is definitely a buyer’s market in Vancouver.” Of course, that’s not true. We’re nowhere near the bottom, and those people house-floggers like Brad Henderson manage to suck into this vortex of destructive velocity will always feel betrayed. Sadly his company just reported that 79% of urbanites between 20 and 45, “believe that financial gains on their home will outperform or be on par with financial investments over the next five years.” If true, that would put the average crap Eastside house at $3 million within a decade. What folly.
Now, to the question. Variable or fixed?
The advice some weeks ago was to stay variable until rates started to move and a defined timetable emerged. The spread at that time was (as Adam can attest) about 1%. That meant the central bank would have to move four times before the VRM advantage was lost.
So, what’s changed?
The Ploz added a quarter point a couple of weeks ago. Then he told us what the target was. Now he’s revealed when he wants to get there (sort of). As a result we’ve discovered the Bank of Canada would like to increase five more times, at least three of those (and probably four) in 2019. Meanwhile the spread between variable and fixed has narrowed. A locked-in fiver at the banks is currently 3.6% to 3.5%, while their variable rates sit around 3.3%. (The cheapest VRM is 2.6%, but that’s from some guy who also sells used Ram trucks in Welland.)
So, yeah, nailing it down for five years at a still-decent rate, with little premium over floating, is sane. Hopefully, Adam, you have the ability to convert without penalty. Because, after a single payment, the [email protected] will look at you funny. Take her a box of edibles.
About the picture...
Kris, in Manitoba, writes: “My dog Danny patiently waits for me to arrive home after work, pour myself a de-compression libation, and fire up the laptop for the latest blog-dog header image and article. I believe he secretly wishes he could grace your banner and sends along this photo should you wish to do so.”
103 comments ↓
I’m in the same boat as this guy
Recent sale report.
According to Zealty the seller of this luxury townhome just took a major hit.
B.C assessment has no record of the previous sale but occasionally at update time errors get rectified and so this one comes with an asterisk
The details…
3248 Granville st,Vancouver.
Paid 2.72 October 2017*
Sold 2.24 October 2018
Originally asking 2.88
Assessment 2.24
It just sold a couple of days ago, and so it will be a few months before I can do the confirmation but if true then they are out of pocket over 600k.
Talk about a pinch and a punch for the first of the month…
M44BC
3248 GRANVILLE STREET
Vancouver
* To be verified in a few months.
https://www.zolo.ca/vancouver-real-estate/3248-granville-street
Finally first
When real estate tanks, people don’t foreclose. That’s the problem. If people sold their houses when they couldn’t afford them, that would indicate a healthy attitude towards housing and would have a lesser effect on our economy than what actually happens. Look at the early 80’s or early 90’s. How many foreclosures were there? Very few.
The issue is that when mortgage payments skyrocket, Canadians will do everything humanly possible to stay in their house. My TFSA is worth 130K and I would liquidate it in a minute to apply to my mortgage if I was going to lose my house and force my kids to sit through that. I would live on beans and rice, sell my investments, cancel the cable, cancel the vacation, cancel the kids piano lessons, get a second job, etc to stay in my house and so would you.
That’s the real problem. It’s that Canadians will sacrifice pretty much everything to keep their homes. Rational? Probably not. Can you blame them? Probably not either.
Attention new Blog Dogs, the following user names are still available:
Morley Superior (Canadian)
Dwight Privilege
Stoner Intoner
Stop Sion on Money Road (Heir in the awful places)
Chancellor Rebalancer
Maxim Salvo
Dinkum Factum
George Sorrows
Ancient and Accepted Blog Dog.
…
Reserved:
Blog Dog Poloz
…
Retired?:
Smoking man
FIRST?!
my issue
i love Dogs
bow wow wow
The spread was far less when we renewed in March, 2017. At that time, the spread was 0.2% between fixed and variable, so we locked in a fiver for 2.3%. Still glad we did it with a renewal in 2022 we have time to manage and plan.
Falling Real Estate Prices May Cause the Next Financial Crisis! It’s ALREADY HAPPENING!
http://www.investmentwatchblog.com/falling-real-estate-prices-may-cause-the-next-financial-crisis-its-already-happening/
Hey #4 Dave Ahem, I was thinking about this question the last couple days and I think you’re right. People have been predicting mass bankruptcies and foreclosures, but I think you’re right that people will do whatever they can, to make sure they don’t lose the house.
I think people selling their homes will be the ones who have to reduce their prices in order to finish the sale, and that’s when affordability will become more apparent. But I also think that’s at least 3-5 years away.
The trend continues across all types of housing in YVR: prices dropping the past few months while inventory builds.
https://theprovince.com/business/real-estate/vancouver-home-supply-up-as-sales-drop-below-historical-average-in-october/wcm/06d7d3ed-22b4-48f4-a40f-d78dcf878605
I like this recent trend of publishing your dog-fan mail.
Danny the dog is actually wishing his human would come home & take him outside to walk/play:)
Interest rate increases mean you pay more on what you owe. While I can totally understand the hope that rates won’t rise as predicted, the fact that an actual rate target (3%) & timeline have been indicated is reason enough to take action now.
Vancouver Island is still seeing all time highs in prices even with sales declining significantly. Communities north of Victoria still have sales occuring at all time price highs despite it taking much longer to sell (many weeks to months instead of a week in 2016 and 2017). Many months into B20 and rising interest rates, and prices are going nowhere but up.
Houses have gone up 30-40% in less than two years, and are still selling at those inflated prices. One would think with sales being drawn forward LAST November because of B20, that almost a year later, we would be seeing a downward trend – especially with rising interest rates. But nope – anything in the 700-1.5 million range is still selling very very well.
Of course, we are outside of the spec tax and foreign buyers tax areas…..hmmm…perhaps a correlation.
It looks like many many many more years of renting for prices to drop back down to 2016 prices. Perhaps it would have been wiser to have purchases n 2015/2016, ridden the wave up and then down, to end up back to your original purchase prices.
At least that way, you get to live a life in your own house while watching your equity grow and then disappear – rather than dealing with the crappy landlords and ridiculous rent increases.
And bubbles are supposed to pop first in the communities outside the core – the last to rise (e.g. suburbs and rural) are always the first to go down in a correction. Except this time, the market cooling tax measures are cooling the core before the hinterland communities…
hey Garth; interest and principal payments 15% of disposable income? wish that was the case for many greater fools
That’s an average, not a norm. – Garth
For all you renters in the GTA and the GVRD, save your money and invest. Your time will come. The day of reckoning is already at hand for these real estate markets. Tremendous opportunities await people with liquidity. Anyone who has waited to buy a single detached property in the GVRD since early 2017 has saved themselves mid six figures on average. Single detached homes are down 20% on average from the peak. If your objective is to buy a home you can wait another couple years. An Eastside teardown should be back to 800k by 2020. Still an exorbitant number on an absolute basis, but a far cry from the 1.3 million in 2016.
The condo market should be as bad or worse. 800k condos make no financial sense. With all the supply coming to the market and sales tanking the presale market should completely crash. It will be unlike anything we have seen in recent memory.
@Dave Ahem
Long term are your kids benefiting from having an overpriced house or a financially secure family? If you could extract $1 million from your house, invested for 25 years and rented you would have enough to buy your children a McMansion and dick off to a tropical island. Almost 11 million. Who cares about your rent with that kind of money?
#4 Dave Ahem on 11.02.18 at 5:16 pm
I regret that you would be speaking for yourself in your summarization and many others, but not all of us.
I would sell and either move to a smaller place or rent, but would not sacrifice on all of the things you have listed.
Yes. I am the one and only real one. I also remember the wanna be me impersonators. I have been living my lifestyle long before blogs put a name/acronym to it. However, I am happy to see people waking up to
the truth.
Freedom First
13 Smith X on 11.02.18 at 5:48 pm
An Eastside teardown should be back to 800k by 2020. Still an exorbitant number on an absolute basis, but a far cry from the 1.3 million in 2016.
///////////////
I have a present for you.
Here is a recent post from my blog…
M44BC
Recent sale report.
I featured these guys last week in a Race to 850k post.
I have been talking about no support at the bottom of the market and this sale verified it.
The details…
3290 e Georgia st,Vancouver
Originally asking 948k,then 878k
Just sold for 775k
Assessment 1.26
3290 e Georgia st,Vancouver
So I should have featured it in a post called Race to 750k instead.
Nearly 40% below assessed value right at the bottom of the market.
This is the first detached going sub 800k but although things are moving fast it will still likely be years before something truly desirable goes for this number in Vancouver proper.
The tracking continues…
M44BC
https://www.zolo.ca/vancouver-real-estate/3280-east-georgia-street
Paper Cash is Becoming Obsolete. Long Live electronic cash.
The number of cash withdrawals at bank Automated Teller Machines has declined by 20% from 2013 to 2017. And 2018 will show another drop.
It has reached the point where for many of us, it feels really strange to use paper money for anything over about $20. Using debit of course IS using cash (just not paper cash). And many people use credit cards for the points but pay it off monthly so that, in substance, pretty much amounts to paying cash.
https://www.cba.ca/abm-transactions
Watch for an acceleration of bank branch closures. And watch for ATM machines to start disappearing.
Banks are reducing their expenses rapidly. But so far are holding onto the savings as added profits. They are so ripe for more wide-spread disruption now. Jeff Bezoes is licking his chops.
Jean Machine going out of business, will close all stores by February
The Canadian apparel retailer is shutting down because of losses
The Canadian Press · Posted: Nov 02, 2018 1:40 PM ET | Last Updated: 4 hours ago
https://www.cbc.ca/news/business/jean-machine-closing-1.4889529
(The cheapest VRM is 2.6%, but that’s from some guy who also sells used Ram trucks in Welland.)
////////////////
he will also buy your gold
#4 Dave You can live in your mac and cheese home while all the rest depreciate around you. Sounds like a win win…..
I also don’t quite understand the 15% average figure mentioned of disposable income for interest and principal payments. Seems low?
I seem to recall all these stats of how in the hot markets some outrageous percentage was going towards monthly housing, in YVR’s case over 100%…? You’d need a lot of people spending less than 15% to make that the average, no?
*scratches head*
I have Vancouver October Housing Data and Chart published:
http://www.chpc.biz/vancouver-housing.html
Vancouver detached house HPI prices continued crumbling beneath the weight of a brick wall of resistance. The FOMO crowd has exhausted itself.
Res-Listings down 30% from JUN 2012 high
Res-Sales down 62% from MAR 2016 high
Current Monthly Absorption Rate = 15%
Current Months of Inventory = 7
Vancouver SF Detached Price (HPI)
Down 5.8% from SEP 2017 Peak
Up 119% in last 10 years
Vancouver TownHouse Price
Down 3.6% from JUN 2018 Peak
T-Houses are priced at 54% of SFDs
or 1 SFD = 1.8 Townhouses
Vancouver Condo Price
Down 2.9% from JUN 2018 Peak
Condos are priced at 45% of SFDs
or 1 SFD = 2.2 Condos
I grew up in London till my late 20’s. It’s a university and hospital town. There is a lot of poverty and crime. Good jobs are scant and hard to find and the people are miserable as all they eat is crabby apple pie.
I got of there for those reasons and so did so many of peers i grew up with. I live in Oakville now!
For anyone even thinking of buying in Vancouver please see:
myrealtycheck.ca
Is anyone willing to bet against a one billion dollar monthly write down of house prices sometime in the next 12 months??
October 2018
Average Change: -6.00%
Up:305 Down:4897
Overall $ Change: $-489,513,218.00
Average Change Amount:$-94,100.96
Good news dogs.
Smokingman is not on the cart yet, hes still alive! He’s not even on the wagon, still falling regularly into a bottle of JD and nearly drowning every time.
Tune in here on November 7th as he comes back in smug satisfaction to gloat on the Republican success in midterms.
How come Garth never mentions [email protected] in same sentence as the Orange Guy ?
Stay variable. Garth may be correct in his prediction of 2 or 3 more rate hikes. But you are likely to get the hikes back in the long run and you will end up better off with the variable over the 5 year term or it might be a wash. The only think that would make me want to switch is if I could lock for an extended period 6 to 10 years at a low fixed rate.
By end of Q1 2019 Canada will be in a recession. Oil is heading to $40. All economic indicators for September stunk and it is just the continuation of a downtrend. Don’t be fooled by a good jobs report either. People will be forced into the job market because they have no money. It will not be an increase in quality jobs.
Kilt.
“If you could extract $1 million from your house, invested for 25 years and rented you would have enough to buy your children a McMansion and dick off to a tropical island. Almost 11 million”
Right. But wait, your rent would remain reasonably low, and your investments would far outpace any rise in RE values.
Yeah, a transition issue. And if we die, we have, you know, a metabolism issue.
I don’t really want to burn a post on a sicko, but here goes.
I just emailed the real Freedom First to see if he is still alive.
This is my third attempt and as yet no reply.
Will keep you guys posted but as what happened to Boom proved, behind each screen name is a person and when that person dies and you continue to use their name just to get a cheap laugh, well,I’m not o.k with that.
Have some respect…
M44BC
M64WI
Is this a good investment Garth?
8580 No. 4 road, Richmond, BC
GREAT OPPORTUNITY to own almost 5 acres (1.98 hectares) rich soil land with no ditch at the front yard located in the heart of Richmond on Number 4 Road and Blundell Road. Excellent location to hold the house in a very good condition with a profitable blueberry farm or build your dream home with your Agriculture business and enjoy abundant amenities and facilities in Richmond City.
Only $6,800,000
“from some guy who also sells used Ram trucks in Welland”
I am from Welland and drive a Ford but have been an Albertan for 46 yrs. Has this blog run out of provinces to insult and now must feed on it’s own provincial weaker rust belt siblings.
Can you post some charts and tables with region specific real estate stats? Thanks.
some of you’all may want to put on fire helmets and see whats going on in Leslieville, or ask a realtor- multiple offers 100k plus over list
For # 25 Billy Bob (none of these economists could fly or land a plane, but here it is anyway):
All in all, the effective interest rate on outstanding mortgage
and consumer credit is estimated to rise by about
95 and 125 basis points, respectively, from their levels in
the third quarter of 2018 through the end of 2020 (Chart
5). This forecast is consistent with expectations around
central bank monetary policy, with the Bank of Canada
likely to build on hikes implemented in July and October
with three additional moves in 2019. Since most consumer
credit products are issued at a variable rate, the
effective rates on consumer credit will increase in lockstep
with the benchmark rate. Meanwhile, the effective
average mortgage rate will increase more gradually1.
This means that total debt service costs, including interest
and principal obligations, will continue to move
higher, likely eclipsing 15% of disposable income by the
end of 2020, which is roughly 0.20 percentage points
(pp) above the previous peak in 2007 and 0.9 pp above
current level (Chart 6). Specifically in terms of mortgage
debt service costs, these will likely hit an all-time high
going back to the early 1990s. But, unlike that period, the
cost of servicing consumer debt will also be elevated,
consuming 8% of income, compared to 6% in 1990s
The effective rate of variable rate mortgages is higher than what is actually advertised in comparison to fixed rate mortgages because the compounding is monthly versus semi annually.
#18 Hawk on 11.02.18 at 5:58 pm
#4 Dave Ahem on 11.02.18 at 5:16 pm
I regret that you would be speaking for yourself in your summarization and many others, but not all of us.
I would sell and either move to a smaller place or rent, but would not sacrifice on all of the things you have listed.
**********
That and it only takes a small segment of foreclosures to change market sentiment. Not every one can hang on as it is stressful on relationships. Not everyone is at the same place in life and context matters. If house building slows further, do our local economies and local jobs disappear. Reality bites! Consequences suck!
Nanaimo down a tick on detached, but still hot. This ain’t no tide. It’s more like a Tsunami where water finds new places to run like never before seen. Money will continue to flow out of the Mainland to the Island north of Victoria. Nanaimo is a gem, but we ain’t accepting any more refugees. Lol.
Not so rosy in the US of A, it seems:
“The finances of Americans may not be as good as they look from the outside.
Despite optimistic metrics like a nine-year-long bullish, if volatile, stock market, higher than expected job and wage growth, and consumer confidence levels nearing record highs, millions of Americans continue to struggle, a study released Thursday from financial consultancy nonprofit the Center for Financial Services Innovation (CFSI) found.
Only 28% of Americans are considered “financially healthy,” according to a CFSI survey of more than 5,000 Americans. “Financial health enables family stability, education, and upward mobility, not just for individuals today but across future generations,” the CFSI says. “Many are dealing with an unhealthy amount of debt, irregular income, and sporadic savings habits.” ”
————————————————————-
https://www.marketwatch.com/story/only-3-in-10-americans-are-considered-financially-healthy-2018-11-01
I wonder how the Canadian stats compare.
*******************************************
Re Variable vs Fixed, I’ve almost always gone with variable and has worked out (while I had a mortgage -I’m now renting).
Other than the savings from the lower interest rate itself, I liked the freedom of an ‘open’ variable mortgage – I hate being in a position of having to pay the bankers more for ‘penalties’.
TCC
Both the incoming Richmond City Council and the BC NDP are on record to bring in measures to reduce the size of McMansions allowed on the Agricultural Land Reserve. So no more foreign buyers will be allowed to avoid the FBT and build 15,000 sq/ft palaces of bad taste on lots like this. Caveat Emptor.
We locked in our mortgage rate the end of last year. It is a 10 year fixed rate mortgage with an annual 20% prepayment option and 3.35% rate.
If we continue on our current monthly mortgage payment, we will only have $55,000 left in 2028. Our current house value is $900,000 but we paid a much lower price of $375,000 back in 2004.
I told my friends to lock in but they are now going to pay 4.5% to 5% mortgage rates soon.
Absolutely correct.
I would rather eat garbage and live in my own home than eat stake and live in someone else’s home.
I’d sleep better too.
So it only takes 9 months to clear a bankruptcy? This is criminal. No wonder people are getting stupid about debt when they are not locked out of the market for longer than it takes to make a new baby
And who pays when a lender gets shafted? The rest of us!
#14 Island Up on 11.02.18 at 5:45 pm
Vancouver Island is still seeing all time highs in prices even with sales declining significantly. Communities north of Victoria still have sales occuring at all time price highs despite it taking much longer to sell (many weeks to months instead of a week in 2016 and 2017). Many months into B20 and rising interest rates, and prices are going nowhere but up.
Houses have gone up 30-40% in less than two years, and are still selling at those inflated prices. One would think with sales being drawn forward LAST November because of B20, that almost a year later, we would be seeing a downward trend – especially with rising interest rates. But nope – anything in the 700-1.5 million range is still selling very very well.
Of course, we are outside of the spec tax and foreign buyers tax areas…..hmmm…perhaps a correlation.
It looks like many many many more years of renting for prices to drop back down to 2016 prices. Perhaps it would have been wiser to have purchases n 2015/2016, ridden the wave up and then down, to end up back to your original purchase prices.
At least that way, you get to live a life in your own house while watching your equity grow and then disappear – rather than dealing with the crappy landlords and ridiculous rent increases.
And bubbles are supposed to pop first in the communities outside the core – the last to rise (e.g. suburbs and rural) are always the first to go down in a correction. Except this time, the market cooling tax measures are cooling the core before the hinterland communities…
******************
Maybe some hot retirement towns like Qualicum/Parksville are still seeing activity but on the outskirts things are going down and properties are pricing for quick sales, two i was looking at sold for low 300K, a couple years ago, prices were mid 500K+. And Parksville – Qualicum are not exactly creating jobs except at the local funeral homes, which is expanding and open 7 days a week. Houses come up for sale weekly – cycle of life.
Stormy (… not Daniels).
Google this ….Richmond peat bog fire
It is probably still burning underground.
btw I’ll be performing at the Salt Shaker Deli this week.
” And wages are expected to ride below inflation, which is not cool”
Good thing our weeping minister got CETA and the TPP signed. Both agreements allow big corporations to import labour from places like Romania and Indonesia. That’ll help with those pesky wages.
Garth,
I know you hate GIC’s but would you try to get over that for a moment and predict where the rates on a blue chip ie. Royal Bank 5 year GIC will go by the end of 2019. They are presently around 3.25 %. Thanks.
ARCHIVED MARKET RELEASES
WinnipegREALTORS® produces a monthly report about the housing market of Winnipeg and its Metropolitan Region, including statistical analysis and year-over-year comparisons.
http://www.winnipegrealtors.ca/market-releases-and-statistics/market-releases/article/525/september-sales-drop-12
@#16 Smith X on 11.02.18 at 5:48 pm
For all you renters in the GTA and the GVRD, save your money and invest. Your time will come.
____________________________
not sure thats possible for most.
with sky high rental rates in Toronto there isn’t much left over to invest.
Young and Foolish # 32..
Ya but … for Pete’s sake you have to have the Mill clear in your house for the 25 years to yank it out ! Think about it… Give it a rest.
Hi Garth, by the same logic would a 10yr fix rate be a solid option today? 2-3 yrs down the road it may seem like a no brainer. Thanks
Trump’s attacks on central bank rate hikes risk creating future economic trouble: Don Pittis
Rate hikes cause recessions — but maybe only when they come too late
Don Pittis · CBC News · Posted: Oct 30, 2018 4:00 AM ET | Last Updated: October 30
https://www.cbc.ca/news/business/trump-fed-powell-poloz-1.4879593
5 TurnerNation on 11.02.18 at 5:23 pm says… “Attention new Blog Dogs, the following user names are still available:..
Reserved:
Blog Dog Poloz
…
Retired?:
Smoking man”
~~~~~~~~~~~~~~~~~~~~
We should retire names like jerseys…
BOOM!
Smoking Man
Freedom First
I don’t understand the aversion to renting by so many people. It’s convenient, and allows great flexibility. True, there are bad landlords, but most are not so.
God LOVES renters
Is the future of western politics Populist not Liberal? Great debate. Bannon figures the populists have won; comes down to a contest between free market, less govmnt, populism of the right & collectivist, more govmnt. socialist populism of the left.
Here in B.C.(at least any riding touching the ocean) the majority by far is the left. Dippers, Greenies & PC Liberals. Same as all the way down the Pacific coast. We’ll see which way the “populists” jump on tuesday.
Exciting times to be a “political junkie”.
Since it is voting season I will try to do a poll this weekend to see if sentiment has changed regarding segment selection.
What I did is randomly selected 3 properties,one detached,one townhome and one condo,roughly in the same area of the city,roughly at the same price point.
Let’s see which one people choose.
M44BC
https://www.zolo.ca/vancouver-real-estate/7296-inverness-street
https://www.zolo.ca/vancouver-real-estate/410-east-11-avenue
https://www.zolo.ca/vancouver-real-estate/289-east-6th-avenue/219
Vote here…
https://pinksnow103480648.wordpress.com/2018/11/02/poll-time/
What happened to my Loblaw shares? Good or bad?
Don’t forget, CPP premiums are increasing in January as well. That means more coming off your pay cheque.
#139 crowdedelevatorfartz on 11.02.18 at 4:06 pm
@#130 Wrk.dver
“Back in ’90, I drove a Scotsdale of that body style 3600 miles in six days”
++++
Calgary to Halifax?
——————————————
I had infiltrated a professional gear head cell in Chandler/Mesa, and had an after market everything super car engine built/balanced and blueprinted, dropped into a $900 truck. I got a late start on day one, but made Roswell, and changed the oil from break in to racing at motel. Next night stopped in Tulsa with rear axle pinion leak, lost three hours and $50 in morning. Made Columbus, that night, Schenectedy the next, then only Boston the next. Arrived in St John in style for the party awaiting the midnight boat to Digby on day six. 3600 nasty miles. The engine builder still boasts up my saga.
My first and last pickup. Thrashed the engine hard for fifteen years, had the truck two weeks.
Tore the engine down, replaced one valve guide in each head, changed the custom fit thrust bearing, and flipped for what I had paid. Still same as brand new after 100,000 miles and 34 Valvoline racing oil changes.
Stunting laws were invented, or I would still be rocking that one as hard as an old Fart can.
M65NS
Wow over 3% drop in sales price in 3 months in Vancouver…
“The composite benchmark price was $1,062,100, a decrease of 3.3 per cent over the past three months”
Global News BC: Homes sales fall in Metro Vancouver again: REBGV.
https://globalnews.ca/news/4623388/homes-sales-fall-in-metro-vancouver-again-rebgv/
Meant to say thank You Garth,
All these crybabies today. Try this at 12.75% to 20.5% in 1980 on a salary of $2300 a month during the NEP, then come back & tell us what you do. Twenty-five percent down, or CMHC on top, variable non existent, 25 yr amort. Fixed mortgages, 1,2, 3, 5 yr max. No 5 & 30, or 5% down. Or fold em.
Boomers, eh. They had it so easy we printed our own money, right? Its fun reading this blog!
The trick to real estate is get the sparkle diamonds outta yer eyes first & buy what you can afford to pay & live in. Anything more & its debt slavery, or foreclosure down the road. You PLAN for a serious shock, you’re financially stupid if you don’t.
Saving is a good plan, first. Then buy, but buy smart. A budget works to keep you out of financial trouble. Never rent your home to anyone, they’ll trash it & you’ll find that as the owner, you do not have the rights to your property & little recourse to recover the costs of damage.
Yeah, Boomers eh, WTH do they know about real estate? I built my retirement home, house # 3 in my life & it costs less than $600 a month to “run” it, so why would I feel I should sell it to you wet behind the ears types, before I have to, like some posters suggest?
Nice 1350 bungalow, a walk to LRT & shopping, on a park, south face. Subdivision. I worked on 90-120 day receivables to pay to build this. Try it some time.
With all due respect…I think Poloz means transition may take a year or two to complete its process.
Kris, in Manitoba, writes: “My dog Danny patiently waits for me to arrive home after work, pour myself a de-compression libation, and fire up the laptop for the latest blog-dog header image and article. I believe he secretly wishes he could grace your banner and sends along this photo should you wish to do so.”
———
My cat waits for me at the window also.
But
I don’t have to take her outside in the rain to take a crap.
Cleaning the litter box takes a minute.
“Ya but … for Pete’s sake you have to have the Mill clear in your house for the 25 years to yank it out ! Think about it… Give it a rest.” — JPN
My point was to say that 1 million invested today will grow (as the previous poster suggested perhaps to 11 million over 25 years), but so will RE. Nobody can really see the future, but inflation usually means higher prices.
Consider that if you bought 416 RE 10 years ago you made a healthy return compared to the TSX. The next 10 years might be the reverse. Or perhaps 416 RE and the TSX will both go sideways.
It’s just over ten years since the esteemed professor penned “Crashing in Kelowna” and although it may not be a crash it’s certainly ominous. Even our agents are looking at leasing Kias, the Audi dealership is devastated.
Buying/selling in August we did okay – got a good price for our old condo and our new place (no size restrictions on dogs!) was purchased for 20% less than it sold for new – a few years back.
Do miss the sun and sand of Phoenix, but our new puppy will keep us focused on what’s important!
66 PO’ed in AB on 11.02.18 at 10:03 pm says… “All these crybabies today. Try this at 12.75% to 20.5% in 1980 on a salary of $2300 a month during the NEP, then come back & tell us what you do. Twenty-five percent down, or CMHC on top, variable non existent, 25 yr amort. Fixed mortgages, 1,2, 3, 5 yr max. No 5 & 30, or 5% down. Or fold em.
Boomers, eh. They had it so easy we printed our own money, right? Its fun reading this blog!”
+1… while I’m GenX, I watched my parents who diligently saved and paid off their mortgage early as rates started to climb in the early 80s. Many of their friends did not and were wiped out (often owning multiple properties).
If you took on a mil of debt and didn’t at least get a crocodile infested moat with the property, you probably paid too much…
Interest rates will rise so I like fixed
In my mom’s basement I fix my mattress to one corner. Never variable
The real estate situation is only worsening the rising wealth inequality in Toronto.
Toronto is becoming a city of ‘haves’ and ‘have-nots’.
https://www.risktopia.com/2018/11/toronto-worsening-wealth-inequality.html
BC Property prices moderating and Vancouver falling off the global luxury / top money laundering destination?
Proof the NDP are doing their job.
B+ for the report card. Still room for improvement. Don’t let your foot off the pedal NDP.
The libartarty control freaks who get orgasms telling you what to think, if you oblige, hugs, kisses, and acceptance to a tribe with no plan, controlling the herd, with stupid ideas is all that matters to these insane control freaks.
No smoking on patios or vaping. Weed is good, we can neutralize the last of the descent. Self-inflicted castration to stupid people.
I did a Dice job search in Trumps America, (VBA Developer), 32, 0000 jobs. And I’m sitting here paranoid frightened to truth tell because of good old James outed me here, and sent a letter to HR.
Fire me, girls.
Red tidal wave in 4 days, have you loaded up on equities yet……
Rates are going up, up, up!
https://www.youtube.com/watch?v=EMC_j0Xbdx0
race to 2 million?
i don’t get this this. just sold at damn near 2016peak pricing. small 25′ lot, house ok/nice but not new nor high end . some character, just barely move in condition. great hood.
teardowns are down as flop shows everyday but anything move-in ready is still thin on the ground around here.
a few full 33′ lots/teardowns across the street have dropped to 1.25ish. but they all sold recently and all 3 have met the excavator, new places going up fast.
get this….
2 days on market
141,000 over ask
390,000 over assessment
saw the sold sticker yesterday.
2148 KITCHENER STREET
MLS® R2312888
3 Storey
4 bedrooms • 2 bathrooms
Selling Price $1,800,000
Final Asking Price $1,659,000
Size of Home 1,968 sqft
Price / sqft $915
# of Kitchens 1
Basement Full, Partly Finished, Separate Entry
Lot Size 0.06 ac
Lot Frontage 24.75 ft
Lot Depth/Size 113.03 ft
Age of Home 104 years
Property Taxes $5,293.25 (2018)
Days on Market 2
——————————-
if you want to see one guy sweating it out, this new duplex has been done for 6-9? months now and still no takers. asking about 90% of peak price, but won’t budge so far.
https://www.realtor.ca/real-estate/20030846/single-family-2158-grant-street-vancouver-british-columbia-v5l2z4
2.4mil is a lot to carry while waiting!
Comrades: vote Putin, oops, I mean Democrats.
#73 The Real Mark on 11.03.18 at 12:12 am
Seriously, knock that personation off. Not cool.
Anyone know what a good 5 year fixed rate is right now?
Correction: Was at Tulsa for BBQ supper, topped up rear axle every hour on the shoulder of the road all the way to Joplin for 1:30 am motel check in. In Columbus, I checked in at 3:30 am. Got a 1/2 inch of freezing rain while I slept there for four hours.
Lest this story sound tall.
#76 Smoking Man on 11.03.18 at 1:28 am
good old James outed me here, and sent a letter to HR.
–
At least not to Antifa.
If you have a proof he did that, you can sue him, preferably in US court if you lived there and if you were employed by an American company when this allegedly happened.
He has no right to interfere with your ability to make a living because he disagrees with your views.
I don’t support the idea and practice, but I can’t help to notice that people were also banned here for good for much less.
I ain’t ever seen the like. No wonder AB oil companies are gnashing their teeth and trying to undo tight knots in their undies. Now they want to form a cartel, lower production and fix prices.
These low oil prices and differentials can cause palpitations. View at your own risk.
http://www.psac.ca/business/GMPFirstEnergy/
66 PO’ed in AB on 11.02.18 at 10:03 pm
Crybabies?
We would love to have “normalcy” in the housing market like that. That’s what kept prices at human levels.
Why do you think rents are so high in our major cities. Why do you think people are moving hours away from their jobs to buy some RE.
WHO profited most off of this joke bubble?
Lay the blame at boomer institutions like the BoC, the big five mortgage lenders, insurance companies, RE cartels and the like.
Almost all of those are headed by boomers.
So look in the mirror if you want to “blame” someone.
MF
#84 WUL,
now Wully, you know that they couldn’t form a cartel because cartels are illegal. Besides, cartels work only if they produce or sell identical products, if the number of producers or sellers is limited, and blind, deaf and dumb investigators can’t trip over them.
Oh, wait …
Geez, I wonder who he was talking about? Garth, any ideas?
John Pasalis on Twitter
For me, there are few things worse than being quoted by Canada’s worst financial planner – someone who told young people not to buy a home 10 years ago because they were “overvalued” at $350K & to invest with him instead because “the big crash” was just around the corner now, priced out of the market because house prices hit $800K the only option is to keep investing while you wait for prices to fall to what, $300K? And of course, how can we forget him telling ppl to invest their RRSPs in Nortel – when it was falling of a cliff. The Worst!
@#63 Wrk.Dvr
Interesting trip! A brand new blueprinted engine no less.
I drove a 1986 Toyota 4×4 pickup from Van to HFX in 3.5 days a few decades back.
Two drivers. We only intended stopping for gas and meals.
Van (Sat morning)to Winnipeg …26hrs.(Sunday Morning)
Winnipeg to Val Dor ,Quebec …24hrs ( Monday morning)(alternator packed it in and took 2 hours to find and replace)
We had veered north after Thunder Bay and went through Timmins, Val Dor, Sagueney, etc and ended up at the ferry terminal in St Simeon. ( Monday night)
Val dor to St Simeon 12hrs ( including repairs to truck)
Missed the last ferry across the St Lawrence by 1 hour….. Caught the first ferry 8 hrs later to Riviere de Loup.(Tuesday morn)
Riviers de Loup to Hfx 14hrs (tues night)
The truck ran great except for the alternator.
And the thick foam pad in the back ( Canopy over the box, sleeping bag, cooler)was awesome for stretching out on to give the back a break.
It was a fun trip but I dont think I’ll ever want to repeat that driving experience/ordeal.
#61 GOLDENBOY on 11.02.18 at 9:38 pm
What happened to my Loblaw shares? Good or bad?
==================================
This happened:
http://media.loblaw.ca/English/media-centre/press-releases/press-release-details/2018/Loblaw-Announces-Closing-of-Plan-of-Arrangement-to-Spin-Out-Choice-Properties-REIT/default.aspx
80 The Real Real Mark on 11.03.18 at 7:19 am says… “#73 The Real Mark on 11.03.18 at 12:12 am
Seriously, knock that personation off. Not cool.”
What is real? How do you define real?
If the interest rate slowly climbs to 3% over the next 15-18 months, the people will be able, for the most part, to adapt to the tightening, and will adjust as necessary.
There will be no catastrophic economic calamity.
Just a gradual slowdown, somewhat lower house prices, a little less robustness in retail spending, and a slight softening in financial markets.
As this adjustment takes place, and the “new normal” sets in, things will start to gradually improve once again in late 2020.
What goes around, comes around.
“As long as the roots are not severed all is well and all will be well in the garden.”
https://www.youtube.com/watch?v=YgGvd1UPZ88
@KLNR
You are right. Not everyone can pull it off. But any single who has saved $500 a month for the last 6 years and invested at historical rates of return should end up with 50k. If they continue to save and invest, the condos will decline and they will be in a good position. The math is even better for couples. Saving 500 each for 6.5 years will land them 100k. In 10 years they could have close to 200k. Now you have options.
Obviously the more you save, the better. I know people who save 60-70% of their income in the GVRD and they rent.
Not saying it is easy, but I’m saying its possible
#69 young & foolish on 11.02.18 at 10:30 pm
“Ya but … for Pete’s sake you have to have the Mill clear in your house for the 25 years to yank it out ! Think about it… Give it a rest.” — JPN
My point was to say that 1 million invested today will grow (as the previous poster suggested perhaps to 11 million over 25 years), but so will RE. Nobody can really see the future, but inflation usually means higher prices.
————————————————————–
Traditionally, RE was considered a hedge against inflation with roughly equivalent appreciation. Lets see what more traditional interest rates do to this scenario going forward…
68 – Ponzius Pilatus
“My cat waits for me at the window also.
But I don’t have to take her outside in the rain to take a crap. Cleaning the litter box takes a minute.”
Another typically uber intelligent cat lover.
Sadly, your IQ may be too high to be appreciated in this comments section, filled as it is with delusional dog owners.
But felines recognize your intellect and respect that.
Oh look, there’s another Lassie humping a fire hydrant – aren’t dogs cute and smart !?
Actually, neither…….same for their duped human slaves.
Gina Locks in a good 10 year mortgage rate
#45 Gina DiSantius on 11.02.18 at 8:02 pm
We locked in our mortgage rate the end of last year. It is a 10 year fixed rate mortgage with an annual 20% prepayment option and 3.35% rate.
**************************************
Congratulations. That seems very wise especially for those who would be in real hardship if they had to pay a lot higher rate at renewal.
Not only can you pay a huge 20% down each year but the mortgage becomes open for 100% payoff after 5 years under the bank act.
And perhaps this mortgage was from some small financial institution. So what? As long as you are not worried about if this lender does not want to renew in 10 years why would most borrowers care how small the lender is? (Or can the mortgage be called early if the lender goes out of business?) When you deposit money you should care about the size and strength of the financial institution. I am not sure there should be ANY such concern when borrowing.
Ratehub is currently showing 3.67% best rate for ten year mortgage. Canwise financial. But they show 4.54% from TD bank.
https://www.ratehub.ca/best-mortgage-rates/10-year/fixed
#83 akashic record on 11.03.18 at 9:20 am
#76 Smoking Man on 11.03.18 at 1:28 am
good old James outed me here, and sent a letter to HR
—————————–
Smoking man is quite possibly James anyhow.
The best writer of fiction, correct?
#87 crowdedelevatorfartz on 11.03.18 at 10:36 am
—————————-
Gotta love breaking down in language barrier country.
I high school francaised my way through that inconvenience once, and at my departure they said “good luck”!
Yeah, bon change vous aussi garcon.
It was worse breaking down just below the Mason Dixon line in ’72 with long hair and pimples though. Deplorables, whew!
That was the night I decided my life goal was to be an expert on all things car, after handing over $100 to have a $1 pair of generator brushes installed.
Youngsters….learn how to build a complete house and every thing in it, and a car from pieces. Financial freedom will follow those two baby steps. My $100 CPP is proof that I didn’t need to work a whole heck of a lot of my life to arrive here intact with those two skills.
Canada, the greatest place on earth to be poor!
@#96 Wrk.dvr
“Gotta love breaking down in language barrier country.”
+++++
It actually wasnt too bad.
My “charge light” came on and I figured it was the alternator ( because it had basically run nonstop for 48 hrs). So I started looking for a garage.
Thinking “How do you say “alternator” in French?”
5 minutes later …Drove around the corner and Voila! A Toyota dealership! The shop foreman spoke excellent english.
Doesnt get much better than that. They had a rebuilt alternator but the engine was so hot they had to wait an hour for it to cool down. We went for breakfast.
Back on the road an hour later heading north east toward Saguaney.
A few hours later a roadblock .
A QPP Highway patrol stopped us on the main road and in broken english said, “The house is coming!”
WTF?
5 minutes later around the corner comes a century old house on a Truck/trailer taking up the entire road…..
Interesting trip.
#95 Wrk.dover on 11.03.18 at 12:18 pm
#83 akashic record on 11.03.18 at 9:20 am
#76 Smoking Man on 11.03.18 at 1:28 am
good old James outed me here, and sent a letter to HR
—————————–
Smoking man is quite possibly James anyhow.
The best writer of fiction, correct?
—
I would be surprized. But maybe we are from places where reporting on neighbors, family was not a fiction. If he created that heartless character he owes me a fictional smokingman fx training.
#76 Smoking Man on 11.03.18 at 1:28 am
“[…] Fire me, girls.[…]” Have you ever considered sanity as an alternative lifestyle? :)
#34 Flop (peace.from outlander)
Thanks Flop. Yes, it’s me.Truth be told, I did get your e- mail yesterday. Thanks, and I appreciate and agree with your message. I recently returned home from a year of recovery/therapy in the hospital.
Freedom First
#100 Freedom First on 11.03.18 at 5:05 pm
May your recovery be complete, swift and long-lasting!
F71ON
Taxes
How your property is assessed
The relationship between your assessment and your taxes
MPAC provides your property’s assessment information to your municipality/local taxing authority. The assessed value and classification of your property is used as the basis for calculating your property taxes. The new value on the Notice you received in 2016 is used by your municipality/local taxing authority to calculate your taxes for the 2017-2020 property tax years.
Learn more about the relationship between assessment and taxation:
https://www.mpac.ca/PropertyTypes/ResidentialProperties/Waterfront