The landing

Well, that’s it, then.

The final niggling shard of doubt was removed Monday as the man responsible for your next mortgage rate bared all. Central banker Stephen Poloz’s transformation from wuss to warrior over the last year has been remarkable. After seriously lagging his US counterpart for ages, Poloz has amped rates five time in just over a year, now indicating there are five more to come.

The last nail in the coffin of debt-snorflers everywhere came in a speech The Ploz flew to London to deliver. “After a decade of extraordinary effort by central banks to flood markets with liquidity,” he said, “the global economy has reached the stage where stimulus can be steadily withdrawn.”

‘No stimulus’ means rates can return to a ‘neutral bias.’ Neutral, he indicated once again, is around 3%, maybe as high as 3.5%. Given the bank rate is down at 1.75%, this means about 1.25% is yet to come. That will deliver a bank prime of just over 5%. Five-year mortgages will be about the same with a B20 moister-killer stress test rate of 6.5%.

The bank’s projections for growth and inflation indicate one simple conclusion. Rates are going up. As mentioned on this blog last week, we’re half-way there. The fact Poloz has once again taken pains to spell this out in Dick-and-Jane language even pathetic bloggers can fathom means he is serious. He’s telling you to prepare.

This scares some folks, as you might imagine.

One of them is my bud, Benny Tal, chief economist at CIBC – a guy who has always leaned towards real estate as an engine of Canadian economic growth. Says he:

“I suggest three per cent may be way too high given where we are in the economy, given the demographic story, given productivity and many other reasons. My fear is that we’re chasing something that’s in the air, and it might actually impact real life. Because every economic recession was helped, if not caused, by monetary policy error in which central bankers were chasing inflation that was not there, took interest rates much too high and killed the economy.”

Well, the US Fed has increased nine times, and the economy there is still on fire. Jobs numbers are historic, wage gains relatively fat, the GDP’s swelling and while the housing market has slowed as mortgages jump, consumer spending has not. Tomorrow’s elections will also pass judgment.

But Canada is not America. While US houses have increased in valued 24% in a decade (since real estate collapsed), here they’ve inflated an unseemly 56% on average. Meanwhile American incomes have grown more than ours. As a result, it’s harder for locals to buy a property in Vancouver., for example, than it is for people living in Manhattan, SF or LA. You know – real cities – where they don’t double-tax pied-a-terres, moan continuously or hate and fear outsiders.

And speaking of moaning, here’s Van realtor Steve Saretsky’s latest missive to clients, where he lays out the bad news already hitting a market destined to revert:

“Home sales across Greater Vancouver fell 35% year over year, the fewest home sales for the month in six years. Total sales for the month fell 26% below the ten year average, increasing the number of homes for sale by 33%. The market downturn has been led by a sharp decline in the detached housing market where sales are the lowest in ten years, with the median and average sales price having declined by 9% from a year ago. This has finally trickled down into the more affordable condo market where the benchmark price has declined for four consecutive months.”

Now, Steve’s no slouch. No shill, either, as far as we can tell. Unafraid to point out scary things like how much more susceptible Canadians are to bloating interest rates than Americans…

…or that condo sales in the Fraser Valley (the hottest sellers back in 2017, when we were innocent and horny) have just crashed by 50%…

Now add this to the warning issued by a snowflake Toronto realtor (whom I dare not name) that significant numbers of middle-class, homeowning GTA families are going sub-prime – paying 7% to 20% rates because they can’t pass the stress test – and you can see the problem. Most people truly believe rates can’t rise. Four in ten new buyers never heard of the test. Millions of mortgages are coming up for renewal. And the dude pulling the levers is doing everything possible to warn.

Will The Ploz cause a made-in-Canada housing-induced recession, as Benny Tal fears? Will people keep piling on debt, whatever it costs? Will the real estate market soft-land or hurtle headlong to earth, guts everywhere?

Hate to say it, but Tuesday night will answer some of those questions. God help us.

171 comments ↓

#1 Cbo on 11.05.18 at 4:49 pm

First. Love it!

#2 Sasha Fierce on 11.05.18 at 4:51 pm

Toronto real estate will never collapse.

It’s a growing city and will become a rising superpower by 2030.

You’d have to be on opiates to ignore the fact that Toronto is home to the largest financial center of Canada, and ranked #1 by Forbes, The Economist and Bloomberg as the greatest city in the world for Millennials, newcomers, women and the LGBTQ+ community.

You can’t refute that many from the outer burbs like Mississauga, Brampton, Vaughan, Markham, Durham Region and Orangeville region commute to Toronto for jobs.

Toronto is a megapolis where the cream of the crop rises.

Whiners and haters such as MRAs, misogynists, right-wing Trump supporters and other hateful groups are angry that they are left behind because they don’t respect women, minorities and the LGBTQ+ community, and businesses aren’t going to hire bigots and women haters to cost their companies. Toronto is a great city.

Sure. Let’s start this thread with a nutbar. It’s that kind of week. – Garth

#3 Duke on 11.05.18 at 4:54 pm

#2 Sasha Fierce on 11.05.18 at 4:51 pm
Toronto real estate will never collapse.

It’s a growing city and will become a rising superpower by 2030.

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

Your comment made me laugh. The truth is, Toronto is a rising super-collapse by 2020.

#4 Gil on 11.05.18 at 4:55 pm

#2 Sasha Fierce

And they were talking about shortages of weed. Clearly Sasha is getting her share and some

#5 Brian Ripley on 11.05.18 at 4:55 pm

My Compare Vancouver to Toronto Housing chart is published speaking of real estate, (Toronto is buying and Vancouver is selling), but on the eve of the U.S. midterm elections…

I am suspicious of what appears to be a majority of Trump Fans/Voters here in Garth’s website comments. If you listen to the Monk debate (Frum vs Bannon, link below) the result of the debate was that 72% of the audience (filmed in Toronto) did not agree with the resolution “Be it resolved, the future of western politics is populist not liberal.” The polling of the Toronto audience before and after the debate remained unchanged, 72% against the resolution.

If Toronto is the center of our economic cultural engine, then Canada is clearly not buying Bannon’s refried Fouth Turning shtick.

So who are you Trump trolls and posers on Garth’s site hiding behind anonymity? You don’t appear to fit a Canadian ethos nor find value in our Canadian social contract.

Here is the Nov 2nd Monk Debate: David Frum vs Steve Bannon:
https://www.munkdebates.com/The-Debates/The-Rise-of-Populism

Trump Notes:

Kleptocratic from the Greek, literally means “rule by thieves” (Wikipedia).

​ITEM: Trump Kleptocracy Watch: An Update.​​ The New Yorker April 4, 2017​

ITEM: Kleptocrats manage to nationalize risk while privatizing profits. ​​Washington Post January 5. 2017​

ITEM: ​Trump will turn America into an ‘all-out kleptocracy’ like Russia and Ukraine. Paul Krugman November 15, 2016

Sociopathic Narcissist: Donald Trump, Narcissistic Personality Disorder and Sociopathy, by John C. Espy Karnacology, March 01, 2017

As Timothy L. O’Brien, the executive editor of Bloomberg Gadfly and Bloomberg View succinctly put it: Two things have always driven the president: self-aggrandizement and self-preservation. Bloomberg, May 10, 2017.

“What is imperative to understand, is that our now president appears to have a definable mental illness that appears to manifest as a narcissistic personality disorder with sociopathy.”

“First, as we have seen demonstrated repeatedly, and using Mr. Trump as an example, narcissists seek out others who will behave in an obsequious manner, not just while in their physical presence but also who will parrot their projections while out of their physical presence.”

“In clinical circles that possess a familiarity of sociopathic narcissistic personalities, there is a slang that refers to those who encircle a sociopathic narcissist, particularly one with power, as ‘pandering whores.’”

“A primary source of anxiety that lives within the sociopathic narcissist is a terror of ruinous disillusionment which would ultimately terminate in a catastrophic exposure of what is in essence a fraudulent existence. As the risk of exposure intensifies, be it in a dyad or more macro group structures, their intrapsychic constellation becomes increasing more fragile and their manifest behaviour becomes more erratic.”

The Russian Connection:

“For years, conservatives — especially fundamentalist Christian conservatives — have held Russia as an ideal to which they could aspire. As Vladimir Putin cracked down on the free press and the rights of his Muslim and LGBT citizens, many conservatives came to see him not as a brutal autocrat but as a paternalistic defender of traditional values. Many white supremacists likewise fawn over Putin’s Russia. Neo-Nazi Richard Spencer, now famous for being punched in the face, called it the sole white power remaining in the world, and Klansman David Duke has said he believes Russia holds the “key to white survival.” J. Ryne Danielson, February 2, 2017”

“Copying from the playbook of Joseph Stalin, Putin revived the Russian Orthodox Church to intensify patriotic support and presents himself as a defender of Christian civilization, because he saw the church had an ability to arouse the people in a way that the party could not.”

Links to the above items can be found here http://www.chpc.biz/history-readings/southern-exposure

Trumps ‘Hare Psychopathy Checklist’:

01. glib and superficial charm
02. grandiose (exaggeratedly high) estimation of self
03. need for stimulation
04. pathological lying
05. cunning and manipulativeness
06. lack of remorse or guilt
07. shallow affect (superficial emotional responsiveness)
08. callousness and lack of empathy
09. parasitic lifestyle
10. poor behavioral controls
11. sexual promiscuity
12. early behavior problems
13. lack of realistic long-term goals
14. impulsivity
15. irresponsibility
16. failure to accept responsibility for own actions
17. many short-term marital relationships
18. juvenile delinquency
19. revocation of conditional release
20. criminal versatility​

Umberto Eco’s definition of Facism from Wikipedia:

“The Cult of Tradition”, characterized by cultural syncretism, even at the risk of internal contradiction. When all truth has already been revealed by Tradition, no new learning can occur, only further interpretation and refinement.

“The Rejection of modernism”, which views the rationalistic development of Western culture since the Enlightenment as a descent into depravity. Eco distinguishes this from a rejection of superficial technological advancement, as many fascist regimes cite their industrial potency as proof of the vitality of their system.

“The Cult of Action for Action’s Sake”, which dictates that action is of value in itself, and should be taken without intellectual reflection. This, says Eco, is connected with anti-intellectualism and irrationalism, and often manifests in attacks on modern culture and science.

“Disagreement Is Treason” – Fascism devalues intellectual discourse and critical reasoning as barriers to action, as well as out of fear that such analysis will expose the contradictions embodied in a syncretistic faith.

“Fear of Difference”, which fascism seeks to exploit and exacerbate, often in the form of racism or an appeal against foreigners and immigrants.

“Appeal to a Frustrated Middle Class”, fearing economic pressure from the demands and aspirations of lower social groups.

“Obsession with a Plot” and the hyping-up of an enemy threat. This often combines an appeal to xenophobia with a fear of disloyalty and sabotage from marginalized groups living within the society (such as the German elite’s ‘fear’ of the 1930s Jewish populace’s businesses and well-doings; see also anti-Semitism). Eco also cites Pat Robertson’s book The New World Order as a prominent example of a plot obsession.

Fascist societies rhetorically cast their enemies as “at the same time too strong and too weak.” On the one hand, fascists play up the power of certain disfavored elites to encourage in their followers a sense of grievance and humiliation. On the other hand, fascist leaders point to the decadence of those elites as proof of their ultimate feebleness in the face of an overwhelming popular will.

“Pacifism is Trafficking with the Enemy” because “Life is Permanent Warfare” – there must always be an enemy to fight. Both fascist Germany under Hitler and Italy under Mussolini worked first to organize and clean up their respective countries and then build the war machines that they later intended to and did use, despite Germany being under restrictions of the Versailles treaty to NOT build a military force. This principle leads to a fundamental contradiction within fascism: the incompatibility of ultimate triumph with perpetual war.

“Contempt for the Weak”, which is uncomfortably married to a chauvinistic popular elitism, in which every member of society is superior to outsiders by virtue of belonging to the in-group. Eco sees in these attitudes the root of a deep tension in the fundamentally hierarchical structure of fascist polities, as they encourage leaders to despise their underlings, up to the ultimate Leader who holds the whole country in contempt for having allowed him to overtake it by force.

“Everybody is Educated to Become a Hero”, which leads to the embrace of a cult of death. As Eco observes, “the Ur-Fascist hero is impatient to die. In his impatience, he more frequently sends other people to death.”

“Machismo”, which sublimates the difficult work of permanent war and heroism into the sexual sphere. Fascists thus hold “both disdain for women and intolerance and condemnation of nonstandard sexual habits, from chastity to homosexuality.”

“Selective Populism” – The People, conceived monolithically, have a Common Will, distinct from and superior to the viewpoint of any individual. As no mass of people can ever be truly unanimous, the Leader holds himself out as the interpreter of the popular will (though truly he dictates it). Fascists use this concept to delegitimize democratic institutions they accuse of “no longer represent[ing] the Voice of the People.”

“Newspeak” – Fascism employs and promotes an impoverished vocabulary in order to limit critical reasoning.​

Steve Bannon Quotes:

“I’ve got a cure for mental health issue. Spank your children more.”

“I, Donald Trump and the rest of the alpha males will continue to dominate the internet without feminist whining.”

​“Women should just log off. Given that men built the internet, along with the rest of modern civilization, I think it’s only fair that they get to keep it.”

​“As insane as my suggestion sounds, it’s genuinely the best recipe for harmony between the sexes until women can stop lying about “abuse” and “harassment” or at least learn to take it as well as dish it out.”

#6 way way off base on 11.05.18 at 4:59 pm

than it is for people living in Manhattan, SF or LA. You know – real cities – where they don’t double-tax pied-a-terres, moan continuously or hate and fear outsiders
………

this is so wrong, the last words that is. Cmon Garth, get out a bit..leave Canada

#7 islander on 11.05.18 at 4:59 pm

TD ad nails it!
https://www.youtube.com/watch?v=biiqupvCUVo

Guess someone’s finally woken up.
Nice change from ‘Richer than you think’ folks.

#8 Gil on 11.05.18 at 5:02 pm

on a serious note though most of the people never learn from mistakes made by others. We ran 10 years of “free money” policy and now we hope that people will get it that this time Poloz is really serious?! Many of these buyers never even saw rates that are drastically different from today’s.
I came to Canada in 97, bought my first house in 2001. How different it is for buyers that dove into the market after 2009, and this is only extra 8 years.
So the bottom line: people will not learn, they will crush. But it will not be as much as to walk away from the debt (which is not that easy in Canada to begin with) and as a result depressed RE will negatively affect economy but will not cripple it into armageddon financial crisis.

#9 Vancourerite on 11.05.18 at 5:06 pm

Interestingly you reference Steve Saretsky Garth, Steve feels foreign buyers have a significant influence on the Vancouver market. Im in favour of the spec tax and a crack down on satelite families. We all have to pay our fair share of taxes.

There are much bigger things to worry about than a handful of envied people. Don’t let politicians deceive you – Garth

#10 jojo on 11.05.18 at 5:14 pm

Kapow
Turn the lights out in Canada on your way out….

#11 Bluetheimpala on 11.05.18 at 5:15 pm

Paper people everywhere.
The flame is lit, do not come near.

Watch them dance, smiles so bright.
From dust to dust, here comes the night.

Tick tock.

#12 jojo on 11.05.18 at 5:20 pm

Garth why do you let Communsit trolls like Dippy Ripley put forth the hate he does and not let anyone respond….

Then respond to his points. Don’t just slobber and spew. – Garth

#13 Sure Thing on 11.05.18 at 5:20 pm

“or that condo sales in the Fraser Valley (the hottest sellers back in 2017, when we were innocent and horny) have just crashed by 50%…”

Sure thing Garth. “crashed” relative to a year ago, after they’d gone up 100%? They’re still above the 16-year average shown in your chart, and don’t bother arguing that the direction is down and extrapolate that we’ll drop another 50% – that’s ludicrous. We’re just reverting to the mean. Nothing to see here – balanced market, in line with the average in the past. Moving on.

A 50% drop is, by all measures, a crash. Deal with it. – Garth

#14 Linda on 11.05.18 at 5:23 pm

Since interest rates have already increased it is difficult to imagine why anyone would believe they would not continue to do so, at least to the levels indicated by Mr. Poloz. Those who do not take action to reduce debt & rein in expenditures will be setting themselves up for financial failure.

#15 NoName on 11.05.18 at 5:24 pm

This is gonna be very interesting, analyst and corps are revising earnings, rates are going up consumer is cash strapped. And i need new roof and driveway. Luckily for me this is second layer of shingles so regardle how bad it looks it wont leak, roof can wait. Iam think ing kitchen should be moved up ladder…

#16 jojo on 11.05.18 at 5:28 pm

Dippy Ripley the only fascist in the room is you.
You spew hate like no other
You perceive your ramblings as fact
You perceive your viewpoint as the right one.

You are wrong on all counts
I like Trump becasue he has ripped the leites a new one so wide that you can see china….

Its a great time to be normal

Ignorant comment. Do it again and you are history here. – Garth

#17 dakkie on 11.05.18 at 5:29 pm

Bad News: Cost of Money Going Higher

http://www.investmentwatchblog.com/bad-news-cost-of-money-going-higher/

#18 Frank The Tank on 11.05.18 at 5:29 pm

So would you say anything that threatens rate hikes, or at least the speed of rate hikes would be a lifeline for RE? Does any such current threats to rate hikes exist?

#19 Spiacog on 11.05.18 at 5:36 pm

The Self Directed RRSP holding a mortgage seems to make sense with the higher rates. You mentioned that the cost of insurance (.6% if one has at least 20% invested) + the cost of setting it up may not make sense. If one takes $200 k as an example, fees of approximately $2400 (including $1200 for insurance) spread over 5 years looks very competitive to an annual management fee on a Cash ETF or Mutual fund. This can also make up the cash portion of a balanced portfolio… The way I see it, I’d rather pay myself a secured, insured cash investment worth $183K over the 25 years instead of the bank? I must be missing something or else it would be more popular…

#20 Westcdn on 11.05.18 at 5:36 pm

My financial plan is simple – I have no desire to drag my cold butt about while waiting for the end. I like struggling because it keeps me alive. Fate is something to be controlled or the inevitable die trying. I have no idea what my fate is and will soldier on using faith. Has anybody wondered why “evil” is the opposite of “live”? Is it about leaving the world a better place or taking what you can get to an empty grave? (Beneficiaries not withstanding).

My best guess is that interest rates will be a 1% higher by early 2021. I expect asset values to decline yet returns rise slightly if chosen wisely. Thus, I am looking for assets that become more valuable over time. My mortgage debt has become a target for reduction because it is now dead money as my ability to lever it into income is too risky given the current wind down of QE. That is fine because I never lived on capital gains – cash flow is what matters. Inflation is the biggest financial threat I face at the moment so bring on higher interest rates. My wind down of my RIF/RSPs funds to living expenses and TFSA contributions continues.

I was also thinking of raising taxes on “taxable benefits” such as sick days, pension plans and share based incentives (as funded by share buybacks – in 1982 this was considered a fraud). I have a target of 5.5% before inflation returns on my savings for the next several years. That will suffice for many years (85?) before I sell my house. It is a target I think I can beat, ‘sides, I kind of like fighting against status.

However, a few more months like October 2018 will destroy my plans. I also think Trump will do better than many expect. But then Trump is more popular than his GOP party. The chances of me kissing the Don’s ring is zero if it is just me. You can bet I intend to dig the TPTB’s out of their bunkers if…

October 2018 reminds me of October 2008 but much lesser. I don’t expect QE to rescue my butt again.

I read someone want to get rid of Deposit Insurance with banks. It may be a good idea as the Government will not let “too big to fail” happen.

#21 marcus on 11.05.18 at 5:37 pm

Rasmussen has Trump and the GOP ahead by 1 point in the House of Representatives. Looks like the pollsters have been front running Democrat support again and skewing the data. Red Wave Confirmed.

#22 Stone on 11.05.18 at 5:39 pm

The household debt service ratios chart doesn’t seem to make sense. If a Canadian household debt service ratio is in the range of 14%, there shouldn’t be any cause to be concerned. 14% is laughably low.

If it goes above 35-40%, that’s where things get uncomfortable, to put it lightly.

Am I missing something here?

You are missing that it is an average and over half of people have no debt of any kind. – Garth

#23 Darts on 11.05.18 at 5:42 pm

#2 Sasha Fierce on 11.05.18 at 4:51 pm
Toronto real estate will never collapse.

It’s a growing city and will become a rising superpower by 2030.

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

Lowe’s announced they are closing down 31 stores in Canada. A third of which are located in Ontario. 1 being a distribution support centre located in Mississauga…………#bullish

#24 Rick on 11.05.18 at 5:43 pm

#5, Wow. What a LONG rant! Did you prepare it over the weekend? I don’t know about others, but if a post is more than a paragraph, I just swipe by it.

#25 Old gringo on 11.05.18 at 5:51 pm

OMG!!!
Some of these comments and thoughts.
What scares me the most is “ they live amongst us and are breeding……..

#26 Brian1 on 11.05.18 at 5:51 pm

Trump came to power resulting in many Republican congressmen retiring because he intended to drain the swamp.The Democrats, alternatively, have chosen to resist him at every turn because they too are part of the swamp and wish to retain their positions.They have thrived at the expense of their constituents in the past.If anyone doesn’t think that Waters, Pelosi, Sharpton and many others aren’t rich, then they are fooling themselves.The Democrats have always done well on the backs of minorities.
Trump’s plan is to consolidate America. He is bringing businesses back to his country in response to a slowing global economy (an economy that is slowing not just because baby boomers have stopped buying houses for themselves, nor buying for their children for the purpose of having grandchildren, but also for the ill conceived idea of the world’s adoption of socialism) not just for his countrymen but also for the protection of his own personal wealth.
The socialist attack on capitalism is counterproductive. Capitalism is the greatest philanthropy; it results in the most precious of commodities; a job. The essence of capitalism is creativity. It provides the incentive for individuals to strive, to produce, to create.
Socialism, however, seeks for everyone to be equal, no matter if their talents exceed those of others. Yes, in capitalism there is exploitation. (It was obviously bad in the 1800’s). However, we have all been exploited and cheated one way or another in life, but this is just a natural process of gaining experience which increases a person’s value. It is a price we pay in any system. This is reason enough to be able to debunk Marxist socialism. Trump is not perfect, but he is too good for the Democrats.

This is… stunning. – Garth

#27 Smith X on 11.05.18 at 5:52 pm

But, but, but….I thought this was a supply problem? :)

All kidding aside, Garth, l have to agree with a previous poster on the influence of foreign buyers in Vancouver. I just disagree that they are all mega rich. Most foreign buyers take out large loans as well. They will be on the front lines of the interest rate reckoning, just like everyone else who bought more than they could afford in the last 4 years.

#28 crowdedelevatorfartz on 11.05.18 at 5:53 pm

@# 2 Ms. “Fierce”
Somewhat amusing diatribe but I think it’s time to increase the meds.

@#5 Brian Ripley’s Believe it or not

Honorary member of the Babylon Society?

#29 Doug t on 11.05.18 at 6:01 pm

Debt + real estate crashing + rates up = recession Canuck style

Get your house in order

RATM

#30 Azashi on 11.05.18 at 6:02 pm

At the risk of triggering Garth, he seems to implicitly agree that *local* home buyers are being shut out of Vancouver and Toronto, even as wealthy immigrants park their fortunes there.

That aside, I think it’s noteworthy to point out that the American economy is booming from another kind of stimulus. Rather than cheap personal debt fueling growth, America seems to have switched to (increasingly expensive) public debt via tax cuts.

#31 Out Of Work CEO, Will Travel on 11.05.18 at 6:04 pm

Fedex is raising shipping rates close to 5 in the U.S. The confidence global companies attend to their business sporting such an aggressive fashion says it all. There is inflation.

#32 Capt. Serious on 11.05.18 at 6:05 pm

I’m pretty sure we will see a consumer led recession in the back half of 2019. The BoC is between a rock and a hard place with the Fed set to keep rates escalating. So many people are swimming and debt, and the only logical way they’ll be able to service that debt is through spending cuts. Unlike the government, individuals do not have the power of taxation. Add in the inverse wealth effect that is going to hit (people feel less inclined to spend when their assets are going down in value), and we could be in for a bumpy 2019-2020.
Also, if the timing is right, Trudeau will be out. People love to blame governments for economic outcomes that have little to do with government. So it goes.

#33 Stone on 11.05.18 at 6:13 pm

#22 Stone on 11.05.18 at 5:39 pm
The household debt service ratios chart doesn’t seem to make sense. If a Canadian household debt service ratio is in the range of 14%, there shouldn’t be any cause to be concerned. 14% is laughably low.

If it goes above 35-40%, that’s where things get uncomfortable, to put it lightly.

Am I missing something here?

You are missing that it is an average and over half of people have no debt of any kind. – Garth

———

In that case, using averages is useless as ultimately, no one is average.

It would be better to have a chart indicating the threshold above what is considered an unhealthy household debt service ratio and point out the percentage of the population that falls in that category and how far above that threshold they are.

If the percentage of the population rises over time found above that threshold and their household debt service ratio also increases, that would be more striking. By including the whole population, it dillutes the results to the point of meaningless.

Ultimately, 8% of the U.S. population defaulting on their loan payments caused the 2008-2009 crash. Not the other 92%. That’s the segment of the population that worries me.

#34 Smartalox on 11.05.18 at 6:15 pm

Re: the Munk debate, Steve Bannon vs. David Frum.

This was my first exposure to Steve Bannon, talking in his own words, and not just through quotes held up by the media for scrutiny.

I listened to his arguments, and came away with the impression that he’s selling snake oil. He’d open his argument with a false or misstated assertion, then use that as the foundation for building out his world view.

And I could see that if you weren’t in a position to refute his ‘hook’ it would be very easy to quickly swallow the line, and the sinker. After a few hits of that, I could see how people would fall for what he’s selling.

But more often than not, the ‘hooks’ didn’t’ apply to me, and without that, the rest of his arguments rang hollow.

‘Now there are no more pensions…’ (I have never in my 20-year career had an expectation of a pension),

‘The mainstream liberal media never reported on how Eric Holder said a mean thing…’ (Actually I read about it in the New York Times, but I can understand that if you don’t read the liberal media, you may not actually see how unbiased they are),

‘The waves of immigrants are coming in…’ (well no, they’re not, they’re hundreds of miles from the border)

‘The party of Davos, the intellectual elites, the scientists and engineers are to blame…’ (I’ve been an engineer for 20 years, and I still haven’t been to any parties at Davos)

After the first 5 minutes, I just found that Bannon had nothing to offer me. This was of little surprise, as I am obviously NOT the target demographic for his particular marketing campaign, but I have to admit, I didn’t think that Bannon’s arguments would be so flimsy, and so easily disarmed.

#35 Narcissism on 11.05.18 at 6:19 pm

I checked out Mr. Trump long ago with the Mayo Clinic, and your correct. I am not too concerned with these symptoms with no cause or cure at hand, because he needs to talk with a trained professional on occasion. I went further, and my main concern was his obvious rare ‘switch’ symptom that baffles the medical experts, and is the one of a greater problem.

#36 Smoking Man on 11.05.18 at 6:19 pm

“Hello, oh yes this Smoking Man how can I help you”

“Sir we are doing a quick poll to see if you will be voting for the Democrats or the Republicans tomorrow?”

Long pause. My brain is calculating the possible implications of sharing my true thoughts. After all, this call can be a survey my employer is doing in stealth.

I’ve seen all the posters at the office, diversity, inclusion, everyone gets a trophy. I want to say, yeah Trumps doing good, look at what he’s doing with the economy. Lowest Job numbers ever.

But then. I risk being labelled a Homophobic, racist xenophobe and all the other phobes, who really know who’s calling me.

I said.
“I haven’t really thought it through.. I’m leaning toward the Democrats”

But in the voting booth, I’m voting for Jobs and Growth.

Red Wave!!!! That’s how polls work..

#37 Ripley's Believe it or Not on 11.05.18 at 6:21 pm

#5 Brian Ripley

Hey Brian, when is the hard copy of your post/book coming out?

#38 CJohnC on 11.05.18 at 6:22 pm

Re: Trump, so far the only posts that are right here about Trump Are Brian Ridley and old gringo

#39 Dolce Vita on 11.05.18 at 6:23 pm

#5 Brian Ripley

No dung Sherlock on the Frum-Bannon Munk debate vote.

We mirror American Tribalism except it would seem there are 72% of the Exhausted (Silent) Majority in Canada vs. 67% in the US:

“Hidden Tribes: A Study of America’s Polarized Landscape”

https://static1.squarespace.com/static/5a70a7c3010027736a22740f/t/5bbcea6b7817f7bf7342b718/1539107467397/hidden_tribes_report-2.pdf

The Silent majority reject traditional/devoted Conservatism from the Right, 25% of the population in America.

The Silent Majority ALSO REJECT, 8% of the population, Progressives like YOURSELF considered far outside the mainstream as the traditional/devoted Conservatives.

Progressives Profile: rich, highly educated—and white, nearly twice as likely as the average to make more than $100,000 a year and nearly three times as likely to have a postgraduate degree.

Pity, the Munk debate did not have a vote on your Progressive viewpoints as presented today.

Not so much genuine concern for social justice as the preening display of cultural superiority.

-Yascha Mounk, Lefty Harvard Prof. on Government from a recent article of his from The Atlantic.

#40 the ryguy on 11.05.18 at 6:27 pm

DELETED

#41 Alessio on 11.05.18 at 6:28 pm

House prices up YoY. Anyone who thinks listening to this blog and renting for a decade makes them better off now is delusional. Prices are sticky and will stay that way as people have jobs to pay down debt. A recession isn’t close and even then money will flow back into RE as a safe haven. Plus immigration is being increased by 2020. Good luck renters.

People should buy houses when they can afford to. Period. – Garth

#42 Lawnboy on 11.05.18 at 6:29 pm

@#24 Rick

Perfect….just what I was thinking.

And …..“ let’s see, was that 2 pills every 12 hours or 12 pills every 2 hours?”

LB

#43 Earl of Southhampton on 11.05.18 at 6:31 pm

#152 James on 11.05.18 at 3:32 pm

” Red or Blue the USA is no longer the country I used to regard as a citadel in democracy.”

James, James, James. Using words like citadel as you respond to Smokey and his kindergarten vocabulary….

#44 Penny Henny on 11.05.18 at 6:32 pm

#148 marcus on 11.05.18 at 3:05 pm
Now who would have seen this coming? LOL! https://www.zerohedge.com/news/2018-11-05/stocks-surge-after-latest-poll-shows-gop-retaining-house

More Zero crap. Bloomberg reports: “U.S. stocks climbed, with Warren Buffett’s Berkshire Hathaway Inc. powering gains in the S&P 500 Index. Treasury yields edged lower. The U.S. conglomerate rose the most since July after the world’s most famous stock-picker revealed he’d been buying back his firm’s own shares. Investors were also hunting bargains after last month’s downtown.” – Garth
///////////////////

If either of you claim to know what moved the market on any certain day then you are both delusional.
Just my two pennies.

I quoted Bloomberg, an authoritative market source. Stocks did not go up because of a poll. Give your head a shake. – Garth

#45 S on 11.05.18 at 6:37 pm

#5 Brian Ripley on 11.05.18 at 4:55 pm

Dude, that was 1444 words vs Turner’s 794. Maybe a table of content would be in order?

#46 Terry on 11.05.18 at 6:41 pm

A Trump victory predicted for more seats in the House and retaining the Senate for the Midterm elections in the USA tomorrow!

“This is the first poll showing a GOP lead, and it may matter: while often accused of bias, Rasmussen was the only major pollster in 2016 to predict a Trump victory; Rasmussen was also the only major pollster whose prediction was proven correct.”

Nate Silvers FiveThirtyEight.com has it wrong again!

GO TRUMP!

#47 Dolce Vita on 11.05.18 at 6:43 pm

Well, busted flat in Baton Rouge.

Your buddy Tan at CIBC,IN AS MANY WORDS, is saying interest rate increases may precipitate a recession what with residential RE in major Cdn. markets taking a nose dive and large (getting larger) high debt servicing costs.

Good to read my Comments from over a year ago now in your mind as well (but only when from someone ex-officio).

As of the past week, we have strong job creation (albeit from the “Self Employed”) and still very low interest rates.

My gut feel is we are headed for some type of economic downturn if you believe:

1. RE an unhealthy 20% of GDP and up next is a large RE Asset devaluation (home values drop precipitously, people will feel less wealthy, thus, spend less).

2. Canadians really are in debt up to their eyelids and on the brink of financial exhaustion (definitely spend less).

#1 well on its way to happening.

#2 not so yet despite Doom & Gloom reports and studies about Cdn. debt levels, since Insolvency Rates et. al. are at historic lows.

#1 may well be that economic shock this time to recession. Debt servicing only exacerbates it.

#48 Dogs wag their tails and say "woof" on 11.05.18 at 6:45 pm

Sigh….I feel compelled to comment (against my nature) yet again.
Re:#5 – Brian Ripley
#12 – Jojo
probably others

OK – got to comment #5 …my eyes glazed over after several words and I moved on…
Jojo- in Garth’s defence – I suspect the same may have happened to him.
I do read this blog religiously (too religiously) every day – LOVE the dog pics, learn some useful factoids, appreciate Garth’s opinions and humor ….like to make reassure myself the motorcycle has not crashed and Bandit is fine.
So for my occasional contribution- a reminder:

“the Lord’s Prayer is 66 words, the Gettysburg Address is 286 words, there are 1,322 words in Declaration of Independence – government regulations on the sale of cabbage total 26,911 words ”
http://www.englishclub.com/ref/esl/

I know that Garth has recently banned or limited (to 3) the comments of certain people who “post obsessively”
– I know it is Garth’s blog but may I humbly suggest that if any comments longer than the blog page itself (or less if Garth prefers) be nuked…..in the interest of diminishing the “word footprint” on the internet ….or something like that …

Most of us here love dogs -in part because they wag their tails more than they bite/ bark.

#49 Penny Henny on 11.05.18 at 6:52 pm

20 Westcdn on 11.05.18 at 5:36 pm
////////////////

I always enjoy your comments.
David Paquette’s too.
:)

#50 Cut the crap ... on 11.05.18 at 6:55 pm

That’s a hell of a looking border collie. Saw a beauty of a one year old at a bud’s ranch that he just got from a Mennonite colony in Alberta … top shelf and now undergoing some loving training to “work the dogies.” Got to love them …

#51 Ray on 11.05.18 at 7:01 pm

Thank You for your insightful blog. It is for me, a candle of sanity in a noisy chaos of fake news. The more I learn,the more I realize how insignificant my opinion is. I have converted totally to ETFs, and have about 5 years ‘safe stuff” to cover the non discretionary spending cash flow. We are prisoners in this 4 dimensional space time frame, and attachments to this illusion just creates suffering . Everyone will eventually obtain enlightenment, it just may take a few more “cycles” for some than others. And yes, I am aware of the irony of this comment. The true currency with people is kindness

#52 westcoastguy on 11.05.18 at 7:02 pm

Is there absolutely any scenario whereby the stress test gets the axe because it makes houses “unaffordable”?

I see local realtors predicting that it will happen … all the while not alternatively suggesting that prices will come down until it becomes “affordable” which would be a catastrophe apparently …

#53 crowdedelevatorfartz on 11.05.18 at 7:10 pm

@#41 Alessio
” A recession isn’t close and even then money will flow back into RE as a safe haven. Plus immigration is being increased by 2020. Good luck renters.”
++++

The last desperate gasp from a realtor struggling to make one….just one commission this quarter….

Donkeys bray with more eloquence

#54 Raging Ranter on 11.05.18 at 7:12 pm

That higher rates might cause a recession is no reason not to raise them. Recessions are a normal and natural part of the business cycle, and extraordinary efforts to avoid them (like keeping ZIRP around for a decade instead of just a year or so) can do more long term structural damage than even a severe prolonged recession.

#55 Dolce Vita on 11.05.18 at 7:13 pm

#37 S

“Dude, that was 1444 words vs Turner’s 794. Maybe a table of content would be in order?”

THAT was good.

I was going to say that my index finger was sore from scrolling past screen after screen of Progressive vitriol (not even Page Down was of much help).

I liked your Comment better.

It has that Techie Zen Reductionist read to it.

#56 Drill Baby Drill on 11.05.18 at 7:16 pm

Even this mangy dog of a blog has a code of conduct but lacks a note stating “excessively long text messages are to be excluded”.

#57 bubble wrap on 11.05.18 at 7:17 pm

Deja vu on the housing bubble?
https://www.rt.com/business/443104-housing-market-bubble-shiller/

#58 Popeye The Sailor Man on 11.05.18 at 7:26 pm

I View the 2008 housing correction as some one (Gov) kicking the can down the road. (dropping interest rates)

This kept the game going, the US deleveraged but Canada and other country’s like Australia just piled it on.

US will weather anything much better than Canada, so I worry for the unprepared and over extended.

#59 Ronaldo on 11.05.18 at 7:27 pm

Hate to say it, but Tuesday night will answer some of those questions. God help us.
—————————————————-
I doubt very much that he/she is paying much attention to the election. Much more important things to tend to.

#60 stage1dave on 11.05.18 at 7:28 pm

#5 Brian Ripley

An articulate post, and a good read.

I actually found the hype and runup to the Frum/Bannon debate more interesting than the “debate” itself…a former speechwriter and WH operative of GWB “debating” a former WH operative of DJT? That’s a nice breadth of view, isn’t it?

Im thinkin’ they coulda sold the place out if they’d had Don Cherry moderating (there’s a contradiction in terms) plus it would have drastically increased the entertainment value…

#61 yvr_lurker on 11.05.18 at 7:28 pm

Meanwhile American incomes have grown more than ours. As a result, it’s harder for locals to buy a property in Vancouver., for example, than it is for people living in Manhattan, SF or LA. You know – real cities – where they don’t double-tax pied-a-terres, moan continuously or hate and fear outsiders.

———————————
HUGE difference between YVR and the trio Manhattan, SF, or LA mentioned here that makes this comment off the mark. Tons more high-paying jobs in these cities than in YVR. Blanket statement that nobody complains and everything is rosey in these places could have used some fact-checking:

https://www.cnbc.com/2018/06/28/families-earning-117000-qualify-as-low-income-in-san-francisco.html

I support the controls in YVR. Give it four years and see where we are at then….

…and guarantee YVR continues to lag. – Garth

#62 Doug t on 11.05.18 at 7:37 pm

#51 Ray

Kudos man – you nailed it – all this “stuff” is nothing and creates suffering

RATM

#63 tccontrarian on 11.05.18 at 7:38 pm

“Now add this to the warning issued by a snowflake Toronto realtor (whom I dare not name)…”
*** Nothing wrong with snowflakes, when they occur with snow.

“… that significant numbers of middle-class, homeowning GTA families are going sub-prime – paying 7% to 20% rates because they can’t pass the stress test”
*** Oh my! A Canadian-style ‘subprime’ you say?

“Most people truly believe rates can’t rise. Four in ten new buyers never heard of the test.”
***Any wonder I like to go ‘contrarian’??

“Millions of mortgages are coming up for renewal.”
I think this is when the ‘slow-melt’ thesis has to be abandonned – to be replaced with:

‘an epic crash’ is inevitable.
—–

TCC

ps. still finding difficult to accept that this was a random event. If debt-slavery was the intent from the beginning, then mission (almost) accomplished banksters. Just glad I’m not going to be road-kill, as many others are well on their way!

#64 KLNR on 11.05.18 at 7:44 pm

@#23 Darts on 11.05.18 at 5:42 pm
#2 Sasha Fierce on 11.05.18 at 4:51 pm
Toronto real estate will never collapse.

It’s a growing city and will become a rising superpower by 2030.

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

Lowe’s announced they are closing down 31 stores in Canada. A third of which are located in Ontario. 1 being a distribution support centre located in Mississauga…………#bullish
________________________

for what it’s worth,
lowes claims all employees will be moved to the other rona/lowes stores. Also no Toronto stores are closing.
Real estate is local, Toronto proper isn’t suffering at all, yet. But you know, whatever.

#65 KLNR on 11.05.18 at 7:52 pm

@#63 tccontrarian on 11.05.18 at 7:38 pm

TCC

ps. still finding difficult to accept that this was a random event. If debt-slavery was the intent from the beginning, then mission (almost) accomplished banksters. Just glad I’m not going to be road-kill, as many others are well on their way!
___________________________
No sympathy here for the folks saddled with debt just to look successful ie: big house/bimmer/cottage/vacations.
If you’re not smart enough to say no to the candy banksters are offering you then you’ve got bigger problems. Unfortunately a potential crash may effect even the smart ones. even those with well balanced portfolios?

#66 KLNR on 11.05.18 at 7:54 pm

@#62 Doug t on 11.05.18 at 7:37 pm
#51 Ray

Kudos man – you nailed it – all this “stuff” is nothing and creates suffering

RATM
_________________________

Agreed. absolutely bang on.

#67 Happy Housing Crash Everyone! on 11.05.18 at 7:55 pm

41 Alessio on 11.05.18 at 6:28 pm
House prices up YoY. Anyone who thinks listening to this blog and renting for a decade makes them better off now is delusional. Prices are sticky and will stay that way as people have jobs to pay down debt. A recession isn’t close and even then money will flow back into RE as a safe haven. Plus immigration is being increased by 2020. Good luck renters.

People should buy houses when they can afford to. Period. – Garth

____________________________________

Garth how do you read the countless crazy posts from the dirtiest, filthiest, scum of the earth SHYSTERS? Its good to see their uneducated stupidity hasnt made you mad yet. These shameless pumpers have no understanding of economics or logic. Trying to explain either is just lost on them. Its nice to see sales have STALLED. A realtor friend tells me the market is crap and falling both in sales and prices. Garth you say people should buy houses when they can afford to do so and that is what will happen to the market. Prices will crash back to the mean average. Happy Housing Crash Everyone. No lies can stop this crash. Look at CIBC tal shaking him his boots as he knows CIBC is holding alot for fraudulent mortgages that CMHC will not pay out.

#68 For those about to flop... on 11.05.18 at 7:56 pm

Pink Pumpkins being carved in West Vancouver.

Featured these guys a couple of times and now they can’t get their money for nothing and are in Dire Straits.

Picked up for 4.35 in February 2017 and back on by July some of the scars of their wrestle with the market are visible in my notes below.

Started off close to 5 and now it has just come back on at 3.59.

The person before them bought it for 3.4 in 2016 and made a quick buck,but unfortunately for these guys it looks as though the selling price will be around the same, meaning they will be labeled the greater fools.

Has the hallmarks of a million dollar loss and if a marriage was involved it might take more than a Hallmark card to get back in the good books.

Freedom First’s spare bedroom is always an option…

M44BC

3050 Spencer Drive, West Vancouver, BC, V7V 3C7

Paid 4.35 February 2017

2017-07-28 : $4,988,000
2017-10-30 : $4,880,000
2017-12-03 : $4,488,000

Then 3,98

Now 3.59

https://www.zolo.ca/west-vancouver-real-estate/3050-spencer-drive

https://www.bcassessment.ca/Property/Info/QTAwMDAyOTVNQg

https://www.zolo.ca/west-vancouver-real-estate/3050-spencer-drive

#69 Madcat on 11.05.18 at 8:03 pm

#36 Smoking Man… Nailed it.

#70 reynolds531 on 11.05.18 at 8:04 pm

46 months at 2.6% remaining. Inflation and higher rates will be my friends for a long while.

#71 k on 11.05.18 at 8:17 pm

This will get us in a warm and comfy mood ! Who wrote these realistic lyrics ” The future’s uncertain and the end is always near “

#72 Smoking Man on 11.05.18 at 8:18 pm

Hate to say it, but Tuesday night will answer some of those questions. God help us-Garth.
……..

God and Aliens are helping Trump. Thunder storms and Tornados on the liberal east coast right around 5pm, devine intervention is all I’m saying.

#73 tbone on 11.05.18 at 8:19 pm

I have been following the price of a house in North York.
Bought for 1.5 mill in sept 2016.
Torn down and new build went on the market for 2.9mill april 2018 .

Price reduction to 2.55 mill august 2018.
Sold for 2.2 mill oct 2018

About 3500 sq ft nicely finished
Im guessing 2.55 was the breakeven price.

Last similar house in the same area went for 2.2 also.
But that one was bought for 950k in around 2013 .
That one showed some profit.

There are a few more new builds listed around the 3 mill mark. And they have been listed for a while .
The future does not look promising.

#74 Annek on 11.05.18 at 8:29 pm

Most people truly believe rates can’t rise. Four in ten new buyers never heard of the test.
………
I cannot believe how ignorant people can be. How oblivious to the world, can these people be. Problem is that these people go out and vote without knowing what the issues are.
Housing was the vehicle for the stupidos to make some money the past ten years. I doubt they sold, though. They just go to bed, dreaming about how rich they are. Everything else, such as stocks etc was too complicated for them.
Time for them to burn, and their only excuse is their head buried in the sand.

#75 waiting on the westcoast on 11.05.18 at 8:30 pm

52 westcoastguy on 11.05.18 at 7:02 pm says… “Is there absolutely any scenario whereby the stress test gets the axe because it makes houses “unaffordable”? I see local realtors predicting that it will happen … all the while not alternatively suggesting that prices will come down until it becomes “affordable” which would be a catastrophe apparently …”

There will always be affordable housing. As interest rates go up, the prices have to fall to stay within the boundaries of what people can afford to buy.

If you are a new buyer today, you will either hold out (downward pressure on price) or go to private loans. Going to private loans makes sense if the market is continuing to climb but in a falling market, it’s suicide. My realtor/ mortgage broker friends tell me people are now walking away rather than piling in. The people taking these heavy interest loans are people renewing and cannot meet the stress test requirements.

#76 meslippery on 11.05.18 at 8:31 pm

Not a trump fan. However lets manufacture stuff at home
even if the price tag is higher.
The price is all your kids have good paying jobs.
Or the 1% and the dirt poor no middle class.

#77 Protea on 11.05.18 at 8:32 pm

#5 Brian Ripley you have amongst many have become far to political on Garths blog. I could not even read all what you copied and pasted !!
Do us all a favour and try and contribute what Garth intended this blog to be !! a learning experience and where you can direct your investments and providing valuable advice on many financial topics that help us to provide and save for retirement. Do us all a favour and get lost unless you have something worthwhile to read.

#78 For those about to flop... on 11.05.18 at 8:33 pm

Pink Pumpkins being carved in West Vancouver.

Don’t even think about give me crap about the length of my posts tonight for the people of Vancouver on this blog this is important stuff.

Here is another case that exemplifies the absolute carnage on the North Shore.

I just showed the one at Spencer and this one is just as messy.

They paid 3 million in April 2016 and just like the last guys didn’t waste much time putting it back on trying to make a quick buck.

It was one of my original cases and has taken a few breaks waiting for some hot sir to be blown back in the market.

One of their neighbors is also in a similar boat.

This house is now on the market for 45% less than originally asking price.

A lot of people are going to be crushed by this violent rollback.

Unfortunately for them the window slammed down when they had both hands on the sill and now they are going to need financial resuscitation.

Medic…

M44BC

2050 Russet Way,West Vancouver, paid 3m April 2016 ass 3.06

Originally asking 3.98

Then 3.19

Then 2.89

Then 2.28

Now 2.18

https://www.zolo.ca/west-vancouver-real-estate/2050-russet-way

#79 Ogopogo on 11.05.18 at 8:33 pm

Here is another casualty of the housing correction. It’s hard not to feel sorry for all the working folks at Lowe’s. It’s hard to feel sorry for the lobotomized housing shills who will lose, and are losing, their shirts.

As the song goes, “Nobody said it was easy /
No one ever said it would be this hard”

“Lowe’s to close 27 stores in Canada as housing markets slow”

https://www.theglobeandmail.com/business/article-lowes-to-close-27-stores-in-canada-as-housing-markets-slow/

#80 conan on 11.05.18 at 8:41 pm

Would not surprise me if less then alt right Republicans are voting Democrat.

Some polls are saying + 9 Democrats. Could be double that. I hope it’s a blow out. A close vote will further divide the USA. Trump is the wrong leader, at the wrong time, for the wrong country. He is Mr. Powder keg.

#81 will on 11.05.18 at 8:42 pm

not buying into the polarization scheme/theme anymore. it’s all venn diagrams for me from now on.

i apologize Garth that my comment has nothing to do with real estate.

#82 Musty Basement Dweller on 11.05.18 at 8:45 pm

Langley Condos Crashing
I’m sure most of you guys are aware of this but I’ll post this link anyways. It’s of special interest to those who say that real estate only goes up and haven’t had the gift of experience of living through this type of thing before.
https://globalnews.ca/news/4631553/langley-condo-market/

#83 Trumpocalypse2018 on 11.05.18 at 8:53 pm

Fuel is cheaper today, fill your tanks. Charge all cell phones and flashlights. Wednesday will be a whole new world, and not in a good way.

PREPARE

#84 AK on 11.05.18 at 8:55 pm

#36 Smoking Man on 11.05.18 at 6:19 pm
“Red Wave!!!! That’s how polls work..”

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

Indeed. At this time tomorrow, a Republican Sweep will be confirmed…

#85 Capt. Serious on 11.05.18 at 9:08 pm

Unfortunately a potential crash may effect even the smart ones. even those with well balanced portfolios?

Canada is like 3% of the world stock market cap. If you have a balanced portfolio you’ll be just fine. If you overweight Canada, well, don’t do that.

#86 akashic record on 11.05.18 at 9:18 pm

Everybody just chill tonight.

https://www.youtube.com/watch?v=8ydY8-Uzah8&feature=youtu.be

#87 IHCTD9 on 11.05.18 at 9:25 pm

#67 Happy Housing Crash Everyone! on 11.05.18 at 7:55 pm

A realtor friend tells me…

————

!?!?

#88 Vampire Studies on 11.05.18 at 9:26 pm

19 Spiacog – it is no that common because the numbers don’t work for very many situations. And it’s not a cash
position. It’s a mortgage either way so it’s fixed
income.

Lots of sites if you just google “Mortgage in RRSP”.

And I don’t believe the higher interest rates are an advantage as you pay it back with after-tax income, then are taxed again as if it were earned income when you withdraw.

Definitely consult an expert.

#89 georgist on 11.05.18 at 9:34 pm

> Benny Tal, chief economist at CIBC – a guy who has always leaned towards real estate as an engine of Canadian economic growth

I won’t be following him then!

I agree that Tuesday has the potential to be very interesting. So many variables, with the vote itself and the FED and BoC.

#90 renter in Surrey on 11.05.18 at 9:36 pm

RE #13 Sure Thing

A 50% drop is, by all measures, a crash. Deal with it. – Garth
—————————————————————————————–
so when we calculate return on the market we should consider long term average

but if it’s RE, we look back just one year to call it a “crash”… OK

If a stock market declined 50% you would call it… right. – Garth

#91 akashic record on 11.05.18 at 9:39 pm

God help us.

You can count on that. Amen.

#92 Smoking Man on 11.05.18 at 9:45 pm

 AK on 11.05.18 at 8:55 pm

#36 Smoking Man on 11.05.18 at 6:19 pm
“Red Wave!!!! That’s how polls work..”

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

Indeed. At this time tomorrow, a Republican Sweep will be confirmed…
……..

I’m not even going to gloat, the outcome is a certainty. We have your academic types on here like Gravy Train. Trained to be drawn to scholarly polls. Bahaha.

Yeat no one in Acedima even knows what Herdonomics is.
I have a Phd in the craft.

Who in there right mind voting trump would admit it to someone they don’t know with all the stigma it carries.

Its shaping up to be a Red Tsumai. People will be more schocked than when Trump Won.

#93 Blacksheep on 11.05.18 at 9:50 pm

Brian # 5,

“I am suspicious of what appears to be a majority of Trump Fans/Voters here in Garth’s website comments.”

“If you listen to the Monk debate (Frum vs Bannon, link below) the result of the debate was that 72% of the audience (filmed in Toronto) did not agree with the resolution “Be it resolved, the future of western politics is populist not liberal.””

“If Toronto is the center of our economic cultural engine, then Canada is clearly not buying Bannon’s refried Fouth Turning shtick.”

“So who are you Trump trolls and posers on Garth’s site hiding behind anonymity? You don’t appear to fit a Canadian ethos nor find value in our Canadian social contract.”
—————————
“Then respond to his points. Don’t just slobber and spew. – Garth”
—————————
I’ll bite…

I am the first to admit, Trump is a highly flawed individual.

I wanted Ron Paul, but unfortunately only the Donald had the balls to Johnny Cash the system and force his way into the white house. So I see it as: Sometimes you have to work with what you have, instead of what you want.

I watched the entire debate. Bannon made Frum look like a contentless, emotional fool.

Bannon commented on all sorts of very real, US systemic wrongdoings, with just a few being:

1) Why 100,000’s of innocents (forget the unnecessary
loss of US Military lives) died and continue to die, in the two multi trillion dollar invasions, that are still ongoing, 17 years later?

2) Or the gross mis justice that took place in both causing the GFC and then demanding a trillion $, or else bail out, required to fix the goddamn mess elites had made.

Frum was often caught, like a deer in headlights, mouth gaped open as he had no valid response to Bannon’s statements.

The best Frum could do was make a piss poor attempt at linking Bannon’s policies with those of Nazi Germany by pointing at the poppy on his chest, twice, hinting at his heritage.

Of course its no surprise, Frum didn’t touch either topic, but Brian, you are clearly intellectually superior to Frum (look how long your post was!)

How would you, counter my two poorly paraphrased systemic criticisms, made by Bannon above?

#94 For those about to flop... on 11.05.18 at 9:55 pm

Recent sale report.

After all the doom and gloom of the previous posts I would like to submit this one for the people in Vancouver that need a little ray of sunshine to brighten their day

I ran this address yesterday and it was in transition in the system and the owner of Zealty, Adam Major was good enough to try and help and now it has come through as cleared.

A lot of people would like to buy a house in Kitsilano at a much lower price but this one set a new bar on the way down.

We’ve had a perfectly liveable detached go for 1.4 in Marpole ,a place that doesn’t get most people dreaming but this one although an oldie will surely make a few people believe that they can dream again.

The details…

2608 W 11TH AVENUE
Vancouver
Kitsilano.

Originally asking 2.04

Then 1.89

Then 1.69

Just sold 1.61

Assessment 2.48

So this perfectly liveable but in need of updating just sold for 35% less than assessed in one of Vancouver’s prime neighborhoods.

It’s still expensive granted,but only 2 years ago people were buying houses like this in non favoured parts of East Vancouver.

You are gonna need some cash but you can at least dream again.

I report negative real estate news in a positive manner most of the time, but with my Race to a million and Recent sale report posts like this, the people that it is the number one thing that they want in life then maybe a second chance is coming your way in the coming years.

I don’t know what I’m doing, but whatever I’m doing feels good…

M44BC

#95 NoName on 11.05.18 at 9:57 pm

Now that my favorite band and song is mentioned, i remember when all this thing went down.
lest keep in mind that kandian brodcast countsil is private corp that regulates. Take a minute and let that sinks in…

video might be ofensiv to some, aldo its made by CBC…
https://www.youtube.com/watch?v=OT8fdG-ln70

Sanitized version of song, knopfler, clapton and collins live. and on a side note until few weeks ago i didn’t know that phil collins was a drummer.

https://youtu.be/6D6cw8Ob2sk

#96 akashic record on 11.05.18 at 9:57 pm

if there is tomorrow on Wednesday and you feel like learning something new.

http://www.openculture.com/free_certificate_courses

#97 For those about to flop... on 11.05.18 at 10:06 pm

Recent sale report.

After all the doom and gloom of the previous posts I would like to submit this one for the people in Vancouver that need a little ray of sunshine to brighten their day

I ran this address yesterday and it was in transition in the system and the owner of Zealty, Adam Major was good enough to try and help and now it has come through as cleared.

A lot of people would like to buy a house in Kitsilano at a much lower price but this one set a new bar on the way down.

We’ve had a perfectly liveable detached go for 1.4 in Marpole ,a place that doesn’t get most people dreaming but this one although an oldie will surely make a few people believe that they can dream again.

The details…

2608 W 11TH AVENUE
Vancouver
Kitsilano.

Originally asking 2.04

Then 1.89

Then 1.69

Just sold 1.61

Assessment 2.48

So this perfectly liveable but in need of updating just sold for 35% less than assessed in one of Vancouver’s prime neighborhoods.

It’s still expensive granted,but only 2 years ago people were buying houses like this in non favoured parts of East Vancouver.

You are gonna need some cash but you can at least dream again.

I report negative real estate news in a positive manner most of the time, but with my Race to a million and Recent sale report posts like this, the people that it is the number one thing that they want in life then maybe a second chance is coming your way in the coming years.

I don’t know what I’m doing but whatever I’m doing feels good…

M44BC

https://www.westsiderealty.ca/ActiveListings.php/Details/1272/2608-west-11th-avenue-vancouver-bc#viewdetail

#98 Nick B on 11.05.18 at 10:09 pm

Good article. I’m surprised by the comments by our CB, seems late in the cycle to finally start to tighten. Canada’s economy is heavily weighted towards housing, so I would wager that higher rates will continue to squash RE and cause a recession. Most recessions are preceded by rising interest rates and this time won’t be different. I like Steve Saretsky, especially for a realtor, he comes at things with research and data.

#99 acdel on 11.05.18 at 10:11 pm

#1 Cbo

You should be so proud! “NOT”!

Garth what’s up with this??? Your endless warnings towards people that make no contribution to this blog has slid towards like politicians making promises??

Yay to all the “FIRST”; eye roll by many of us!

Crist; grow up!

Regarding your post; most of us saw it coming, thanks.

#100 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 11.05.18 at 10:18 pm

“You know – real cities – where they don’t double-tax pied-a-terres, moan continuously or hate and fear outsiders.”

So true, and Toronto/GTA is right up there as a deplorable wannabee not-real city.

Do Toronturds realize there are 9 massive outlets of untreated sewage being pumped into their waters, just above their ‘fabulous beaches’?

https://www.thestar.com/news/gta/2018/11/05/studies-say-torontos-ravines-and-inner-harbour-are-in-trouble.html

“….extremely high levels of E. coli — an indicator of sewage — in the water this summer, on several occasions exceeding the city standard by 241 times.”

“There are nine sewer outfalls in the inner harbour and over the entire summer, the nine sites failed recreational water quality limits 44 per cent of the time.”

So Toronto is not just a shithole of a city when it comes to people and their overpriced, overrated shacks…….

It’s actually, a scientifically proven shithole!!

How about them Argoooooeeeesssss, too :(

#101 Newcomer on 11.05.18 at 10:24 pm

#5 Brian Ripley on 11.05.18 at 4:55 pm
——–

I didn’t read you comment at first because, like many others, I don’t read comments over about 200 words. But a lot of people mentioned it. So I looked at it. It’s still too long to read, but at the bottom you have something called Bannon quotes, and then you list things not said by Bannon. You’ve got one from Milo, a shock jock entertainer. If you do not fact-check the information you base your views on, you never have a clear picture. Also, you will influence more people with 100 true words than with a 1000 muddled and inaccurate words.

#102 young & foolish on 11.05.18 at 10:29 pm

Another week, another skyscraper or condo project announced for Toronto. What are all those developers thinking? Don’t they know it’s all about to crash?

#103 akashic record on 11.05.18 at 10:31 pm

#93 Blacksheep

Umberto Eco died a couple of years ago. I don’t think #5 Brian Ripley has the answer.

#104 Chelsea on 11.05.18 at 10:59 pm

Finally the interest hikes are making a difference in the economy, but, still seeing new listings priced high, no-one seems to get it, that buyers past with millions were buying at these inflated, extreme prices, are no more. Well, maybe a few trickling in, but, still unaffordable in B.C. Sorry RE, we aren’t the rocker fellas….. just a middle class family looking for affordable housing ..

Oh well, will keep my fingers crossed, but not hold my breath…

#105 acdel on 11.05.18 at 11:03 pm

#100 50 YEARS OF MAPLE LEAF INCOMPETENCE!

Too funny but a sad reality; they are too busy posting “FIRST” on this blog’ or after they have paid there heating bill, keeping warm, or filled up their tanks for another shopping trip or like the ordinary just getting to work protest against Canadian Oil, what an oxymoron! World oil is world oil; 9 billion of us in the next 20 yrs; where is the money going to come from for alternatives while China on average builds a new power plant per week on coal. Largest coal exporter from Canada to China is Vancouver. The hypocrisy is mind boggling!

#106 sideshow on 11.05.18 at 11:12 pm

#68 For those about to flop… on 11.05.18 at 7:56 pm

… and now they can’t get their money for nothing and are in Dire Straits.

– – –

I would stand up and applaud that pun, but I have Industrial Disease. ;)

#107 Ca$h money on 11.05.18 at 11:41 pm

Thanks for the market data flop! Good to see the growing gap between assessed and actual sale. This won’t sit well with a lot of folks.

#108 Keith on 11.05.18 at 11:42 pm

It’s all good in Toronto. Or not. Consider the source.

https://www.cbc.ca/news/business/treb-october-sales-1.4892473

#109 yvr_lurker on 11.05.18 at 11:52 pm

#61

I support the controls in YVR. Give it four years and see where we are at then….

…and guarantee YVR continues to lag. – Garth

If “lagging” means that YVR becomes more affordable for the next generation, if small businesses can thrive without exhorbitant rent increases, if more high tech can set up shop and retain workers who can afford to live here, if the next generation no longer see the need to leave, then I fully support YVR “lagging behind” world-class cities (with “world-class” here being the definition used by speculators and developers).
Or perhaps you would prefer the newly created feudal society being created in Palo Alto (which I know first hand from having lived there… great opportunities, stunning poverty…). Have a read:

https://www.washingtonpost.com/national/a-semi-feudal-society-in-east-palo-alto-the-influx-of-tech-companies-pushes-residents-to-a-breaking-point-over-gentrification/2018/11/02/03e1004c-d17c-11e8-b2d2-f397227b43f0_story.html?noredirect=on&utm_term=.2fbf420c3582

You lamented too few high-paying jobs in YVR. With taxes like that, get used to it. – Garth

#110 Musty Basement Dweller on 11.05.18 at 11:56 pm

Good to hear our hard-working NDP government in BC is hammering those condo flippers. Well done everyone. See attached link. Finally someone is doing something about our Vancouver housing problem instead of ignoring it.
https://www.vancouverisawesome.com/2018/11/05/condo-flipping-bc-registry/

#111 fishman on 11.06.18 at 12:00 am

When the electoral results pop up on your 55″, pay attention to the big blue circles of the major urban centres: surrounded by vast red. Then dwell on Mao’s first 2 laws of revolution 1/ go to hinterland 2/control local population.
I’ll gather around my 55′ like old women with their knitting gathered around the guillotine. I’ll cheer for the reds if the blue heads fall in the basket. Hold out hope that enough red heads will carry on if the blue heads prevail. Never accepting the historical truth that revolution ultimately consumes all that embrace it.
Maybe not all. Mao’s heirs of the “long march” are the fabulously wealthy plutocrat rulers of the new China. The odds of turning out a winner are long thats all. Better odds with a Garth balanced portfolio & no revolution.

#112 Get yer G7 used car..... on 11.06.18 at 12:12 am

Bloody hell the government can be totally insane at times….$23 million of cars for one weekend!

No wonder “I am Adrienne Clarkson and you are not” feels so entitled…

“The federal government spent $23 million buying 631 new cars for the G7 summit. For “motorcade” purposes the government bought 154 Chevrolet Suburbans, 140 Touring-model Chrysler 300s, 109 Toyota Siennas and 28 Dodge Chargers. It acquired 88 Ford Escapes, 43 Mitsubishi Outlanders, 32 Nissan Rogues, 30 Dodge Journeys and seven Ford Explorers for “administrative” reasons.”

#113 Brier Barrington on 11.06.18 at 12:21 am

DELETED

#114 Gregor Samsa on 11.06.18 at 12:32 am

#93 Blacksheep
>I watched the entire debate. Bannon made Frum look like a contentless, emotional fool.

So did I and I agree. Frum was just another corporate media mouthpiece, and everything he said could be summed up as “Orange Man Bad!” as he compared Trump with Hitler, called him a racist, a fascist, a traitor to Russia, a criminal, and offered not one piece of evidence to support all this.

Meanwhile Bannon laid out some clear arguments while dealing with a hostile crowd, boos and heckling, protesters interrupting, and a clearly biased “moderator.” Impressed the hell out of me and really makes one ponder which is actually the “good” side.

Putting my betting cap on, I predict: red wave, rising U.S. rates, rising Canadian rates, and Canadian housing getting clubbed like a baby seal.

#115 FOUR FINGERS WATSON on 11.06.18 at 1:03 am

A 5 year mortgage of 300k at 2.5% costs about 1343.00 per month. A 300k mortgage at 5% costs about 1744.00 per month. Difference is about 400 bucks per month. Probably not a game changer for most people.

#116 Blacksheep on 11.06.18 at 1:19 am

akashic # 103,

#93 Blacksheep

Umberto Eco died a couple of years ago. I don’t think #5 Brian Ripley has the answer.
————————-
When in debate, never ask something, you don’t already know the answer to. Besides, if I believed Brian could offer viable counterpoints, I would have never posed the questions to begin with.

#117 The Real Mark on 11.06.18 at 2:00 am

https://www.youtube.com/watch?v=HtPt8UlyTis

Another great interview with Ross Kay on Howestreet.com/TalkDigitalNetwork. Touches heavily on the changing sales mix.

#118 millmech on 11.06.18 at 2:10 am

I see a developer is now dumping lots without houses now,Listing ID: 175570.

#119 Fortune500 on 11.06.18 at 2:19 am

Toronto real estate prices are up despite the last rate increase and the threat of more to come.

#120 Stan Brooks on 11.06.18 at 3:32 am

No Amazon HQ in Canada:

https://ca.yahoo.com/finance/news/amazon-split-hq2-two-cities-wsj-reports-194419623.html

There goes the wet dream of renting basements and garages to Amazon engineers.

It seems the BoC head got the marching orders from his bosses and it seems the message is clear: enough of the cheap credit, time for the sheeple to pay back.

#121 Howard on 11.06.18 at 5:57 am

Welcome back HHCE

#122 Howard on 11.06.18 at 6:02 am

#102 young & foolish on 11.05.18 at 10:29 pm

Another week, another skyscraper or condo project announced for Toronto. What are all those developers thinking? Don’t they know it’s all about to crash?

————————————

Haven’t you read about all the condo project cancellations lately?

Half of these developments won’t be completed. Just a scam to take the pre-con buyers’ money, earn interest on it for a few years, and then return it (interest free) once the project is axed.

#123 Howard on 11.06.18 at 6:07 am

Fantastic!

Province moves forward on condo, strata assignment register : https://news.gov.bc.ca/releases/2018FIN0081-002123

The money quote : “We will not allow real estate speculators and tax frauds to take advantage of loopholes in the system any longer, and this register sends a clear message. The days of avoiding taxes through condo flipping are over,” said Carole James, Minister of Finance.

Carole James is badass!

BC is sinking into a morass of government overkill. – Garth

#124 Frank The Tank on 11.06.18 at 6:55 am

#100 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 11.05.18 at 10:18 pm

————————————-

If you channeled that hate of Toronto into something productive, you might accomplish wondrous feats.

#125 The Real Mark on 11.06.18 at 7:06 am

“#115 FOUR FINGERS WATSON on 11.06.18 at 1:03 am
A 5 year mortgage of 300k at 2.5% costs about 1343.00 per month. A 300k mortgage at 5% costs about 1744.00 per month. Difference is about 400 bucks per month. Probably not a game changer for most people.”

I think you’re a bit confused. When the interest rate doubles, the cost of money doubles, and hence, the cost of servicing a mortgage debt doubles. Yes, its true, at higher interest rates, some lenders may allow for reduced payments against equity. However, a logical consequence of higher interest rates, especially against a highly interest rate sensitive asset such as housing is that lenders become increasingly nervous about the value of the collateral that underlies the loan. So they may very well be less apt to allow such hijinks, in that, they may insist upon increased payments into equity as well to cover off what may very well be an emerging deficiency in equity.

And yes, even if your hypothetical scenario holds true, $400 a month out of a household is devastating to discretionary consumer consumption. With no other significant demand driver in the Canadian economy seeming to emerge, that’s an awfully ugly deflationary hole that the Bank of Canada will have to dig the economy out of somehow. Higher retail mortgage rates are likely a given, not due to the Bank of Canada which is probably on the precipice of being forced to cut rates in the next few quarters, but rather, due to decreasing creditworthiness of most Canadian mortgage borrowers.

#126 maxx on 11.06.18 at 7:16 am

“Will The Ploz cause a made-in-Canada housing-induced recession, as Benny Tal fears?”

Based on his remarks, Benny is still rah-rah-sis-boom-bahing re, appearing to echo both the first ripples of yowling overreaction as well as more to come.

“Will people keep piling on debt, whatever it costs?”

Yes, because few understand the value of cash as it relates to life priorities, most especially long-term priorities such as retirement. Until indebted fools have their noses rubbed into normal rates, this will not change.

“Will the real estate market soft-land or hurtle headlong to earth, guts everywhere?”

Beavers who can hang onto their bricks and mortar will find all sorts of ways to absorb normal rates. Those who cannot, never could and will go back to renting whilst bleating to msm.

As for guts everywhere………no. As the economy strengthens and re-diversifies, the fallout will be viewed as essentially inconsequential.

Healthy personal finances translate into a healthier macro economy. There is no single good or service that can carry an entire economy on its own when money is worth practically zip. Each individual is a micro economic engine and as many as possible need to be contributing non-debt dollars to the economy at large.

Time is long overdue for a serious course of interest-rate medicine.

#127 Conspiratard on 11.06.18 at 7:20 am

ALIENS!!! Harvard and CNN say so.

https://www.cnn.com/2018/11/06/health/oumuamua-alien-probe-harvard-intl/index.html

Now it’s all starting to make sense.

#128 crowdedelevatorfartz on 11.06.18 at 7:24 am

@#79 Ogopogo
Re Lowe’s layoffs
+++
#104 Fish posted this at 9am in the morning( Nov 4 comment section) and several other blogdogs have commented on it. Old news.

#129 crowdedelevatorfartz on 11.06.18 at 7:27 am

@#87 IHCTD9
Re Happy Housing Crash
“A realtor friend tells me…”
+++++
I was thinking the exact same thing… :)

#130 akashic record on 11.06.18 at 7:35 am

According to a recent survey in Toronto 20% of people does not know a single neighbour.

#131 crowdedelevatorfartz on 11.06.18 at 7:36 am

@# 94 Flop
Re : Kitslano address

I lived in a house a few blocks away from that address in the mid 1980’s.
It sold for 238k in 1988. ( Mortgage rates 12%)
$238,000 in 2019 ? …..THAT would be good news :)

#132 NEVER GIVE UP on 11.06.18 at 8:26 am

Number 5 great post filled with prescient truth!

Number 24 sadly your illiteracy has gotten the better of you.

#133 crowdedelevatorfartz on 11.06.18 at 8:41 am

“BC is sinking into a morass of government overkill. – Garth”
++++
I agree the pendulum has swung too far Left ….unfortunately….. that is the result of 15 years of Liberal misrule/arrogance/corruption and voter outrage.

The NDP may be reelected ( definitely if the Liberals keep their current nonstarter “Leader”) but I’m sure they will also eventually slide down the slippery slope of cash donations, promises to lobbyists, back room deals, etc etc etc.

And , if we are to follow the Liberal example as a guide…after the NDP’s eventual election drubbing at the polls…..off into the sunset with a huge govt severance package and a juicy “honorary” appointment at 100’s of thousands per year salary with what ever company they awarded multi billion dollar contracts to..
NDP. Liberal.
They’re all the same.
Laughing at the voting public as the tax paying sheeple we ultimately are….

#134 Broadway Limited on 11.06.18 at 8:58 am

Hey Garth –

As one living small, simply and debt-free, I am rather enjoying the discomfort of over-indebted snowflakes. A simple leading indicator of this stress is the number of credit counselling ads on TTC subway trains I ride to work. Recently they have become more common. If rates keep rising as you suggest – and it’s long past time they did – I suspect more ‘Get Out Of Debt’ ads will appear.

#135 IHCTD9 on 11.06.18 at 8:59 am

#129 crowdedelevatorfartz on 11.06.18 at 7:27 am
@#87 IHCTD9
Re Happy Housing Crash

“A realtor friend tells me…”
+++++

I was thinking the exact same thing… :)
___

The truth inadvertently slips out, HHCE secretly cavorts with shysters.

#136 Kelvin on 11.06.18 at 9:04 am

“Because every economic recession was helped, if not caused, by monetary policy error in which central bankers were chasing inflation that was not there, took interest rates much too high and killed the economy.”

Benny Tal, what have you been smoking? 2008 was caused by overleveraging, not interest rates. And that’s just within my lifetime.

Cost-of-living has been increasing since 2008, generally faster than wage increases. There’s nothing imaginary about the inflation we’re currently facing.

Who is this guy and why is he getting paid to spout this nonsense? Is there a Real Estate Mafia who owns him?

#137 Howard on 11.06.18 at 9:10 am

#132 NEVER GIVE UP on 11.06.18 at 8:26 am

Number 5 great post filled with prescient truth!

Number 24 sadly your illiteracy has gotten the better of you.

—————————————–

Re: 24, I think you meant laziness has gotten the better of him.

Apparently you don’t know the definition of “illiteracy”.

#138 Renter's Revenge! on 11.06.18 at 9:13 am

#120 Stan Brooks on 11.06.18 at 3:32 am

There goes the wet dream of renting basements and garages to Amazon engineers.

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

“Wet dream”? Why? Because of the flooding?

#139 NoName on 11.06.18 at 9:15 am

This is funny, an dem wonder why they didn’t win.

https://www.instagram.com/p/Bp1uqLkgV6_/?utm_source=ig_share_sheet&igshid=y2iw2xek5ypf

#140 crowdedelevatorfartz on 11.06.18 at 9:18 am

Lobbying
The scourge of democracy.

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=2ahUKEwjRqLeS-r_eAhVuFjQIHSn6B8gQFjADegQIAxAB&url=https%3A%2F%2Fglobalnews.ca%2Fnews%2F4627289%2F2018-midterm-vote-most-expensive%2F&usg=AOvVaw0Fy1_oln7V9qyUWX1hPprK

#141 SaraJ on 11.06.18 at 9:26 am

https://www.canada.ca/en/financial-consumer-agency/news/2018/10/remarks-bylucie-tedesco-commissioner-financial-consumer-agency-of-canada-national-conference-of-the-mortgage-professionals-of-canada.html

could this “25% of HELOC holders only pay the interest on their HELOCs most months.” be one of the reasons for low arrears on mortgages in Canada? Using Heloc to pay mortgage and pay only interest on mortgage.

#142 Remembrancer on 11.06.18 at 9:30 am

#34 Smartalox on 11.05.18 at 6:15 pm
Re: the Munk debate, Steve Bannon vs. David Frum.
—————————————————————The RE equivalent of this would be akin to Tim Hudak OREA prez debating Tommy Vu 1980s/90s late night infomercial impresario on direction of loft vs. high-rise condo…

#143 -=jwk=- on 11.06.18 at 9:37 am

@ #64 or what it’s worth,
lowes claims all employees will be moved to the other rona/lowes stores. Also no Toronto stores are closing.
Real estate is local, Toronto proper isn’t suffering at all, yet. But you know, whatever.

Employees get reduced hours at the new stores, forcing them out rather than just laying them off.

Also no Toronto stores are closing.
Because the two in Mississauga and the one in North York don’t count for some reason?

#144 IHCTD9 on 11.06.18 at 9:40 am

#133 crowdedelevatorfartz on 11.06.18 at 8:41 am
“BC is sinking into a morass of government overkill. – Garth”
++++
I agree the pendulum has swung too far Left ….unfortunately….. that is the result of 15 years of Liberal misrule/arrogance/corruption and voter outrage.
___

BC seems hopeless on the political front. Right now, what they’re doing is in the same spirit of what Trump is doing – pointing fingers at the ‘bad guys” and then passing new laws.

I have to think the current regime is a one trick pony, and when they’ve sufficiently napalmed the BC RE market, anything else they put their gnarly fingers to will further pound the poor BC’ers into the ground like a wooden tent peg.

I don’t think places like Vancouver will be too attractive for youth from here on in – well, at least not to the smart ones. just look at that income/RE cost link I posted yesterday – worst city in Canada to try and buy a place to live. Much easier to just steer clear of the whole mess right from the get go.

#145 -=jwk=- on 11.06.18 at 9:52 am

Hey flop, 2050 russet is court ordered, they lost everything on that one….

2050 Russet Way,West Vancouver, paid 3m April 2016 ass 3.06

Originally asking 3.98

Then 3.19

Then 2.89

Then 2.28

Now 2.18

https://www.zolo.ca/west-vancouver-real-estate/2050

Now bankrupt…

#146 Travis on 11.06.18 at 10:06 am

#134 Broadway Limited on 11.06.18 at 8:58 am

As one living small, simply and debt-free, I am rather enjoying the discomfort of over-indebted snowflakes. A simple leading indicator of this stress is the number of credit counselling ads on TTC subway trains…

***

In Ottawa I’ve noticed not only an increase in the number of similar ads on the radio and on buses. I’ve noticed they say things like “We can help you with a consumer proposal” without feeling the need to explain what the jargon means. Most marketing used to say “help avoid bankruptcy” or “help you through bankruptcy” to keep it simple, but I guess so many people know about personal financial misery that these terms are in common use. It’s a bad sign.

#147 dharma bum on 11.06.18 at 10:12 am

#51 Ray

Everyone will eventually obtain enlightenment, it just may take a few more “cycles” for some than others.
——————————————————————–

Yes.

Resist the illusion. Do not remain attached. Relieve your suffering.

#148 millmech on 11.06.18 at 10:15 am

#41
Yes we will need all the luck we can get, as it will be very hard to chose the right rental with so many coming down the pipe in the near future. What is the specuvestor to do since no one will buy the investment property that was suppose to double or triple in value on completion date.
If the unit can not be sold it will be rented to create cash flow to help pay the HELOC that was used to finance it.
Take note that a lot of people who bought also work in the trades building these units and if the market continues to seize up they will have a rapidly depreciating asset and no employment to support the loan payments. Thus they will have to rent it out at any amount to keep the wolves away from the doors.

As an added bonus about the slow down that no one sees coming, the mills that produce the lumber for our housing market have cut back on the weekend overtime production and some have cut back to one shift. The plant that makes the nails to hold the particle board to the studs has 75 nail making machines working non stop 24/5, they have cut back to two shifts and may go back to just days if the orders keep declining.

#149 Citizen on 11.06.18 at 10:24 am

Garth,
Canada is pooched! Central Bank is about to school us in proper money management again.

Has there ever been a time where our economy has been worse off than the United States?

#150 SimplyPut7 on 11.06.18 at 10:39 am

#67 Happy Housing Crash Everyone! on 11.05.18 at 7:55 pm

Benjamin Tal is shaking because all of the banks, credit unions and private lenders especially the MICs lied about the credit quality and income levels of the applicants when approving the mortgages from 2014-late 2016.

Extending the amortization period back to 25 or 30 years at renewal or moving from fixed to variable rate mortgages will not save every indebted homeowner in a rising interest rate environment. Especially when they have to accept the completed speculative condo or new house currently under construction that they were hoping to sell to the rich foreigner with the suitcase full of money.

Something is going to have to give, most of them like the rest of Canada have limited resources, and when they decide to cut their non-essentials out of their budget, it will hurt the Canadian economy and cause the next recession.

Good Luck, 2020 and beyond is going to be ugly.

#151 Fish on 11.06.18 at 11:02 am

also auto maintenance, I paid 800 to have a fan belt put in, what a joke, also my brake pads were gone, front end needed packing

Not happy with that also new Battery I had to get

So unexpected expenses do come up, people, so do prepare for them

KEEP PLUGGING

#152 Keith on 11.06.18 at 11:09 am

BC is sinking into a morass of government overkill. – Garth

Yes, with a nation wide lowest unemployment rate of 4.2% it’s tough times in B.C. Damn socialists.

Non sequitur. – Garth

#153 Stan Brooks on 11.06.18 at 11:15 am

#150 SimplyPut7 on 11.06.18 at 10:39 am

Yep,

Benjamin Tal is shill for the banks who wants low rates/so more debt slaves with somebody else to cover the risk/CHMC.

He would crap in his pants by the very idea that their ‘high quality’ mortgages many with HELOCs on it can be potentially transferred to the balance sheets of the banks in case CHMC fails or is disbanded.

All the banks exclude CHMC insured mortgages from their liabilities when assessing risk. But they gladly collect the profit for simply originating a mortgage with no liability whatsoever and very limited administration.

#154 Ronaldo on 11.06.18 at 11:15 am

#105 Acdel

A few facts on coal you should know about.

http://www.westshore.com/#/facts

#155 Duke on 11.06.18 at 11:37 am

#33 Stone on 11.05.18 at 6:13 pm
#22 Stone on 11.05.18 at 5:39 pm
The household debt service ratios chart doesn’t seem to make sense. If a Canadian household debt service ratio is in the range of 14%, there shouldn’t be any cause to be concerned. 14% is laughably low.

If it goes above 35-40%, that’s where things get uncomfortable, to put it lightly.

Am I missing something here?

You are missing that it is an average and over half of people have no debt of any kind. – Garth

———

In that case, using averages is useless as ultimately, no one is average.

It would be better to have a chart indicating the threshold above what is considered an unhealthy household debt service ratio and point out the percentage of the population that falls in that category and how far above that threshold they are.

If the percentage of the population rises over time found above that threshold and their household debt service ratio also increases, that would be more striking. By including the whole population, it dillutes the results to the point of meaningless.

Ultimately, 8% of the U.S. population defaulting on their loan payments caused the 2008-2009 crash. Not the other 92%. That’s the segment of the population that worries me.

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

This is the proof that you cannot argue with stupid people.

#156 Fish on 11.06.18 at 11:42 am

CMHC expects housing starts and sales to slide over next 2 years

Income, employment support demand for housing, but they’re expected to slow, agency says
The Canadian Press · Posted: Nov 06, 2018 10:22 AM ET | Last Updated: 40 minutes ago

https://www.cbc.ca/news/business/housing-real-estate-sales-1.4893798

#157 Lee on 11.06.18 at 11:51 am

#32 Captain Serious,

Social Media and especially alternative media (Rebel, etc.) have destroyed the Liberal party’s ability to control the media in Canada. The Rebel has over 1,000,000 subscribers which means it speaks to over 2,000,000 family members in a country where only 16,000,000 people vote. Do not believe the polls. Any poll you read leans at least 10% left because of the way polling is done and who responds. At present the Liberals consistently beat the PC about 39%-31% in Polls. That really means about 41%-31% at the voting booth in favour of PC , which is about how the Provincial election went in favour of the PC over the NDP. If the GOP does well today polling is dead.

#158 FOUR FINGERS WATSON on 11.06.18 at 11:53 am

#125 The Real Mark on 11.06.18 at 7:06 am

“#115 FOUR FINGERS WATSON on 11.06.18 at 1:03 am
A 5 year mortgage of 300k at 2.5% costs about 1343.00 per month. A 300k mortgage at 5% costs about 1744.00 per month. Difference is about 400 bucks per month. Probably not a game changer for most people.”

I think you’re a bit confused. When the interest rate doubles, the cost of money doubles, and hence, the cost of servicing a mortgage debt doubles.
…………………………….

Try using a mortgage calculator. I did.

https://mortgageintelligence.ca/assets/calculators-mi/CAMortgageLoan.html

#159 Fish on 11.06.18 at 12:03 pm

LOCATION and $ LAND

#160 Bottoms_Up on 11.06.18 at 12:54 pm

anyone get their Loblaws bread payout yet?

#161 Evangeline on 11.06.18 at 1:07 pm

#114 Gregor Samsa on 11.06.18 at 12:32 am “Frum was just another corporate media mouthpiece, and everything he said could be summed up as “Orange Man Bad!” as he compared Trump with Hitler, called him a racist, a fascist, a traitor to Russia, a criminal, and offered not one piece of evidence to support all this.’

He’s a Republican neverTrumper and they hate Trump even more than the Democrats hate Trump. I couldn’t believe how superficial his research was since he’s reputed to be a great intellect.

“Meanwhile Bannon laid out some clear arguments while dealing with a hostile crowd, boos and heckling, protesters interrupting, and a clearly biased “moderator.” Impressed the hell out of me and really makes one ponder which is actually the “good” side”.

Bannon’s full movie, “Trump’s War” is on youtube. I’ve never clicked the link, but I believe it’s free. (I watched it elsewhere.) Bannon is doing some things that I like and some things that I don’t like, but overall he is doing more good than not.

#162 RL on 11.06.18 at 1:09 pm

Hi Garth, any comments on why household debt service ratios slid so much more in the US compared to Canada after ’08? Had the banks there simply allowed folks to become more over leveraged than was the case in Canada? Has that changed over time?

#163 Steven Rowlandson on 11.06.18 at 1:09 pm

If 3% is too high then it must be that home prices, mortgage debts and government debts are too high and 3% interest rate or higher would make the default risk intolerable. If you don’t owe too much the bank owns you but if you owe too much you effectively own the bank.

#164 JB on 11.06.18 at 1:31 pm

#36 Smoking Man on 11.05.18 at 6:19 pm

“Hello, oh yes this Smoking Man how can I help you”

“Sir we are doing a quick poll to see if you will be voting for the Democrats or the Republicans tomorrow?”

Long pause. My brain is calculating the possible implications of sharing my true thoughts. After all, this call can be a survey my employer is doing in stealth.

I’ve seen all the posters at the office, diversity, inclusion, everyone gets a trophy. I want to say, yeah Trumps doing good, look at what he’s doing with the economy. Lowest Job numbers ever.

But then. I risk being labelled a Homophobic, racist xenophobe and all the other phobes, who really know who’s calling me.

I said.
“I haven’t really thought it through.. I’m leaning toward the Democrats”

But in the voting booth, I’m voting for Jobs and Growth.

Red Wave!!!! That’s how polls work.
_____________________________________________
Too bad you are a FAKE AMERICAN and can not really vote!
BTW. If you were voting for jobs and growth then bully. Voting now is broken down into several categories in the United States of America. The Democrats, the Republicans, the independents and then for the old orange guy and his party of Codswallop.

#165 Question to Garth on 11.06.18 at 1:56 pm

#100 Toronto Hater

“So Toronto is not just a shithole of a city when it comes to people and their overpriced, overrated shacks…….”

Not sure Garth why you as the moderator of this pathetic blog allow this kind of hatred to be spewed out…

#166 jess on 11.06.18 at 3:04 pm

georgia what no power cords on ebay?

a Snellville polling location in Gwinnett County where voters waited in line Tuesday morning for 4.5 hours while election officials worked to replace malfunctioning electronic voting equipment. A line filled with African American voters snaked around the elementary school. Some voters couldn’t wait for hours and left the line.

NBC News has confirmed that the issue at Anderson Livsey Elementary in Snellville, GA was indeed a lack of power cords. Gwinnett County Director of Communications Joe Sorenson tells @NBCNews “the machine was not supplied power and was running on battery & the battery ran out” https://t.co/YFa45nihXs

https://www.motherjones.com/politics/2018/11/equipment-malfunctions-and-voting-machine-shortages-bring-long-lines-in-georgia/

#167 Adam Major on 11.06.18 at 3:25 pm

Thanks Flop,

Here is the link to the sold info on 2608 W. 11th

https://www.zealty.ca/mls.html?id=R2317131&[email protected]

We have assessed values for Vancouver so if logged in on the site, you can scroll down to see the sold price ration to assessed value.

#168 jess on 11.06.18 at 3:27 pm

According to the complaint, which can be read in full below, Alexander told authorities that—in the words of the FBI agent—the “President of the United States says it’s ok to grab women by their private parts.”

https://www.motherjones.com/politics/2018/10/bruce-alexander-grope-woman-trump-says-its-ok/

======

Malta’s Pilatus Bank has European licence withdrawn

Bank had been accused by murdered journalist Daphne Caruana Galizia of processing corrupt payments

General Electric Hit By $1 Billion U.K. Tax Bill

http://fortune.com/2018/11/05/ge-uk-tax-bill/

transfer pricing
https://www.accountancydaily.co/disputed-tax-big-business-hits-ps278bn

#169 crowdedelevatorfartz on 11.06.18 at 3:45 pm

@#164 Answer to Question

“There are nine sewer outfalls in the inner harbour and over the entire summer, the nine sites failed recreational water quality limits 44 per cent of the time.”

It’s actually, a scientifically proven shithole!!”

+++++

Because its mildly amusing and true?

#170 Lorne on 11.06.18 at 4:18 pm

#133 crowdedelevatorfartz on 11.06.18 at 8:41 am
“BC is sinking into a morass of government overkill. – Garth”
++++
I agree the pendulum has swung too far Left ….unfortunately….. that is the result of 15 years of Liberal misrule/arrogance/corruption and voter outrage.

The NDP may be reelected ( definitely if the Liberals keep their current nonstarter “Leader”) but I’m sure they will also eventually slide down the slippery slope of cash donations, promises to lobbyists, back room deals, etc etc etc.

And , if we are to follow the Liberal example as a guide…after the NDP’s eventual election drubbing at the polls…..off into the sunset with a huge govt severance package and a juicy “honorary” appointment at 100’s of thousands per year salary with what ever company they awarded multi billion dollar contracts to..
NDP. Liberal.
They’re all the same.
Laughing at the voting public as the tax paying sheeple we ultimately are….

………………
An excellent summary in support of Proportional Representation so neither of those parties will ever have dictatorial powers again!

#171 Fish on 11.07.18 at 8:39 pm

Home equity lines of credit fuel worries as rates rise and prices fall
Barbara ShecterBarbara Shecter
November 6, 2018 6:08 PM EST

https://business.financialpost.com/personal-finance/mortgages-real-estate/home-equity-lines-of-credit-fuel-worries-after-rising-rates-prices-report